Shirley Ken: Third Readings 
Shirley Ken: Third Readings 
[Volume:620;Page:16124] 
Hon KEN SHIRLEY (ACT) 
: 
 At the outset I will say that I found the analysis of the member who has just resumed her seat to have been very sound. I think that she gave a very fair analysis of the situation. Unfortunately her conclusions were inconsistent with her own analysis. Totally rejecting the market is totally inconsistent with her speech because all the reasons she gave in her speech were reasons for more market participation in and less government of the industry. She said that we do not have the least-cost options available to us which is bad for the environment. I agree with that analysis but I say the market will deliver the least-cost options and thence will give the best environmental outcomes—not big-Government prescription. The example of the most expensive over-investment in gold-plated generation that we have done is the Government’s “think big” Clyde Dam which our grandchildren will still be servicing the debt on. That is the strongest argument against the conclusions of the Green member who has just resumed her seat. 
The ACT party strongly opposes this legislation. It is very bad legislation. I think Mr Peck from Invercargill made the point that it is a bill for today. Government speakers are virtually conceding that it has weaknesses but say that it is a sort of stopgap measure to try to tide us over as the Government tries to grab more levers and have more controls. Well it is not a bill for today; it is a bill for the 1930s. It is all about the politicisation of the energy sector big-Government control more government and less market participation. That is the fundamental failing of this bill and the ACT party deeply regrets it. 
Energy is critical to this country. Next to our good fortune in having a temperate climate the key competitive advantage that we have in this country is comparatively cheap electricity—an adequate availability of competitively priced electricity. If we lose that we are done for. Our whole economy as a trade-dependent nation is based on processing our key export products. We are exporting energy. For milk-powder wood pulp and aluminium—for all our key exports—the cost of electricity is as great as the input of the raw material derived from the land and if we do not have competitively priced electricity on an international basis we are done for. What is the policy of this Government? It is to drive up the price of energy. The Minister said so. He said that energy was too cheap which is why windmills are not competitive and that if we had more expensive electricity windmills would then become competitive and that would be good. No that would be bad but that is what this Government is doing. Because of the Government’s capture by the Green movement it thinks that somehow if we go for more expensive electricity put blockages against coal and hydro generation and favour and subsidise wind generation it will be good for the New Zealand economy. That would not be good; it would be disastrous for the New Zealand economy. But that is the course of action this Labour Government has embarked on. 
Of course one can embark on that course of action only if one controls the levers which is why the Kyoto Protocol is such a wonderful instrument. It is the perfect instrument for the socialist because one can progressively control all the levers. One nationalises the sequestration credits and then says to industry that it will have a carbon tax put on it but that exemptions will be given. One tells people that if they go to the Government and lobby it the Government will consider their cases and give exemptions. That is a politicisation of the total economy. It is a recipe for a command economy and a recipe to drive up the price of energy in this country and diminish our competitive advantage against other trading nations—our competitors out there are in the global marketplace. It is disastrous for New Zealand but somehow the Labour Government speakers have come to this debate to try to defend that and say that it will be good for us. It will not be. 
The whole structure of the New Zealand energy sector is one of not enough market and too much government involvement. That is where the Greens’ conclusions are so wrong. Those members say that the market has failed. But it is not that the market has failed; it is that the Government has prevented the market from working. Looking at our generation we see it is 80 percent controlled by State-owned monopolies that gouge our export industry with unbelievable price hikes. One hundred percent of our transmission is controlled by a single State-owned enterprise; there is no competition and no market. Then when we come to the retail supply end we find we have not applied price signals because of the metering problem. So the domestic consumer is not exposed to price signalling. We do not have time-of-use metering and domestic consumers cannot respond to pricing signals because they are shielded from them. So at every step it is Government intervention and policy that prevents the market from working. 
I was interested to hear the National Party claim credit for removing the restriction on energy supply companies becoming involved in generation. Well I say good on those members for claiming credit for that but I would remind the House of who imposed it in the first place in very recent history. I remember spending several days in Bill Birch’s office with Max Bradford and Tony Baldwin pleading with them not to do it telling them not to go down that path and saying that we did not need to split the supply and energy companies and then prevent supply companies from getting involved in generation. But just a few years back that is exactly what the last National Government did—against the advice of the ACT party. We warned National about that and the very aspects that we warned it about have come to pass. So I am delighted that National has now abandoned and recognised the folly of the policy that it implemented. 
But we should not blame the market for the mistakes made in the Bradford reforms. Overall the market reforms in New Zealand’s electricity sector have been a success. The problem is that we have not continued forward. We have not allowed the market to work because of too much Government interference and too much monopoly. That is why this bill is so bad. The Electricity Commission is an absolute puppet of the Government and will become the plaything of the Minister. This is heavy-handed regulation that rather than encouraging the investment we need in our energy sector will be the single biggest put-off. For foreign investors the world is their oyster; their money flows like water to the best opportunities. They will look at New Zealand and see the great big State-dominated sector the heavy-handed regulation and the great big instrument that the Minister has. This legislation is the equivalent of the Minister having his hand up the back of the ventriloquist’s puppet and the puppet looking at him and saying: “Minister you are an idiot.” It is an “I’m not.” “You are.” “I’m not.” “You are.” sort of situation. The instrument that the Minister has created has already shown that his decision to subsidise his own State-owned enterprise Genesis Energy was silly. It was silly. It was stupid public policy but it is just another recent example that we are seeing of that from the Labour Government. We will see a whole lot more examples like that because Government members cannot help but fiddle. They are fiddlers—socialists are fiddlers. They have to have their hands on the control levers—they are control freaks. That destroys markets destroys confidence and kills investment. 
This bill is bad and the ACT party will be opposing it.