The recent announcement from Labour and the Greens with regard to setting up a single national buyer for wholesale electricity to curb the excessive profits of the power generators, (who by the end of the current round of partial-privatisations will overwhelmingly be in the private sector), was certainly a shot across the bows of the National led government.

On the day it was announced, prior to the float of Mighty River Power, stocks in the privatised Contact Energy dropped as investors understood that the days of rorting profit out of ordinary New Zealanders may be over.

John Key likened the move to that of Soviet Russia and also said that this was a far left policy. A right wing columnist in the New Zealand Herald suggested that Chavez was alive and well in New Zealand. With comments like this the reader might believe that capitalism was hanging by a thread in New Zealand and the workers were about to rise the red flag over the Beehive. The truth of the matter is Key had misjudged the Labour Party leadership as he thought that the leadership would not fundamentally challenge the free market orthodoxy that this privatisation was based on. This policy announcement came as a consequence of the pressure that is building up from the rank and file members of the Labour Party for a change in economic policy direction.

When the policy is looked at in the cold light of day - what is apparent is that this is a market led policy for a failed electricity market. Unfortunately this was the failed electricity market used by the last Labour government to hike up prices to pay the Crown every increasing dividends at the expense of workers who found it increasingly difficult to pay their bills. 

National understands that such a rort needs to be privatised so their rich backers can monopolise these excessive profit, which saw the ruse of popular capitalism being rolled out under the guise of Mum & Dad investors.

But this time less than 3% of the population bought shares in Mighty River Power. This was half as many as when Contact Energy was sold in the 90s. We can safely say that popular capitalism is as dead as one of its main advocates Margaret Thatcher!

Additionally the share price, after the initial upswing, is now wallowing at or around its opening price on the NZX. Recently the share price has even dropped below the float price. Certainly a tepid response to the Meridian float is anticipated as the privatisation policy is overwhelmingly opposed by the public. The government is set to lose $180 million in lost revenue over the next five years as a result of privatisation.

The policy of the Labour and Greens is a step in the right direction but it does not go far enough. A genuine socialist response to the issue is needed. What is required is a policy of immediate renationalisation of privatised state assets when the next Labour government is re-elected. 

Additionally the present policy of nationalisation based on a capitalist model must be repealed. This policy allows the present nationalised industies to be used as milch cows from which the capitalists can make vast profits from.

A nationalisation policy needs to be based on workers control and management of the commanding heights of the economy so that the wealth created in society is placed under democratic workers control. This linked to a plan of production for society as a whole is key to rising the red flag permantly over the Beehive!

Socialist Appeal says

• Labour to renationalise all assets that are privatised
• For workers control and management of industry
• Labour must nationalise the commanding heights of the economy