Alliance Party demands 'end of greed' in electricity sector

Alliance Media Release - FOR IMMEDIATE RELEASE - 22 October 2008

Alliance Party Co-Leader Andrew McKenzie today called for the nationalisation of the electricity sector in the wake of announcements that Contact Electricity Directors wanted to double their fees after sending their customers letters informing them of a 10 percent increase in their electricity bills.

Low income families throughout New Zealand are going to suffer because Contact directors feel that they are unpaid in the international marketplace.

"Contact Electricity's Deputy Chairperson, Phil Pryke is already paid $1000 a day," Mr McKenzie said. "He wants it doubled to $2000 a day. This is at the same time that New Zealand was facing financial recession. People who were already facing the chill wind of economic recession would pick up the bill for his salary increase."

Mr McKenzie said that Contact directors are apparently so arrogant, that not only did they treat their customers with contempt, they even ignored their own shareholders and, even their financial advisors who were against such an increase. This does not say much for the great 'shareholding democracy' which supposedly under the reforms, would keep a rein on these individuals.

Mr McKenzie noted that the electricity reforms of the 1980s and 1990s were the cause of the problem. By allowing the market and big business into the electricity sector, companies could charge what ever they liked.

"Electricity was, and remains a natural monopoly," he said. "The fact is that the companies have largely formed unrepresentative cartels. The idea that somehow prices would drop as the various companies competed amongst each other is now seen for what it is, a sick and expensive joke."

Mr McKenzie said that New Zealand's electricity sector was a shambles and it was time that these people were brought to brook by returning the sector to public ownership.

"Electricity is a public good and people should not go without power, or be severely financially disadvantaged so that company directors could get unreasonable pay increases."

Mr McKenzie said that only the Alliance was committed to ensuring people's wellbeing came first in the provision and supply of electricity and gas. This meant company boards would be abolished and price controls on electricity would be imposed.

Mr McKenzie said that Contact Electricity's attitude toward people made him sick at heart.

"I do compare Contact's directors to vampires (just like their Wall Street counterparts) but that is an insult to vampires," he stated.

ENDS

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