Can the Government Guarantee Domestic Power Prices if the Power Companies Are Sold?

Alliance Party media release

FOR IMMEDIATE RELEASE

Tuesday 7 August 2012

The government says domestic power prices will not rise steeply if shares are sold in the three publicly owned power companies, but can they guarantee it? And what if they are wrong? This has the Alliance Party worried, according to co leader Kay Murray.

Electricity is an essential product. Everybody depends on it. Domestic electricity prices have been rising faster than the rate of inflation since 1991 when the government first applied its free-market policies to the sector, with only around 40% of the sector being privately owned. Both history and logic point to even greater price rises when more of the sector is sold off.

The Labour and the Green parties maintain that once these assets are sold the country will not be able to afford to buy them back. So what will the government do if people cannot afford to pay their electricity bills? Let them freeze because they can't heat their homes? Already the health system treats many people, especially children and the elderly, with illnesses caused by living in cold damp homes. Or will they use taxpayers' money to subsidize the profits of the electricity company shareholders by assisting people on very low incomes to pay their power bills, leaving the rest of us to grin and bear it?

Our electricity industry was built up by the state and has been owned by the state for close to100 years because previous generations understood that access to electricity is vital for everyone. The very least our government can do is explain how they intend to keep domestic electricity prices affordable after they have privatised most of our power companies. We cannot rely on market forces; market forces have arguably got us into the mess we are in.

What is plan B, Mr Key?

ENDS

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