Wednesday, 18 September 2013

Cunliffe v Key: Two sides of a Muldoon

In his first day in the House yesterday, in the only chance he will have in four weeks to demonstrate he has what it takes to back up his windy rhetoric about “having John Key’s number” and showing the PM with his pants around his ankles, David Cunliffe did at least choose a real target on his first chance to defenestrate his opponent, which is John Key’s prevalence when “supporting business” to take that line too literally by supporting the shareholders of particular businesses.

He could have chosen anyone from Fletcher Building to Sky City to Rio Tinto. Instead, Cunliffe chose yesterday to target the business Chorus, for the use of whose copper lines the Key Government is setting the prices customers pay to use Chorus’s  copper network–-setting them at a level high enough to encourage consumers to switch to the Key Government’s bright, shiny, multi-billion dollar Ultra-Political Fibre Broadband network, and (in the process) delivering a profitable windfall to the very business Cunliffe dictatorially dismantled when he was Minister in Charge of Dismembering Telecom.

A complicated story to tell, but a worthwhile one to target because that profitable windfall for this one business is crippling many others, all of whom are forced to pay the higher prices dictated by the Key Government.  They’re calling this a “copper tax.”  A “tax” inflicted upon them because the  flagship National broadband project is going down the toilet, and customers are being made to pick up the slack by being price-fixed into buying into it.

That was the real point Cunliffe needed to make yesterday after putting his Freudian foot in his mouth--but he couldn’t, because he has always been as much in favour of a multi-billion dollar “ultra-fast” government broadband network as the Key Government.

Trouble is, both he and Key were banking in their multi-billion dollar election promises to deliver ultra-fast government broadband on  demand for ultra-fast broadband that doesn’t exist—such a banked-up demand that only a government fibre network (apparently) was able to satisfy it.

Yet the only reason the government is price fixing now that the rubber is hitting the road is that the actual demand for ultra-fast fibre over not-quite-so-fast copper is so slight that the government has been panicked into “encouraging” customers to change by jacking up the prices on the service most customers actually favour.

Which is making all our broadbands more expensive.

And which makes you wonder just how sound an “investment” the Prime Minister’s pet project really is, and how ethical it is to jack it up by delivering rents to cronies.

So Cunliffe is right to target Key’s cronyism. Key’s predilection for favouring favourites is based on trying to “help” business. But his help being so tightly targeted ends up as textbook cronyism, with the Prime Minister picking winners, Thinking Big, and setting prices to redirect demand to businesses government favours. Those with long memories will remember this was one face of the Muldoonist  orthodoxy that killed the country.

The other face was Muldoon’s ability to destroy the value of a business just by looking at it.  And that is David Cunliffe’s forte, as evidenced by his dismemberment of the company he made and is still making a political football: Telecom and its offshoot Chorus.

So between Cunliffe and Key we have two faces of Muldoonism.

And two-faced might be the right way to describe both of them.

2 comments:

  1. The companies themselves are just as bad. Vodafone had the barefaced cheek to go on record as saying the government should get out of the broadband price fixing market and let the commerce commission fix the price instead. Chorus said the opposite. Nobody seems to have considered the option of all of the different parts of govt all getting the hell out of the way and giving our fucking money back.

    ReplyDelete
  2. Pete. I'm normally not concerned about swearing in public but to use the M-word is just going too far!!!

    ReplyDelete

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