Thursday, 18 November 2010
National Broadband Network Financial Transparency Bill 2010
Debate resumed from 15 November, on motion by Mr Turnbull:
That this bill be now read a second time.
in reply—I want to thank the members from all sides who have spoken in this debate and just briefly sum up the issues between honourable members. The government, in pursuing the NBN, are confusing the means with the end. They have established as their goal the building of a fibre-to-the-home national network for a cost of $43 billion to 93 per cent of households. That is the means. The end is the provision of universal and affordable broadband across Australia. The task of this parliament and the government should be to determine the most cost-effective way of delivering that that will provide competition and the lowest access prices to Australian consumers, and that is exactly what our National Broadband Network Financial Transparency Bill 2010 has asked the Productivity Commission to do. The terms of reference would require the Productivity Commission to analyse the availability of broadband services across Australia, identifying those areas where services are not of a high standard, and then to look at the different options by which that can be rectified.
It is clear enough to us that that goal of universal and affordable broadband can be achieved for a tiny fraction of the $43 billion bill that the NBN will involve, but the government does not want to know that and so it has resisted this legislation and refused to have it referred to the Productivity Commission—this notwithstanding that the government’s principal economic adviser, Dr Henry, has said on many occasions that every major infrastructure project should be subject to a rigorous cost-benefit analysis and any that does not pass that test necessarily detracts from Australia’s wellbeing. And, of course, the government established Infrastructure Australia to do precisely that job of prioritising, analysing and performing a cost-benefit analysis on major infrastructure projects. So common sense dictates that this project, the biggest of them all, should be subject to a rigorous cost-benefit analysis.
The government members have said no. What has been their argument? They have said it will delay the rollout of the NBN. That is completely and utterly untrue. The cost-benefit analysis would proceed while the initial demonstration sites that are being rolled out now were being built. Indeed, the experience in those sites would be very useful, I have no doubt, to the Productivity Commission. The government members have said, ‘The problem with a cost-benefit analysis is that you’ve got to put in a lot of assumptions and it’s subjective.’ If that were the case, you would never do a cost-benefit analysis on anything. You would never do an economic analysis of anything that involved looking into the future, because of course you have to make subjective decisions. Indeed, the government has made subjective decisions and judgments here in the assertion which a number of government members made and which of course Senator Conroy has made many times, which is that we should build this fibre-optic network not because of what it can do today but because of the things we do not know that it may be able to do in 20 years time. That is absolutely extraordinary, indicating a complete lack of understanding of the time value of money.
The refusal to undertake a cost-benefit analysis is bad enough, but now we have, in this bill, the opportunity to require the government to publish a business plan by tomorrow. If this bill were passed by the House and the Senate, a business case would have to be published tomorrow. The business plan is there—we know it is there—but the government will not publish it. They will not release it until after the House has risen. The Prime Minister does not want to be questioned on that business plan in this place. She does not want members and senators to challenge the government or scrutinise the government’s spending on this project based on that business plan, and so it is being hidden from view.
The reality is this: any Australian with a small business who goes to his or her bank to borrow $20,000 or $50,000 for a cafe, a retail outlet or a farm has got to produce a business case. The bank manager will say: ‘Where’s your business plan? Where’s your business case?’ And they will scrutinise that and hold the would-be borrower to account.
This government is taking $43 billion—this is not a $50,000 loan; this is $43 billion—from the Australian people, from Australians’ taxes, and asking this parliament, their representatives, to approve it, and we have not seen any business plan at all. All that we have seen is a study by McKinsey, and all we know about that is that the NBN management disagrees with it, so we literally have no basis for knowing what this network is going to look like in terms of its architecture, its design, its cost and its economic impacts. I say to all honourable members here—government members, opposition members and above all the crossbenchers: if you seriously believe in the so-called new paradigm, if you seriously believe in accountability, if you seriously believe in letting the sunshine in, how can you allow this government to keep all of us and all Australians in the dark and spend so much money with no scrutiny, no accountability and no information?
We talk a lot here about the digital divide and the importance of making internet access available to everybody. We note that 76 per cent of people in the major metropolitan cities have access to the internet at home and only about 63 per cent in the outer regional areas do. That is something that policy should address, and our policy in 2007, the OPEL policy, would have done that and our policies today would do that. We are totally committed, as I hope the government is, to ensuring there is affordable universal broadband, particularly in those regions. But where the big digital divide is is one based on income. Only 43 per cent of households with incomes of less than $40,000 a year have access to the internet at home. For higher incomes it is almost a hundred per cent, the high 80s and mid-90s penetration. So the big digital divide is marked by income, and that is why affordability of access is vital. The NBN will make internet access more expensive, not cheaper.
It will make it more expensive because it is a massively capitalised government monopoly. The arrangements the government is putting in place with Telstra about which the OECD has expressed such grave concern will prevent any competition with the NBN from facilities such as the Telstra HFC network. There will be nothing to stand in the way of the NBN charging very high prices, and indeed, because of the huge capital burden its architects have imposed on it, it will have a very great incentive to do so. The McKinsey plan, which has been disowned—I do not know whether this part of it has been disowned—forecasts internet access prices increasing by at least four per cent a year for the next decade. Internet prices have been coming down precipitously over the last decade. We are going to spend apparently $43 billion of taxpayers’ money to send them up again.
This is crying out for rigorous analysis. The government says, ‘You only want to send it to the Productivity Commission because you want to kill the NBN.’ Well, we are utterly committed to universal and affordable broadband. We are utterly committed to the end, to the goal. The question is what the most cost-effective means is, and that is why one business group, one business leader after another, one leading economist after another, has called for a cost-benefit analysis to be performed. The telecommunications sector is calling for a cost-benefit analysis to be performed. The second tier telcos in the Alliance for Affordable Broadband—PIPE Networks, Allegro, Vocus and others, these companies who it is claimed will be great beneficiaries of the NBN—themselves have pleaded with the Independent members of this House to support the reference to the Productivity Commission. The only voices opposing a reference to the Productivity Commission are the people who do not want the truth to be told, who do not want the facts to be revealed, who want $43 billion of taxpayers’ money to be spent without any scrutiny, without any accountability, without any responsibility.
Madam Deputy Speaker, I commend this bill to the House.