Just as hip-pocket issues surface, Nats implode
Luck can come from unexpected places. Noone in the Beehive can have possibly imagined a gift like Jami-Lee Ross. The fallout from Simon Bridges’ decision to order an inquiry into who leaked his travel expenses had looked for weeks to be set to turn ugly.
Labour supporters can clearly remember a series of unpleasant episodes when the leaderships of Phil Goff, David Shearer, David Cunliffe and Andrew Little were unravelling. None of that compares to what National, which has managed to stay so united for so long, now faces.
Ross appears to have set off such chaos that even if the unhappiness with Bridges’ leadership – which Ross claims to be taking hold within the caucus – is overstated, National will struggle to operate as a functioning Opposition for some time.
Even if he is to survive as leader, Bridges will struggle to assert his authority while the serious accusations which Ross has put to him are, presumably, investigated by police.
He failed to firmly deal with the allegation at his first opportunity when he fronted up to reporters shortly after Ross’ marathon press conference.
Even if the questions National puts to Labour in coming weeks are difficult, they will have less of an impact on the Government’s morale, given the Opposition’s internal ructions.
National’s problems come just as it appeared to be gaining ground on the one kind of issue which can unite voters: those that impact our wallets.
Surging petrol prices have been dominating the news and this week this could have continued as the Government races to change the Commerce Act so it can instruct the Commerce Commission to investigate.
Official figures released yesterday showed that petrol is pushing up the cost of living, with some predicting inflation could reach 2.5 per cent next year. While this is low by historical standards, it would represent a seven-year high and a hit to households, especially those on fixed incomes.
There could be worse news to come for the Government on energy. A leading energy analyst has highlighted issues emerging which could affect both gas supplies and electricity prices.
Woodward Partners’ John Kidd warned this week that the stress on the energy sector had reached a point where it ‘‘presents a direct and immediate risk to NZ’s economic performance’’.
The problem, as Kidd sees it, is falling storage in New Zealand’s hydroelectricity systems, combined with problems at several gas fields, including the largest, Pohukura, which has cut gas production.
This has caused the wholesale price of gas to surge, which could lead to some types of manufacturing cutting back on production, as well as putting pressure on household bills. It will inevitably have a further impact on power prices, as gas is often used to generate electricity.
But for the Government, the most embarrassing problem could be what the electricity sector does next to keep the lights on. Genesis Energy, an electricity generator majority owned by the Crown, has raised the possibility it may have to start importing coal to cover the possible shortfall of gas to keep the Huntly power station operating.
Although the shortage of gas is not caused in any way by the Government’s planned ban on new offshore oil and gas exploration permits, the emerging situation highlights that for all of our renewable generation, the energy system is always vulnerable.
Kidd, who has been critical of the Government’s energy policy, said the possibility of NZ importing coal ‘‘makes a nonsense of those, including the Government, who continue to maintain that carbon leakage is irrelevant to the debate’’.
Carbon leakage is the idea that in taking steps to mitigate climate change, a country may simply cause more carbon to be emitted elsewhere.
The issue became one of hot debate when officials at the Ministry of Business, Innovation and Employment claimed the Government’s moves on oil permits could lead to higher emissions globally, effectively because NZ’s gas (which can be exported) is cleaner than China’s coal.
It is unfair to link the sector’s current problems to a proposed ban on new exploration permits, as it is unlikely the ban would have an effect on our oil and gas production for about a decade. Energy Minister Megan Woods says the economy has time to transition to new forms of energy.
But timing is important in politics. As the environment select committee this week began hearing submissions on law changes to give effect to the exploration ban, the risks to New Zealand’s electricity supply are in greater focus.
If consumers see electricity and gas bills heading in the same direction as petrol, or if the economy begins to be disrupted by gas shortages, they may wonder why the Government is taking steps which could cut supply later.
There could be worse news to come for the Government on energy. A leading energy analyst has highlighted issues emerging which could affect both gas supplies and electricity prices.