Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

asked the Treasurer, in writing, on 24 May 2011:

Is the $18.1 billion of funds to be invested in the National Broadband Network included in the 2011-12 budget deficit of $23 billion and the forward estimates figures for the underlying cash balance over this period; if not, why not.

Wayne Swan (Lilley, Australian Labor Party, Treasurer) Share this | Link to this | Hansard source

The answer to the honourable member's question is as follows:

As outlined in the Budget papers, the Government will invest $3.1 billion in 2011-12, and $18.2 billion over the period 2011-12 to 2014-15, in NBN Co. This investment is in the form of an equity injection to a public non-financial corporation (PNFC), and therefore has no direct impact on the underlying cash or fiscal balances. This is because the equity injection involves swapping one financial asset (cash) for another (equity).

The classification of NBN Co as a PNFC is determined by the Australian Bureau of Statistics in accordance with the guidelines set out in the Australian System of Government Finance Statistics Concepts, Sources and Methods 2005.

Additional public debt interest (PDI) costs associated with debt issued to finance the equity injections will impact on the underlying cash and fiscal balances. The Australian Office of Financial Management undertakes a single PDI calculation on the basis of the Government's overall financing requirement, which is outlined in Note 10: Interest Expense on page 9-21 of Budget Paper No.1 2011-12.