A $340 million Broadband Investment Fund (BIF) established by the Labour government has been axed, the Government announced today.
The fund was to use taxpayer money to build the country's broadband infrastructure.
It allocated the $340m over a maximum of five years with industry players asked to apply by September 30 last year.
The fund was suspended before the election and Communications and Technology Minister Steven Joyce announced today it would not resume.
No money was given out before the suspension.
Funding for the Digital Development Council (DDC) would also be withdrawn immediately, Mr Joyce said today.
The DDC was established to advise government and to strive to make New Zealand a leader in information and communications technology.
The BIF was not compatible with the new Government's broadband plans.
The Government would work directly with industry groups rather than using the DDC, Mr Joyce said.
"We remain committed to engaging with the groups represented by the DDC but believe that direct interface is a much more effective means of receiving input and advice from these organisations."
New initiatives aimed at the roll out of ultra-fast broadband would be announced soon, he said.
"This is a $1.5 billion investment and, to get this right the first time, we will work carefully through the detail and ensure we have the right structure in place to secure the digital infrastructure which is so important to New Zealand's future prosperity."
Labour's communications and IT spokeswoman Clare Curran said the decisions on the fund and the council were "gut wrenching and wrong".
"Both have sent the industry tumbling backwards into uncertainty at a time when confidence, investment in regional growth and smart, innovative digital solutions should be at the forefront of an economic growth strategy," Ms Curran said.
"Dozens of innovative broadband projects poised to deliver fast broadband services to communities across New Zealand have been cast aside in an extraordinary backward step for our digital industry."
There was also no sign of a plan to roll out National's promised $1.5 billion fibre broadband network covering 75 percent of New Zealanders within six years.
"This is worse than a slow start. It's a kick in the teeth to the New Zealand's digital strategy which was considered world class and which had contestability and transparency as its base principles, along with a commitment to encouraging regional investment through local utilities."
DDC chairwoman Fran Wilde said members were disappointed but "keen not to lose momentum" and they would meet to see how they could assist the sector.
