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Wednesday, May 03, 2006

Rodney Slates Labour's Disgraceful Destruction of Telecom's Property Rights

A Press Release From Rodney Hide

Today's announcement from the Government that Telecom's local loop will be unbundled has been slammed by ACT Leader Rodney Hide as a big step backwards for free markets and private enterprise.

"This decision is not about allowing competition, it's about government forcing a private company to open their network to competitors", Mr Hide said.

"Labour has absolutely no respect for private property rights.

"Instead of creating an alternative network, a group of companies have pressured Ministers to let them leech off Telecom's lines.

"As well as Telecom, the losers from this evening's announcement will be those companies which have built their own networks, including TelstraClear, Citylink, Woosh, Wired Country, Enternet and Airnet.


"This sends a chilling message to any company wishing to invest in infrastructure - Government will regulate and control you, unless you do what politicians say.

"Labour has shown its true colours - and a socialist desire to interfere elbow-deep in private enterprise.

"Telecom is one of New Zealand's most successful companies. Politicians should stick to their role of governance, and let businesspeople run their businesses.

"Who knows which company Labour will whack next.

"Government's forced unbundling of the local loop is a big step backwards for private enterprise and free markets",
Mr Hide said.

16 Comments:

Anonymous Anonymous said...

For a party that purports to support economic development, those statements are unbelievable. It's terrible how politicians feel obliged to slate any idea that isn't executed by them. Duplicitous bastards.

7:38 PM  
Blogger PC said...

Well said!

7:45 PM  
Blogger Trevor Loudon said...

Anonymous. Would you invest money into Zimbawean agriculture? Why not? Because property rights in Zimbabwe are meaningless.

Prosperity depends on secure property rights. Labour is telling all potential investors in NZ infrastructure that their property rights are highly insecure.

Many will now invest elsewhere, meaning much slower development in the long term.

That's why ACT condemns this robbery.

7:58 PM  
Blogger PC said...

Just to make it clear, my 'well said' was not in support of the Anonymous moron in favour of theft, but of the one politician who isn't.

9:03 PM  
Anonymous Overtaxed worker said...

"one politican" - Is PC implying that Heather Roy is in favour of theft ? Brave call given she is training on use of guns, lol.

9:53 PM  
Anonymous spam said...

@Trevor -

Whilst the Zimbabwe farms example may be a valid argument on principle, I think it falls-down on specifics.

You imply that communications companies wanting somewhere to invest shouldn't come here, because the government might steal their property rights. Isn't it a valid point to note that these companies will be comparing the business environments in New Zealand as well as other locations, and see that New Zealand is now just one of the many that has unbundled?

4:06 PM  
Blogger Trevor Loudon said...

The effect will be much wider than telecommunications. The message is clear-Labour does not care about property rights. That will be a disincentive to any business wanting to make a big capital investment in ANY type of infrastructure. Couple that with Chris Carter's recent overruling of the Environment Court and you get a pretty business unfriendly picture.

7:12 PM  
Anonymous Anonymous said...

"This sends a chilling message to any company wishing to invest in infrastructure - Government will regulate and control you, unless you do what politicians say.

What a load of crap! The only companies that should have anything to worry about are those that satisfy the following criteria:
1. It is a large monopoly
2. It is a service provider
3. Its service provision is based around a network
4. That network could potentially be opened up for competition via an access pricing scheme
5. That company is hugely profitable and would remain profitable after such regulatory schemes are implemented.
6. That company is using its monopoly status to restrict supply

Can anyone name any other company like that in NZ?

8:56 PM  
Anonymous Anonymous said...

Rodney would rather have the government cater for foreign shareholders than ordinary New Zealanders.

9:38 PM  
Anonymous James said...

Anon....f**k over foreign investors and you f**k over Mr and Mrs NZ big time.Go and look at those places in the world that have little foreign investment and work out why they all seem to be third world socialist shitholes...

Ands its a short step from diddled foreign investors to Kiwi invesrts being diddled....

4:24 PM  
Anonymous Anonymous said...

There is a difference between foreign investment and foreign ownership.

If you look at USA and countries in Europe you will find that they have a very small percentage of their assets owned by foreigners.

If the regulation goes according to plan (I have my doubts), Telecom's market share will decrease but other companies' market share will increase.

1:35 PM  
Anonymous RJ said...

In reply to Anonymous...
well there is for example the government's own Transpower, but that's alright because the government owns it, eh. There's Ontrack, the monopoly rail network. But of course, government owned. There's the State highways all government owned and all a monopoly.

Now, if the government wants to control what Telecom's line network is used for, they could do the obvious thing and buy them off Telecom.

6:28 PM  
Anonymous Anonymous said...

Local ownership doesn't necessarily imply state ownership. There are some large assets that could be easily owned and run in the private sector for profit. If it is a service provider, foreign investment regulation could help ensure that it stays locally owned.

Other large assets can't be owned/run easily by the private sector. For example, try privatising roads.

The govt buying the lines off Telecom could have been a plausible alternative.

With access pricing, other firms still have to pay a cost related fee to Telecom in order to access Telecom's network.

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