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Q+A - Michael Parkin interviews - Steven Joyce

Sunday 22 September, 2013

Deputy Political Editor Michael Parkin interviews Economic Development Minister Steven Joyce

Q+A, 9-10am Sundays on TV ONE and one hour later on TV ONE plus 1. Streamed live at www.tvnz.co.nz   

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SUSAN          Well, the tension is becoming unbearable.  Emirates Team New Zealand is just one race from bringing the America’s Cup home to New Zealand, but it’s still anyone’s game as Oracle ramps up the pressure.  So, what would it mean for the country?  Michael Parkin spoke to Economic Development Minister Steven Joyce, who’s in San Francisco, just a few moments ago and asked him, without jinxing the outcome, how much would a defence cost us if we win?

STEVEN JOYCE – Economic Development Minister
Oh, look, it really is too early to say.  There’s all sorts of things that have to be considered, where it would be hosted in Auckland, for example, you know, what sort of support that the team would need, what sort of support the infrastructure would need, the contribution that Auckland makes, all those sorts of things.  So it’s just a bit early to say yet, but certainly should what we all hope to have happen happen, well, then we’ll be having conversations.

MICHAEL      Is that $36 million that was pumped into the last campaign – is that a realistic figure?  Or would you expect to be going beyond that?

STEVEN       Really can’t say at this point.  It’s just too early to have those sort of conversations.  I mean, obviously, if there was infrastructure involved and if the Government was involved and contributing to that infrastructure, that would, you know, be different to actually supporting the team.  But I don’t even want to hazard a guess at this point, Michael.  We’ll just have to have those conversations once this regatta is over, and, as we know, it’s taking a little time to come to its conclusion.

MICHAEL      Having seen what you’ve seen over the past couple of days, what sort of shape would you like to see the next regatta take in terms of participation and the number of countries represented?  What’s the sort of minimum you feel there?

STEVEN       Oh, well, I think everybody would like to see more teams represented if at all possible, and we need to make sure that everybody understands whose role is what.  And, obviously, should Team New Zealand win the Cup, then they would be the defender, they would have a challenger, a first challenger of record, and they would work out all those details, so it wouldn’t necessarily be the Government’s thing to determine.  But the reality of it is I think everybody would like to see more entries than has been possible in the current regatta, but that depends on a whole range of things, like the format, what sort of yachts they’re going to race and all that sort of thing.

MICHAEL      You’ve obviously talked about Auckland there and the part that it would play in a defence.  How do you ensure that there’s an on-going legacy and benefits from whatever it is you would have to build down there to host the Cup?

STEVEN       Well, I think that was very successful last time that we defended the Cup in Auckland.  Effectively, Viaduct Harbour and all that area around there was created and was catalysed by the America’s Cup defence, so I don’t think that’s a challenge if it’s done right.  And, of course, we have on our government team a minister who was very closely involved with it at the time, one Murray McCully.  So, you know, again, we’d work all our way through that once we’ve won it, but I’ve got to stress again, you know, as we’ve seen in the last few days, the thing still has to be won, and the other side are not giving up.  They are very, very focused on competing, and we’ve seen that time and again.            

MICHAEL      Consider me, I guess, optimistic.  I mean, if we were defending this cup, would there be a part for the regions to play in this, like could we see Wellington get some of these sort of associated but smaller regattas, as opposed to it all being held in Wellington— in Auckland, sorry?

STEVEN       Well, talking to the America’s Cup team, the Team New Zealand guys, they’re very aware of involving the whole country, as I think they were last time, and you will recall the late Sir Peter Blake was very focused on that,  and they’re very much focused on Sir Peter’s legacy as well.  So I don’t think you’ll have any issues in that regard.  They’d be seeking to involve the whole country if it comes to the point where the Cup is won and we’re holding a defence.

MICHAEL      I have to say it – if we can change tack to Chorus?  The Prime Minister’s comments that the company go under if these Commerce Commission recommendations are upheld – was he right in saying that?

STEVEN       Well, I think it will be very challenging, and I think the Prime Minister’s right to highlight that, because you have a situation where a company has entered into a contractual arrangement on the understanding of what it— more or less what its pricing situation was, and it’s quite difficult because we effectively changed the whole structure of the industry at the time that that was undertaken.  And, of course, they’re in a situation, depending on the outcome of the Commerce Commission, they could lose a lot of the revenue that they were seeking to put towards the UFB.  Now, that’s something we’ve just got to work through, but there’s no doubt that would have been a pretty significant challenge for them.

MICHAEL      But Chorus signed on to this deal knowing what was going to happen in three years’ time.  They’ve got a billion dollars of government money to go out and roll out ultrafast broadband.  There was never any expectation that the copper price was going to be kept high for their benefit, was there?

STEVEN       Well, again, I’m sorry, a lot of people rewriting history currently, and that’s just simply not the case.  Everybody expected a bit of a drop, but you go back and read all the analysts’ reports from the time and all the critiques – nobody expected the sort of proposal that the Commerce Commission came out with.  And let’s be clear here – this is not unlike a number of other industries in that you have an infrastructure provider who is trying to build new infrastructure, and, of course, they’ve got to— they’re a monopoly provider, so they’ve got to be regulated, and on the other side of it you have a bunch of retailers or downstream customers, and they want to try and get that for the minimum price that they can.  So if you could think of airports and airlines, which as we know is a perennial battle, where the airlines think the airports are charging too much and the airports don’t understand the airlines’ position, well, this is not unlike that in the telecommunications space.  And people just sort of swallowing the argument from one side of the spectrum is actually, I think, just being a little bit unfair.  I think we’ll get to a solution in this, but you can’t expect them to roll out infrastructure which is—

MICHAEL      But you’ve now got a powerful lobby group here trying to overdo your work here.  I mean, you can understand that people at home using the internet don’t like the idea of having the price artificially inflated on them.  It’s that simple, isn’t it?

STEVEN       Yeah, but that’s wrong.  And you can call it a powerful lobby group, but fundamentally they are misrepresenting the facts a wee bit, and that’s the issue.  The first thing is they’re suggesting that somehow that the contract is being changed, and it simply isn’t.  They’re suggesting that somehow that Chorus is going to get a big bonus, which it simply isn’t.  And they’re suggesting that prices are going to go up, which they’re simply not.  Prices are actually going to go down.  So apart from that, you know, I suppose their argument has some mortar, but with the greatest respect to them, they are being a bit cute, and I think they know they’re being a bit cute.  And when I had a conversation with two or three organisations that were thinking of being part of it, along the lines that we’re having now, they realised pretty quickly that they were being, you know, they were being pushed in a direction that probably takes it a bit far.  Fundamentally, it’s about how do you value the infrastructure when we’re moving into a new network environment which is fibre rather than copper-based, and that’s a debate which is being had and rolling out as we speak.  And Amy Adams, the minister, has got a discussion document out there with three or four options on it, and it’s no simple or more complex than that.

MICHAEL      Minister, did you underestimate the pushback you were going to get when you made this decision to change these prices?

STEVEN       No, I don’t think so.  I mean, there’s one or two PR practitioners that are known for this.  I remember when I was the minister, they ran a campaign on something else, and the ISPs are quite good at arguing their case, but I noticed that they’re not actually saying, ‘Whatever price cut occurred we’d pass on to consumers’.  They are actually talking about who gets to profit what out of the prices charged, so I think we all have just got to be awake to it and know that there is a midpoint here that will work fine and don’t necessarily be taken in by the PR spin from the paid practitioners, because there’s a bit of that going on.


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