MEDIA RELEASE

MBIE FUNDED REPORT SHOWS $2B DOWN THE TOILET FOR JOYCE’S TELECOMMUNICATIONS CORPORATE WELFARE

13 DECEMBER 2016
FOR IMMEDIATE RELEASE

An independent assessment of the Government's Ultrafast Broadband fibre rollout, funded by MBIE, shows that none of Steven Joyce's promised economic productivity gains have resulted and is major blot on the Government’s corporate welfare empire, according to the Taxpayers’ Union.

Responding to the MOTU report, Picking Up Speed: Does Ultrafast Broadband Increase Firm Productivity?, as covered by the NBR this morning, Taxpayers’ Union Executive Director, Jordan Williams, says:

"Being able to say ‘I told you so’ is little consolation for the fact that the Government has wasted billions on a UFB network which hasn’t resulted in any of the productivity gains it said would result."

“Even worse, the $2 billion spent by the Government is actually an understatement of what New Zealanders have been forced to pay because the Government has held up the price of copper services so as to artificially subsidize fibre."RELEAS

“This is what happens when politicians decide something based on emotion, buying votes and wanting to support sexy industries. Steven Joyce refused any cost benefit analysis prior to the UFB announcements and swallowed the Kool-Aid being provided by the telecommunication providers who benefited from the rollout money."

“Of course every New Zealander wants fast internet. But the Government chose to roll out fibre, when many experts were pointing out that developments in copper technology meant that for the vast majority of households, advanced ADSL technologies were more than suitable."

“While there are economic benefits of having fibre in business and industrial districts, private industry was already heavily investing in those services. Politicians came along and decided that there would be some sort of economic bonanza if billions were spent in laying cable to every New Zealander’s living room. This paper confirms that the Government’s claims were economic pixie dust."

“The UFB rollout is one of the biggest scandals of modern politics. Huge vested interests managed to squeeze more than two billion taxpayers’ dollars out of the Government for little, if any, benefit to the economy."

“The Taxpayers’ Union has long labelled the UFB scheme as ‘corporate welfare’. Steven Joyce has even mocked us for that characterization. This report shows that the Union was absolutely right.”

The Taxpayers’ Union 2016 report on corporate welfare is available at www.taxpayers.org.nz/welfare_bums.

ENDS

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