Great column from Selwyn Pellett, a business leader who is involved in the high tech area.
Firstly, the justification for the plan is invalid or at least greatly exaggerated. New Zealand doesn’t have anything like the same Crown (government) debt as Portugal, Spain, Iceland or Greece. The combination of private sector debt — via our foreign banks — and Crown debt is unacceptably high at around 90% of GDP. However the difference in New Zealand’s case is that a greater proportion of our debt is private sector debt. A default on this debt impacts on the balance sheets of foreign banks not the New Zealand government.
Our Crown debt is, by global standards, still low. Lumping these two types of debts together, as the Prime Minster is doing to attempt to justify this policy, is at best mischievous and at worst dishonest.
The dividend stream that flowed out of Telecom – and indeed out of the country – would have been enough to see our broadband infrastructure in place a decade ago, with all the positive effects on GDP growth. Telecom’s ability to extract monopolistic pricing effectively became a foreign tax on all New Zealanders and a handbrake on our economic development.