John Key Finance Spokesperson

Tuesday, 16 May 2006

Cunliffe Should Go After Telecom Gaffe

Communications Minister David Cunliffe's comments that Telecom may have to cut its dividend to fund more capital investment are totally inappropriate and his head should roll, says National Finance spokesman John Key.

Mr Cunliffe was reported by Bloomberg today as saying that Telecom may have to cut its dividend to fund increased investment. This follows the Government's decision to unbundle the local loop.

"This is a company that, because of the Government's unbundling announcement, has seen its market value fall by more than 2 billion to 8.6 billion.

"This is not a step over the line by the Minister, it's a giant leap over the line.

"It is totally inappropriate for Mr Cunliffe to be making comments about a private sector company's dividend policy. That's not his job.

"This is the slippery slope that we feared - by having such sloppy execution by the Government over unbundling and possible separation of the company it is making Telecom's job more difficult.

"This is not in the best interests of the company - or New Zealand.

"You might have thought the Labour Government had learnt after Helen Clark's comments before it bought into Air New Zealand.

"Mr Cunliffe should resign, or Helen Clark should sack him."

ENDS

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