House debates

Thursday, 30 September 2010

Questions without Notice

Broadband

2:24 pm

Photo of Sid SidebottomSid Sidebottom (Braddon, Australian Labor Party) Share this | | Hansard source

My question is to the Prime Minister. How will high speed broadband, such as that being rolled out in my electorate, drive a modern, productive Australian economy?

Photo of Julia GillardJulia Gillard (Lalor, Australian Labor Party, Prime Minister) Share this | | Hansard source

I thank the member for Braddon for his question. In answering this question, I say very clearly to the House that I have taken inspiration from the first speech in this parliament yesterday by the member for Greenway, who gave a great dissertation about the National Broadband Network. In her speech she reminded all of us that if you look across human history it is divided into those who embraced the challenges of the future and those who were stuck in the past. Inspired by the member for Greenway, I found another few examples of people who did not see fit to embrace the challenges of the future. Thomas Watson, the Chairman of IBM, said in 1943:

I think there is a world market for maybe five computers.

He might have missed the challenges of the future. HM Warner of Warner Bros said in 1927:

Who the hell wants to hear actors talk?

And Decca Records said in 1962:

We don’t like their sound, and guitar music is on the way out.

These are a few examples of people who missed the challenges of the future. In the modern age we have the Leader of the Opposition saying that the National Broadband Network is a ‘white elephant’. That will join this series of quotes as yet another example of someone who cannot embrace the challenges of the future.

When we look for inspiration about the challenges of the future we should probably look at some of the studies around the world looking into the benefits of broadband. I draw the House’s attention to the United Nations Broadband Commission for Digital Development, which demonstrated the economic benefits of high speed broadband in its report:

In the 21st Century, broadband networks must be regarded as vital national infrastructure—similar to transport, energy and water networks, but with an impact that is even more powerful and far reaching.

The report goes on to say:

… for every 10 per cent increase in broadband penetration we can expect an average of 1.3 per cent additional growth in national gross domestic product (GDP) …

Broadband is the infrastructure of the future, which is why the government is committed to building it. Meanwhile, we see the other side on a mission of destruction to prevent Australia having this technology of the future.

Members of the parliament and members of the Australian public may have seen claims from the opposition about cost-benefit analyses and the National Broadband Network. I draw the attention of the House and members of the public to the fact that an independent McKinsey-KPMG implementation study has been conducted into the National Broadband Network. It was done at a cost of around $25 million and it has produced a weighty tome that makes War and Peace look like an airport novel. I recommend members, if they are seriously interested in understanding the economic benefits of the National Broadband Network, to look at that implementation study. We are committed to the technology of the future. I say to the opposition: it is time to stop the campaign of destruction, to recognise the benefits of the National Broadband Network and to work with the government to ensure that Australia gets this technology of the future.

2:28 pm

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

My question is to the Treasurer. I refer the Treasurer to the Treasury’s advice to the incoming government which warns that the $43 billion National Broadband Network ‘carries significant risks, including financial risk for the public balance sheet and risks around competition and efficiency’. Will the Treasurer precisely explain to the House the nature of these risks, when they were first drawn to his attention and why, given the gravity of the Treasury’s warning, a thorough cost-benefit analysis of this project is not being conducted as a means of managing and mitigating those risks? (Time expired)

Photo of Wayne SwanWayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | | Hansard source

I welcome the question from the member for Wentworth about this very important national investment, which has got the potential to lift the speed of our economy, to substantially improve productivity and to take the Australian economy into the 21st century in a confident way. He mentioned the red book, and I think there would have been similar advice in the blue book as well. It pays to read these documents in full, because what the red book said to the incoming government was simply this. It said: ‘A more competitive and hence more efficient and productive telecommunications sector will come from the NBN.’ It went on to say: ‘It is a transformational infrastructure resource for the economy, enabling new and enhanced ways of delivering business and government services and facilitating communication.’

Nothing could be more dishonest than to put that question the way it was put by the member for Wentworth, because the fact is that Treasury is very, very supportive of the NBN and has been involved in the process from day 1. It is important we go through this, because the fiction has been maintained by those opposite that there has not been a substantial business case built for the NBN, and of course there has been a very substantial amount of study and work from experts, both domestic and international. It started with the independent expert panel shortly after we were elected. Sitting on that independent expert panel was the Secretary to the Treasury. They are quoting Treasury advice. It is very important to understand these linkages.

Photo of Tony AbbottTony Abbott (Warringah, Liberal Party, Leader of the Opposition) Share this | | Hansard source

Reluctantly, Mr Speaker, I do raise a point of order on relevance. How is this answer directly relevant to the question that was asked, which is about the significant risks, including the financial risk for the public balance sheet, in the red book? It is the risks that were alluded to in the red book that he must provide an answer to.

Photo of Harry JenkinsHarry Jenkins (Speaker) Share this | | Hansard source

The honourable member will resume his seat. The question then did go on to ask for certain actions and, whilst it may be that some think it is a long bow that the response from the Treasurer is directly relevant to the nature of the need for a cost-benefit analysis, others might think otherwise. The Treasurer is responding to the question.

Photo of Wayne SwanWayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | | Hansard source

Mr Speaker, the very first risk is not to build the NBN.

Photo of Harry JenkinsHarry Jenkins (Speaker) Share this | | Hansard source

The Treasurer would be starting to argue the case if he were going to keep on that line.

Photo of Wayne SwanWayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | | Hansard source

The Treasury secretary was on the panel that we appointed, which concluded that none of the private-sector proposals offered value for money. So we then moved through. We took the decision to build the NBN and we then commissioned an implementation study by McKinsey and KPMG, which concluded there was a strong and viable business case. That is a study of something like 500 pages. Those opposite have been wandering around the country saying that we decided to embark upon this, we did not have any advice, we did not have any analysis and we did not have any costings. We had all of those, and all of that is presented in the implementation study. It says the project can expect to earn rates of return of between six to seven per cent. That gives us enough to pay back the cost of funds over time and to pay back the taxpayer.

But with any major investment of course there is a risk. There is always a risk with any major undertaking that a government enters into, and the Treasury is logically saying to the government, as they have done and will continue to do: ‘This is a very important project for Australia. You are going to get value for money. We do need it to lift our productivity. But what we have to do is work our way through all the issues.’

Photo of Joe HockeyJoe Hockey (North Sydney, Liberal Party, Shadow Treasurer) Share this | | Hansard source

That’s not right! That’s ridiculous!

Photo of Wayne SwanWayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | | Hansard source

That is right and it is not ridiculous. It shows you what a strange and bizarre world those opposite now inhabit that they can deny the logic of the Treasury advice, the logic of the Treasury participation in this process and the logic of the red—(Time expired)