This past week has seen Wellington’s ruling coalition of chaos in fully dysfunctional mode. In the last six days, the ACT Party and New Zealand First have had two strikingly different responses to two strikingly similar problems in two key sectors of the economy: supermarkets and energy companies.
In both those sectors, the incumbents enjoy such a lopsided amount of market dominance that this deters new entrants, delays innovation, reduces competition, and results in price hikes and levels of profit-taking that neither shoppers nor energy-using firms (e.g. Winstone’s lumber and paper mills in Ruapehu) can afford to pay.
A similar structural problem exists in both sectors. Supermarkets are being allowed to control both the wholesale and retail arms of the industry. Gentailers have been allowed to control both the generating of electricity and the retailing of it. It is not rocket science to conclude that the role of government should be to step in and protect vulnerable consumers and businesses by splitting these roles. Such action is the only remaining tool left in the toolbox to foster meaningful competition.
But here’s the thing. David Seymour of the ACT Party is promising to fight to prevent a regulatory solution to how the supermarkets
continue to use their market dominance to worsen the cost-of-living crisis. Seymour though, has never meet a regulation he didn’t want to beat into submission, and he’s not changing his spots: “If it’s really true that all we need is a bit more regulation to make groceries affordable, we should already have the cheapest groceries on the planet.” (Reality check: for a long time, New Zealand has had one of the least regulated, least competitive, most profitable supermarket sectors in the developed world.)
In stark contrast, Shane Jones is talking a tough regulatory game about the energy companies, via a “review” of the electricity sector he is conducting with Simeon Brown. On RNZ yesterday, Ingrid Hipkiss asked Jones the key question: is he going to split up the retailers and the gentailers? Jones replied:
I would have done that three years ago had I had the oppportunity. The party I come from has always wanted to do that. And it’s distressing to hear people from the competitive end of the retail sector say they’re pulling out of the retail market because of the over-reaching dominance of these big players, who own too many of the customers. So that will be one of the options we ask the experts to look at.
Right. So there’s one part of the coalition government promising to push back against any regulatory solution to market dominance and lack of effective competition, while another part of the coalition government is all for it, and always has been. What will happen when these issues arrive at the Cabinet table? My bet would be that Seymour will trump Jones, in all senses of the word. Because Christopher Luxon and Nicola Willis have Seymour’s back, every time. He’s their chief flak-catcher for divisive policies that they both advocate, but where National wants to retain a level of plausible deniability.
Bills for the Treaty Principles Bill
The Treaty Principles Bill is a spectacular example of this centre-right tag team in action. Sure, the conflict-addicted mainstream media has done its best to portray this is as a “battle” between National and ACT, in which neither are getting what they want. Dream on. It is a collusion, a good cop/bad cop routine whereby National solemnly promises the public it will kill the Bill, while giving ACT (a) a parliamentary platform and (b) a $4 million paid political advertisement for ACT’s toxic views on race relations.
Ultimately, Seymour won’t care a toss when the Bill is finally voted down. By then, ACT will have been in the headlines for six months as the heroic champion of the anti-Māori backlash. This process will constitute a priceless recruitment opportunity. Winston Peters ate ACT’s lunch by fraternising on the parliamentary lawn with the neo-Nazis and conspiracy theorists. Well, the Treaty Principles Bill will enable ACT to enjoy payback time, as they cheerfully set about
gutting New Zealand First’s redneck support base.
There are no good options here for New Zealand First. Yet arguably, it should probably try to vote the Bill down at first reading, on the grounds that it is a flagrant waste of taxpayer money, a bet on a hobbled nag, a subsidy for losers etc etc. Peters, however, is too busy overseas and Jones is too inept to devise such a response all by himself.
Footnote One: Couldn’t the government have saved the jobs at Winstone’s pulp and timber mills by – say – offering bridging money until the international commodities prices improve, and /or the exchange rate provides Winstone with some breathing space – until the cavalry led by Simneon Brown and Shane Jones come to the rescue on energy pricing?
It could have done so, but it chose not to. In the interview with Hipkiss, Jones himself pointed out that he has his $1.2 billion regional development investment fund. Hipkiss also cited the $600 million in annual dividends that the government takes from the energy companies. Either option, she indicated, could have been utilised, surely. Nope, not according to Jones. Allegedly, there just isn’t enough “fiscal bandwidth” to come to the rescue.
How times do change. A decade ago, then National Party PM John Key came to Rio Tinto’s rescue with a $30 million handout, and the energy companies arranged a sweetheart supply deal of electricity at reduced prices, a package tailored especially for the impoversished multinational:
Mr Key defended the payment…”If Tiwai Point had closed straight away then hundreds and hundreds and hundreds of jobs would have disappeared…
So as always, it comes down to a conscious choice, based on a political calculation. The 200 workers at Winstone’s mills were deemed disposable, while previously, the hundreds of jobs in Southland were not treated the same way. Key could arrange cheap electricity for Rio Tinto, but Luxon was unable, (or unwilling) to do likewise for Winstone, and for the community that depended on Winstomne’s mills for their livelihoods.
Footnote Two: CTU economist Craig Renney has (conservatively) costed the six month first reading/select committee process for the Treaty Principles Bill at $4.15 million. Renney outlined to RNZ how he arrived at that figure. Along the way, he spelled out how Seymour and the government could halve that figure by minimising the taxpayer-funded inputs to the drafting and submissions process.
Needless to say though, neither Seymour nor Luxon seem to be at all interested in practicing the sort of efficiencies that they have demanded of the public service, at the cost of nearly 7.000 jobs.
Harris v Trump
Even Fox News conceded their man had a bad night, and that the race would now tighten as a result. At this point, the main problem for Kamala Harris is not Donald Trump, but her proximity to Joe Biden. Fairly or otherwise, 60% of Americans are telling pollsters they want a change from what the Biden administration has been delivering. For obvious reasons, Harris is perceived to be part of that problem, especially when it comes to the cost of living.
Still, as polling analyst Nate Silver says on his Silver Bulletin site, she got the debate she wanted. Wisely she ignored this sage advice offered by a prominent liberal pundit on the eve of the debate:
Forget all that media-hyped stuff about provoking her opponent into saying something silly. If she does that, she runs the risk of appearing manipulative.
Instead…Trump helplessly jumped at every single bait she offered. After about three minutes of relative normality, Trump behaved, as someone said online, like a gremlin fed after midnight. As per usual, Trump also lied incessantly including his repetition of a weird claim made previously by J.D. Vance, that immigrants from Haiti have been stealing and eating the household pets in Springfield, Ohio. (Surely, that was in Shelbyville.)
On abortion, the contrast with Biden’s incoherent dribble during the last debate could not have been more stark. Still, as Silver concluded, if Harris doesn’t improve her poll ratings post-debate, it may be that America is simply not interested in buying what she is selling.
Footnote: Fox has now pivoted into blaming the ABC moderators for Trump’s dismal showing- and Trump himself is bleating that it was a “three on one” contest. How truly pathetic. David Muir and Linsey Davis gave an incisive, meticulously-researched example of how to moderate a presidential debate.
They posed tough, specific questions to both Harris and Trump, often using the candidate’s own words, and they fact-checked on the fly in a respectful and neutral tone. This example of how to do a very difficult job deserves to be taught in journalism schools.