Majority government owned gentailers generated nearly $600 million in dividend entitlements for the Government during the June 2026 year as power prices rose

According to Selectra NZ electricity cost is $0.35 / kWh (NZD), which is quite high when compared with Asian countries. Australia is around $0.36 / kWh. Energy costs in US and EU are considerably higher at $0.39 and $0.41 / kWh respectively. 

However, in Asian countries, especially China, electricity costs have been falling over recent years; whereas in the west there seems to be an underlying government policy to allow consumers be to gouged. Of course the government can claim it's just their laissez faire policy at work. In New Zealand consecutive governments have allowed monopolies and duopolies, including our energy sector to flourish for decades. They seem to think that in a small country this is acceptable. Sure Nicola Willis will commission the odd "official enquiry" into supermarkets or fuel companies, but the reality is that the government couldn't care less.

I annoys me when commentators say we live in a low wage country. Actually NZ wages are quite high by global standards. What the country needs is to lower costs. To achieve this we need to start thinking like Asia. In Shenzhen - China, arguably one of the most high-tech cities in the world, people can live their comfortably for less than NZD800 / month. (Its not all due to scale or high population) 

We need a government that prioritises bringing costs down for its people, rather than letting them be screwed by corporates giants. 

So the dividend paid to the government is a tax on us consumers and the no tax increase party has increased its taxes..

That Ross Payne cartoon is so clever.

It's worth mentioning that earlier this year the government tipped around $200 million into the Genesis cap raise to fund new generation, so you could net that out against the dividends received. 

The dividend reinvestment is interesting and makes sense the government would have to participate to maintain their ownership - not sure what the general population uptake is (I always participate but many want the income now) - I imagine this means another maybe $1-200 million that isn't received as cash. 

The DRP allows the SOE to get investors to reinvest capital - if they didnt the Taxpayer would have to tip even more in. The yield is only 3 to 4% so its not startling really - probably why the shareprices relative to other markets has been so poor in NZ.

The Dividends the Government gets are nearly all paid out as energy subsidies to superanuitants and other lower income groups. If the dividends stopped how do we fund that plus everyone then gets a reduced bill, but the lower income groups get less than they do now in payments.

The top 30% wouldnt even notice but the bottom 30% would.

Be careful what you wish for.

The Price of Sovereignty

The fiscal mechanics of state governance and the journalism that chronicles them often miss the forest for the trees. 

A prime example is the coverage by business journalists on the financial windfalls of NZ's majority state-owned energy generator-retailers ("gentailers"). 

While a $600 million dividend payout to the Crown may look like a fiscal win on the government's balance sheet, it is actually a hidden, highly regressive tax on the productive economy.

By treating electricity as a cash cow rather than a foundational public utility, the NZ government, and the financial media that covers it, fails to realise how high energy prices damage national competitiveness and worsen domestic inflation.

1. The Immediacy of Energy Inflation: Electricity vs. Oil

Financial reporting frequently separates "imported inflation" (like global oil shocks) from "domestic inflation" (like retail electricity price adjustments). 

This is an artificial economic divide. In reality, energy costs, regardless of whether they come from an oil barrel or a hydro dam, are immediately and universally inflationary.

When oil prices spike, the cost of moving goods rises instantly, leading to immediate surcharges on freight and transport. Electricity operates under the exact same economic rules but has an even deeper impact on domestic production. 

When wholesale power prices spike or retail electricity tariffs rise (such as the 6.8% increase in early 2026 following an 8% hike in 2025), that cost is passed directly into every stage of the domestic supply chain.

A cold storage facility, a manufacturing plant, or a local supermarket cannot choose to "use less" electricity when prices rise - they must keep the power on. 

These businesses pass those expenses directly onto consumers to protect their operating margins. Because energy is baked into the price of every single product and service, power price hikes act as a compounding force across the Consumer Price Index (CPI).

2. International Benchmarking and Loss of Economic Competitiveness

When financial media focuses primarily on corporate earnings, it overlooks a more urgent issue - how NZ's electricity costs benchmark internationally, and how this affects the productive economy. 

NZ's electricity market structure relies on a marginal-pricing system where expensive fossil fuels often set the price for cheap hydro generation. This setup has pushed forward power prices well above the long-run cost of building new generation.

Compared to countries that actively subsidise industrial energy or run integrated public grids, NZ’s productive sector is at a severe disadvantage. This structural flaw has real-world consequence...

Industrial Risk: Major electricity consumers face an existential crisis. The rapid spike in electricity and gas prices has already triggered a "risk of deindustrialisation," forcing the closure of several domestic factories and timber mills.

Destruction of the Primary Sector: The closure of major gas and industrial operations, such as Methanex's decision to indefinitely idle its NZ operations, marks the loss of foundational industrial capacity.

When local businesses are forced to compete with overseas manufacturers who enjoy cheaper, more stable power, NZ's productive economy loses its edge.

High power prices don't just reduce corporate profits; they shut down domestic industries and leave the country reliant on imported goods.

3. Electricity as a Core Public Utility

A critical review of NZ’s economic strategy suggests that the state needs to completely rethink its priorities. For long-term economic sustainability and genuine wealth creation, electricity should be treated as an essential public utility, ranking right up there just below money creation and alongside domestic resource sovereignty.

Under the current system, the state acts as a conflicted majority shareholder in gentailers like Mercury, Meridian, and Genesis. It collects hundreds of millions of dollars in dividends while regular citizens and local businesses shoulder the bill. This arrangement creates a perverse incentive - the government benefits financially from the exact energy scarcity that harms the rest of the economy.

True economic sovereignty requires treating energy not as a commodity to be rationed for profit, but as a key component of the foundational infrastructure that powers everything. 

If the government used its money-creation powers to build abundant, low-cost renewable energy and infrastructure, it could transform electricity from an economic burden into a distinct competitive advantage.

Conclusion

Any celebration of massive state dividends from high energy bills misses the bigger picture. A $600 million payout cannot offset the damage done by closing factories, shrinking industries, and rising inflation across local supply chains. 

If NZ wants to build a resilient economy and generate real societal wealth, it must stop treating electricity as a short-term cash register. The country needs to manage its energy grid as a strategic public utility, designed to power and encourage long-term national productivity.

This is what happens when you stuff a natural monopoly public good in to corporate template, run by expensive administrators focussed on competition and maximum profit with minimum possible acceptable performance, rather than a cohesive organisation staffed with engineers tasked with value, development and resilience. 

The inability to do the more difficult thing of creating and running a unified enterprise that doesn't turn in to a inefficient bureaucracy or corporate wannabe government department shows a dispiriting lack of imagination.

Can we maybe just stop taking the simple, stupid option? 

I guess the actual government revenue from the energy sector is in fact a lot higher given that the dividends are paid post NPAT so the govt has already creamed off the tax.

Are the shares issued under DRP newly issued or just bought on the market?