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Home / Politics

<i>Paula Oliver</i>: Plan shows National is more than just tax cuts

By Paula Oliver
NZ Herald·
22 Apr, 2008 05:00 PM3 mins to read

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Opinion by

KEY POINTS:

If nothing else, National leader John Key's plan to put $1.5 billion of Government money into an ultra fast broadband network marks another milestone in his party's move away from the purist policies of its past.

Key is describing a lack of investment in New Zealand's telecommunications network
as a "significant market failure" - strong words from a National Party leader.

His acknowledgement that the market hasn't worked, and won't work without a helping hand from the Government, is a big step away from the "market rules" position his party has been more widely known for.

It has been a year since Key first mused about using Government money to help kick-start broadband.

Back then he was promptly contradicted by none other than his deputy, Bill English, who ruled out widespread government investment in national broadband infrastructure because it would "crowd out" private sector investment.

Clearly Key has won that argument.

Yesterday English would say only that he was fully on board with the move.

"You can work through all the complexities of these things, but in the end you still have to decide whether you're going to have a crack at it or not," English said.

"We decided we should have a crack at it, despite the complexities."

Internal squabble apparently over, Key is now hoping to get maximum traction out of his announcement before Labour unveils its Budget on May 22.

It is one of four or five key things he plans to campaign on and then implement in his first term as Prime Minister should he win this year's election.

The broadband announcement is all about Key showing he has a wider plan - outside that old chestnut of tax cuts - to lift New Zealand's future economic performance, productivity and wages.

It was Australia's Labor Prime Minister Kevin Rudd who last year was credited with outflanking his predecessor by pledging to put A$4.7 billion ($5.58 billion) into a national high speed broadband network.

John Howard's team insisted the investment should come from private enterprise.

In New Zealand, the political positions are reversed, with Key on Rudd's side of the argument and Labour sounding more like Howard.

Labour has its own grand plan to get broadband moving in New Zealand, and it clearly intends to stick to that and beef it up further.

It has already laid claim to the issue by taking on Telecom and dismantling it.

Communications Minister David Cunliffe says the Rudd/Key idea would put Telecom back into a monopoly position and pour taxpayer money into the pockets of that company's shareholders.

But it was difficult yesterday to find too many people close to the issue willing to rip into Key's move.

To avoid Key wrestling the issue away from Labour and in public minds making it his own, Labour needs to reveal - and soon - more of its big plan for broadband.

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What do you think of National's $1.5bn broadband plan?

22 Apr 09:58 PM
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