News that the CEO of Contact Energy is now earning $1.7 million a year, or $33,000 a week, has shocked many New Zealanders and reinforces the urgent need for Labour's NZ Power policy, Labour's Finance spokesperson David Parker says.

'Currently power companies are allowed to charge excessive prices by pricing all electricity at the price paid for the most expensive electricity produced (often gas fired).

'Under Labour's NZ Power consumers pay the average, rather than the highest, cost of generation. This saves hundreds of dollars a year for the average household and about 5 per cent for commercial users.

'This is only fair. Sixty per cent of NZ's electricity comes from hydro, which is the cheapest electricity to produce in the world. It's fuelled by the energy which comes from our public rivers. At present the public gets little benefit from this.

'I have been challenged by the business community on how I justify Labour's policy to drop power prices.

'It's easy. People are cold. A couple of weeks ago I was in Wanganui. It was a cold day. I dropped into a suburban library. I was told many of the people who come in do so to get warm. They stay for hours on cold days because they cannot afford to heat their homes.

'In sawmills where electricity costs are higher than they should be, others have lost their jobs.

'Many people don't see how tough it has become for low income New Zealanders.

'I am ashamed at the widening gaps in New Zealand.

'Home ownership is at the lowest in 60 years and still falling. Lots of New Zealanders have lost hope of ever owning their own home.

'The number of kids in severe poverty (subsisting in households with less than 40 per cent of the median income) is up 20 per cent under this government. We live in a country where kids go to school hungry.

'Our decile 1 primary schools have a 50 per cent turnover each year. Inequality is now said by the OECD to be a major cause of the poor literacy and numeracy of the long, long tail that bedevils our education system.

'A good government runs the country in the interests of all New Zealand. Surely we can do better than this. Stopping overcharging for electricity is part of the answer,” says David Parker.

Source: Office of David Parker.