Telecommunications (Development Levy) Amendment Bill

I move, That the Telecommunications (Development Levy) Amendment Bill be now read a third time. As I have heard in this debate, fast and reliable connectivity is critical to New Zealand’s economic growth. Like running water or electricity, connectivity has become a fundamental must-have service for homes and businesses. The Telecommunications (Development Levy) Amendment Bill—we should have given it a catchier name—highlights the Government’s commitment to extending enhanced connectivity to regional New Zealand. It will help us to deliver faster, more reliable connectivity to the regions.

I would have thought that it would be hard to argue against better connectivity for our rural and remote communities, but there have been a number of MPs across the other side of the House—Labour MPs—who I believe are putting politics ahead of people. I cannot wait to be out on the stump in 2017 reminding rural New Zealanders that Labour campaigned against their getting better broadband. Labour is the only party in the House opposing this bill, and I find its position astonishing. It is showing tonight that it would rather side with the telecommunications company executives and their profits than support the extension of broadband to communities that need it. No wonder it cannot win in regional New Zealand. No wonder it is so out of touch. No wonder it is bottoming out in the polls. It cannot even bring itself to support better broadband for regional growth for rural and provincial New Zealanders who desperately need it. It annoys Labour so much to see a Government programme succeeding that it will cut off its nose to spite its face. And, of course, Labour members cannot filibuster if they are voting in favour, which is what we know they are all about, really.

There has been some confusion from the benches opposite, so let me set some things out very clearly. Opposition members who are opposing the extension of the Rural Broadband Initiative are opposing the basic principle of ensuring that our most rural areas have the same opportunities that faster broadband offers our cities. We do not support that. Opposing this extension is refusing rural New Zealanders the same connectivity that other parts of New Zealand enjoy. Labour members will tell us—and they have been telling us throughout this debate—that uptake of the Rural Broadband Initiative is low. They are cherry-picking the numbers, and they know it. We know that 8,500 people have signed up under the fixed wireless broadband programme, and that is only 20 percent of the Rural Broadband Initiative 1 spend.

Furthermore, Labour members are completely ignoring the fact that one of the core benefits of that part of the spend is enhancing cellphone connectivity. The cellphone connectivity benefits of those Rural Broadband Initiative towers mean that every quarter nearly 2 million New Zealanders benefit from it. The other 80 percent of the programme is fixed line copper broadband. As of 31 March more than 85,000 households were able to connect, and almost 68,000 households have. That is an uptake rate of 80 percent. That does not even begin to cover the service provision to rural hospitals, rural health centres, and rural schools. This is the programme that Labour is trying to tell you is not working and is failing. If that is the definition of failure, Labour has not got a clue.

We have also heard that this is some sort of new tax. Well, I can tell you that it is not a tax and it sure the heck is not new. Taxes, for those who do not know, have a broad-based application. Levies are targeted and are used for specific targeted purposes. The telecommunications development levy has been in force since 2011 and replaced the telecommunications service obligation, which had been in force even longer and was higher. And, of course, we announced these changes in August. In this case, it is a levy charged against some of the large telecommunications companies, and it is used to fund open access infrastructure in areas where it would otherwise not be commercially viable for it to be built. Someone has to pay for it, and I do not believe it is fair that taxpayers should foot the bill for the infrastructure that the telecommunications companies use to provide their commercial services. The levy is user-pays, and that is exactly how it should be.

The Government’s rural broadband programme reflects our commitment to rural communities. We are working with our private sector partners to provide services and coverage that would not otherwise be feasible. By 2016, 90 percent of New Zealanders in areas not covered by ultra-fast broadband will have access to rural broadband under Rural Broadband Initiative 1. The $150 million raised by this levy extension will be put specifically towards extending the Rural Broadband Initiative so that almost all Kiwis can benefit from better connectivity under the National Government. That is $100 million for expanding fast, reliable broadband to the regions, and a further $50 million for expanding mobile network coverage in black spots.

The Rural Broadband Initiative is making an immense difference to the way that rural firms do business, to the way that our kids learn in rural and remote schools, and to the way that health services are delivered to patients. There does, however, remain a high level of unmet demand in rural areas that are not scheduled to receive upgrades under the original Rural Broadband Initiative. This is due to increased numbers of customers, high download demand constrained by existing cabinet technology, and backhaul limitation. This bill is about letting us get on with making funding available for communities to improve their connectivity, with a $100 million contestable fund for extending broadband in our regions. The criteria for the fund will focus on enhancing connectivity across all areas outside the ultra-fast broadband footprint, and they are open-minded about the range of technologies that will be used. This bill means better connectivity for more people.

Mobile phone coverage is an essential form of connectivity and can be even more important in rural and remote New Zealand, where it has benefits for public safety, as well as the potential to grow productivity in our regions. Currently, the Spark, Vodafone, and 2degrees networks claim to provide, collectively, mobile access to approximately 97 percent of New Zealand premises. However, those existing mobile networks achieve less than 50 percent geographic coverage of New Zealand. There remain many rural and remote areas of New Zealand such as sections of State highways and remote tourist areas that would benefit from extended coverage. The benefits of expanded mobile coverage include, of course, improved communications for businesses and residents who live and work in those areas; improved public safety, particularly on our State highways; and making our tourism destinations more attractive, particularly in some of those smaller communities. As a result, this Government is establishing a $50 million contestable fund with the aim of providing mobile emergency calling and voice and contemporary data service coverage. The fund will enable companies and communities to nominate black spots in key tourist areas and work together to make a case for funding. Let me also confirm that none of the money from this contestable fund will enable any company to satisfy its existing obligations to provide coverage.

Rural connectivity is absolutely critical, and everyone in this House agrees on that, except for Labour. Everyone in this House agrees on that, except for Labour. Can I thank New Zealand First, the Greens, the Māori Party, United Future, and ACT for their constructive approach and for recognising that, actually, we do need to get on, at pace, with rolling out broadband to our rural communities. Someone has to pay, and it is appropriate that it should fall on the telecommunications companies. I thank those parties for recognising that this levy has been in place for a long time. It is a matter of cents in each bill, and if any telecommunications companies argue that they needs to put their prices up as a result, then their consumers should look long and hard at those claims, because I do not believe that they stack up. This is a Government that is fulfilling its promises to regional New Zealand. This is a Government that knows that connectivity is the core plank for regional economic growth, and this is the Government that is delivering it. I am proud to commend it to the House.

Labour believes that there should be an inquiry into the Rural Broadband Initiative. If there is anything that has come out of the debate tonight, then it is that this Government does not listen and that that Minister, Amy Adams, does not listen. This Minister pushes things through and ignores concerns. She has denied that this is a tax. It is obvious that this is clearly a tax on consumers, and it is going to be imposed on consumers. She has refused to answer questions about the evidential basis for the rural broadband scheme and whether it has actually delivered. She has refused point-blank to provide any evidence to the House or in this debate, and her ministry has not provided any information on this.

The debate that the Opposition parties have had tonight begins the debate that should have been held in a select committee. This should have been a first reading speech. If this had been a first reading speech, then the Labour Party would have supported the bill in its first reading. The Labour Party would have supported the bill in its first reading. This is a bill that is being taken through all its stages under urgency, with no opportunity for submitters to come before a select committee or for members of a select committee to ask for evidence from all parts of the rural community. We have heard tonight from some of the industry players. We have heard from a major telecommunications company. We have heard from an industry association that represents the telecommunications industry, and we have heard from the organisation that represents the smaller wireless internet service providers, which are the ones that are coming up and the ones that are building strong, community-based connectivity throughout New Zealand that is not part of the Rural Broadband Initiative. Those are the organisations that should be being supported and nurtured, but the Rural Broadband Initiative is not doing that.

The Rural Broadband Initiative has had no scrutiny, and the next part of the Rural Broadband Initiative will have no scrutiny either, which is why Labour cannot support it. If there is to be an inquiry, then we need to take a principled view on this, and that is what Labour has done tonight. Labour members took a consistent, principled view on these issues when they went into the election. We went into the election with policy that raised concerns about the Rural Broadband Initiative. We said that there had been ongoing concerns, over a number of years, that the Rural Broadband Initiative was not delivering broadband to the tens of thousands of rural New Zealanders. We said that the existing scheme was inadequate for the needs of many of our rural communities, and that although it was providing internet access via cellphone towers—that is an improvement over dial-up, and there is no doubt about that—it falls far short of the quality and speed provided to urban New Zealanders through ultra-fast broadband and existing connections. This is not the step change that the Government promised. The standard of rural broadband services has been woefully less than the step change that was promised. We have taken a principled position on this, and we are holding to that position.

This issue is not about telecommunications companies, actually. It is not even about the instrument of the telecommunications development levy as a levy—that is not what this debate is about. It is about what this Government is doing without scrutiny, under the cover of urgency. It is pushing legislation through that will spend $150 million of new money, which is going to be paid for by the industry but will be passed on to consumers—and I do not think that anyone can argue about that tonight—and the debate is about whether or not it is right to do so. We have missed a stage in the process, and it is a critical stage. We are the legislators. We are the legislators who are making the decisions on these issues, and we have got to be accountable for them. If you do not take a principled position and you allow a piece of legislation that commits $150 million to go through all its stages under urgency, with no scrutiny, then the Labour Party thinks that that is irresponsible. We cannot, in good conscience, vote for this bill, because it has not gone through the right process. The Minister has not addressed the important questions that have been raised tonight. She has glossed over the issues. She has refused to answer questions about where the accountability for the Rural Broadband Initiative lies and where the economic analysis for the next tranche of this programme sits.

There are real New Zealand businesses that are investing heavily without Government or industry-funded money through a levy. They are investing heavily in their local communities. They are based in places like Gore, Ōwaka, Timaru, Ashburton, Culverden, Seddon, Richmond, Masterton, Napier, Palmerston, Palmerston North, Inglewood, Hamilton, Tauranga, Waiheke, and Whangarei. The organisation that contacted us via the email that my colleague from New Zealand First Tracey Martin read out earlier is an organisation that was formed only recently and that represents those wireless internet service providers that are the quintessential essence of what innovation in rural New Zealand looks like. But they are struggling because they are doing it themselves, and this Government has allowed a programme to be developed around rural broadband that, firstly, has not delivered for consumers, and, secondly, has provided the money mainly to big providers, which have entrenched their status in rural New Zealand and have blocked many of those smaller companies from coming through.

There are no guarantees by passing this legislation tonight that those smaller companies are going to get a look-in and are going to be able to thrive. That is the story. That is what we should be promoting here tonight: the progress of a piece of legislation that is going to nurture those sorts of businesses and allow communities to develop connection capability that actually suits their region and that is not part of a one-size-fits-all structure, which is what this Minister is proposing and which the previous Rural Broadband Initiative has done and has not delivered on. Labour cannot support this bill tonight because we have taken a principled position. We are absolutely committed to rural connectivity. We are the party that took comprehensive policy into the last election. We are the party that works alongside rural New Zealand and rural communities. We are the party that knows how to do this well rather than the once-over-lightly from the Minister and what she is proposing to this House. We do not support this bill.

I could start off in many ways in this third reading of the Telecommunications (Development Levy) Amendment Bill, but I will actually start by borrowing a line from a movie that I saw many, many moons ago: you, Miss Clare Curran, had me at “inquiry”. I mean you had me gobsmacked with the word “inquiry”. This is how Labour does everything: “Let’s do an inquiry.” With the modern-day techno speeds that we actually get in this world, she wants an inquiry that will take months and possibly years and millions of dollars potentially. She wants an inquiry. People in the rural sector are complaining to her, as she commented, and she wants an inquiry. This is so typical of Labour. This is how ineffective it is and this is how wrong it is about this issue. It is the only party in this Parliament that is opposing this bill. We live—

💬 Todd Barclay: Shame!

Yes, that is right, shame. Todd Barclay, you know about the rural sector. You actually live there. You know how desperately we actually need this. We live in a world where things are instant and accessible. We can even access our telephones with a thumbprint nowadays. We cannot wait for an inquiry. This is the reason why we are here. This is a good bill and we need to pass it tonight. I commend the bill.

It is so disappointing to see a Government so out of ideas, so vacant, so desperate to hit the panic button that it has New Zealand’s Parliament in urgency after Budget night for a bill that, from its point of view, is simply a bill to roll over an existing tax. The Government cannot have it both ways; either this bill is a “nothing”—in which case the Government should not be taking Parliament’s time, abrogating the select committee process, and ramming the bill through under urgency—or it is actually an issue and it is actually a problem, and it needs to be thoroughly debated. The Government cannot have it both ways. The Minister, “Out of Breath” Amy, is back here saying the oldest trick in the book: that Labour opposes broadband. We do not oppose broadband. Our whole history has shown leadership in the telecommunications sector, without which this Government would have very little to play with. It does not have to lecture us about our commitment to rural broadband. We are absolutely secure in our commitment to broadband roll-out. Straw man arguments never work. They never work because, in fact, we know why we are opposing this bill.

I am going to take you through the objectives of good policy. I am going to take you through the issues that arise with this bill, and, finally, why we cannot support it on grounds of process. The objectives are quite simple: better connections for faster, cheaper broadband everywhere in New Zealand—ubiquitous coverage. We want to see users with strong capability and the confidence to use the gear wherever they are in New Zealand. We want to close digital divides. And, thirdly, we want vibrant content competition wherever people are in New Zealand. That means having enough bandwidth so that terrestrial, aerial, and online providers can compete to deliver the best deals to consumers. We are firmly on the side of getting broadband into the regions. The issue is not “whether”, but “how”. That is where the Government’s arguments run into fundamental trouble.

Earlier we quoted from an extensive OECD study that showed the really wide range of issues that arise with rural broadband roll-out. It is necessary to evaluate the $300 million worth of investment that has already been made. It is necessary for a range of reasons. The technology is shifting, and the frontiers between backhaul fibre, copper extension, mobile satellite and innovative disruptive technologies like Project Loon from Google—all of those things—are changing, and we need to assess the best way to deploy the public’s money. The second issue is that this is a tax. The industry has made it clear that this is a tax. The Telecommunications Carriers Forum has made it clear that this is a tax. It is a tax; therefore, it is a broken promise. It is a tax; therefore, it should not be done under urgency without a generic tax policy process or proper select committee consideration.

The Government, in its attempt at a defence, said: “No, no, it is just the rolling over of an existing programme.” No, it is not. It is not, because the existing law legislates for the sunsetting of the current telecommunications development levy. It legislates the sunset. That is why the Government has managed to enrage pretty much the whole industry with this seemingly simple piece of law, because companies have had to disclose their profitability based on some certainty of contracts under the existing law. They certainly did not expect the Government to undermine that by pushing legislation through under urgency. This is a change, it overturns preceding law, it overturns preceding contracts, and it is somewhat strange to see members opposite delving, with some torture, through the archaeology of Coase theorem to find some justification for standing on their liberal heads and saying that they are in favour of Parliament expropriating private property rights without so much as a by-your-leave or the “The Maestro” of the Northland by-election giving a decent explanation. Chris Bishop—back to strategy school.

The other problem with this is—without evaluating the rural broadband programme that has currently been in place—that there could be very, very few technology areas as dynamic as broadband roll-out over long distance. We have got 3G, we have got 4G, and we have got 5G coming, which looks like it will deliver more broadband speed than you can get through a closed deployed copper wire. It is certainly going to be very disruptive for the industry. Any prudent Government would want to look very carefully at that technology frontier before putting a new obligation on the industry, which is designed for the old world, not the new—designed for the old world, not the new.

The bottom line is that we can have a whole lot of arguments about the technology, about the construction of the tax, about how good or bad the previous deployment has been, but the fact that those issues are out there should be proof enough of the fact that we need a select committee process. The industry said that it wanted to have a say. It offered to co-design this legislation with the Government, but it got a salute instead. The public wants to have its say. The public wants to say “No taxation without representation.” We do not think that ramming this stuff through under urgency is fair representation. Then, of course, we have got technical problems around the fact that the commencement date is not specified and that we are overriding, with the stroke of a pen, law that has been painstakingly developed through multiple public processes.

In summary, there are both very important substantive technology and policy problems, and there are significant process issues as well. This is not simply an extension of an existing agreed industry position; this is a new tax. This is a broken promise. This is desperate government. This is desperate government, because it does nothing to lift productivity, it does nothing to create jobs, and it does nothing to deliver a better future for New Zealanders. It is just a tax. Ask people in New Zealand’s regions whether they think National has a plan for them. Chris Bishop, did you ask Northlanders? I think you did, and I think you got the answer, which was that Simon Bridges’ bridges convinced nobody. They convinced nobody that National had a plan for the region, because 5 years of being ignored and then 5 weeks of random pork barrels—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

So here we are, and you are rightly bringing me back to the point that this bill should be about regional New Zealand. Give regional New Zealand a say. Have a select committee process and call for submissions. Although we strongly support rural broadband, we do not support abrogating the parliamentary process in this way. We cannot support this bill.

I seek leave to correct the record of the House for the voting during the Committee stage. It should have been 13 votes for the Green Party, and not 14.

This is for the Committee stage—

💬 Eugenie Sage: Since dinner—since the dinner adjournment.

The ASSISTANT SPEAKER (Lindsay Tisch): For all Committee stages since dinner?

💬 Eugenie Sage: Yes.

The ASSISTANT SPEAKER (Lindsay Tisch): And the first reading?

💬 Eugenie Sage: No, just since the dinner adjournment.

The ASSISTANT SPEAKER (Lindsay Tisch): I will just check with the Clerk. Leave is sought for the Green Party to change its vote from—

💬 Eugenie Sage: From 14 to 13.

The ASSISTANT SPEAKER (Lindsay Tisch): —14 votes to 13 votes in every vote cast since dinner. Leave is sought for that purpose. Is there any objection? There is none. The record will be changed accordingly.

The telecommunications development levy, when we continue it with this bill, will provide the funding to provide support to the rural communities of New Zealand, because this Government works for all New Zealanders. I commend this bill to the House.

What is in a name? That which we call a rose would, by any other name, smell as sweet. Is it a levy? Is it a tax? Actually, who cares? Has Bill English broken his “no new taxes” promise? Well, he put up GST, he put up the petrol tax, he has introduced an airport levy, he is introducing a capital gains tax, he has cut the paper boy rebate, and he has put a tax on private jets—it does not actually matter whether he says he was not going to introduce any more taxes. He has extended and introduced new taxes left, right, and centre—in fact, literally left, right, and centre if you think about the political spectrum. It just does not matter.

The relevant question is: what do we do about paying for the continuation of the Rural Broadband Initiative, and for these black spots? Earlier on in the debate I was trying to work out what the different objections were, and what the questions were about. I just want to acknowledge again the Minister for having taken a call and responded to some of those questions. I just want to reflect back on some of those.

The first question was in relation to the press release from Spark about passing on prices. The Minister said that it cannot be justified as that would be double-charging consumers because it is already contained in the price. The Telecommunications Carriers Forum has a different view. It said that, actually, the industry has been absorbing those costs rather than passing them on, and so it would be new for the industry to pass them on. It is kind of unclear which of those views is correct. It becomes quite difficult, and I can fully appreciate why the Labour Party would like to have a proper select committee process so that we can get to the bottom of that.

The second question was about the quality of the connection and whether the money that has been spent so far—the $300 million that has been spent so far—was a good use of the money and whether it was producing the results. I am afraid that we did not get a good answer on that question; nor did we get a good answer—or, in fact, any answer—about the issue of evaluation and reporting on the effectiveness of the existing Rural Broadband Initiative. Tracey Martin raised the question of why it is up to the Greens and New Zealand First to do the Government’s job for it. There are a bunch of questions here, and a Government bill about the quality of the spend. Where was the Government’s response? We are not getting a response to a number of these questions.

There was a related question that was about new technologies. Mr Cunliffe spoke very eloquently about that, and, again, I do not feel that that was addressed. We did have a question about whether companies would get two bites of the cherry. We received an unequivocal answer from the Minister on that, that they would not, and I am very pleased to hear it. That was the point of one of our Supplementary Order Papers, and so we feel that that has been answered, and I appreciate that from the Minister.

We also asked why this legislation needs to be passed under urgency. Again, the Minister responded directly to that, saying that we cannot start negotiating, and there is such urgency to roll out the whole programme that we cannot wait for the full legislative process to go through this. I empathise with the Government’s sense of urgency. As I said in my first or second reading speech, having travelled around the country over the last 10 weeks, in the rural areas in particular, the digital divide is exacerbating an existing social, educational, and economic divide. We have real urgency to get this out there, which is why the Green Party is inclined to support this bill, even though we would normally not support bills being progressed under urgency because of the lack of scrutiny that goes with passing legislation under urgency.

We asked a related question that was around why we are doing this now—seeking funding while the policy design is being consulted upon. Again, I think that relates to the sense of urgency, so we were satisfied with that answer from the Minister. The question about competition—and this was another Labour Party concern that I do not feel was sufficiently addressed—was whether small companies and a broader range of companies will be able to participate in the programme, or whether it is just going to be the established players. So that one is still kind of up in the air. The ninth question was around what the Minister’s response was to the two Supplementary Order Papers put forward, but I feel that that was answered, as well.

So some questions were answered; some were not. We are left, actually, with some discomfort about voting for this bill because there were a number of the key issues, we feel, the Government did not actually bother to try to answer.

We also had the question of whether the legislation is constitutional, so it has been quite a surreal night. Who would have thought that a telecommunications funding bill would have involved the regent of Belgium and other constitutional arrangements? And there was the question of the Royal assent, which took up close to an hour and was sort of a fascinating piece that we got into on this bill. It has been quite a strange legislative process tonight. Strange enough, as I have said, because I felt like New Zealand First and the Green Party were kind of doing the Government’s work for it, because we were not getting answers to those entirely valid questions that the Labour Party was raising.

We will be voting for this bill, but we are disappointed that some of those questions have not been answered, including some of the really substantive questions about the quality of the spend of the money so far, and the possibility that we would be throwing good money after bad here. I did want to gently remind the Labour Party, which stood on principle tonight on the matter of urgency and said that it could not support such a weak legislative process, that only a couple of months ago it supported the Remuneration Authority (Members of Parliament Remuneration) Amendment Bill through the urgency process. This piece of legislation was passed not only without any of the normal legislative processes but it contained algebra that no one in the House could actually comprehend. At least we have some idea of what this bill will actually result in, which is the raising of $50 million a year for the next 3 years. That is, actually, a pretty simple proposition. That is easy enough to argue about, but the MPs’ remuneration bill contained a formula that, literally, no one knew what they were passing as they were passing it.

It has been a fascinating evening. We will be supporting this piece of legislation because we do believe that the programme needs to continue, with a great deal of urgency, but we do have some discomfort and we will be looking to the Government to answer those questions that it did not bother to answer tonight. Thank you.

Can I just allay the fears of the Green Party member James Shaw by saying that New Zealand First member Darroch Ball is a member of Mensa and that he actually understood the algebra in this bill—so New Zealand First was well-informed when it voted, thank you very much.

New Zealand First is supporting this bill because New Zealand First believes it should be supported. We would agree with Labour in some areas. We would agree with the Labour Party that it would be a good idea for the Commerce Commission to do an inquiry or a review of the $300 million spend. I disagree with Melissa Lee when she waved her hands wide and said that you have to stop everything in order to do a review. I remind Ms Lee of the digital literacy inquiry, which actually looked at the work of Network for Learning. It was done by the Education and Science Committee, under the chairmanship of Nikki Kaye, and that inquiry changed the direction of Network for Learning while it was still going. While it was still being developed, the inquiry identified that it was going in the wrong direction, and it shifted direction so that it was a much better provider.

We would also agree with the Labour Party on the need for local small to medium sized enterprises to be part of this roll-out and to be able to participate in the provision of the Rural Broadband Initiative. We are sitting here on 21 May, and it interests me that on 19 May the Warkworth Area Business Association put out this email to all its members. The title of this email is “Ultra-fast broadband improvements”. Much has been made that the industry did not know that this funding was coming. Much has been made that the industry did not have an opportunity to be consulted. Again, I say that lobbyists for industries always have the telephone numbers of Ministers. I find it hard to believe that the industry did not call the Minister’s office and have a conversation about this. The email goes on to say that on 12 March the Government announced that this funding was coming.

I think it is pertinent to the bill that we are talking about—and to the conversation that has been had about whether there has been consultation, about whether there has been a review, about whether there is going to be participation by the public, which is the other area that has been addressed—that this email says: “The ultra-fast broadband 2 funding is intended for rural towns.” It says: “In order to make an informed decision about how to allocate funding, central government has invited local authorities, including Auckland Council, to submit a registration of interest. This is an opportunity to communicate to central government any issue with broadband and the level of demand for better services in rural Auckland. We would like your help to make sure that we get as much accurate information to Government as possible.” The questions they ask relate to a description of where you live, i.e. the boundary of your community; what your current internet service is like; what problems you have with your broadband connection; the extent of the problems; and what demand for broadband services is like in your community. They ask members to please provide other information around business information, and any other information that they want to provide to the register of interests for the funding for the broadband roll-out.

That is the Warkworth Area Business Association. That is a local group taking control and talking and sending directly to Government information around how this—what we are talking about tonight; what will be funded—is delivered. We take the Minister’s word that the reason this needs to go through under urgency is that without the levy that has been there since 2011 and without it being secured in legislation until 2020 there is no way that the Minister can start the process of deciding how and where it will be spent. This is a process matter at the moment. We agree that sometimes process needs to be short-circuited. In this instance, this is a continuation of a levy that has been in place for several years, that was fully consulted on, and that the telecommunications companies knew was coming, and the levy is to continue to deliver what we know is needed.

However, we do support many of the areas that the Labour Party has mentioned; we just do not support their call to try to stop this bill tonight. We have a member on the Commerce Committee. We would support a call from that committee to do a review or an inquiry and to actually have a go at making sure that up to this point we have been in the right direction—how we could possibly, while the Minister is consulting the communities, have a look at this and make some bright decisions. Let us not change just for change’s sake, but let us actually look at where we might be able to improve. Kia ora.

We have made very good progress tonight on this bill. It provides excellent infrastructure for New Zealanders. I commend this bill to the House.

The next call is a split call. Dr David Clark—5 minutes.

I rise to speak for the last time on the Telecommunications (Development Levy) Amendment Bill, a bill of broken promises. Labour will be opposing this bill. As many of my colleagues have outlined, there are many problems with it. We must say, first and foremost, it would have been much smarter for the Government to expose this to public scrutiny. The fact that this evening it has imposed on New Zealanders a tax that will be borne by businesses and households without allowing the public to have its say is shameful. There is no need for this rush, absolutely no need whatsoever. This obviation of the normal processes is a travesty.

Of course, we heard the Minister for Communications, Amy Adams, in her opening speech say that “the industry will not need to put their prices up or explain to their customers why their bill is changing”, and within the hour we had one of the major telecommunications companies saying that it would be putting up its prices as a consequence. And, of course, we know the reason why this is. It is because in that industry, planning is years ahead. Telecommunications companies plan years ahead for infrastructure developments, and so, of course—of course—they have taken into account the fact that the levy was supposed to run out. Of course, they have taken that into account in their planning and so they had built in what charges they thought necessary. And now they get slapped with another charge, which was unexpected, a tax on them that they can, and must, pass through to their customers. They are going to make their bills transparent so that we see when we use their services the extra dollar per month that that will be costing as a result of this change for each and every business or person connected to this service. That might not sound much to some people but to many business people struggling in the regions that extra dollar does matter—it does matter. It is a marginal cost but it is a cost. Every marginal cost matters. It does become prohibitive for some people. That cost is on top of many other costs that this Government has put on top of small business. It has put up red tape left, right, and centre. It seems to have no heart for small business. We have heard of plenty of additional taxes: the paper boy tax in the last set of Budgets. We have had the additional child support—

The ASSISTANT SPEAKER (Lindsay Tisch): Order!

—expectations and so on.

But coming back to this bill here, we have got in the departmental disclosure statement a clear yes as to whether this is in the nature of a tax. Yet we have the Deputy Prime Minister dancing on the head of a pin. It is a shame he cannot land an aircraft on the head of a pin like the last Labour Government did nine times in getting to surplus. We have him dancing on the head of a pin when his own department says that yes, this is a tax. It is one of three new taxes after this Government said it would introduce no new ones before the last election. InternetNZ, of course, called for a review. It said: “Why do we not look at it and see if this rural broadband money is being spent effectively?”. There is $300 million being poured into this. It does not seem an unreasonable request but a Government that is out of touch might say “No, we will not have a review. We do not care that only 8,500 people have taken this up by our best estimate. We do not care that it has cost $7,000 a head for this particular initiative to be taken up, because we are the Government. We won the election and we do not care any more what the people think.”

Well, that is a Government out of touch, I am afraid. It is a Government out of ideas. Introducing new taxes seems to see the big idea we are facing today. The reason, of course, we can see that this is being passed under urgency is because Government members are trying to hide their failure in rural New Zealand. They are embarrassed, at least, for their failures in rural New Zealand. Of course, I have seen in my own electorate the need to get a petition. A group has gone to the extent of having a parliamentary petition to get rural broadband. I encourage others who are experiencing the same difficulties around New Zealand to do the same, to approach their local MPs, and to get a petition set up that will be heard by Parliament, because this problem is costing hundreds of millions of dollars and the Government is wanting to be unaccountable for spending. This is a Government that does not care about taxpayer funds and that does not care about small business. It is a tragedy. It is a shame. I hope the next speaker, because I know he is sympathetic to the issues of small business, will take on some of these challenges as well. We have seen a Government that is prepared to break its promises on the surplus in the Budget, the biggest promise of all. It was central to the election campaign promise and it has broken it.

I call David Seymour—5 minutes.

Well, I had enormous hopes for the previous member’s speech. I hoped to see a principled, detailed, economically literate, public policy - based rebuttal of the bill. Sadly—sadly—my hopes were misplaced. But I thought that in the interests of informing the House, I should show the member how somebody might have given such a rebuttal and might have critiqued the bill. The first question to ask about any public policy intervention or revenue-raising initiative is: where is the market failure? Why is the game theory outcome not Pareto optimal? You might look for an answer like that in the regulatory impact statement.

It is a sad commentary on the standard of regulatory impact statements in New Zealand, I am afraid to say, that they are not very strong. It seems the problem definition is mostly about why the current policy is not as big as we would like it to be. It even quotes political party websites in the regulatory impact statement. That is not the kind of problem definition and identification of market failure that one would like to see in a regulatory impact statement.

One might well argue that there is no public policy basis or intervention logic behind this bill. The Opposition could have done that, but, sadly, it did not. It might have raised the question of technological change. If I could indulge the House with a small personal anecdote, 15 years ago my flash uncle wired his entire house with ethernet, and we thought that was pretty cool and he thought that was pretty cool. Then along came something called Wi-Fi, and then we did not think he was so cool and neither did he. You might think that is a small personal anecdote, but I recently heard that larger organisations are capable of such mistakes. Indeed, the entire Tasman District Council recently—as recently as 15 years ago, that is—made a regulation that every house in its region should be wired with ethernet. That lasted for about 3 years and it was swallowed by the same fate. Anybody who wants to fund a rural broadband initiative through any kind of revenue source should be very wary that technological change is happening a lot faster than Government programmes and legislation, even legislation as fast as tonight.

Hypothetically, if you did agree that there was a case for the public funding of telecommunications infrastructure, you might ask some questions like: to whom is the benefit and what is the most appropriate source of revenue to fund that benefit? It seems the principle is that it is current telecommunications users. Well, what we find in the regulatory impact statement is that one of the best rationales you can find is that we need to do this for people who do not have access to telecommunications services. So we are charging the people who are using the services on behalf of people who are not using them. That sounds to me like a public-good argument or a redistribution argument, and if you adopt the principle that you want to raise revenues in the ways that are least distortionate of behaviour, then you should use low-rate, broad-base taxes such as indirect taxes like GST.

None the less, that was not the quality of argument that we heard, even from some of the most able members on the other side of the House. So I conclude with another thought, which is that even the best public policy relies upon political support to be sustainable. What this bill is really about is ensuring that the body politic of New Zealand is able to keep supporting the public policies under which it lives. That is why there is a naked, unashamed, redistributionist element in this bill, and perhaps in another time and another place and another electoral result, I might speak out about it a little bit more strongly. But seeing as those who can actually are unable to, apparently, for cognitive reasons, I will not either and will be supporting this bill. Thank you, Mr Deputy Speaker.

I support this bill.

It is a sad indictment on the level of debate in this House from the National Party that that was one of the better contributions to this bill. I commend Mr Macindoe for getting up and at least telling the truth about their position on this bill. He did not say anything to support it because the grounds on which to support this piece of legislation are very thin.

It was with ultra-fast speed that the Minister for Communications was forced to eat her words from her first reading speech. I will, for the benefit of the House, remind the National Party what Amy Adams said in her first reading speech: “The industry will not need to put their prices up or explain to their customers why their bill is changing.” Within the hour, not even 60 minutes had passed from those words leaving the Minister for Communication’s mouth, Spark New Zealand issued a press release making a liar of the communications Minister. That press release says that now the Government has confirmed the levy/tax will continue rather than reduce as originally legislated for, it has put upward pressure on future costs and Spark will have to pass that cost through to its broadband and on-account mobile users. Not even an hour had passed.

We had the Minister who said: “No, New Zealanders, don’t worry, we’ve got this sorted. We’ll get this money from the telecommunications industry.” And then the telecommunications industry said: “Well, actually, Minister, we’re going to get it from Kiwis.” According to this press release from Spark, the average bill of Kiwis using broadband will go up by $1 a month. You can argue: “Hey, that might not be a lot of money.” It certainly is not a lot of money for the people who support the National Party with all their big cheque books, but it certainly is to people on this side of the House.

There needs to be some scrutiny around this piece of legislation as to the effectiveness of the expenditure for the first tranche of the Rural Broadband Initiative. Maybe Mr Seymour might like to join the Labour Party and other parties on the Commerce Committee to get an inquiry on the effectiveness of the Rural Broadband Initiative. I think Mr Seymour actually raised a very good point: is what we are doing the most effective use of the money? Is it the right technology?

We may not agree with everything that Mr Seymour may want to look at, but he might want to join our initiative to get an inquiry into whether or not we are getting good value for money. I always thought that the ACT Party was the bastion of trying to make sure that every taxpayer dollar was spent well. But, no, no, no, not tonight—not tonight. Three hundred million dollars was spent on the first tranche of the Rural Broadband Initiative. We want to know whether that money has been spent effectively.

From that side of the House we heard, during the Committee stage at least, very few speeches. They are lions in their seats but lambs on their feet. They would not get up and take a call to say: “Well, this is good spending of $300 million.” At least David Seymour stood up and said: “Hey, is this money being spent effectively? Are we doing the right thing?”. I look forward to Mr Seymour getting to the Commerce Committee—a very good select committee—and helping us get our inquiry over the line. I look forward to you coming to our meeting next Thursday.

Four hundred and fifty million dollars is not chump change; it is a lot of money. And $300 million has already been spent on the first tranche. There is concern in rural communities as to whether that expenditure has been effective to deliver what has been promised by this Government, and that is that 86 percent of rural people would get at least 5 megabits per second. There have been—and I believe that the number is three or four; I think it is three—rural communities come to our Commerce Committee and say: “Well, Parliament, that hasn’t been our experience. We have slower or ineffective broadband speeds in our area, and we were promised this.”

We thought it was a really good idea to see whether or not that first $300 million was spent effectively. I thought that the Government might think that too, but, no, we have already heard from the chair of the Commerce Committee that she is not interested in having an inquiry. Maybe we need just that one more vote. Maybe on Thursday morning at 10 o’clock, which is roughly when we have our meetings, Mr Seymour, you might want to turn up and help us out. I am sure that you and your members do not want to see $450 million go down the drain.

We actually do want to make sure that the Rural Broadband Initiative is effective. We actually agree with the objectives of the Rural Broadband Initiative. Who would not? Isolated rural communities want to make sure that they are connected, not just for economic benefit; there are educational benefits and health benefits from the Rural Broadband Initiative. If we are going to spend more money, we want to make sure that that money has been spent effectively, and that simply has not been the case.

There has also been an argument from that side of the House—not a very strong one—that this will not affect the telecommunications industry. That is not necessarily the case, because the telecommunications industry is not very impressed with this Government. The industry is saying that this piece of legislation has been rushed through urgency. Geoff Thorn—no stranger to us; he used to be the general manager of Parliamentary Service—who is now the chief executive of the Telecommunications Carriers Forum—[Interruption]

💬 Hon Member: Take a call, Mr Bennett.

Yes, take a call. Get up. You were here for the Committee stage, but I did not hear one peep out of Mr Bennett—not one. All he can do is interject—all he can do is interject. Well, just shush for a minute, Mr Bennett, and listen to what the telecommunications industry has got to say about your process—slamming this through at 11 o’clock at night.

This bill has been introduced under urgency, and doing so avoids any public debate. Well, heaven forbid that we have public debate. Heaven forbid that we actually let the public have their say on this, seeing as they are going to be the ones who are paying for it—a dollar every month. We cannot have the people coming in here. This is a proposal that has not been the subject of any consultation and that has avoided the usual scrutiny that would apply to Government spending. They go on.

For the benefit of Mr Bennett, this bill extends a tax. That word “tax” is mentioned four times in this press release, I must add, and that tax to date has not been explicitly recovered from consumers. However, the industry cannot continue to absorb ongoing costs of this magnitude. Translation: the telecommunications industry has absorbed these costs and is saying it cannot do that any more. As we saw from Spark, who is going to be paying now? Its customers—its customers. The Government is furiously trying to spin: well, do not blame us; blame the telecommunications companies. Well, who is passing this legislation through in the dead of night? It is this Government—it is this Government—and there is no scrutiny. No members of the public can come and ask any questions, and this is the way the Government is doing it.

The Rural Broadband Initiative is a great thing, but if we are spending $450 million, we want to make sure we do it properly. Do not just throw the money out there, into the wind, and hope that everything is all right. If we are going to spend $300 million we want to make sure it is being done properly, and this piece of legislation allows us to collect $150 million more to roll out the second tranche. I think we should take a big, deep breath and have an inquiry to look at whether the first tranche worked, before you have $150 million more spent. It can be done, otherwise we might be wasting taxpayers’ money. I know Mr Seymour hates that, so I look forward to seeing him on Thursday morning at the Commerce Committee. It might be your turn to bring the baking.

I can do no better than to echo the sentiments of the senior whip.