Dennis Jensen (Tangney, Liberal Party) Share this | Hansard source

Both the member for Braddon and the member for Greenway have said that the last federal election was partly won by Labor using the National Broadband Network to gain the key votes of the Independents. Indeed, both the member for New England and the member for Lyne listed broadband high on their agenda. We know now that the NBN is apparently going to be rolled out from the outside in. But the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, has yet to be honest with the Australian people about the financial implications for the NBN of Labor’s negotiations with the Independents. He must do so now.

The NBN will be a $43 billion government owned telco monopoly that will fail to deliver on the capabilities it has proposed. The NBN is proposed to be more than just a high-speed broadband network. The scheme is supposed to deliver a range of new technology options such as smart grid capability and open-access internet protocol TV. Despite the massive cost to taxpayers, it will fail to deliver on these key capabilities. The government is rolling in a lemon. In effect, the minister is insisting that there should be a freeway onramp to every home, even if the householder only wants to drive the kids to school and go to the shops. And the minister insists that households pay for this onramp. Yet we see the reality: only 10 per cent take-up in the portion of the NBN currently rolled out.

This project is the largest single infrastructure investment in our nation’s history and the government refuses to do a cost-benefit analysis and has not published any business case. It also refuses to allow the NBN’s works to be subject to the Public Works Committee of parliament. Any government, Liberal or Labor, has never been allowed to invest so much money with so little scrutiny or accountability. So why should the Gillard government be allowed to do so now?

The cost of the scheme is of great concern, effectively $5,000 for every home in Australia. In terms of interest alone, this will be $350 to $400 per annum per household, assuming 100 per cent take-up, and we see from the initial rollout that the take-up is only about 10 per cent. Worse still, this is just the cost of servicing the loan, never mind depreciation, providing service and making a profit. In reality, the current commercial price of a fibre-to-the-home connection is less than $2,000, both internationally and indeed within Australia right now. Why the Australian taxpayer should pay more than 250 per cent above the odds is beyond me.

So why is it so much more expensive? Well, it comes down to the inefficient design of the network architecture. Within the NBN, there are in effect three fibres for every home. One could argue ‘do it once, do it right’ and the cost of the extra fibre is insignificant in the scheme of things. However, the cost to physically install, terminate and manage the fibre is the expensive part. It would appear there is a basic misunderstanding of access network design and the fundamental physics of the transmission of data using fibre. Today we can already transmit 10 gigabits per second on a single fibre, with 40 and 100 gigabits per second coming soon.

So why do we need to have three fibres for every home, with two of those fibres completely redundant? Senator Conroy says that there has been an ACCC analysis carried out on the NBN and that that is enough to argue the government’s case. But this wasn’t a cost-benefit analysis and didn’t consider alternative solutions. Like the government’s climate change committee or ‘committee for predetermined outcomes’, this analysis was simply advice on how the government could implement a policy it had already decided upon. This advice was deliberately limited. The shadow minister for communications and broadband has introduced a bill in this place to ensure that the NBN faces rigorous scrutiny. The National Broadband Network Financial Transparency Bill will refer the NBN to the Productivity Commission and bring the government to account over this $43 billion black hole.

The production and publication of a detailed 10-year business plan including key financial and operational indicators will force a true and transparent analysis of the project, expose its economic and technological deficiency and also ask a crucial question that Labor has yet to ask of the NBN: ‘Is this the most cost-effective way of providing all Australians with fast broadband?’ This analysis will not delay the NBN rollout and will provide advice that makes the network more efficient and more cost effective. Throwing away money on this network will not, as the government say, foster a ‘modern and more competitive economy’, rather it will grow our national stimulus debt exponentially and will ensure generations to come are burdened by repayments on this fibre dinosaur. This government have wasted our money in the past and, if we let them, they will do it again.

You would hope, given the massive cost to the taxpayer, that as much of the technology would be sourced inside Australia to retain as much of the $43 billion as possible. We were promised the NBN would create tens of thousands of new jobs in Australia. The Treasurer last week in question time said:

Building the National Broadband Network will create something like 25,000 jobs per year.

The Minister for Infrastructure and Transport said of the NBN:

It will drive job creation—the jobs of the new century, the jobs of the future.

Both obviously neglected to inform themselves of the facts. A number of media outlets have highlighted Australian companies which have been sidelined in their dealings with NBN Co. Their preference to deal with international organisations has already cost Australian jobs. The fibre-optic cable proposed to be used in the network is to be sourced from Corning, meaning it will be manufactured predominantly in Mexico. Why use a technology which is designed and manufactured overseas when there are Australian manufacturers of fibre-optic cable, which are both better designed and cheaper?

The decision to go to Alcatel for the gigabit passive optical network directly cost 50 jobs at NEC, who were designing their solution here in Australia for the global market. The operational support systems/business support systems solution vendor, while still to be decided, is most likely to go to an overseas organisation to the detriment of local company, Clarity. This firm already has their solution installed in a number of carriers within Australia, and they are winning bids overseas. A decision such as this could mean Clarity pack up in Australia and head off overseas.

Members of the Gillard government continually rise in this place to lambaste the opposition as critics of fast broadband infrastructure and information technology. Nothing could be further from the truth. The coalition understand that in an information age access to efficient communications services is vital to improve the provision of health, education, social inclusion and economic developments. We are proponents of a network that can be adapted and upgraded as technologies improve.

One size does not fit all. Using fibre as the solution for all Australian households—inner city, regional and rural—does not provide the most economical and efficient solution to the problem. Funding a project without a business plan and cost-benefit analysis is poor business practice and an irresponsible allocation of taxpayer funds. The coalition supports fibre as the backbone of any broadband project but fibre is not the magic elixir to solve all our communication problems. Again, the government flaunts its $43 billion fibre solution as the only solution that every Australian wants.

But we must accept that Australians are taking up wireless broadband at a rate that far outstrips fixed-line broadband, which is now fairly static. Consumers are sending the government clear messages, but they are being ignored at every turn. In this light it is difficult to see a business case for the NBN. Not only is the project financially irresponsible it creates risk around competition and efficiency in the telecommunications market.

I call on my coalition colleagues, government and crossbench members to support this private member’s bill and motion in both houses so as to hold to account Australia’s biggest ever infrastructure project. This is clearly a policy that needs to be fixed. It is far too important to be left in the hands of incompetent bureaucrats and government ministers, especially those of the Rudd-Gillard government infamy.

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