New Zealanders are working harder and spending their money wisely, but they are struggling to get ahead.
One of the biggest problems that Kiwis face is the relentless rise in power prices.
Since 1997, power prices have risen twice as fast as inflation. The average annual family power bill has gone up by almost $770. Prices here have risen faster than in many of our major competitor countries.
That hurts not only households but also holds back businesses and makes it harder for them to compete.
Prices keep going up despite the fact that about two-thirds of our electricity costs next to nothing to generate because the water that powers our hydro-dams is free, and the dams themselves were paid for decades ago. Even now, when demand is flat, power companies continue to put their prices up.
National’s plan to sell our assets will only make it worse.
Super profits
Our electricity market is not competitive and that means power companies have made super profits on the back of Kiwis. That makes it harder for people to pay their bills and keep their homes warm, especially if they are on fixed incomes.
This is not right and Labour will change it. We will bring prices down.
New Agency
That is why the next Labour Government will create a new agency called ‘NZ Power’ to act as a single buyer of wholesale electricity from multiple generators.
That power will be sold to multiple retailers, separate from generators. This will protect consumers from the rapid prices rises of the past and guarantee supply.
We will also introduce a fairer pricing system so that electricity companies get a reasonable return, and consumers finally get a fair go.
We are confident that we can bring down power bills by $230 to $330 a year for the average family. Not only will prices fall, any future price rises will be far lower.
Reduced costs
Lower power bills will not just take the pressure off households but also lower costs for businesses and companies.
Business and Economic Research Limited (BERL) an Independent group of economists, estimate that lower power prices will create over 5000 jobs and boost economic growth by $450 million.
This is another example of how smart, active, hands-on government can help us grow our economy and create jobs.
New Zealanders have been doing their bit, and it is time that the Government did its bit too. That is why the next Labour government is committed to creating new jobs, lowering power prices and helping 100,000 families into their first homes.
Later this month, National will hand down its fifth budget.
It needs to be a budget that will help hardworking Kiwis get ahead.
Labour Party is committed to achieving this goal.
David Parker is a Member of Parliament on Labour List and the Party’s Spokesperson for Finance.
Read related report about the Government’s partial sale of Might River Power Company earlier this month, elsewhere in this issue.
