Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Hansard source

See if you can repeat it. The Minister for Infrastructure and Transport is enjoying a little bit of mirth because of all of the details in this motion, but at the heart of this is a very grave matter of accountability. The government says that we want to delay the National Broadband Network, that we want to frustrate the NBN. There is nobody in this House more committed to the universal availability of affordable fast broadband in Australia than I am. The coalition is as committed as the government is to the speedy availability, where it is not currently available, of fast broadband on an affordable basis. The object of the policy is completely bipartisan. There is no material disagreement between us on this point. The issue, however, is simply the fundamental one which I come back to again and again—and I fear I will come back to again in the future—and that is financial responsibility and accountability.

When this government came into office in 2007, it said that it would not undertake or fund any major public infrastructure project without a rigorous cost-benefit analysis. What does a cost-benefit analysis involve? Let us just reflect on that for a moment. A cost-benefit analysis in this context means no more than this: identifying your objective—and for this purpose, all Australians should have fast broadband at an affordable price. That is the objective. The cost-benefit analysis seeks to identify the most cost-effective way of achieving that, stacking the various options up against one another and working out the one that delivers the service most expeditiously and at the least cost to the taxpayer. It is no more than fundamental, basic common sense. So when the government came in and made that commitment to doing a cost-benefit analysis on major infrastructure projects, it was widely welcomed.

They established a specialist body, Infrastructure Australia, an expert body with distinguished people from the private sector on it, and the public sector, I might add, with the express role of identifying major infrastructure projects around Australia, prioritising them, and performing cost-benefit analyses. If the honourable members have regard to Infrastructure Australia’s website, they will see there that they have their whole cost-benefit analysis set out. It is very detailed and very careful.

That is all, in a nutshell, we have asked the government to do. We are not trying to get into an argument about this technology or that technology—you can make all of those cases and people will take different views. The truth is that broadband in the future will be delivered, just as it is today, over a variety of technological platforms depending on the needs of the particular user, their location and the applications they are deploying. The real issue is: what do we need to do to deliver this objective—fast broadband for all Australians—and how do we do it at the least cost to the taxpayer? That is the fundamental question.

You would think that a government that came to office with the policy of doing a cost-benefit analysis for any major infrastructure project would not hesitate to do one for what is the largest public infrastructure project in Australia’s history. We are not talking about small change here. The total expenditure by the government on this project will be $50 billion. How much of that is netted off by revenue will depend on the performance of the network. Needless to say, the company’s business case, insofar as we have seen it, is based on some very optimistic assumptions. I say without any criticism of Mr Quigley or the staff of the NBN that all of us are familiar with the melancholy experience of commercial life, that every business that goes bankrupt began with a highly optimistic business plan. None of them started off with a business plan that said that they were going to go broke. They all said they were going to go gangbusters. Sadly, all too often, they do not. This involves a huge expenditure and huge risk on the part of the Commonwealth, so a cost-benefit analysis is thoroughly appropriate. We have argued that that should be undertaken by the Productivity Commission. That would be very well employed to do it, but if the government was prepared to have Infrastructure Australia do the work, I am sure that they could do it with equal or comparable effectiveness. When the minister gets up to speak in a moment he will take half a paragraph out of an Infrastructure Australia report in which the members of Infrastructure Australia, I think you could say, genuflected respectfully in the general direction of the idea of a national broadband network without actually giving any opinion on the cost-effectiveness of this particular proposal.

The government have never been able to answer the challenge of their failure to do this work other than to accuse the opposition of being Luddites or opposed to technology or addicted to wireless or stuck in the dial-up era, or some other curious slur to sling against us. That failure to undertake that work leaves this parliament in a very, very difficult position. We are literally going into a huge investment almost blindfolded. As parliamentarians we do not know, we do not have the information to know, whether this is the most cost-effective way of undertaking this exercise. We do not know whether there are better alternatives. We all have views on that—some of us have views that are more informed than others—but we do not have an authoritative objective, a rigorous study that identifies what those alternatives are. Yet they are spending more money on this project than our country has on any other infrastructure project in our history and we are doing that at a time when there are huge claims on our government and our governments for investment in public infrastructure. We are just about, it would seem, to raise a $1.8 billion levy to fund infrastructure for flood reconstruction. If money is so short that we need a levy to raise $1.8 billion, why are we spending $50 million without a cost-benefit analysis?

We know that there are substantial existing telecommunications assets in the ground, presently working and with many years of life ahead of them, which can deliver fast broadband on a fixed line platform to Australian homes. Indeed, even if you buy the rather spurious proposition that the entire copper customer access network is defunct or out of date and rendered obsolete, the HFC network passes 30 per cent of Australian households and that can be used for fast broadband at speeds equal to, if not greater than, those promised by the NBN. These are all the critical issues that need to be examined.

While the government can choose not to refer it to the Productivity Commission for a cost-benefit analysis, in the normal course of events this project would come before the Public Works Committee. The Public Works Committee is a committee of this parliament established 100 years ago to oversee reckless government spending on public works. The objects of the Public Works Committee Act are, for example, to enable better decisions about major projects, given that large projects have financial, social and environmental impacts on local areas and the community at large, and to provide objective scrutiny of the various different options for delivering a project.

I grant you, the Public Works Committee is unlikely to be able to do as rigorous a job of cost-benefit analysis on the NBN as the Productivity Commission could, although it could seek expert advice and conceivably could ask the Productivity Commission to assist it. But the act—and this is an act that is a century old—requires the committee, for example, to report on the stated purpose of a work and its suitability, the cost-effectiveness of the proposal, the amount of revenue it will produce if the work is revenue producing, and the current and prospective value of the work.

Looking at the NBN, this is what the Public Works Committee would do. It would identify: what are we trying to achieve? Presumably, the answer to that would be universal broadband at an affordable price. It would then seek to ask the question: is this a cost-effective way of achieving that agreed object? It would then examine the amount of revenue. Is this really a commercial project? Is this genuinely going to produce revenues to offset the massive Commonwealth government investment? And—and this is a particularly important one—it would look at the current and prospective value of the work, because the value of the work is a very material issue for the government. The government is, for the time being, working on the financial fiction that the dollars that it is investing in the NBN and that it is taking from cash—borrowed cash, of course—are being replaced, following the investment, with an asset equal to the amount of cash invested.

There is nobody, not one person, in the telecommunications world who believes that this investment will be worth anything like, anything approaching, the level of investment by the Commonwealth in the NBN. The consequence will be that at some point there will have to be a massive write-down. The National Audit Office will require the government to take a hit, and that will have to go through the budget. But that, I suspect, is some time off.

One can recognise why the government does not want the Public Works Committee to do its job. The Public Works Committee would, if it were doing its work, seek to answer the very questions that the government is trying to avoid having addressed. The rather dispiriting irony of all of this is that the government goes to great lengths to prevent the Public Works Committee examining this project.

As a member of the Public Works Committee, I found myself up in Brisbane considering a Commonwealth government project—a public work—of $50 million. In other words, it is of a value 1/1,000th the size of the NBN. The NBN will involve expenditure of $50,000 million or $50 billion. This was $50 million for vehicle sheds, some tarmac and some classrooms for the reception, inspection and deployment of new wheeled vehicles for the Army—important work but not the biggest project ever undertaken. Nonetheless, it was our duty, because it was more than $15 million, to look at it. The Department of Defence turned up—uniformed officers and bureaucrats—and described how they had undertaken a cost-benefit analysis. That is what they had done for a $50 million project, yet this government—so reckless—is determined, if this regulation is not set aside, to prevent the Public Works Committee doing that job on this, the biggest public infrastructure project in our country’s history.

The minister will say in a moment that they have a better idea and that they have a joint committee.

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