David Seymour shoots down Shane Jones’ proposal to nationalise electricity market

Wednesday, 10 September 2025

Deputy Prime Minister David Seymour has shot down any suggestion that the Government might nationalise electricity generators after Cabinet colleague Shane Jones suggested it.

Seymour said the Government discussing nationalisation would harm the investor confidence needed to bring down energy prices.

The suggestion was contained within a memo prepared for internal NZ First policy development but signed off by Jones using his ministerial titles - including Associate Energy Minister.

Jones, who holds the regional development portfolio, is openly aghast at the high cost of energy in New Zealand and disparaged his coalition colleagues for doing “nothing” on the matter at his party conference over the weekend.

He has been pushing for intervention within the Government, to no avail.

In the memo, Jones included among potential policy levers the option of re-nationalising the sector “if all else fails”.

“It is only 30 years since New Zealand (and much of the rest of the world) had a fully nationalised electricity system. New Zealand had much cheaper (inflation-adjusted) electricity than today,” Jones wrote.

“There are obvious political and property-right issues that will likely prevent any reversion to the pre-1998 situation today but it is instructive to consider how a nationalised system might respond to today’s challenges and what, if anything, can be done to co-ordinate the private market to move in that direction.

Seymour, who is acting prime minister, said no Government ACT was a party of would ever support “anything like” nationalisation.

“If you want more generators built, it doesn't help to have a Government saying: ‘Oh, nice generator you got there, would be a shame if anything happened to it, the Government might nationalise it’. That does real damage to investor confidence.”

Seymour noted that Jones had a right to talk about different policy options.

Energy Minister Simon Watts, currently sitting on an independent market review by Frontier Economics, had not been provided Jones’ memo.

Watts said “all options were on the table” but the “premise” of any reforms of energy would be market-based.

“In New Zealand we have an energy market that is market-based, and that is an important principle.”

Jones has promised to run a “Trumpian” campaign on the energy sector if nothing was done, suggesting “rust belts” could be created if there were no intervention.

The 20-page memo was written for NZ First leader Winston Peters in July, and released by Jones this week. It homed in on how New Zealand’s declining gas stocks would led to more wood processing and pulp and paper mills existing the country, and the possible remedies.

“The odds are stacked against meaningful intervention,” the paper read. It said the Electricity Authority “lacks the fortitude, and its culture has been timorous and apologetic” and that “MBIE will always favour market solutions”.

“It fears the risk of substantial reforms or robust interventions will break the system. It is a system, however, that will never address energy poverty for households nor hardship for industry.

“Without profound action, the die is cast, a rust-belt decline with a widening gap in societal wellbeing.”

Solutions proposed by Jones included using high-carbon dioxide gas from existing fields in Taranaki, however to make this economically viable, exempting this Co2 from the emissions trading scheme might be required.

Also possible, according to Jones, was diverting gas use away from electricity generation for the use of industrial consumers. This would mean, in the short term, importing more coal to run the Huntly power station - Jones also suggested supplying the power station with domestically mined coal.

Alongside pushing for intervention in the sector, Jones has received Cabinet consent to explore co-investment in independent energy generation with the owners of the Kinleith Mill, Oji, to secure the Japanese firm’s “ongoing confidence”.

Ministry of Business, Innovation, and Employment (MBIE) officials have been tasked with talking with Oji, an intervention Jones called “quite extraordinary”.

MBIE declined to comment on the conversations due to “commercial sensitivities”.