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
The apparatus of NZ government would argue that, being a democracy, it has to respond to people. With the unspoken subtext that it’s easier to ‘serve’ stupid people than people who look after themselves.
Little is in their control, it’s a show. An expensive un amusing one.
I hope AI is going to prove to government what Uber did for taxi licences. Distintermediation like the Red Sea on Pharoahs army
On reflection, just who is price gouging? Executive level public servants and politicians might need to take a look in the mirror before casting stones.
Hypocrites.
"Competition law already exists."
No doubt first on Hipkins' radar will be the mRNA vaccines that were sold at extravagant prices, and that not only did not work, but have harmed or killed.
Second on Hipkins' radar will be the $100 Billion of excess and wasted spending the previous Labour govt racked up, pushing up inflation and a primary cause of the current cost of living increase. And not just over priced / price gouging, prices for things that were not required.
Speed bumps, face masks, vaccines, quarantine centre, testing.... The list is about 22mettes long.
Not to mention business shutdowns that has a flow on effect of increased costs.
Would Hipkins resign and fall on his sword over his…
Biggest gouging I know is the Tribe blackmailing the electricity generators to use water on the South Island rivers.
There is also another word for it.
We live in Coromandel and mostly shop in Thames where there is a Paknsave which are extremely cheaper than Four square here in Coro.
Both are supplied by Foodstuffs, why the difference in prices apparently it is not freight whereby they do not have to pay.
We are told Four square owners are making more profit so they can upgrade to a Paknsave.?
Confused Na just greed we think.
Do your homework on where to shop, it aint that hard.
Vote ACT.