5. Hon Dr NICK SMITH (National—Nelson) Link to this
to the Minister of Energy
Did the Government promise Roy Hemmingway that the Electricity Commission would be independent of the Government; if so, why has this, in Mr Hemmingway’s words “not turned out to be true”?
Hon DAVID PARKERHon Dr Nick Smith Link to this
Is the Minister telling the House that the statement by Mr Hemmingway: “When I came to New Zealand three years ago, I was promised that the Electricity Commission would be independent of the Government’s wishes.” is a lie?
I am saying that the Electricity Commission is able to take its day-to-day decisions independently, but it has always been bound to give effect to the Government policy statement.
Hon Dr Nick Smith Link to this
Can the Minister confirm that last year Minister Trevor Mallard pressured the commission to seek alternatives to the Waikato line, so as to deflect political pressure at the time of the election, but that after the election Ministers pressured the commission to get on and approve the line; and is that blatant manipulation of the commission not just further evidence that this Government will break any law and bully any independent statutory officer to cling on to power?
Madam SPEAKERWould the member please be seated. We will hear the answer, please, so that the Minister does not have to repeat it.
No, it is not. The Hon Trevor Mallard quite rightly directed the Electricity Commission to considers alternatives. This Government still supports that course.
Maryan StreetHow does the Minister respond to suggestions that he has stacked the board of the Electricity Commission in order to push through the Waikato upgrade decision?
I reject that suggestion, too. The Government’s only appointment to the Electricity Commission in the last 3 years has been the very competent Hon Stan Rodger. His appointment stated he will not be participating in the Waikato upgrade decision. I also point out that his appointment—just like that of the Rt Hon Jim Bolger to the gas industry regulator—was uncontroversial. Finally, it is also pertinent to remember that the four other commissioners who have served with Mr Hemmingway remain.
Hon Dr Nick Smith Link to this
Why should New Zealanders have any confidence that the decisions of the Commerce Commission, involving hundreds of millions of dollars, in relation to Vector will be able to be made independent of the Government, when its fingerprints are all over the workings of the Electricity Commission?
Because the Commerce Commission has statutory independence from the Government—it is actually a bit different from the Electricity Commission in that regard. I further point out that the reality here is that once every 3 years someone in my position has to make a decision as to whether an electricity commissioner is appointed for a further 3 years. I made that decision because I decided it was unwise to appoint Mr Hemmingway for another term. I take responsibility for the decision and believe it to be the correct one.
How does the Minister respond to those who say that because he has not appointed Mr Hemmingway for a second term, no one will want to chair the Electricity Commission?
The chair’s $300,000 salary is substantially more than what a university professor is paid. I expect there will be significant interest in this prestigious role.
Hon Dr Nick Smith Link to this
Will the Minister—noting the importance of independent statutory offices like the Electricity Commission to the integrity of Government—initiate an independent inquiry into the very serious accusations made by Mr Hemmingway yesterday of interference, of politicisation, and of pressure from Ministers, so that the public might know whether it is Mr Hemmingway or him who is telling the truth?
No, I will not. It is the responsibility of Governments around the world to appoint those who participate in, and are chairs of, regulators. That is all that has happened here.
Hon Dr Nick Smith Link to this
Does the Minister agree with the statement made by Mr Hemmingway yesterday—given that he was handpicked by Labour, and given Mr Parker’s own statement that he has a “huge depth of knowledge of electricity issues”—on radio that Labour’s policies would drive up electricity prices unnecessarily and that the Government’s policies were a “confusing muddle”?
Of course, it is somewhat ironic that that member who has just resumed his chair actually opposed the creation of the Electricity Commission. We already know from the draft Electricity Commission decision that it will carve substantial costs from the Transpower proposal, however it proceeds.
Hon Dr Nick Smith Link to this
How can the Minister retain any pretence that the Electricity Commission is independent of the Government—noting the importance of that—when the Government owns over $10 billion worth of electricity State-owned enterprises; and is not the Electricity Commission now just a poodle to be used as the Minister’s plaything?
No. The duty of the Electricity Commission is set out in law as being to give effect to the Government policy statement.
Peter BrownWhat is the Minister’s view on the assertion being made by some that, in the interests of independence, it would be better to dispense with the Electricity Commission entirely, and to have its duties and functions undertaken by the Commerce Commission?
The Government is looking at what the relative roles of the Electricity Commission and the Commerce Commission should be. It is, however, absolutely clear that more regulatory oversight is required for lines companies that are absolute monopolies—including Transpower—than was the case back in 1998, when they were left unregulated to plunder the country.
Hon Dr Nick Smith Link to this
How was it fair for the Minister yesterday to justify sacking Mr Hemmingway on the basis of the tensions between the Electricity Commission and Transpower, when the Government itself has been the cause of those tensions by pressuring the commission last year to kick the Waikato line project for touch during the election campaign, and then, post-election, changing tack and pushing it as hard as it could; and is not Mr Hemmingway just being used as a scapegoat for Labour’s political shenanigans?
Not at all. The breakdown in the relationship between Transpower and the Electricity Commission at the most senior levels is something that neither organisation should be proud of. It was not caused by this Government, but we will fix it.
Hon Dr Michael Cullen Link to this
Has the Minister seen any reports indicating that the Dr Nick Smith who has been asking the questions today is the same Dr Nick Smith who urged the Government to do something to resolve the issue of transmission supply into Auckland, and that his benchmate, Judith Collins, is the same person who called on the Government to stop the transmission line upgrade into Auckland?
Hon Dr Nick Smith Link to this
I raise a point of order, Madam Speaker. Not only are the statements of the Deputy Prime Minister untrue; they are also totally beyond the responsibilities of the Minister. I know he is a new member.
Having listened to the question, I say that there is responsibility as to whether the Minister does something.
Hon Dr Nick Smith Link to this
I seek leave of the House to table a statement made by the Minister on 15 July 2006 that he was pleased with Mr Hemmingway’s performance, and that Mr Hemmingway had in-depth, expert knowledge of the electricity sector.