Concern over changes to Telecommunications Development Levy

The Telecommunications Forum (TCF) is concerned about the process the Government has followed to extend a tax on the telecommunications industry to pay for the extension to rural broadband. Following the Budget announcements, the Government tabled a Bill in the House under urgency, to extend the Telecommunications Development Levy in order to tax the industry to pay for the next round of the rural broadband initiative.

Geoff Thorn, the TCF CEO said "This Bill has been introduced under urgency and doing so avoids any public debate. This is a proposal which has not been the subject of any consultation and which has avoided the usual scrutiny of that would apply to Government spending.

"The TCF supports expanding broadband to New Zealanders wherever they are, and the industry is investing billions to support this goal. The Government’s initiative to partly subsidise the build of the fibre networks (UFB) to urban New Zealand is a positive investment for all.

However, extending the rural broadband initiative and taxing the industry to fund it, is not only inconsistent with the funding approach for UFB, but is a financial burden the industry cannot afford as it deals with declining revenues and profits.

"The Bill extends a tax, which to date, has not been explicitly recovered from consumers. However, the industry cannot continue to absorb ongoing costs of this magnitude."

MBIE is proposing further changes to the Telecommunications Development Levy. Geoff Thorn said "The TCF is now concerned about the industry’s opportunity to be consulted on these changes, and for the industry to propose further changes.