Inflation rate and power prices do not connect

When I travel around the country, people tell me what is important to them. At this time of year, I hear a lot about the high cost of power.

Whether you are running a business or a household, soaring electricity prices are an issue in New Zealand.

Last year, power prices rose five times faster than inflation, even though demand was flat. That tells us that there is something wrong with our system.

Many of our competitor countries have seen declining electricity prices. That makes it difficult for New Zealand’s hardworking businesspeople to compete. They tell me that they feel abandoned by the current Government.

Families feel abandoned too. It is tragic when the elderly cannot afford to use their heaters to warm themselves on winter evenings.

Labour will not sit back while big power companies make super-profits at your expense.

That is why the next Labour Government will create an agency called ‘NZ Power’ to act as a single buyer of wholesale electricity.

NZ Power will act like Pharmac. It will ensure that electricity companies get a fair return on their investment, while passing on savings to you.

It is a bold policy that will lower power costs for businesses by 5% to 7%.

Households will have costs lowered by 10%. For the average family, that would mean savings of hundreds of dollars.

Economic boost

According to Business Economics Research Limited (BERL) an independent economic research group, NZ Power will boost New Zealand’s economic growth by $450 million and create 5000 jobs.

It will allow 1.7 million Kiwi households to have an extra half a billion dollars a year to spend in our economy. There are many countries around the world that have a similar system, and some of them, including Canada, US, South Korea and Brazil have very fast-growing economies.

We will stay on track to reach surplus by 2014-2015; that is important to Labour.

We balanced our budget nine times out of nine. Since then, the National Government has been in continual deficit.

I have listened to the people of New Zealand as I travel around the country.

Whether you run a business or a family budget, the next Labour Government will reduce your power bill, boost businesses and the economy, and create the jobs that New Zealand needs.

David Shearer is Leader of the Labour Party and Leader of the Opposition in Parliament. The above article is exclusive to Indian Newslink. In the picture appearing here, he is seen announcing his Party’s Power Policy with Finance Spokesperson David Carter in Wellington on April 18, 2013.

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