The Government says Labour is scaremongering by claiming that free local calls could be axed.
Labour communications spokeswoman Clare Curran released a Cabinet paper today which detailed plans to review the Telecommunications Act.
The paper, prepared by Finance Minister Bill English, proposed scrapping the Kiwi Share, which requires Government approval for any shareholder to acquire more than a 10 percent share in Telecom, and the Telecommunications Service Obligation (TSO) which limits phone line rentals to the rate of inflation and guarantees free local calls.
Communications and Information Technology Minister Steven Joyce said the Cabinet paper was about the Government's regulatory review programme and had identified areas to look at.
"Clare's just basically taken that and leapt forward several notches and suggested that meant the end of free calling and Telecom being sold to the highest bidder overseas and taken off the stock exchange," he told NZPA.
"Neither of those things are on the table... Our intent is to retain free local calling and our intent is not to further loosen foreign ownership around Telecom."
The Cabinet paper called for the "beginning of a regulatory review programme" which was part of the Government's first 100 day commitments.
The review's aim is to improve the quality of regulation which would "deliver big gains for the economy".
It will include a provision for the immediate removal of inefficient and superfluous regulation and will also create a system for future review.
Ms Curran said the Government was intent on a "creeping dilution" of the regulatory framework.
Mr Joyce said that was not what the Government was trying to do and said the exercise aimed to look at ways to promote greater efficiency and market competition.
He said the TSO needed to be looked at in light of technology changes and some regulation was outdated.
"But we're not changing the outcomes that would concern people."
The review will cover not only telecommunications but also the Resource Management Act, climate change, building, industrial relations, overseas investment, financial markets and local government regulation.
