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PM Speech - Opening New CLEAR Building

I welcome this investment by Clear and the boost is giving both to NZ and to the North Shore.

It is in the opening of buildings like this one that it becomes obvious what happens when you open up a market to competition – like we have with the telecommunications market.

People do not just get choice and cheaper phone calls, but new businesses bring with them new jobs, and new infrastructure, which in turn provides jobs in a range of other industries.

Most of you will be aware that at the beginning of the week we took some further steps to improve the operation of the telecommunications market.
We have taken three steps in the general competition law:

 We have strengthened Commerce Act penalties - cease and desist orders to allow the Commerce Commission to intervene when there has been a prima facie breach and urgent action is necessary.

 We have restored the definition of dominance in Section 36 to pre-1992 levels moving back from the dictionary definition of “dominance” to the economic definition.

 We have set the threshold for mergers and acquisition so that it allows scrutiny of all proposals potentially detrimental to competition in New Zealand markets. This allows the Commerce Commission to scrutinise mergers where “high market power” can be gained without a single firm gaining high market share.

These changes set a delicate balance between preventing dominant firms from using their market power to stifle or eliminate competition, while at the same time allowing those dominant firms to compete.

More particularly, we have also announced some changes to the information disclosure regime applied to Telecom. In future it will be required to publish twice-yearly financial statements for its “local loop” business. It will also be required to disclose the net economic cost of complying with the Kiwi Share Obligations.

These changes will assist companies in their negotiation of interconnection agreements with Telecom.

They will maintain the momentum of the last decade and I hope they will provide for even more aggressive competition between telcos, and less time spent on inter-company rows.

The Government has also recently announced moves to reduce red tape on companies offering international telephone services in New Zealand.

We've decided to repeal regulations requiring companies providing certain international telecommunications services to be registered with the Ministry of Commerce at a cost of $10,000 a year.

The registration requirement was introduced in 1989 to reduce the risk of international monopoly companies taking advantage of the open New Zealand market, to the detriment of New Zealand consumers. This was because an overseas monopoly company may only accept incoming calls from the highest bidder among New Zealand companies, which would inflate the price to consumers

But now with the liberalisation of Australian, North American and European markets as well as the thriving competition in this country, the regulations are no longer needed.

I know that Clear and other players will be pleased at the loss of yet another strand of red tape from your lives.

The fact is that prices have come down in the telecommunications market – both for domestic and international calls, and Clear has played a very direct part in making that happen.

The Statistics New Zealand residential telephone service price index shows that prices have declined by on average 3.6 percent per annum in real terms since March 1991.

At the same time, investment by the industry has gone up with over 6% of GDP over the last decade (excluding smaller Internet providers) accounted for by the telecommunications industry - $400 million of this by Clear.
Out of all of this it is the investment in people - this is what is really pleasing to me.

I understand Clear has nearly 1000 staff. These are the people who will provide your future competitiveness, as I am sure you are only too well aware.
The quality of the physical working space you have created here, as well as the positive environment of the North Shore as a place to work will help keep your staff focused and on the ball.

These are all factors firms now have to take into account if they are to attract and retain staff - to build an environment where young New Zealanders will want to stay and make their future.

But it can’t stop there. Firms need to be more involved in helping young New Zealanders get the skills they need to equip themselves for the knowledge-based economy.

The Government also needs to do its part to keep our young here.
Next week the Government will launch our 5 Steps Ahead strategy. I don't wish to go into detail here today, but I can say that one of our goals is closer linkages between industry and the education sectors.

The Government does not hold all the answers, but what we can do, and what this Government is committed to doing, is to maintain a supportive business environment to help businesses succeed.

We will not see a return to the intrusive red tape of the past.
We will keep inflation and interest rates low.

We will spend your taxes prudently and reduce them as the government’s finances permit.

We will keep paying off debt.

We will continue to reduce indirect taxes like ACC – so that businesses have more money to put where it matters most – back into business.

We will ensure that the Employment Contracts Act, and the flexibility it gives to both workers and employers, stays in place.

There are political parties out there who cannot and will not promise these things – indeed they are intent on reversing most of them.

That is not just bad for employers – it is bad for workers as well.

I don't know what studies the opposition parties are looking at, but it is clearly not the ones that show most employers expect to make savings from the ACC reforms, or the ones that suggest most employees are quite happy with the Employment Contracts Act.

This Government wants all New Zealanders to lift our sights - to lift our growth from 3% pa to 5% pa.

It will take a concerted effort. We will need to invest in people. We will need to help make ideas work for NZ.

The Government will play our part.

And we will need to encourage firms like your own to invest in our future. Not just in high skilled staff, but also in intelligent buildings and facilities to attract and support them.

Clear Communications have done that and you are to be congratulated.

I am now pleased to declare this wonderful building open, and to wish you all the best for the future in these new premises.

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