Electricity sparks Parker's political ambitions

National's reforms of the electricity industry "incensed" David Parker so much that he decided to do something about it.

Indeed, it was one of the reasons behind the Labour list MP's entry into politics in 2002.

Now, as the new Energy Minister, he is in the hot seat with the jury still out - a decade on - on the success of those electricity changes.

National wasted no time in attacking the appointment of a mere second-term MP to the critical energy and transport portfolios as well as Attorney-General.

But Labour is obviously hopeful Parker's experience in the relevant fields of law and business as well as the ability and energy he demonstrated during his first term will give him as good a chance as anyone at getting to grips with the knotty complexities of the power industry.

The Roxburgh-born, Dunedin-raised 45-year-old has been involved in business since an early age through his family's ventures. But he also showed some activist tendencies early on. While completing his commerce and law degrees at Otago University, he co-founded the city's community law centre, which provided the model for similar organisations throughout the country.

Parker said his legal career began with general law before he moved on to court work, including stints as a duty solicitor and in family and environmental law.

After a couple of years overseas, he worked at the Queenstown office of large South Island law firm Anderson Lloyd, specialising in Resource Management Act law. He returned to the firm's Dunedin office to work in civil litigation, eventually becoming a managing partner. After a few years, he resigned from the partnership to pursue business interests but remained with the firm as a consultant until the 2002 election.

Parker's businesses included a successful late-night cafe, a not-so-successful renovation of Dunedin's St James Theatre, work with pioneering biotech venture capitalist Howard Paterson and a burgeoning fund management company.

Parker likes to talk about the character-building experience of the ill-fated theatre venture.

"I always go into that. ... I've always made it clear that I have been an entrepreneur and I have been involved in many, many different ventures, but I've skinned my knees and I have failed."

The "atmospheric" St James was in danger of being bowled for a carpark "so myself and four others, including my wife, bought it ... That was an unmitigated disaster".

Cost overuns, operating losses and management problems meant the venture turned into "a terrible experience". Luckily, he was able to pay a few bills with more law work and other business ventures such as forestry and fund management.

His company, Fund Managers Holdings, accepts funds from investors and lends them out in mortgages.

"It's a very, very secure and conservative form of investment."

The company started with $7.5 million in funds. These days, it has more than $800 million under management. Parker remained a director of the company until his resignation effective yesterday.

The new minister becomes animated when talking about his business relationship with Paterson, "a rare and wonderful person, absolutely inspirational".

He got to know Paterson while at Anderson Lloyd, where he provided him with advice on competition law.

"When Howard started embarking on his biotech ventures, at a time when the Nasdaq was steaming, he offered me what started as a part-time job and quickly turned into full-time work."

His time with Paterson involved "sleuthing through all of the Crown research institutes and the universities", identifying commercial opportunities and then "putting corporate structures around them".

"The one I probably had the most involvement with was Blis Technologies, where I was centrally involved in the negotiation of the deal with the university and then became its founding general manager, taking it from start-up to its float on the main board."

Parker said working with Paterson, who died in 2003, was "fantastic fun".

"He just moved so fast. 'Deal a day, David, deal a day', that was his mantra. He just had this life force and vitality that carried along other people with him.

"Although that was really fun, what was really most stimulating were the philosophical discussions about moral and political issues."

But despite his work with the charismatic multimillionaire and his own successful ventures, Parker says his upbringing left him with an "egalitarian set of values" that, along with what he sees as poor economic management by National, informed his political allegiance with Labour.

"I don't like to see the gap between the rich and the poor growing too quickly and ever larger. I absolutely believe in the prime importance of quality health and education publicly provided through taxes."

He rubbishes the notion that National is the more business-friendly of the two major parties.

"The history of the past two decades shows that the most fiscally responsible governments have been Labour.

"Who was it restructured the economy in the 1980s when National left it in disarray?"

Although he believes the pain experienced by New Zealand following the economic restructuring of the 1980s was unavoidable, he said it was prolonged in provincial areas into the late 1990s unnecessarily by National's "austere economic policy settings, which were too harsh".

The past three years had seen the Labour-led Government make "substantial progress" for business.

Parker said that "like just about everyone else in Otago", he was "incensed" by the way local communities were forced to sell off their locally owned electricity assets in a hurry under National's reforms of the industry in the 1990s.

"Local council-owned companies were plundered by middle men who made tens of millions of dollars at the expense of the communities who'd been forced to sell them quickly and at the expense, eventually, of consumers."

Before the reforms, most of the lines, retailing and generating assets in the south, excluding the big schemes, were locally owned "and it had worked. For a hundred years lights hadn't gone out and prices were reasonable."

As Energy Minister, Parker is unlikely to try to turn back the clock and he says he's in favour of an unregulated economy "as far as possible".

Still reading his briefing papers, Parker was this week playing his cards close to his chest.

"Some level of regulation is absolutely unavoidable in any economy ... but you have to take care not to over-regulate.

"From my business background, I'm acutely aware that market dominance and monopoly-like powers are and can be pernicious."

But does he see that in the electricity industry right now?

"I don't make a conclusion to that effect, but I think for me one of the questions that I want to ask, and it's asked by plenty of the large business consumers of electricity and small business consumers and small domestic consumers, is do we have real competition in the wholesale electricity generation market and the retail electricity market?

"I'm asking the question at the moment, because I think there is an issue that needs to be investigated, it needs to be thought about again.

"But I'm not saying that it isn't competitive. I just say that it's not so clearly competitive that we can take it for granted that it is."

David Parker

* Labour list MP.
* Minister of Energy, Minister of Transport, Minister Responsible for Climate Change Issues, Attorney-General.

Family

* Born 1960, Roxburgh, central Otago.
* Married with three children.
* Leisure activities: Social soccer, skiing, tennis, film and art.

Education

* BCom, LLB, University of Otago.

Previous work history

* Chief executive, Blis Technologies; founder/director, Fund Managers Holdings; Percolator Cafe.
* 1982 to 2001 barrister and solicitor, litigation partner with Anderson Lloyd.