If elected, the National Party proposes to spend $1.5 billion of crown money on rolling out ultra-fast broadband to 75 percent of New Zealand homes and businesses in an effort to "future proof" New Zealand. A further $3 billion would need to come from the private sector say business experts.
The National party's five point plan to stop New Zealand further slipping behind the rest of the world, was unveiled in leader John Key's speech to the Wellington Chamber of Commerce last week.
"New Zealand needs to focus its efforts on the things that will really make a difference to our earning power," he said. "We're number 22 in the developed world for income per person—and falling."
Personal tax cuts, disciplined Government spending, reducing regulatory and office bureaucracy, improving education and investing in infrastructure will future proof the nation according to Key.
A key component in National's plan is increased investment in ultra-fast broadband.
"Our initial goal is to ensure the accelerated roll-out of fibre right to the home of 75 percent of New Zealanders," said Key.
In the first six years, priority will be given to business premises, schools, health facilities, and then homes. And to pay for it, National would contribute up to $1.5 billion from the crown coffers, providing they win the election.
"There is no doubt in my mind that speeding up the introduction of fibre-to-the-home across New Zealand will provide very positive returns to the economy as a whole, which will, in turn, benefit all taxpayers," said Key.
Peter Dunne, leader of United Future came out in support of the move while lambasting other politicians critical of Key's proposal.
"If direct government investment like Mr Key proposes is not the answer, then I'd like to hear two things from the critics—first, what is the alternative? and second, why has it not happened to date?" Mr Dunne said in a press release. A Government released statement by Communications and Information Technology Minister David Cunliffe said Telecom is the only company able to implement National's fibre plan. "John Key may state that his plan will involve a number of private players but reality will rule," said Cunliffe.
"The lack of detail and over-reliance on a single fibre network indicates National's plan hasn't been well thought through." The business sector stood to gain benefits from better broadband by increases in productivity, connectivity and innovation, Business New Zealand said in their media release.
But getting private sector investment could be a problem suggests Business New Zealand Chief Executive, Phil O'Reilly.
"Market participants agree that the total amount required to get broadband to 75 percent of premises is around $4.5 billion, and while a taxpayer injection of $1.5 billion would be a significant help, there is still the matter of gaining sufficient private sector investment to fund the balance," he said.
A further worry, said Roger Kerr, Executive Director of the Business Roundtable was the state becoming involved in telecommunications with fibre.
"We are not convinced this action is justified. If the returns are as good as they suggest they are, then private investors would be keen to do this," Kerr said.
Bronwyn Howell a Telecommunications Analyst from Victoria University said that every New Zealand home may not need a six lane highway running to it.
"New Zealand has a universally available service now and reasonable speeds," she said. "Ninety percent of users are small, with the other ten percent very large users."
She said decisions should be commercially driven, like the fibre run to Miramar. "Peter Jackson needed it out there so met the costs."
"It sounds like a great idea but the telecommunications sector is a highly complex system. You need a sound business plan when using tax payers' money,' she said.
The Engineering, Printing and Manufacturing Union (EPMU) representing thousands of telecommunications workers said the policy was a step in the right direction, but more details were needed.
"While we welcome any move to improve New Zealand's high-speed broadband we would like to see some more detail about how the money promised will be spent, and we'd expect a pretty big chunk of it to be allocated to wages and training if this announcement is to be taken seriously," said EPMU national secretary Andrew Little in a press release.
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