Hodgson emphasises ICT for economic transformation

Improving access to quality, fast, reliable broadband services is a priority in the government's economic transformation agenda

Economic development minister Pete Hodgson has given ICT top billing in a key statement on the economic transformation of New Zealand.

Improving access to quality, fast, reliable broadband services is a priority in the government’s economic transformation agenda.

“There is little argument about why we need to do this, and little argument over our historic lack of competition or relative underinvestment,” Hodgson says. “We are past seeing this as a discretionary activity or an enabling part of a modern economy. Indeed it is better viewed as a prerequisite.”

The lack of high-speed reliable broadband is largely owing to an unsatisfactory level of investment, says a Cabinet paper that Hodgson refers to in his speech. Telecommunications regulatory reforms are designed to increase competition in telecommunications, and “incentivise the industry, and particularly the incumbent, to increase investment,” the paper says.

That, however, will probably not be enough. “It is unlikely that it will be commercially viable for traditional telecommunications service providers, such as Telecom, to make investments in key infrastructure bottlenecks in areas outside major urban centres in the next three years,” the paper says. As ICT Minister David Cunliffe hinted at the Summit, part of the answer could lie in public-private partnerships.

Hodgson gives no firm proposals in his speech while the Cabinet paper, drawn up before the Summit, says only that the government will continue to “monitor levels of investment in broadband infrastructure and will initiate a process for engaging with the private sector on this issue”.

A number of the other key areas of economic transformation identified in a speech the minister gave last week play directly into the ICT area. These include supporting the internationalisation of New Zealand businesses and improving our export of weightless goods and innovative solutions, particularly in the expanding area of environmental sustainability.

Other areas earmarked for innovation in export include “digital content”, but software is not specifically identified.

NZ Institute chief David Skilling says “a lot of the words are right,” but there is nothing essentially new in what Hodgson says. It shows the government is serious “to a point” in ranking broadband and other ICT elements as a high priority.

“But are we likely to see any material change and commitment? Are they willing to put in the money and pull the policy levers to make it happen?” Skilling asks. Hodgson’s speech and the Cabinet paper are still light on specific commitments, he says.

“There appears to be more willingness to think more creatively about the [financing] options,” but for evidence of a firm commitment, next year’s Budget will be the acid test, Skilling says.

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