Labour commerce spokesperson Paul Swain has called on National to clarify who is running government policy - Ministers or Telecom.

Mr Swain was commenting on reports that the government has delayed and may even have abandoned plans to strengthen New Zealand's anti-competitive law and on the government's failure to enforce the Telecom Kiwi Share.

"In the competition area, there is widespread support for tougher laws, and the government has introduced legislation to increase penalties for breaches of the Commerce Act and to outlaw tacit collusion between firms.

"The most difficult issue was proposed changes to prevent dominant companies like Telecom from using their market power in an anti-competitive way. Amazingly, the government was moving to align our law with the less permissive Australian system but it has backed away at the last minute because of lobbying by Telecom.

"The government is being particularly gutless on this matter. It knows there are problems with the very light-handed regime under the Act, and it knows there is a need for the changes.

"But once again, as soon as Telecom barks they run cowering into the corner. This wimpish behaviour is putting the future of New Zealand's competitive economy at risk.

"Similarly, it appears the government is sitting on its hands while Telecom is deliberately flouts the Kiwi Share option. Telecom intend to charge two cents per minute after 10 hours use for residential customers using the Internet unless they use a new access code.

"Telecom have neatly distinguished between voice and data traffic and want to charge for the latter. This is not about overload on the voice network. It is about Telecom getting rid of its obligations under the Kiwi Share when voice and data become indistinguishable.

"It is an outrage and the government should be threatening Telecom with action if it continues to breach its obligations to all New Zealanders," Mr Swain said.

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