Government invests NZ$360m in broadband rollouts

The New Zealand government will invest a further NZ$360 million in its ultra-fast broadband and rural broadband projects as part of this year's Budget.

Communications Minister Amy Adams announced on Thursday that there would be a contingency of up to NZ$210 million in capital funding from the Future Investment Fund for the Ultra-Fast Broadband (UFB) project.

The project is aiming to roll out fibre to 80 percent of New Zealand premises. A total of 46 percent of the first stage of the project had been completed, ahead of schedule and on budget, Adams said. The next phase of the project will commence after a business case has been developed.

A further NZ$150 million from an extension of the Telecommunications Levy will go to fund improvements for the country's rural broadband network, contracted out to Spark and Vodafone, and for targeting mobile blackspots. The rural broadband project is now more than 73 percent completed.

"Better connectivity is critical to building a stronger economy and creating more jobs and higher wages," Adams said.

"New Zealand's digital economy is undergoing a transformation as we roll out Ultra-Fast Broadband and Rural Broadband Initiative throughout the country.

"Fast and reliable connectivity is critical to New Zealand's economic growth. Like running water and electricity, connectivity has become a vital service for homes and businesses."

In April, the Ministry of Business, Innovation, and Employment announced it would audit Vodafone's mobile sites where the company is required to offer a minimum 5Mbps download speeds to 86 percent of rural premises.

The audit would not, however, test the coverage of the towers.

The levy funding for rural broadband has been criticised by the Labour opposition, however. Labour's IT spokesperson Clare Curran said that it was wasteful spending on the Vodafone-led rural broadband contract.

"The rural broadband initiative is looking increasingly like another example of wasteful government spending after officials admitted they can't or won't measure the connections," Curran said in a statement.

"Spending a total of $450 million with no data to measure its success or failure is waste, pure and simple.

"The new spending comes from a levy on telco companies which will be passed onto consumers. It's a broadband tax with no guarantee of results."

Among other investments outlined in the Budget, the New Zealand government will plug NZ$35 million into Immigration New Zealand's new IT systems for border security and visa services.

The New Zealand Security Intelligence Service and the Government Communications Security Bureau -- which has been in the headlines over the past year after documents leaked from NSA whistleblower Edward Snowden revealed it had been spying on its Pacific neighbours -- will receive NZ$20 million over four years for "essential security services".

This will include recruiting staff, as well as core IT services, vetting program, and cyber-security services.

The government is also investing NZ$12.1 million to establish the New Zealand Business Number to provide a single number for businesses to use when interacting with the NZ government.

The New Zealand government is forecasting a deficit of NZ$684 million for 2014-2015 before moving to a surplus of NZ$176 million in 2015-2016 and NZ$3.6 billion in 2018-2019.