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  • NBN Business Plan - Another Labor Failure

    20/12/10

    The Government has published today a 160 page summary of the 400 page NBN business plan.

    It confirms that the NBN’s cost has blown out even further, and before substantial construction has commenced. Only seven months ago Stephen Conroy said the Government’s own investment (exclusive of debt) would peak at $26 billion. Today we learn that at least $27.5 billion of equity will be required from taxpayers.

    The roll-out of the NBN was promised to be completed in eight years. We now learn that it will not be complete until 2021 – three years later and 14 years after Labor’s original failed NBN tender.

    Many Australians with inadequate broadband services today, whether they are in the country or the city, will have to wait much longer to get adequate broadband under the NBN than they would under the more practical approach outlined by the Coalition.

    The Government has repeatedly refused to allow the Productivity Commission to conduct a rigorous cost benefit analysis into the whole NBN project – to answer the question what is the most cost effective way to provide universal and affordable broadband for Australians.

    Senator Conroy has justified this refusal on the grounds that the Government had already spent more than $25 million on an Implementation Study by McKinsey. Yet all the major assumptions in the McKinsey Study are contradicted by NBN itself in this summary Business Plan. The $25 million turns out to have bought advice that was not worth a cent.

    The need for independent cost benefit analysis of the NBN is absolutely fundamental. Every billion dollars spent needlessly on the NBN is a billion dollars that cannot be spent on public transport, roads, hospitals or schools.

    The NBN Co has estimated that the retail price for a 12 mbps service with a 50 GB cap will be between $53 and $58 a month. This is not materially different from many ADSL2+ plans currently in the market.

    Despite this being the largest infrastructure investment in our nation’s history, the Government is not publishing a complete set of financial statements.

    Instead the document includes a series of summaries of financial matters which would be regarded as utterly inadequate were the NBN a private company seeking the approval of its shareholders for such an investment.
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