John Key’s claim this morning that Chorus will go bankrupt if the Government doesn’t bring in the copper tax is pure scaremongering, designed to cover up National’s blunders in the UFB rollout, says Labour’s Finance spokesperson David Parker.
“To claim that Chorus is about to go broke is not economically credible. It’s just scaremongering. It is astonishing that the Prime Minister made this claim without producing the analysis to back it up.
“Chorus should not get a $600 million subsidy paid for by Kiwi consumers and its competitors.
“Even if the Chorus ultrafast broadband project is less profitable than Chorus expected when it won the $1 billion interest free loan ahead of competitors, it is not the Government’s role to impose a tax on Kiwi families to keep those profits up.
“Chorus can sort itself out – that’s how markets are meant to work. Chorus has not said it would go broke. Even if its contract has not panned out as it hoped, its choices include lower dividends and raising additional capital.
“This morning John Key made another ridiculous claim – that the Government had to intervene because the Commerce Commission got the law wrong. The Prime Minister is not a lawyer.
“Even if the Commerce Commission was wrong on a matter of law, Chorus could review that decision through the Courts or attempt to sort it out through the Commerce Commission process. There is no need for Government interference.
“The copper tax is another example of John Key’s corporate welfare programme. From SkyCity to Rio Tinto and now Chorus.
“Yesterday it emerged that Treasury said there was ‘no economic justification’ for the Rio Tinto subsidy. When the documents emerge on Chorus they are likely to show the same thing.
“There is a clear pattern now of ad hoc interference in markets by this government after phone calls between the Prime Minister and the CEOs or directors of big corporates. Their corporate welfare comes at the cost of Kiwi consumers and their competitors, said David Parker.
13 September 2013 MEDIA STATEMENT