On Tuesday 16th April in Wellington Dr Geoff Bertram presented a very interesting paper on "Asset Values and Regulation." He argues that during the last decade "excess monopoly profits grabbed by deregulated electricity networks, gas pipeline owners, airports, and ports were crystallised as revaluations of their fixed assets."
He explains his conclusion in some detail, including the various models used to establish asset value in the corporatisation and sale of the assets led to capture of excess profits. Discussing regulation of natural monopoly providing an essential service, he argues the regulator's first task is to set a value for the Regulatory Asset Base, on which prices can be set. He discusses the options and the history, and the implications for consumer prices. He demonstrates the sharp rise in gentailer asset value and concludes that as of 2012 the revaluations totalled over $10 billion, which is not justified by competitive edge or special advantages, but is entirely due to the ability to capitalise excess profits secured from price-gouging, mainly of residential but also small industrial and commercial customers.
Two other presentations from Dr Bertram cover some of the same issues and can be found under his name in the resources section of the website.
An earlier presentation by Peter Harris, Dick Werry and Jim Turner examined the difference in costs over a ten-year period between the water and electricity networks in the Wellington region. The water network remained in public hands and the electricity network was privatised. The costs of the water network rose 17% over the ten years 1999-2010; the costs of the electricity network rose 295%! The authors conclude the electricity rise was largely to service the grossly inflated capital value.
These presentations are all available in the Resources section of the website.
Previously on our voyage, our our speakers used the analogy of New Zealand as the Titanic to share how they viewed the state of the New Zealand economy; headed towards disaster, but with the distinct advantage of time and knowledge to prepare for impact or avoid the economic and social icebergs altogether.
They shared their wisdom built up through years of collecting data, distilling information and acquiring knowledge with the audiences of hundreds at the Q Theatre in Auckland and Downstage in Wellington, suggesting changes that could take place to steer the course of the ship through the path of least resistance.
On the 3rd of March 2013 we are bringing the seminar to Christchurch. Our previous speakers, Rick Boven, Bernard Hickey, John Walley and Selwyn Pellett will be joined by Bronwyn Hayward, Senior Lecturer at University of Canterbury. They will evolve the message from one grounded in illustrating the extent of the damage to one grounded in presenting ideas and solutions for better, fairer and more opportune future for this country.
Join us at the Court Theatre on Sunday March the 3rd. Doors open at 1.00pm for a 1.30pm sharp start. The wonderful Michele A'Court is going to push the boat out and set us off on our voyage and media commentator David Slack will steer the ship. You are invited to join the speakers afterward for refreshments and discussion.
Book your free ticket here.
On December 3rd Lori Wallach and Jane Kelsey delivered presentations on the Trans-Pacific Partnership Agreement (TPPA) to a large audience in Auckland. They identified TPPA as one the biggest political issues facing New Zealand, Jane focusing on the NZ implications of the agreement and Lori on the implications of US participation.
While many specific concerns were raised, the overall picture was one of what amounts to structural and even fundamental constitutional reform being imposed on NZ without any democratic input. Clearly, the agreement affects far more than trade, potentially constraining the social and economic policy options of future NZ governments. Although exit provisions may exist, associated costs mean they are unlikely to ever be triggered. Above all, the nature and extent of these issues has been difficult for observers to assess because of the secrecy and lack of democratic accountability inherent to the negotiating process. Seemingly, only those with the most to gain have been officially privy to the details.
We have had a number of inquiries asking whether the seminar was recorded and available. Sorry, no. However, you can find much of the material referred to at:
You can download fact sheets on the TPPA's impact on medicines, environment, finance, GM, investment and tobacco & alcohol. There also Youtube videos of the these speakers on the same topic available here for Jane and here for Lori.
What they won't tell us and why we should be worried about the Trans-Pacific Partnership.
On December 3rd, two of the world's foremost critical voices on international free trade and investment agreements — Lori Wallach and Jane Kelsey — will deliver presentations and take questions on the Trans-Pacific Partnership Agreement (TPPA), a treaty being negotiated between the United States, New Zealand, and 9 other countries on the Asia-Pacific rim.
The TPPA is one the biggest political issues facing New Zealand, but one of the least publicised and least understood.
It involves eleven Asian and Pacific-rim countries — including the United States — and it being negotiated in secret with no possibility of public oversight. If it goes ahead, we risk major damage to our economy, our environment, our health, and the ability to shape our own future.
The presentations are at 6.30pm, 3rd December, in the Old Government House Lecture Theatre, University of Auckland. You can register here.
Brian Easton introduced this Fabian series in Wellington on Monday 10 September. The theory of light-handed regulation, "the notion that the market can be left to self-regulation by private interests with a minimum of public regulation through law and supervision" that took hold in the 1990s was based on absolute faith in markets, coupled with an expectation that reputational threat, the possibility of damages, or faith in the moral behaviour of business would ensure that business behaved responsibly.
It often takes time before the effects of irresponsible behaviour surface, and the consequences may be very serious. Brian Easton give several examples of where this faith has been misplaced, and the result has been financial loss, accident and death. He argues that while the list is selective "we need to see the regularities across a wide range of instances and address the mindset of light-handed regulation," and offers some principles that may set a context for regulating an economy.
Brian's paper may be found in the the Papers and Presentations section of the site. Further seminars in Wellington will cover work safety, finance sector, energy sector and building and construction. Details are in the Upcoming Events section.
- Recent Fabian events
- A Tale of Two Networks
- Trans-Pacific Partnership - High Stakes in Secret
- How the Right uses Rhetoric to Influence Education Policy
- Navigating an Uncertain Future - the Movie!
- The Important Thing About Income Inequality is What You Do about it – Exploring the Path to Reducing Income Inequality in Aotearoa New Zealand
- When are Assets Sales Appropriate?
- The Credit Downgrade and the Banks
- What should be our Economic Priorities?
- The Search for Solutions - Fresh Ideas for a Productive Economy