Mackey Moana: Debate on Crown Entities Public Organisations and State Enterprises — In CommitteeText is incorporated into the Bound VolumeMackey Moana: Debate on Crown Entities Public Organisations and State Enterprises — In Committee[Sitting date: 14 May 2013. Volume:690;Page:9900. Text is incorporated into the Bound Volume.]MOANA MACKEY (Labour):I do want to respond to some of the extraordinary comments made by the Minister in the chair in his very animated contribution to the Committee. I think you know you have really touched a nerve and you are on the right track when you get those kinds of speeches from the Hon Dr Nick Smith. It is kind of like our canary in the coalmine. If the Hon Dr Nick Smith looks like he is going to blow we are on the right path. Certainly that was the tenor of the response we got from the Minister. Well the Hon Dr Nick Smith and the National Government can continue to drink the Kool-Aid if they want and try to convince themselves that we have a competitive electricity market but they know that that simply is not true. It simply is not true.I want to concur with the comments made by my colleague David Parker in terms of the announcement of our policy. I assure you that the screaming and the hysteria would have been far worse if we had held off announcing this policy until after the float than it was announcing it beforehand so that investors could know exactly what they were going to get at the change of Government next year.Let us be clear: 2.5 percent of New Zealanders bought shares in Mighty River Power—2.5 percent. One hundred percent of New Zealanders owned that company in the year that we are discussing—100 percent. That is not going to be the case in the future and that is a tragedy.Mighty River Power owns nine hydro stations on the Waikato River. It has five geothermal stations in the central North Island and a gas-fired station in Auckland. If you look at those hydro stations these are assets that were built by the taxpayers of New Zealand—built by the taxpayers of New Zealand. They have been paid off in full so why is it that New Zealanders are not getting the benefit of cheap hydroelectricity generation? We have one of the highest levels of hydro generation in the world. Why is that not reflected in our power prices to consumers and to small and medium sized businesses? Why? In a time of flattening demand a surplus of generation and a collapsed carbon price why are power prices continuing to go up? If there was ever a time that you would consider—Paul Goldsmith: Transmission.MOANA MACKEY: It is not transmission. Paul Goldsmith says it is transmission. That is the go-to response. It is completely untrue—completely untrue—that transmission and line charges have been responsible for the driving up of electricity prices. It is the wholesale electricity market. You only have to look at the report in 2007 that confirms that. All the evidence confirms that it is not transmission and line charges that have driven up electricity prices; it is the wholesale electricity market and that continues to be the case to this day. I am very pleased that Paul Goldsmith raised that so that I could—[Interruption]; do not tell people that—absolutely refute the single biggest fallacy in this debate which is that it is transmission charges that have driven up electricity prices. It is not.So when it comes to Mighty River Power I pose the question again. Electricity prices for consumers and households went up on 1 April. Within weeks of that the chief executive of Contact Energy was saying that they were going to go up again. If power prices do not go down when we have flattening demand a surplus of generation and a collapsed carbon price when are they ever going to go down? Silence. The answer is that we do not have a competitive market. It is interesting that the chief executive of Mighty River Power Doug Heffernan came out and said that it is socialist. Apparently he thinks that a mechanism that will deliver an actual competitive retail market is socialism and he defends the status quo—Simon O’Connor: No he said it’s communism.MOANA MACKEY: Communism—no he actually said socialism. To be fair to him he said it was socialism. So this is defending an uncompetitive market which is what National is doing and what the chief executive of Mighty River Power decided to do. Well Labour’s policy will deliver real competition and choice in the retail market. We will still have competition in generation. We will still have competition in the retail market. That is what the mechanism will deliver. This is not regulating right across the board. This is a system that is used all around the world like in the United States of America. Does the National Party think that the United States of America is communist? Because that is what National is out there telling the people of New Zealand. The United States of America Mr Hayes is where this model is also used and I do not think any of us would claim that it is—Hon Dr Nick Smith: No it’s not true.MOANA MACKEY: Well the fact that Dr Nick Smith says “No it is not.”—this is the wonderful thing about Nick Smith. He just shakes his head and says no to things that are absolutely factually correct hoping that people will believe him.The reality is power prices are too high. Yes they went up when Labour was in Government. That shows that the model does not work. The Bradford reforms have not provided the decrease in power prices that were promised at the time. It has failed. As I said the National Party can continue to drink the Kool-Aid if it wants and pretend that it has not failed—Report noted.