POLITICS : Let There Be Light

This time next year we may well be getting used to power cuts. That could be critical to Labour’s 2008 election chances. The politics of electricity are the politics of rights. People have long since assumed right to electricity on the basis of need akin to the claim to food.
So governments get no kudos if the lights, heaters and hot water stay on. But they get the blame for interruptions.
So if there are power cuts it won’t matter that National governments under-invested in electricity and other infrastructure in the 1990s. Labour is in charge now.
Nor will it matter that markets and price signals did not produce the required investment. In the public mind, if markets didn’t do the necessary, the government should have. That is part of what governments are for.
Nor will it matter that part of the problem is that economic growth from 2001 to 2005 was far faster than anyone predicted. Governments are supposed to be all-seeing – though in this case it would have had to foresee house bubble and householders’ willingness to borrow against rising value to have imagined the splurge of consumer spending which continued driving GDP long after the early 2000s export boom had worn off.
Nor will it matter that the cabinet did begin to grasp the magnitude of the problems in 2003 and has been scrambling ever since to shovel money into infrastructure to catch up with demand. The more it looks as if it is scrambling, the more it will look as if it is the culprit.
To appeal to the future does little to assuage the present. That was Labour’s problem in the 2005 election with Auckland’s roads. The money already being spent and the bucketloads more of future spending promised during the campaign counted for little against the actual deficit as Aucklanders saw it.
By 2008 there will be physical evidence of roads built and being built – but that will count as negative for the government rather than build plus.
By 2008 electricity generating capacity should have caught up with demand, perhaps even got bit ahead. But will the grid be capable of carrying that supply continuously to consumers?
There have been number of near blackouts over the past couple of years and in June there was spectacular one in Auckland. It was freak breakdown but if maintenance and rebuilding had been up to speed the freak would likely not have happened.
So, just as the cabinet scrambled to lift generating capacity after the problems of the early 2000s – even abandoning its lofty aims of increasing renewables’ share – it is now scrambling to lift investment in the grid.
It wasn’t scrambling last year. Quite the opposite. It kicked the new Waikato transmission line into touch before the election to draw some electoral poison. That doesn’t mesh with its newfound urgency.
Then for good measure the Government’s own regulator declared the line premature on optimal investment criteria.
But optimal investment doesn’t reckon with shocks. Rational arguments that overinvestment has costs just as underinvestment does don’t register with voters. Shocks do.
So how does Labour get out of the trap?
High-flown rhetoric about “economic transformation” won’t do. In pub-and-club-land keeping the power on is not “transformation”. It is business as usual – or should be.
Alleging the other lot would do worse, or at least no better, won’t do either. Being in opposition for third term, National has considerable flexibility in the plausible tacks it can take on attack – failure to ride Transpower, failure to use private funding, failure to put heavy national interest clause into the Resource Management Act, failure to get the regulatory regime right.
In the atmosphere of annoyance and recrimination that power cuts would generate, National could imply with near impunity that it would do better on all those counts.
Labour ministers essentially have two choices.
They can go on asserting there will be power for all next year and try to blame someone else if there are blackouts. Or they can acknowledge there might be power cuts and talk about ways to deal with that eventuality.
The first way just ensures the blame will stick if there are cuts. The second way just might earn point or two for being upfront.
It’s the difference between tactics and strategy. But strategy is the luxury of new government. And this one is in its third term.

Colin James is Management’s regular political writer.
[email protected]

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