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Molesworth & Featherston (Weekend) – Feb. 18 2006

Molesworth & Featherston - Weekend Update edition

Business and Political News
18 FEBRUARY 2006

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Battle joined

The Government has clearly decided that a bit more regulation and laying into some infrastructure providers and regulators is one of the best ways a social-democratic Government, that is not prepared to adopt neo-liberal solutions, can get the economy to “transform”.

Prime Minister Helen Clark’s attack on Telecom's broadband pricing, speed and public uptake, in her speech opening the year in the House, is just the tip of the iceberg when it comes to Government attitudes to the issue.

Behind the scenes ministers have lost all patience with the local loop unbundling fixes put in place over the years – with one who talked to M and F this week describing the recent deal between Telecom and TelstraClear over fast internet wholesaling as “outrageous” and an example of how simply letting Telecom use threats to challenge the regulator's decisions – and therefore delay offerings to rivals forcing them, to accept weaker slower deals – had to end. Miss Clark also indicated a rethink on how to get more Auckland roads for the Government's buck. Problem one is a reduced tax take as higher prices lower the amount of fuel motorists buy. The more pressing issue is how to control costs, which are escalating as demand for contractors' work increases. Transit is in line for a rark-up from ministers over its role too.

Commentators are saying National leader Don Brash's speech in reply was one of the best he has delivered, and it did contain more energy and smart one-liners than his other offerings. A commendable effort, but overshadowed by the Prime Minister’s programme that preceded it and Foreign Minister Winston Peters’ show-pony speech that followed. But it is clear National is going to play up the integrity-thing and Labour's lack of principle this term. In that regard, the Electoral Commission's finding that the pledge card spending from the parliamentary "Leaders' Budget" was actually attributable electioneering was a Godsend. The party is very much keeping its counsel on new economic measures until the depth of the slowdown in the economy is apparent.


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