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Plain English, 15 May 2006

Plain English

15 May 2006

Telecom drops its bundle on Rural New Zealand

Labour’s decision to unbundle the local loop leaves the rural south high and dry with all the costs and no benefits. No one will be competing in the local loop in Dipton or Clydevale or the Taieri Plain, and Telecom no longer have any reason to provide broadband in those areas. Investment in rural broadband has already slowed down and now it will stop. Rival technologies are still too expensive and risky just yet. Rural broadband will happen as fast as these other technologies improve. After the euphoria has died down, we want to know Labour’s plan to fill the gap left by Telecom pulling back.

Hope or Hoax

Now the unbundling decision has been made, consumers want their cheaper, faster broadband. But it won’t come easily. Only Telstra Clear have the serious money and know how to invest enough to be seriously competitive. They might decide large investment in a small market is too risky, and stick to solving their Australian problems. The small Internet providers have talked big, but now they need to deliver on the promise. They will be dealing with tricky, demanding customers with high expectations - a much harder job than campaigning against Telecom. We may find that high speed broadband is like airlines and railways in this difficult small market where there’s room for only one big operator. I hope I’m wrong. Fast, cheap broadband for everyone would be great, and I hope unbundling brings it. But the signs aren’t good.

Tunnel Threatens Te Anau

I ran a public meeting in Te Anau this week to talk about a new proposal for an 11 kilometre bus tunnel from the Grimstone Valley to the Hollyford Road. The tunnel would cut the five-hour Queenstown Milford trip to two hours. Over the years all sorts of wacky proposals for a new Milford-Queenstown route have come and gone, but this one looks serious. The Department of Conservation is taking it seriously enough to allow for it in the Mt Aspiring National Park plan, and the proponents are credible investors with access to serious money. Te Anau people need information and time to work out whether a tourist route that bypasses the town is as bad as it looks. We need to know how the Milford Dart Tunnel stacks up against other ideas for relieving congestion in Milford Sound. The consent and concession process for this tunnel will take at least three years, so there is time to consider all the possibilities.

Australia Marches On

Howard and Costello continue their march of continuous economic reform – and it’s paying off. Over the next three years Australia is forecast to grow at 10 per cent and New Zealand will grow by 5-6 percent. The gap between the economies will get worse. Australia’s aggressive moves to cut taxes and stay competitive amount to another raid on our best and brightest.

New Zealand has its own distinctive way of life, but it’s not a rest area up a dead end. We owe it to our young people to keep New Zealand competitive and attractive, as well as fair. Economic growth is about better productivity, better incentives and reward for getting ahead. Labour’s polices consistently blunt incentives and hold back productivity. Dr Cullen’s budget will be uninspiring and dull compared to Australia’s aspirational budget, and will reduce the rewards for getting ahead.

Bill English


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