NZX chief Mark Weldon says the decision by the state-owned power generators to use an Australian derivatives market to hedge themselves is another case of "shooting ourselves in the foot".
His frustration is understandable. The NZX had been working for some time on a local version of an energy futures market. That now looks unlikely to get off the ground.
It is extremely hard work promoting capital markets in this country and to have any one avenue for growth choked off is a great shame.
The power companies' decision to overlook a local option raises the difficult issue of just how much our Government should get involved in these so-called "NZ Inc" issues.
It is a particularly awkward debate for the business community, given the broad consensus that the free market is - under normal circumstances - a good thing.
Since 1984 New Zealand has maintained a pretty strong culture of business freedom.
But we did pass an act of Parliament to allow the creation of Fonterra and the Government still plays an important and seemingly never-ending role in the regulation of our telecommunications industry.
There are tax breaks to support the film industry and there is public money invested in R&D and marketing for a number of our most important industries.
The current regime is more pragmatic and less ideological than the National Party of the 1990s.
But, unfortunately for the NZX, putting pressure on SOEs to buy NZ-made would have been a step too far.
It was only on Wednesday that the Minister for SOEs, Simon Power, issued a decree requiring them all to be more explicit about their financial goals and performance targets.
The message from Government to the SOEs is pretty clear - more commercial rigour, please.
It would not be a good look to then turn around and start directing their behaviour.
The power companies also made it clear that they felt the Australian option was the most practical fortheir needs - the ASX marketis already up and running, it hasdepth and a proven track record.
We would also not expect the board and management of state-owned companies to be making subjective and potentially political calls about what benefits the wider national interest.
Such questions come up all the time in the wider world. Think of the fuss the Rugby World Cup organisers generated by choosing to use a foreign song for their commercial.
The Government, quite rightly, didn't get involved in that one either, despite the God-awful song choice.
Ironically, the hard-nosed commercial approach being taken by the power companies may yet prove a saviour for the NZX.
The merits of this week's decision aside, the more like independent, financially focused companies the power generators behave, the more attractive they become as potential targets for partial privatisation.
And that, political hot potato that it is, still looks like being the best chance the NZX has of getting a significant shot in the arm from the Government.
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<i>Liam Dann</i>: NZX bitten by free-market principles
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