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State Owned Enterprises

SOEs Gouge Kiwis

Libertarianz leader Richard McGrath today said that privatisation is a better guarantor of competition and lower prices than the SOE model, which has seen three state-owned power companies turning huge profits by apparently overcharging retail customers.

“The Commerce Commission has pointed the finger at Mighty River Power, Genesis and Meridian who, it says, pushed wholesale prices up 18% higher than they needed to be,” said Dr McGrath.

“Power generation is not a core function of government, and these companies should be sold off,” he added. “The market should be fully privatised so that new companies can increase competition and drive prices down.”

“The Resource Management Act should also be abolished to streamline the construction of hydro-electric dams, nuclear power plants, wave farms and other modes of electricity generation, including small-scale ventures.”

Dr McGrath suggested that while state-owned enterprises were an improvement on the old government departments whose wastage, inefficiency and poor service were the stuff of legend, they had now passed their use-by date.

“All SOEs should now be sold off. History has shown that sustainable low prices are more reliably achieved in a free market where it is easier for new players to set up -- and where the shareholders are private individuals, not politicians.”

ENDS

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