“Well, that’s another nice mess you’ve gotten me into.” One of the great punchlines of early comedic cinematography, owned by Oliver Hardy, who, with his mate Stan Laurel, leapt to prominence in pre-First World War classic Hollywood as the bumbling duo Laurel and Hardy. Today they’re considered one of the cornerstone influences in modern comedy entertainment.

An odd opening paragraph you might say, but there are so many metaphors in there for where New Zealand finds itself currently.

To be us, with all we have, with all our potential, now finding ourselves at a place in history where manufacturing sites around the nation are closing completely, or a best culling significant staff as a result of unaffordable energy pricing and input costs, is arguably tantamount to economic and commercial treason.

Emotive words you might say but the fact is we’re here on the back of our own actions and what can only be described as self-sabotage.

And neither am I levelling the entire blame on the inane ideologically-driven vote-securing announcement made in April 2018 effectively terminating any future for our native gas industry.

I would argue the first absurd act is framing the chain of recent energy events in the context of a small First World country deciding it wants to play in the high-volume low value commodity game, and successive governments being perfectly happy about that. A nation with no people, no scale whatsoever, deciding the road to Oz is paved with milk powder, butter, cheese faceless/nameless ingredients, unprocessed wood, pulp, paper, and even the export of firewood etc. In other words, incredibly low margin businesses that would normally require absurd scale.

The stack ‘em high and sell ‘em cheap game is the one we chose though, and with the severe limitations we have, it then became the role of the government and regulators to ensure the market for locally sourced inputs is set up so those willing to have a crack get the best deal they can.

Of course, one thing we can supply en masse in New Zealand is energy, the globe’s all-time most precious commodity and currency. Hang on though – hydro’s out – no more of that; what we have is what we’ve got. Coal’s out – unless it suits, but not our own, that way we can fudge the narrative to the children. Gas? Nope, not now. Wind? Yep … great. Geothermal? Yep … great. Ideal! How much can we generate? Nothing like what we need, but even if we could, we can’t store it and ensure supply continuity.

Then of course comes the structure of it all and establishing anything but a competitive playing field for generation and supply. ‘Oh, but it’s a big ticket item and generation is expensive and timely.’ Well, yes, that might be true, but Newsroom reported on 8 August our gentailers have paid out $10.8 billion in dividends since 1999, while only increasing generation 1%. In other words, for every dollar spent on increasing capacity, $2.41 has been paid out in dividends. Their debt levels are also “strikingly low” it reported. And 1999 is a quarter of a century ago – even we can build something moderately big in that time.

The near-sighted short-term cameo fringe benefit of this supply approach is an absurdly high spot price. However, telling the starving that if they want to eat they’ll need to buy your caviar will result in revolution at some point, and that might be closer than they realise. Here’s hoping.

But it’s not just all about energy either – let’s be fair. A social educational strata based on resenting those who create the wealth and jobs leads to onerous consent processes, compliance, and workplace benefits completely unrelated to output. It’s our right to be a First World nation, surely?

Thankfully the ‘candy house’ that was the last coercive administration has for the time being gone, although not for long I fear – there’s comfort here now at being wrapped in the arms of Mother State.

However, Luxon’s global door-knocking, peddling New Zealand’s wares, and Simeon Brown’s  infrastructure, might be futile endeavours if we’ve gin-trapped our own economy.

If we’re innovative enough, imaginative, and aspirational enough could we even have a value-add economy given who and where we are? I don’t know, I guess you’d have to ask Peter Beck.

Creativity has always been a trait of ours; aspiration sadly, has not always followed as readily as laziness. Just look at our view on wealth creation being obsessively fixated around dwellings! Dormant, lifeless, absurdly ‘low rent’ in terms of the potential prize versus the realised. And who cares about our kids wanting a home – it’s all about me. ‘The government should set up a grant for them!’

The scary thing is nothing in all this is fixed quickly. The sad thing is, more and more of the people who wanted to get out of bed and earn, pay taxes, and contribute to a better tomorrow rather than rely on yet another state-funded crutch from an ever-reducing tax take, will now head away off-shore in the wake of the recent closures.

It’s another fine mess indeed.

All the best

Dave McCoid
Editorial Director