Fran O'Sullivan: Political capital costs Shearer market trust

Labour and Greens now need to flesh out rushed power policy

Whoever dreamed up Shearer's message is playing smart politics. Photo / Mark Mitchell
Whoever dreamed up Shearer's message is playing smart politics. Photo / Mark Mitchell

It didn't take David Shearer long to zero in on the million dollar-plus pay packets of chief executives running the country's power companies as the next stage of his campaign for government control of the market.

Shearer's decision to target the executives while his deputy Grant Robertson is trying to reassure financial markets that Labour is not into full-steam ahead central planning mode is typical "bad cop, good cop" politics.

It will work for Shearer in the short-run. But the 2014 election is so far away that Robertson's attempt to defuse opposition to the pledge to set-up NZ Power to control the power market runs the risk of back-firing if the party can not maintain the rage against power prices.

Yesterday, the Labour leader took to Facebook to push out the message: "The CEOs of New Zealand's 5 big power companies were paid $6.6 million in total last year. New Zealand's electricity market isn't working. Labour's NZ Power will fix it."

Whoever dreamed up Shearer's message is playing smart politics. They will be taking a punt that the faceless black figures shown on Shearer's campaigning advertisement are unlikely to slug back.

And that while plenty of punters will see through the cheap politicking, enough others will agree with the central proposition that the reason why they've not been getting cheaper power bills is because the CEOs are banking a million bucks apiece to give added ballast to the campaign.

Shearer's targeting of the chief executives came after Labour's fellow-travellers slagged them off as rent-seekers or doing a job that any smart supervisor could do. Contrary to what such critics say, these companies are complex beasts. And changes to the electricity market need much more sophisticated consideration than Labour has so far offered.

But that does not appear to be uppermost in the minds of either Shearer or his finance spokesman David Parker for now.

And why would it be when what they really needed to do was to create a wedge against National to stop the Greens from encroaching on Labour's political base? What is interesting is how Labour's personal targeting is not confined to power company bosses.

Yesterday, MP Trevor Mallard couldn't resist slagging off Trade Minister Tim Groser for chalking up $250,000 in travel expenses during the first quarter of 2013 while he chased the plum job in global trade: director-general of the World Trade Organisation. And insinuating that Groser's colleagues' motivations in championing him for the WTO role were "not honourable". (In other words they wanted rid of him).

Groser is eminently qualified for the role. It's certainly not been the vainglorious pursuit that Labour implies. He is a former chair of the WTO's agriculture negotiations. The point is that no one can simply apply to be the WTO boss. Candidates have to be nominated by the member states. As indeed Groser was along with eight other candidates.

The Trade Minister has chalked up the flying hours pursuing his candidacy. But the amount spent on Groser's campaign pales in comparison to that spent by the two candidates who will go through to the final round: Brazil's Roberto Azevdeo and Mexico's Herminio Blanco.

For starters, Groser had to fly on commercial routes. Brazil's president had put Government planes at Azevdeo's service. Blanco also had the full weight of the Mexican Government behind him.

Labour won't win across-the-board support by being mean-spirited. Particularly when it is obvious that a previous National Government funded former Labour MP Mike Moore's successful tilt for the WTO role (he had to share the term).

But Labour's decision to play a more ruthless game has clearly enabled it to finally bank some political capital of its own. In Shearer's case this was sorely needed as his brand had become subsumed to the more dominant positioning of Greens leader Russel Norman.

Labour and the Greens are now broadly singing from the same song sheet in a number of areas.

Both parties back a comprehensive capital gains tax. The detail of their overall taxation policy is broadly in alignment. Higher income earners can expect to stump up more tax if Labour and the Greens go into a coalition Government after the 2014 election.

Labour wants to introduce compulsory superannuation via KiwiSaver. It is unclear whether the qualifying age of universal superannuation will also be raised to 67.

But the fact that Robertson had to reiterate the message that "as we said on the day we launched NZ Power, we have no plans to intervene in any other markets", indicates there is now broad distrust about the party's plans within the financial market sector.

If Labour wants to turn that around it needs to flesh out the policy that it rushed out less than 10 days ago.

Otherwise its motivations will remain suspect to a sector whose support the economy will need if Labour and the Greens take power next year.

- NZ Herald

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Head of Business for NZME

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

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