Market failure is one of the marks of our time. From unaffordable, low-quality housing to child poverty to the over-valued dollar killing jobs to over-priced broadband and failed government IT procurements, the market keeps getting it wrong. The Greens and Labour know the answer is for the Government to step in; National just turns a blind eye. Russel Norman did it again yesterday.
The Greens’ ICT package has been widely welcomed by the ICT community and everyone who wants cheaper, faster broadband. They’ve done something quite simple and smart – looked at this important, sustainable industry, looked at the aspects of market failure that are holding it back and said ‘we’ll fix that’.
Taking a $100m 25% cornerstone investment in the second undersea cable is smart. As you know, the problem isn’t that the current cable is out of capacity – it’s got lots. The problem is, it’s a foreign-based monopoly that’s taking us all for a ride, charging too much for too little and too slow. The second cable will add to the physical security of our international internet connections but it’s bigger effect will be to take away the monopoly power and monopoly rents enjoyed by the Southern Cross bale at present.
Reforming government ICT procurement to give locals a look-in is also smart. Currently, the over-valued dollar means our producers get undercut by foreign companies, who often underbid and under-deliver. Novopay is the latest outrage, and the IRD’s new computer system is shaping to be the next. Taking into account the economic benefits of buying local is only sensible. You and I do it all the time, why shouldn’t the government?
Meanwhile, National’s pouring all its effort (not that there’s a lot of it) into mining – a polluting industry that employs only 20% of the people employed in ICT, and which sends the lion’s share of its profits overseas.
National is prepared to let the big problems fester while it engages in crony capitalism (mining favours, SkyCity, asset sales, irrigation subsidies) to favour its mates. Both the Greens and Labour are showing they are willing to get their hands dirty and fix what’s really wrong with our economy.