Labour acts to bring down power prices

Labour Leader David Shearer has today unveiled new policies to bring down power prices, stimulate the economy and create at least 5000 jobs.

“The annual average household power bill has risen by almost $770 over the past 15 years. Prices are rising faster in New Zealand than in many other countries.

“Under our plan, the average household’s power bill will be cut by between $230 and $330 a year. That’s a reduction of more than 10 per cent for residential users. Commercial and industrial users will have their bills reduced on average by 5 to 7 per cent.

“I’m not prepared to sit back while power companies cream super-profits at the expense of households and the economy. National’s asset sales plan will make the problem even worse when overseas and corporate investors push for higher returns on their investment.

“That’s why Labour will intervene in the electricity industry to regulate power prices and protect consumers from the rapid rises of the past while still ensuring a fair rate of return for generators.

“We will set-up a single buyer, NZ Power, to purchase all electricity generation at a fair price, based on the actual cost of production. That will mean more than half a billion dollars will be transferred from the coffers of the power companies directly into the back pockets of Kiwis.

“The policy will have significant flow-on effects for the economy. Independent economists BERL estimate the new structure will create at least 5,000 jobs. It has also estimated it will increase GDP by up to $450 million.

“The Crown will forgo dividends and tax revenue from the power companies. We’ve taken a conservative view of the impact on the Government’s books, estimating it will be between $60 and $90 million a year.

“Kiwis have been stung by high power prices for far too long. People are working hard but can’t get ahead because of the rising cost of living. They’re doing their bit and the Government should do its part too. That’s why we are acting to bring down prices,” said David Shearer.

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