New Zealanders are working harder and spending their money wisely, but they are struggling to get ahead.
One of the biggest problems Kiwis are facing is the relentless rise in power prices.
Since 1997 power prices have risen twice as fast as inflation. The average annual family power bill has gone up by almost $770. Prices here have risen faster than in many of our major competitor countries.
That doesn’t just hurt households, it holds our businesses back and makes it harder for them to compete.
Prices keep going up despite the fact that about two-thirds of our electricity costs next to nothing to generate because the water powering our hydro dams is free, and the dams themselves were paid for decades ago. Even now, when demand is flat, Contact Energy has just announced more price increases.
And National’s plan to sell our assets will only make it worse.
Our electricity market is not competitive and that means power companies have made super profits on the back of Kiwis. That makes it harder than ever for people to pay their bills and keep their homes warm, especially if they are on fixed incomes.
‘We will bring prices down’
This isn’t right and Labour will change it. We will bring prices down.
That’s why the next Labour Government will create a new agency called NZ Power to act as a single buyer of wholesale electricity. This will protect consumers from the rapid prices rises of the past and also guarantee supply. We’ll also introduce a fairer pricing system so electricity companies get a reasonable return, and consumers finally get a fair go.
We expect we can bring down prices by between $230 and $330 a year for the average family. Not only will prices fall, but any future price rises will be far lower.
Lower power prices won’t just take the pressure off households, they also lower costs for businesses and companies.
Independent economists BERL estimate that lower power prices will create over 5000 jobs and boost economic growth by $450 million.
This is another example of how smart, active, hands-on government can help us grow our economy and create jobs.
100,000 families and their first homes
New Zealanders have been doing their bit, and it’s time the Government did its bit too. That’s why the next Labour government is committed to creating new jobs, lowering power prices and helping 100,000 families into their first homes.
Next week National will hand down its fifth budget.
It needs to be a budget that will help hardworking Kiwis get ahead.
That’s what Labour is committed to.