The Insider
Power plays
The electricity industry is rife with gossip about the Government’s review of the sector. Draft terms of reference were circulated before Christmas and comments closed last Friday. The terms of reference are so wide that they have raised hopes among some people, and anxiety among others. Energy Minister Megan Woods has talked about “future proofing” the system to cope with new technology, while NZ First ministers have focused on the price people pay and their dislike of the current regulators (the Electricity Authority). The Greens are focused on renewables and David Parker has strong views about pricing mechanisms. Given the many vested interests involved, much will depend on who runs the inquiry — perhaps a former Energy Minister will be called back to sort it out?
Cash generator
One thing Labour and its political partners will be noting amid the electricity review is the money being made by the partially privatised SOEs which dominate power generation and retailing. Are they the officials’ equivalent of Telecom? Mercury’s third profit upgrade in a year came this week, and while a lot of the dividends will come back to the Government, there will be concern that electricity prices do not reflect costs. Once, large profits were justified on the basis that money was needed to build new generation capacity, but in recent years profits have almost all gone to shareholders, with little incentive to increase supply.
Lay of the land
One SOE which will be more pleased with the change of Government is Landcorp, the state-owned farmer. It has been through various changes in strategy, including a period of rapid dairy conversion in the central North Island, then diversification into niche ventures such as sheep milk. The $2 billion business has never really made much money and the previous Government would probably have chopped it up eventually. Now calling itself “Pa¯mu”, it has rebranded as environmentally sustainable, with a focus on plants and trees, which will certainly please some of its new political masters. However, Treasury officials remain sure the Government will not be getting much return on the $2b in assets any time soon.
Planting puzzle
Landcorp’s newfound love for trees seems at odds with comments from Regional Development Minister Shane Jones, who has bemoaned the lack of land available to start planting his billion trees. But as well as Landcorp, there is the Department of Conservation, the country’s largest land owner. DoC land is not all untouchable National Parks — vast swathes of its holdings are classed as stewardship land and could be used for planting, if there was a will to make it happen. Surely Jones hasn’t thrown in the towel already?
Star gazing
Other Jones comments may come back to haunt him. Jones has said “Halley's Comet will be back” before he met with the iwi-appointed leadership group, the Iwi Chairs Forum. Jones’ comments were in response to the assertion of Ma¯ori rights to freshwater and probably played well among NZ First’s core constituency. However, if he wants trees planted and regional economies boosted, Jones might need to work with iwi to help make things happen. The Forum will be meeting with PM Jacinda Ardern and it is quite likely areas in Jones’ portfolios will come up. Halley's Comet was last here in 1986, and is not expected back until 2061.
Quake fallout
Disruption continues to Wellington’s public sector following the 2016 earthquakes, with the demolition of Statistics House over summer the latest visible sign. The impact on businesses at the Beehive end of the city has been noticeable, with one Featherston St snack operation going into liquidation for the second time since the quakes.
Bring back Jesus
Parliament returns to business next week, and the “Jesus for New Zealand” movement will be holding a rally urging Speaker Trevor Mallard to put Jesus’ name back in the daily parliamentary prayer. Mallard moved to remove references to Jesus and the Queen from the opening of the day in the House, but said he would consult about a fulltime replacement. The old prayer always rested uneasily with some, with its references to a “true religion”. However old traditions die hard, as Mallard is finding out.
Unlucky next
As the political year gets under way, ministerial sweepstakes have opened in various offices. Usually, a Government loses a minister year. Sometimes it’s incompetence or inability to cope with pressure; sometimes it’s self-inflicted scandal or hubris; other times plain bad luck or falling out of favour. As speculation begins, one name comes up more than others . . .