KEY POINTS:
Over the past few months, the Government has made little secret of its irritation with some regulatory agencies. Ministers have, at the drop of a hat, denounced and discarded decisions reached independently and with the benefit of expert knowledge. Now, the ultimate expression of that dissatisfaction has been delivered in the Telecommunications Amendment Bill. Taking charge of Telecom's split into three divisions will be the Minister of Communications, not, as might have been expected, the Telecommunications Commissioner. This, noted Parliament's finance and expenditure select committee, would give the minister a "high degree of control" over the process.
On one level, this indicates the seriousness of the Government's approach to the telecommunications market. On another, it eliminates confusion over who is calling the shots. But on every other, it is a regrettable development. Here is the Government abandoning any pretence of relying on expert independent agencies to monitor the country's vital economic arteries. It now wants the regulatory ball in its own hands.
Unfortunately, Government decisions will not always be in the country's best long-term interests. Sometimes, they will reflect a minister falling under a particular influence. The last National Government's fawning approach to Telecom is a case in point. At other times, decisions will be based on popular opinion and made for short-term political gain. In many instances, the same verdict would not be reached by an independent agency detached from immediate pressures.
All this has not prevented a heightened level of Government tampering. The latest decision follows a rebuff to Telecommunications Commissioner Douglas Webb after he changed his mind and came out against the "unbundling" of Telecom's business. As it happens, the Government was right, in the interests of competition, to overrule him. But its ongoing undermining of his position means that, one way or another, he is virtually certain to leave the job when his term expires in March. That will be a shame because, the unbundling blemish aside, Mr Webb has become a respected figure in the industry, and has accumulated a high degree of expertise.
His departure will follow that of Roy Hemmingway, the chief electricity regulator, who fell foul of the Energy Minister over Transpower's plan to string giant pylons across Waikato. He asked the national grid operator to postpone the project and investigate options for supplying Auckland. That was unpalatable for a Government anxious about the security of the city's power supply.
Again, the Government had good reason for concern. But that was certainly not the case when the Conservation Minister vetoed the Environment Court's approval of a marina at Whangamata. Only a High Court ruling remedied a grievous error of judgment. Nor was there any acknowledgment of the ludicrous nature of a situation, generated by loophole-tapping lawyers, that would have resulted in a minister ruling on a planned code-sharing agreement between Qantas and Air New Zealand, which is 80 per cent owned by the Government. Legislation passing that job to the Commerce Commission could have been passed. It was not.
Ministers' penchant for meddling has undermined confidence in the regulatory framework, and created considerable confusion. At least, there will be no bewilderment over the splitting up of Telecom. The cloak of Government complaisance has been removed. So, too, however, is the prospect of vital decisions being made for all the right reasons.
