Government To Get Tough On Power Companies Over Price Gouging

The Government is promising to get tough on power companies if they use the Emissions Trading Scheme to unfairly inflate their prices says Climate Change Minister Nick Smith.

Mercury Energy and Contact have this week announced power price increases of around three percent or five dollars a month.

The power companies blamed the price hike on the introduction of the ETS on July 1.

Speaking on TV3’s “The Nation” today Dr Smith said he did not believe Mercury Energy or Contact were taking advantage of the ETS.

But he said the Government would hold an inquiry if power companies increased prices by more than five percent.

“If we see power companies using the ETS as an excuse to price gouge, then we reserve the right to have an inquiry and to hold them to account.”

Dr Smith said the expected increase in power prices will be offset by tax cuts in the Budget.

“Even if you include the GST increase, 25 bucks a week was the benefit of the Bill English budget for families - three dollars a week will be the cost for families from the ETS.”

He said ultimately consumers have the power to switch electricity providers if they are unhappy.

CLIMATE CHANGE MINISTER ADMITS THE ETS WILL NEVER BE POPULAR

The Emissions Trading Scheme will never be popular admits the Climate Change minister Nick Smith.

The ETS comes into force on July the first.

Those against it – including National’s support partner ACT and Federated Farmers – are calling on the Government to delay the scheme.

Speaking today on TV3’s “The Nation” Dr Smith said he didn’t expect the ETS would ever be popular.

But he believed New Zealanders will respect what it will achieve.

“I simply say to New Zealanders is look we need to plant trees, we've been losing forests, we need to invest in renewable energy. Over the last decade the big increases have been in thermal generation, and while I don’t expect the ETS will ever be popular, I think people will respect what it will achieve, and that is New Zealand doing its fair share around climate change.”

“We've got a really important brand, both in tourism and markets internationally, on the basis of a clean green brand. There are issues of market access. We do not intend, a John Key government will not be leading the world on climate change, but we will do our fair share.”

NATIONAL TO LAUNCH ADVERTISING CAMPAIGN ON ETS

National will launch a national advertising campaign on the Emissions Trading Scheme next month.

The ETS is due to come into force on July 1st.

Those against it – including National’s support partner ACT and Federated Farmers – are calling on the Government to delay the scheme.

Speaking on TV3’s “The Nation” this morning, Climate Change Minister Dr Nick Smith said there would be an “information campaign” in June.

“We are producing pamphlets for householders, to small businesses, for farmers, so they can get a better explanation of how it works.

“I'm also going to be spending a good amount of time in the month of June on the road, getting around New Zealand communities and talking to them about what the ETS impacts”.

Dr Smith acknowledged the ETS would “never be popular” and is a “hugely complicated beast”.

He said most people were concerned about where the money would go.

“People have got this idea…about the ETS being at tax. It's not, the government doesn’t make any money from it. In fact, the government is going to lose money. It is effectively saying that when you fill your car up with gas you're gonna be paying somebody to plant a tree.”

LABOUR WOULD NOT SELL SOES

Labour would not sell state owned assets according to its finance spokesperson David Cunliffe.

The Government has floated the idea of partial privatisation of Kiwibank and other SOEs.

Speaking on TV3’s “The Nation” today Mr Cunliffe said keeping state owned assets was a “no-brainer”.

New Zealanders should not be asked to pay for something they already own.

“Kiwibank only needs 100 million dollars which, in the scheme of the Government’s books, is not a lot of money.”

Mr Cunliffe said the Government had made close to 100% return on its investment and Kiwibank was worth keeping.

“It’s saved hundreds of millions of dollars for other non-kiwibank customers by keeping the big four banks honest in bringing interest rates down and it’s also helped to stabilise New Zealand’s net international debt position by creating credit domestically, and that’s incredibly important.”

He said Labour would look at bonds to encourage savings instead of partial privatisation.

“If mum and dad kiwi put their money into an SOE they already own, that’s arguably not growing the savings pie because they could be putting their money into another savings instrument.”

CREDIT FOR NATIONAL - FROM LABOUR!

National deserves credit for sticking to the Emissions Trading Scheme, says Labour Finance spokesperson David Cunliffe.

Speaking today on TV3’s “The Nation” Mr Cunliffe said Australia's Government would live to regret the day they moved away from their ETS.

However, he said National deserved credit for pushing on with the scheme.

“Fair is fair to the Government. It is good that they have stuck to theirs.

“But tax payers need to understand that because National has watered down Labour’s ETS so much they are going to end up footing hundreds of millions, in the end billions of (dollars) of an extra bill.”

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