RODNEY HIDE: Empty fridge, full press conference
Chris Hipkins wants to outlaw "price gouging."
He has no idea what it is.
Companies found guilty would pay penalties and "hand back every dollar of excess profit."
Labour's Arena Williams supplies the soundtrack: butter up 58%, bread up 45%, mince up 30%. Nearly one in three households couldn't afford enough food.
Ostensibly, big business is ripping off households.
Underlying, Labour has discovered a new crime: charging what the market will bear.
What price is gouging?
Nobody knows. That is the point.
A price is not a moral verdict. It is a signal. It matches what is scarce with what is wanted. It tells farmers to milk, bakers to bake, truckies to drive. Get the signal wrong and the shelves empty.
High prices are rude. They are also how you get more supply. Cap them and you get less of whatever you claimed to care about.
Governments that take over pricing do not abolish scarcity. They hide it. Then they invent queues, coupons, black markets, and speeches about fairness.
Famines are not caused by shopkeepers. They arrive when politics replaces prices.
People are not poor because Countdown has a checkout. They are poor because policy has been stuffing the economy for years -- tax, spend, regulate, then wonder why butter costs more.
Hipkins' answer is more regulation.
Of course it is.
The Greens want KiwiMart: nationalise the shops. Labour wants to police "excess profit." Same instinct. Blame the till. Spare the Beehive.
Hipkins knows better. He has sat in Cabinet. He has watched price controls abroad turn into shortages. He is not stupid.
He is desperate.
Election year. Voters feel the pinch. Someone must be the villain. Business is handy. Government never is.
So we get a law against a word.
Price gouging. Excess profit. Hand it back.
Hand what back? To whom? By whose spreadsheet? The Commerce Commission already has a job. Competition law already exists. What Labour wants is a political cudgel: the power to declare a price immoral after the fact.
That does not feed anyone.
It does discourage the next shipment.
If you want cheaper butter, stop strangling the productive economy. Cut the taxes and the rules that make everything dear. Let prices do their rude, useful work.
Outlawing the signal that keeps the supermarket stocked is not compassion.
It might be how you get some votes. It's also how you empty the fridge.
Rodney Hide is a former Minister and ACT Party leader
Economies are circular. It’s the governments job to decide how big that circle is. When profits and jobs flow offshore, the inevitable happens. Compare the sources of government revenue in NZ to Australia. Our largely offshore owned businesses pay a disgustingly small proportion of the tax take. We don’t have the scale for true competition and we generally end up with duopoly or cosy cartels. The productive sector has become a tiny part of our GDP, and the rest has become a money go round funded by fractional banking. The profits and wealth flows offshore without reinvestment. Show me a government in the last 50 years that has done anything to promote coherent nationalistic values and identity. Just more bread…
So the global price of coffee increases...Take that off the list, as price increases are not allowed. The Kiwi $ tanks, price increases on bananas, oranges, rice, et all, so take all imports off the list. Export prices increase, so domestic products under price control such as butter, Cheese, are simply exported to Kazakstan to give a far better return. The good side. Supermarket employees will come under Public sector employment. That means potentially 25% increase in salary , $3000 to learn Tereo, morning half hour singalongs, chin tatoos and huge greenstone adornments.And maybe supermarket hours will change to match government departments. 9.00am to 4.30 pm, with Friday afternoons closed. Could somebody suggest a few lefties visit Pyongyang to stud…
Hipkins is simply talking crap to appeal emotionally to uninformed voters.
Price gouging is an abstract concept that's almost impossible to regulate. But it sounds great for the voters.
Food costs are an election issue. Politicians need to look like they're going to do something.
Nationals proposal to create a 3rd competitor by breaking up the major player seems the most reasonable as long as it splits the wholesale supply chain - but it will be complex and might even increase overall costs and prices. the Pack N Save model only works in large markets so it won't help smaller towns - unless Pack n Save get into wholesaling.
The key to reducing food prices appears to be in the…
He seems a bit dim
Hipkins and his party has already done so much damage last time in majority that we are still strugling. It is now a party for those with very short memorys and it seems there are fewer and fewer of them..