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Electricity market's move to Australia a blow
Electricity market's move to Australia - another blow to
NZ capital markets
National's
support for the decision by electricity generating companies
to select the Australian stock exchange ahead of the NZX for
futures trading is another harsh blow to the development of
New Zealand capital markets, Labour says.
"The Government’s support for an Australian-based electricity hedge market – allowing the buying and selling of electricity at a future date to reduce volatility in prices in our domestic electricity market – is a slap in the face for the New Zealand Exchange," Labour's Energy spokesperson Charles Chauvel said.
"The NZX, led by Mark Weldon, has been working hard to set up its own future trading markets. It has been negotiating with Energy Hedge, which represents the major New Zealand generators – Contact Energy, Genesis, Meridian, Mighty River Power and TrustPower,” Mr Chauvel a former Deputy Chair of Meridian Energy, said.
“But Energy Hedge has decided to trade via the ASX, not the NZX, and Energy Minister Gerry Brownlee says he supports the move.”
Labour's Commerce Spokesperson Lianne Dalziel said she believed that the decision essentially undermined the report of the Capital Markets Development Taskforce, which had been established to formulate a blueprint for New Zealand's capital markets.
Lianne Dalziel agreed with the NZX's concerns that an Australian-based market could put up barriers to smaller companies trying to enter the market.
"New Zealand's interests are better served by encouraging onshore energy generators to conduct futures trading via the New Zealand stock exchange.
"These trades relate to New Zealand conditions. They should occur onshore,” Lianne Dalziel said.
Ms Dalziel and Mr Chauvel said National’s support for the new market’s move to Australia only added to its record of undermining New Zealand capital markets.
“National talks a good game but in its 18 months in office so far it has ceased pre-funding the New Zealand Superannuation Fund and cut Kiwisaver contributions, both of which develop capital for investment in New Zealand.
“Supporting the setting up across the Tasman of this futures market again raises the question to National stated intention of ‘broadening and deepening New Zealand's capital markets’."
ENDS
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