Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Hansard source

I welcome the opportunity to speak on this matter of public importance. It is a debate about appropriate technology for the future but it is also a debate about accountability. The public have a right to know that taxpayers’ funds are being used appropriately and responsibly. This government is refusing the Australian people that fundamental right in regard to the National Broadband Network. The NBN is the largest taxpayer-funded investment in Australia’s history. It is essential that the government provide taxpayers with complete transparency to ensure that they are getting value for money.

Regrettably, we all know what happens when Labor tries to spend money. We had $2.4 billion wasted on the pink batts disaster, a further $8 billion wasted on the school hall rip-off, a $1.2 billion blowout in the laptops for schools program and another $850 million wasted on solar homes. The amount of waste and mismanagement in Labor’s first term is unprecedented in Australian history. In fact, it makes Whitlam seem like an amateur. The blowouts and mismanagement of taxpayers’ money in Labor’s first term demonstrate why the NBN needs proper scrutiny and why the project should be subject to rigorous parliamentary oversight. Instead of submitting to an independent cost-benefit analysis, the government is choosing to make wild claims about the kinds of services that faster broadband will offer. As Kevin Morgan wrote today in the Australian:

It’s all starting to sound too good to be true and as such seems to have more in common with a giant Ponzi scheme than responsible and prudent policy. Like the promoters of any Ponzi scheme the government tells taxpayers: ‘Trust us. You don’t need to know the detail of the scheme or have a look at the books, just agree to put your money in because the dividends from the NBN down the track will be vast’.

So what has the government got to hide? Unless the government allows the Productivity Commission to conduct an inquiry into the NBN, parliament could reasonably assume that the government believes its own project is not commercially viable. Minister Conroy cites cost as a reason not to hold a Productivity Commission investigation into a project costing $43 billion. It is the largest project in Australia’s history and we cannot afford to do a study. Also, Minister Conroy uses time as an excuse. I guarantee that a Productivity Commission inquiry will not delay the project by one minute. All of the evidence suggests that the rollout will be unviable and that is why the government does not want to conduct a productivity study.

Today we learned that the Tasmanian broadband company Exetel have only signed 18 customers to their new NBN special offer of free connection and zero sign-up costs. You would have to ask how many people have actually signed up for the 100 megabit service with Exetel. It is not exactly selling like hot cakes because they have secured a grand total of three customers. The CEO of Exetel, John Linton, could not explain to the media why the NBN is proving so unpopular in Tasmania.

NBN Co. have spent millions of dollars advertising the service available and we should expect that the small towns chosen would jump at the chance to be the first people to sign up to this new service. But when it comes to Exetel, 18 customers have signed up in the space of five months—fewer than four customers a month. If I were a company executive I would be a bit concerned about the results of this test marketing exercise. I would be a little less than encouraged, I might say. I think any prudent investor, after having a test marketing exercise that has yielded such low connection rates, would be having a very careful look at this project.

These figures are exactly why the Tasmanian government is going to force the public to receive a connection unless they expressly choose to opt out. You cannot actually get customers in the market so you force them to join in. Tasmanian government modelling estimated that only between 16 to 25 per cent of premises passed by the rollout would take up the connection on a voluntary basis. So the government will start making connection mandatory unless customers opt out.

If the opt-out model is implemented in mainland states and territories the project could blow out costs by at least $3 billion, according to the McKinsey implementation study. Yet, the minister said that these facts are wrong despite the implementation study saying that if they are not installed on a demand-driven basis and instead are installed on an opt-out basis, the costs would blow out by $3 billion. This is because the government will be connecting additional homes that do not require the service.

The implementation study also recommended that the government offer incentives to retail service providers in order to sign up customers. According to the study, the incentives could run to $3 billion, or $300 per customer that the telcos sign up. The government is so worried about the project and its viability that it wants people to be forced onto the network at taxpayers’ expense. Labor is also destroying any potential competition to the NBN by preventing broadband services being provided down the HFC cable networks owned by Telstra and Optus. The government is ensuring that broadband wholesale prices will be free from competitive pressures. As Michael Porter from the Committee for Economic Development of Australia referred to in the Australian Financial Review:

… it means a new state monopoly surrounded by victims of political euthanasia such as cable broadband.

Mr Porter goes on to say:

There is no physical or economic reason for denying the long-term use of the HFC cable for broadband purposes.

At last night’s dinner, the Prime Minister told the Australian Industry Group that the government was committed to competitive markets, yet the government refuses to consider a competitive approach with regard to allowing the HFC network to compete with the National Broadband Network. This is a cross-city tunnel approach to infrastructure. Just as the New South Wales government closed the roads to eliminate competition and force drivers onto the cross-city tunnel—a financial disaster, I might say—the Gillard government proposes to close the HFC network to people who might want to use that as an alternative to the NBN.

Why should we not have competition between carriers? Will it not result in a better outcome for consumers? Will it not result in cheaper prices? Will it not result in an excellent use of resources? Today, the Business Council of Australia called for a rigorous cost-benefit analysis of the NBN and, subject to its outcomes:

… alternative options for meeting the objectives of the government may need to be considered.

These comments were backed up by Reserve Bank of Australia board member Roger Corbett:

Laying cables in and between the major cities is one thing, but the cost of laying cable to secondary areas is enormous. Is it justifiable? So I am all for an independent assessment, and I ask is laying cable the most effective way of delivering these services in these areas, or is there a better way?

The government does not want that question considered. If there are better ways for improving broadband services to regional areas then surely the government should examine them before it goes ahead with spending $43 billion of taxpayers’ money and potentially producing a massive capital loss for taxpayers. Mr Porter from CEDA also said:

We need soundly financed broadband evolution, not centralised revolution. We need to fix blackholes, improve satellites, expand backhaul competition to mobile towers and towns, and so forth.

The coalition agree with these assessments, which is why we believe the NBN must be analysed by the Productivity Commission. The commission is well placed to deliver an assessment on the economic and social costs and benefits which would be delivered under this program. Every regional member of parliament should be supportive of the coalition’s bill that would require the Productivity Commission to complete an independent analysis. Equally important to identifying black spots in regional areas is the National Broadband Network Financial Transparency Bill’s provision that the commission release:

… an analysis of the availability of broadband services across Australia, identifying those suburbs and regions where current service is of a lesser standard or a higher price than the best services available in … capital cities.

This is very much an argument about transparency. This is very much an argument about ensuring that Australian taxpayers’ dollars are invested for maximum benefit to the community. It is very much an argument about appropriate technologies for differing circumstances. There is great concern that the government is hiding behind a veil of secrecy. We saw Minister Conroy ducking and weaving at Senate estimates, unable to give clear and concise answers to reasonable questions, the sorts of questions the Australian public has a right to have answers to. It is absolutely essential we have a Productivity Commission inquiry into this investment. It is absolutely essential that we ensure that taxpayers’ interests are protected while we deliver appropriate technology.

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