Buy back Mighty River Power – Peters

  • 20/04/2013

New Zealand First leader Winston Peters says he won't support the National Party to form a government unless it buys back Mighty River Power.

The power problems don't end there. The Labour-Greens proposal continues to draw criticism and warnings from a share broker.

"Even Treasury says not to do what the Government's doing," says Mr Peters. "Treasury's not known for its North Korean views on economics is it?"

And he'd use your superannuation to do it.

"You've got the ability to access the Cullen Fund, KiwiSaver in the short-term," says Mr Peters.

Under its "super buyer" model, the Labour Finance spokesman says the Crown will forego dividends during the start-up phase.

"We think the power companies should earn a profit and pay a dividend," says David Parker. "We're not saying they should be driven to extinction."

He says Labour's policy will cost an affordable $100 million and it's time to acknowledge the model is wrong.

"Should people face ever increasing power prices, they've gone up by $700 since the so-called Bradford reforms, over and above inflation," says Mr Parker.

But the architect of the 1998 free market reform of electricity denies reforms have failed.

"When the competitive market was allowed to work, prices fell between 1998 and 2002 before Labour started fiddling with the market," says former National Energy Minister Max Bradford.

He says Labour's claims their model has worked in Canada are wrong.

"The first chief executive of the organisation is now saying they created a Frankenstein, so it hasn't worked there," says Mr Bradford.

Labour refutes claims there'll no longer be competition in the market and downplayed the slide in the share price of energy companies yesterday.

"Contact Energy are not going to go broke through this," says Mr Parker.

But share broker JBWere says the drop in the share price has already reduced the savings of those who have KiwiSaver accounts that invest in shares. It warns less capital will be invested in the New Zealand share market if state intervention in power goes ahead.

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source: newshub archive