'Collective responsibility and whatnot' - Shane Jones keeping quiet on energy reforms

The government's loudest voice on energy policy is keeping his opinions to himself for now, citing Cabinet collective responsibility.

Despite being the minister for resources and an associate energy minister, Shane Jones was noticeably absent from Wednesday morning's announcement, which was fronted by finance minister Nicola Willis and energy minister Simon Watts.

His office would not provide a comment or statement when contacted by RNZ.

But on Wednesday afternoon, the New Zealand First MP appeared on The Platform, and said he had proposed a number of ideas in the buildup to the announcement.

"I wrote a paper for Winston [Peters], about 15, 20-odd pages, two or three months ago. And we distributed that to our political colleagues and to stakeholders and the community and industry so they could see where we're coming from."

That letter, according to the New Zealand Herald, contained suggestions around the increased use of gas, building another coal-powered station, government signing long-term contracts to guarantee supply, splitting the gentailers into generators and retailers, and nationalising the entire system.

"But, you know, collective responsibility and whatnot. So that's why the finance minister and the minister of energy, they've led these announcements today," Jones said.

Collective responsibility is an important principle ministers must adhere to, enshrined in the Cabinet Manual.

"Issues are often debated vigourously in the confidential setting of Cabinet meetings, although consensus is usually reached and votes are rarely taken. Once Cabinet makes a decision, Ministers must support it... regardless of their personal views and whether or not they were at the meeting concerned."

An exception to the rule is the 'agree to disagree' clause, most recently invoked by New Zealand First to oppose two new pathways to residency.

Jones' response suggests New Zealand First does not feel strongly enough about the energy package to invoke the clause, but he did, however, hint the party would campaign more vociferously on energy as the election approached.

"I'm not the energy minister, but I did warn the gentailers that time is passing, and social license is really important, and if we have a situation where they're incapable or disinterested in delivering affordable energy prices, then forces bigger, what they believe is under their control will, in my view, come to the fore."

The gentailers have long been in New Zealand First's sights, and Jones has openly floated the idea of nationalising them.

The government is not doing that, nor is it acting on a recommendation from reviewers Frontier Economics to divest its shares in the gentailers.

Instead, it has written to Genesis, Mercury, and Meridian to tell them it is willing to support capital raises for long-term generation projects.

Finance Minister Nicola Willis said there was a perception from the gentailers that the government would not provide equity injections to support investments, a perception the government wanted to "correct."

Jones has made no secret of the fact New Zealand First wanted the energy portfolio for itself, but it did not secure it in coalition negotiations.

"We did get portfolios that expose us to the downside of energy prices going haywire, and energy policy not delivering an affordable or secure level of output," he told The Platform.

"So there's always been a different approach that New Zealand First has taken, and it's been more from the consumer end, and less from the insider or investor end."

ACT is in the opposite camp to New Zealand First on the gentailers, preferring privatisation.

ACT energy spokesperson Simon Court said Frontier's proposal of divestment might make sense.

"When we think about the enormous infrastructure deficit that has opened up around transport and health and other really vital services that the government needs to provide, it looks sensible to recycle some of that lazy capital sitting in these energy companies, but that's a decision for a future government," Court told RNZ.

As a Parliamentary Under-Secretary, Court is also bound by the principle of collective responsibility.

"This government has been clear, we're not looking at recycling capital now, but if we do it should go to the highest and best use."

Court said calls to re-nationalise the gentailers would make investors nervous.

"I think it's entirely appropriate that this government says we're going to deregulate, we're going to regulate where it makes sense, we're going to invest where it makes sense. But we are not going to start breaking up or threatening companies simply because power prices have spiked due to a shortage of supply," he said.

"Let's focus on all the underlying factors that contribute to a shortage, and wait for these changes to take effect."

The government's package also contained an announcement the government would start a procurement process for a new Liquified Natural Gas import terminal, and would issue a Request for Information from the sector to see what projects it would like government help on.

The plan has been met with a lukewarm response from business.

Former National leader and energy minister - now Auckland Business Chamber chief executive - Simon Bridges described it was a "missed opportunity" and not enough to address the root causes of unaffordable energy prices and tenuous supply.

While gentailer Meridian described the package as "bold," the Employers and Manufacturers Association disagreed.

"No, no it's not bold... the recommendations that were in that report, many of them were never going to fly. Putting something out for procurement and tinkering around the edges to some degree that's not bold," said head of advocacy Alan McDonald.

Responding to the criticism, Watts told Checkpoint the package would create "some of the most significant changes" in the market in decades.

"We expect that the downward pressure on price will start immediately," he said.

"One of the key drivers of why we've got high prices in New Zealand is because there is a risk premium built into that, because the market does not have certainty that if we have a dry year, ie. we don't have enough water in our hydro lakes, we will not have the ability to produce power.

"And there's a premium that's built into the power prices that we pay today, because the market does not have certainty about that core issue. This suite of actions that we're implementing deal with that problem statement, and that's really, really important."

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