Senate debates

Thursday, 25 November 2010

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010

In Committee

3:58 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

I note at the outset that the government has clearly made a very strategic decision on the handling of this legislation. It has pulled off the Minister for Broadband, Communications and the Digital Economy and sent in Senator Lundy because Senator Lundy is at least able to ad lib and give a speech without looking at her laptop all the time about the concepts of the government’s proposed NBN legislation. It is certainly a very smart move by the government to pull Senator Conroy away from this legislation and to move in Senator Lundy. I congratulate Senator Lundy for putting on display today all of her passion, expertise and commitment to this portfolio. In the last week we have witnessed the Gillard government sending in the Minister for Finance and Deregulation, Minister Wong, to run a bit of a check-up on Senator Conroy, to run a bit of an independent review, because the government is clearly having second thoughts about this whole NBN process. We now have this pincer movement—with Senator Wong on one side and Senator Lundy on the other side—and they are holding up Senator Conroy in the face of battle.

Essentially, Senator Lundy has just said: ‘Trust us—we’re from the government. These are the assertions we’re making about the NBN. Just take our word for it.’ The reality is that the government have not demonstrated that their proposal is the best way to achieve faster and more affordable broadband. That is what this debate is all about. In fact, under the Rudd government, the then Minister for Finance and Deregulation, Lindsay Tanner, was just about bragging about the fact that they were not going to do a cost-benefit analysis—they were not going to go out of their way to demonstrate that this was the best value for money and the best way of ensuring faster and more affordable broadband for all Australians. Of course everyone agrees with the object of this amendment. Senators on this side agree with the concept that we want faster and more affordable broadband. That is not at issue; nobody disagrees with it. The question is whether the government’s proposal of the pursuit of a project that is now worth $49.5 billion and already has an overrun of $6½ billion is the most effective way to deliver faster and more affordable broadband for all Australians.

Senator Lundy tells the chamber: ‘Trust us—we’re from the government. We’re telling you that this is future-proofed technology; we’re telling you that this is the best way to go, so just take our word for it.’ But I remind the chamber and people around Australia that this government was not able to give away $2½ billion worth of pink batts. Even the then Prime Minister, Kevin Rudd, apparently told caucus that that was one of the great failings of the government. The government could not give away $2½ billion worth of pink batts for free, so how can we trust them with a $49.5 billion project sight unseen?

The fundamental problem of this government is their total incompetence, because that drives everything else. There are incompetent ministers on the front bench and ‘zombies’ on the back bench. In saying that, I am quoting Senator Cameron, a very authoritative source. Senator Cameron knows a zombie when he sees one, and he has identified the whole Labor backbench as zombies. These are not my words; these are Senator Cameron’s words. We are in a circumstance now where there is a combination in the government of incompetence and zombiism, and what happens? When they stuff up, they have to cover it up. Everything they do is driven by this need to cover up their stuff-ups. That is where the secrecy and the cutting of corners again and again come from. That is what got the Rudd government into trouble and why the then Prime Minster eventually lost his job—fundamental incompetence could no longer be swept under the carpet.

Essentially, the process that ran this morning was a demonstration of all of the fundamental problems of this government. They knew that they wanted to bring this legislation on. They knew that they wanted to run a gag motion. They knew that they wanted to vary the hours for debate. They knew that they wanted to stop us from even having debate on the gag motion. But were they ready? No, they were not. As we were debating a motion to suspend standing orders this morning, people were busily drafting the motion behind the doors—they did not even have their paperwork ready. They were not even ready to apply a gag, just as they were not ready last night.

Today is an incredible day in the history of the Greens’ contribution to parliamentary democracy. In years gone by, Senator Brown always prided himself on occupying the high moral ground in his scrutinising of governments, whoever those governments were. In seeing his smile from one ear to the other while jumping up to move the gag motion last night, his absolute pleasure in trying to cut down debate, his anger when the move failed last night and his enthusiastic attempts to limit debate on this important legislation today, we have also seen a significant shift in the way the Greens contribute to Australian political life. Senator Bob Brown has demonstrated that the Greens are now a party of power. They are the ones who are running this government—they are the ones who are in charge—and what happened last night and today is an indication of the sorts of things that will happen from 1 July next year, when they are going to be totally in charge. At least now there is still a little bit of restraint—Senators Xenophon and Fielding have to be on board for some of these little power games. Graham Richardson would have been proud of what Senator Bob Brown did last night and today.

Today I asked some questions of Senator Wong. One of them was: ‘Why does the government say that this project cost $37.5 billion when, according to the summary business case, it actually cost $49.5 billion?’ Before Senator Wong could even jump to her feet, Senator Conroy was jumping out of his skin and interjecting like mad, trying to run the line, ‘You cannot add together capital expenditure and operating expenditure’ and ‘It is inappropriate to add those figures together.’ That might well be the case if the NBN was a company that was actually generating revenue, but the problem is that the NBN has no money whatsoever. The NBN is starting at ground zero. The NBN is going to be fed entirely by taxpayers’ money, borrowed money or by money that is coming from bonds or other means.

The reality is that, according to the summary business case that has been released, $35.7 billion will go to NBN Co. as total capital expenditure and $13.8 will be spent as part of the Telstra agreements for decommissioning and infrastructure payments by June 2020. That is $49.5 billion. So on the table now is $6½ billion more than the figure we were given as the worst case scenario figure. That is black and white; I am not inventing this. This is in the summary business case that Julia Gillard, the Prime Minister, was shamed into releasing last night in order for the government to be able to get this process underway today.

This week we have had the revelation—it is not something the government has volunteered—that the Minister for Finance and Deregulation, Penny Wong, commissioned an independent review to check up on Senator Conroy. The minister for finance did what ministers for finance should be doing; she wants to make sure—to the extent that she can—although it is a bit late in the process for her to be doing so, that the money put into this project is well spent.

The problem, though, is: what happens if this independent review says the business case does not stack up? We will have already passed this legislation. Why have an independent review of a business case, which would seem to suggest that the government has some second thoughts and concerns, if you do not leave yourself room to move depending on the outcomes of that review? If there is no capacity for this parliament to make decisions depending on the outcomes of the independent review, why have it at all? It is a waste of money, isn’t it? Why should the Senate make a decision in relation to a business case which still has not been released when we do not know whether the independent auditors that have been asked to look at it actually agree that it is a legitimate proposition?

Senator Lundy tells me, ‘Trust us—we’re from the government.’ Julia Gillard, the Prime Minister, does not trust Senator Conroy, because she has asked Senator Wong to commission an independent review. She has asked Senator Wong to check what Senator Conroy is up to. If the Prime Minister and Senator Wong cannot trust Senator Conroy, why should the Senate trust him? Why should we be making decisions on this sort of legislation, with $49.5 billion at stake, without having the benefit of some third-party endorsement that says either, ‘Yes, this business case stacks up,’ or, ‘No, it doesn’t’? All we have is the government’s word for it, but we know that the government itself does not think that it quite stacks up. Why otherwise would we be having this independent review?

There are all these issues and additional questions that emerge from the business case summary that was released. The summary states:

The equity requirement from Government based on our current plan is $27.1bn.

For ‘government equity requirement’, read ‘taxpayers’ dollars invested in the system that is going to be set up’. That is what this is: $27.1 billion in required government equity is essentially the share that taxpayers have to put in now. Furthermore, what does ‘current plan’ mean? How many plans are there? Are we going to have a plan this week, a plan next week, a plan in January and a plan in March? How often do these plans get adapted? When I asked that question of Senator Wong, she was not prepared to entertain it at all. Why make a business case that says, ‘We need $27.1 billion if we do what we are telling you today that we want to do’? What is the import of the word ‘current’, Senator Lundy? I would be very interested to know what that word means in your business case summary. Is there an intention to have another plan next week, in January, in February and in March? How much beyond $49.5 billion will it go?

Other speakers in this debate have very clearly laid out the problems in terms of some of the expenses that have not been taken into account even in the summary of the business case that was presented to us. Government expenditure on the NBN has already increased by over $1 billion since the implementation study. The government, as I have just mentioned, says that on current projections it will need to provide $27.1 billion for the NBN to be viable. It used to be $26 billion; now it is $27.1 billion. What is it going to be next week and the week after? If this keeps going up at $1 billion a month, where will it end? I am sure that Senator Lundy, who has been put in the position of having to defend the indefensible because of the incompetence of Senator Conroy, will probably find it difficult to answer some of these questions.

The next problem is that there is absolutely no guarantee that the price of broadband will decrease. Page 21 of the business case summary states it very clearly:

… NBN Co. anticipates being able to reduce real prices for all products and nominal prices for all products, except the basic service offering …

The basic service is 12 mbps. Most regional and remote areas will receive the basic service, as they will rely on satellite and wireless broadband. They face the prospect, as Senator Lundy well knows, of real price increases. Maybe Senator Lundy, living in Canberra, is not so worried about the real price increases that people in rural and regional Australia will face. It is very comfortable living in Canberra when you are close to the centre of power, where all the federal decisions are made about spending taxpayers’ dollars.

There are many other problems and issues that I would like to raise, but I am conscious that Senator Xenophon, who was so kind as to organise a coffee for me, has something to contribute to the debate. I will defer to him.


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