Benson-Pope David: Urgent Debates — Mercury Energy—Disconnection of Electricity Supply 
Benson-Pope David: Urgent Debates — Mercury Energy—Disconnection of Electricity Supply 
[Volume:639;Page:9744] 
Hon DAVID BENSON-POPE (Minister for Social Development and Employment) 
: 
 I am pleased to have the opportunity to speak in this debate. Along with all members of this House I share the feelings of loss that the family have had and I would like to thank the previous speakers for passing on—on behalf of all of us actually—the surprise and condolences around this very real family tragedy. 
This is a useful opportunity to be able to delineate the decisions that have already been taken by Cabinet and the processes that will be followed in future. As members will be aware a decision has been made. A large part of that is already in the public domain but not in the wider sense understood by people in detail yet and that is why I think today’s debate is particularly useful. A decision has been made to proceed with special requirements particularly around the needs and the situation of vulnerable consumers. None of this is without semantic difficulties and it is fraught with definitional issues. That is why I think the timing of the development of this policy is particularly useful. 
The Electricity Commission will issue draft guidelines in line with the decisions made by the Government. After 3 months from the date of implementation of those guidelines the commission will be monitoring and coming back to the Government to see whether there is sufficient compliance with the guidelines. It is my view that the guidelines to date albeit voluntary have generally been quite well complied with. We certainly have had an appalling example of non-compliance which led to this incident and to this debate but I think it is important not to criticise unreasonably the other companies public or private involved in the industry because of the totally unsatisfactory performance of one supplier. That is why I think cautious decisions about the need to regulate further depending on performance is the desirable way to proceed. 
The Government will be introducing legislation in due course to amend the Electricity Act to make future regulation possible should that need to occur. So that is a given. I think it is important that members of the House and the New Zealand public are aware that the Electricity Commission has advised us that retailers have already taken on board—well and truly I would imagine—the sad lessons from the last couple of weeks and that the commission envisages it will get very good cooperation indeed throughout the implementation phase of its guidelines and I will talk a little later on about the detail of those guidelines and the changes. 
Essentially the wording in the guidelines will be much stronger. Words like “should” will be changed to more appropriate language such as “must” and “will be required to” and the guidelines will make absolutely clear the requirements and expectations of these companies delivering essential utility services. I believe that the threat of regulation will be as effective as it has been in a large number of other areas. I am only too aware of all sorts of voluntary accords in my environmental portfolio area that have been well complied with and interestingly the people who previously argued for voluntary regulation are often now coming to the Government and asking us to regulate to make sure that there are no freeloaders and that everyone is on board. That is good news. I believe that the threat of regulation will indeed be very effective as it should be. 
There are however as I commented a moment ago some very good practices among electricity retailers. The example of Meridian in Christchurch has already been quoted. I am advised that Meridian funds a number of agencies to provide people with the sorts of budgetary advice services and support that are often provided by the Ministry of Social Development in various forms particularly in the form of Work and Income but also via other agencies. I compliment them on that. I have no reports of things not working well in that area. I am also only too aware of a perhaps too informal but none the less very effective protocol—that term might be an overstatement—or working arrangement with Contact Energy in my Dunedin electorate. Irrespective of the chills of the North Island people will be aware that the criticality of power supply is often much greater in the south particularly at the moment and as a result of disconnection concerns from constituents some years ago my office and I made contact with the local Contact Energy operators and have come to a regime that has ensured there are grossly fewer problems—I would not say none—with that company and with supply in our area than there have been in the past. So I think it is only too clear that retailers have learnt from this. 
I need to put on record that the Electricity Commission and the Ministry of Social Development did negotiate in good faith on their own initiatives the first set of guidelines and now we are in the situation because of these tragic circumstances where we clearly want to strengthen them and improve them. 
What has happened over the last couple of weeks has clearly been a huge wake-up call for those who do not have good practices or are not ensuring that good practices are being followed. I am sure they are hurrying to make sure such practices are in place because after the consultation period of a month which I referred to and the rewritten strengthened guidelines being finalised there will be a 3-month period for implementation. At the end of that period we will be looking at the Electricity Commission surveying exactly what the practices are observing and monitoring the level of disconnection and coming back to the Government with further recommendations. Of course given that that period will be during winter I think that will be an instructive exercise. 
The Electricity Commission as I intimated earlier is absolutely clear that it will recommend regulation if it assesses that there is not a satisfactory level of compliance with the new guidelines. We believe that the wake-up call from what has happened—the tragic events we have seen—has already sent retailers the very powerful signal that the expectation is that compliance with the new strengthened guidelines will be absolute. 
We are going to be seeing in the community a much stronger set of guidelines and if they are not properly complied with there will be if necessary further regulation. We will make sure that there is good monitoring of the issues around vulnerable consumers and disconnection issues that other consumers are being properly advised of where they can go for advice should they need it and the monitoring regimes that the Electricity Commission will be put in place. Can I say though in order to leave no possibility for doubt that it is my view that in a country like New Zealand irrespective of the particular issues of this or any other case it is just not acceptable that any consumer who happens to have a debt of less than $200—as it was in this case—should be disconnected from the power supply. I just do not believe there can be any reason where at that debt level disconnection would be acceptable. 
The previous speaker quite rightly identified the issue. We do expect all of us in this community to face up to our financial commitments. But it is equally an indicator of the humanity of a society that we make sure that those who for whatever reason—and there are many valid reasons—are unable to do that or find difficulty doing that get the level of support and advice they are entitled to as members of this community. In that respect members of this House and members of the New Zealand community will be only too aware of the lengths to which this Government has gone to make those financial burdens lighter. I guess in many ways the attitude to this matter characterises the different flavour of the politics and the philosophy of the different parties in this House. Labour in one of its first moves in Government reindexed the floor of national superannuation and has shifted it annually since 1999. This Government reinstated the public provision of accident compensation and has moved the minimum wage annually since 1999—not a record that predecessors in the House would be able to claim. 
Of course that very shift in people’s base income is one of the key factors in making the payment of utility services infinitely more affordable. Members of the House are only too aware that the Working for Families package now in the final implementation phase since 1 April this year is providing very substantial assistance to around 360000 New Zealand families. These are families that because of extra tax credits and other types of support as part of the components of the Working for Families package can obviously find it easier—if not completely easy in many cases—to face up to the cost of the provision of utilities such as power. In addition to that of course that package will lift a very large number of children out of poverty—and energy poverty is an important part of that deprivation. Clearly the last phase of Working for Families has put huge extra amounts of money into families’ pockets—the increases in family support and the family tax credit level and the regular inflation adjustment in particular. 
The previous speaker also alluded to the energy insulation and retrofitting initiatives that have been running for a number of years. Those sorts of conservation measures are a clear and valuable part of the sorts of initiatives—very substantial initiatives—that this Government has incrementally put in place since being elected to the Treasury benches in 1999. 
I will share with members one small example of a pretty typical New Zealand family. Chris and Allan live in Onehunga. They have three children. Their Working for Families package has increased their income by $365 a week. That is $365 a week they would not have had this Government not been in power and that is $365 a week that makes it easier for them to pay their mortgage to pay their bills for utility provision including electricity and to make ends meet rather more comfortably. So for a very large number of New Zealanders it is much easier to meet those financial commitments; but for those who still need support we will provide that. 
In closing I send one very clear message both to members of the House and to the community. I would urge people who are having issues around power supply in particular or who have historical issues in that regard not to hesitate to contact Work and Income. Anyone facing disconnection or having trouble paying a power bill can call and ask for assistance whether or not that person is a current client of Work and Income. We will assist people privately and confidentially by looking at their financial circumstances and giving them advice ourselves on what assistance they can get or indeed providing assistance if that is appropriate. We will continue to advise people—whoever they are and whether or not they have an existing relationship with Work and Income—on what other Government or other assistance might be available such as the Working for Families tax credits that I have referred to or a very substantial range of other budget services such as budget advice which is often provided by other independent agencies a large number of which are funded by various sorts of Government funding or indeed by some of the utilities such as the one I mentioned. 
 Of course the sooner people put their hands up and ask for some advice to help with the ordering of their affairs the sooner they can be assisted. As someone said during question time often we do not notice things until they arrive which is too late. This is an area where for example the guidelines will insist that there are no disconnections or discussions of disconnection on Friday or over the weekend so that we can come to a much more manageable arrangement when people have difficulty. Thank you very much for the opportunity to clarify some of those matters.