Profit motive behind death in Mangere

It would be compounding the tragedy in Mangere last week if the issue came to be seen as a mistake by an individual person.

The government will be hoping for this outcome as will Mercury Energy. The last thing they want are people questioning why essential services such as electricity, water or telephones are provided by profit-making corporates rather than as public services for the common good.

For the sake of the Muliaga family it is important the various investigations go ahead but for the sake of all of us it’s important we identify the underlying cause of the problem. Investigations often just provide a smokescreen or give time for community outrage to subside but here we need to stay focused and not allow the real culprits to slip from sight.

Because no matter what details emerge it should be very clear that the quest for profit in a state-owned company has come before the basic humanitarianism New Zealanders once took for granted.

Folole Muliaga’s death was a tragedy waiting to happen that was never going to occur in Remuera or Fendalton but almost certainly would occur eventually in Mangere – the lowest income electorate in the country.

Research conducted by the Ministry of Consumer Affairs and released in March 2005 revealed one in six kiwi families had borrowed money within the previous year for day to day living expenses such as paying the power bill or buying groceries. If one in six is the average then in Mangere the figure would be far higher – perhaps up to 80% of families regularly borrowing to get by.

Remember too that the number of Pacific Island families suffering severe hardship increased from 16% in 2000 to 30% by 2004. Paying an electricity bill is a big deal.

So why should this essential service be provided on a not-for-profit basis?

Because under a business model the focus shifts from providing the service to everyone at an affordable price to the demands of shareholders. They “own” the business and the board and senior management are employed as their agents to run it on their behalf. There is little room for morality or ethics. “The social responsibility of business is to increase its profits”, said economist, and darling of the Business Roundtable, Milton Friedman. What a wonderful sense of assurance this is for greedy shareholders. Families are reduced from citizens to merely a source of income and profit.

This is why a struggling family had its power cut off despite being just $168.40 in arrears and despite paying $61.90 on May 2 and $45 on May 18. The family were doing their best but the shareholder – the government in this case – had already set an agenda requiring profits from the electricity supply. What flowed from there were policies and procedures to meet this overriding objective. The financial analysts at Mercury would have calculated the best value for the shareholder was early disconnections of families in arrears. Never mind the consequences for the family. It should not be the hapless contractor in the firing line but government policy which demands profit from an essential service.

It’s sickening to see the National Party try to get political mileage from the issue. It was a National-led government which created the artificial, profit-focused market for electricity in the 1990s. They set up competition at three levels involving electricity producers, lines companies and retailers. A mad grab for our community assets ensued resulting in the maze of companies, some private some public, where the shareholders interests have overridden the interests of citizens.

It was pure lunacy. Far from reducing the cost of electricity the opposite has occurred. Prices have soared by 50% and more since Labour came to power in 1999. And the supply itself has worsened as companies have underinvested in maintenance and production in favour of the dividend demands of shareholders. Aucklanders know this only too well after the summer blackouts of the CBD a few years back. Shareholders always come first.

The policy is overseen by our Minister of State-Owned Enterprises, Trevor Mallard, who has been the main government cheerleader for these profit-driven policies for essential services.

The death in Mangere was not a single unfortunate mistake by an individual as the government would like us to believe. It was a dramatic failure in the delivery of an essential service to a kiwi family. If there was accountability within the government and pigs could fly then Trevor Mallard would resign.

The irony is that the very Pacific Island families who so loyally support Labour are the very ones who have suffered the most from the free-market policies and corporate capitalism pursued by the Labour-led government.

Families like the Muliaga’s are cannon-fodder for Labour’s economic policies.

Just two weeks ago the Prime Minister opened a revamped Labour Party office in the Mangere electorate and spoke boldly of the local community being Labour’s community.

She’s right. Mangere continues to support the government and Labour continues to deliver unrelenting hardship to these most vulnerable of New Zealanders.