Thursday, 15 September 2011
National Broadband Network Financial Transparency Bill 2010 (No. 2); Second Reading
I indicate that, when it comes to spending $43 billion on the nation's single biggest infrastructure project since the Snowy River hydro scheme, it is crucial that there be checks and balances and that they are conducted to ensure that the investment is worthwhile. So, in that sense, I support the intention of what the opposition is trying to do through the National Broadband Network Financial Transparency Bill 2010 (No. 2), but it is the means by which it is trying to do it that I am concerned about.
Infrastructure of this sort can only be done once in a lifetime and it is crucial that it be done right. I accept that having the Productivity Commission look at the NBN project will shed light on this investment and on the most prudent use of taxpayers' funds. I supported the passage of the NBN legislation earlier this year, and in fact late last year in terms of the Telstra separation bill, following extensive negotiations. The public policy dilemma here is that Senator Conroy as the Minister for Broadband, Communications and the Digital Economy has had the unenviable task of effectively trying to unscramble an egg, given the privatisation of Telstra and its vertical integration and given that the OECD has said that we have one of the most constrained telco systems in the world in terms of a distinct lack of competition and lack of choice, something that is bad for consumers and bad for other entrants into the marketplace.
I made it clear that I do not want us to replace one monopoly, after it has been unravelled through some very complex pieces of legislation and some very complex deals with Telstra which are yet to be voted on by Telstra shareholders, with another. That is why I moved a number of amendments after significant negotiations with the government and after advice from my office and external advice from individuals such as Associate Professor Frank Zumbo, from the University of New South Wales, to ensure that there would be a level playing field for new entrants and for those accessing the NBN. I think it is important that Telstra does not further consolidate its market share in a way that fetters competition and, in turn, prejudices consumers.
As a result of the negotiations I had with the government, with the Prime Minister's office, late last year, an agreement was reached. I have tabled the letter of 23 November 2010 from the Prime Minister in the Senate previously. I will read the third paragraph of that letter. The context of the letter was that the government indicated there would be an accountability process:
... to establish a joint committee on the National Broadband Network, the JCNBN, to provide progress reports every six months to the parliament until the completion of the project ... The composition of this committee will mirror the Joint Committee of Public Accounts and Audit ... the committee will report on rollout progress, report against the final business plan, assess risk management processes and look at other matters the committee determines are relevant to its deliberations ... the committee would commence work on 1 July 2011—
in fact, it commenced before that time, as I understand it—
and will draw on any relevant material from the Standing Committee on Infrastructure and Communications, due to report back by August 2011. The committee would be able to call witnesses including MPs and senators about the performance of the NBN or any other matters of local interest.
The Prime Minister also confirmed on behalf of the government that government agencies and officials, including the Australian Competition and Consumer Commission, the Productivity Commission, the Australian Communications and Media Authority as well as the NBN Co., will if required be able to appear before or contribute advice to the JCNBN, and that the scope of the advice would be 'consistent with the purposes of the committee', as I have just outlined—namely, to consider the rollout and implementation of the NBN—and that the government will be writing to the Productivity Commission and the Australian Competition and Consumer Commission to advise these arrangements.
So we have a situation that, as a result of the Prime Minister's undertaking tabled in this parliament—effectively the position of the government—there will be a level of scrutiny and transparency in the process, which is welcome. That level of transparency and scrutiny will require the Productivity Commission to be involved in this process. My concern with the opposition's bill is that having a process of starting from scratch in terms of the cost-benefit analysis would not be a helpful exercise. What would be a more helpful exercise in the prudent and judicious use of taxpayers' funds would be to ensure that there is scrutiny of the process—for instance, testing matters that the shadow minister for communications and broadband, the member for Wentworth, the Hon. Mr Turnbull, has set out. I note from his address to the National Press Club on 3 August 2011 that he talked about an alternative approach to the NBN—that is, still having a national network but with an implementation and approach, whether it is fibre to the node or fibre to the home, that is somewhat different. I think Mr Turnbull's assertions are that that would save a considerable amount of money in terms of the rollout of the NBN and still substantially deliver to Australians what he says would be fast affordable broadband.
So I think it is not unreasonable for the Productivity Commission to look at that in the context of the joint committee looking into the NBN. In fact, that is what Mr Turnbull said on behalf of the coalition to the National Press Club just last month. He said:
But remember the debate is not about fibre per se; rather it is about whether the enormous cost of running fibre into 93 per cent of homes and businesses is justified by the benefits. That is the core financial issue with respect to the NBN.
So that is the key issue here, and I think it can be dealt with by virtue of the government providing the Productivity Commission to give advice to the joint committee to look at these issues. That is the appropriate way to deal with it. If the committee decides not to go down that path, then I think that this bill needs to be revisited. I think it would be a mistake for the committee not to allow the Productivity Commission to give advice—to forensically look at these issues and give appropriate advice to the committee. But we have a mechanism in place, as we have an undertaking which has been communicated to the Productivity Commission, for an alternative way for the Productivity Commission to provide valuable input to this committee. Of course I should acknowledge that the minister, Senator Conroy, has outlined that Mr Turnbull's approach would not work and that this is the best way of going forward, so there is a contest of ideas as to what would be the most appropriate way of rolling out the NBN. But I do not consider it unreasonable—and I consider it to be within the terms of the Prime Minister's letter of 23 November 2010—for the Productivity Commission to look at these alternative approaches in terms of the policy objective of giving Australians fast, affordable broadband.
So I think that is what the debate should be about and that this particular bill—and I understand the intentions behind it—is not the appropriate vehicle to achieve that policy objective, to achieve that level of scrutiny. We already have a mechanism—that is, the joint committee. If the joint committee, in its wisdom, decides not to go down this path, then I think that this matter ought to be revisited. But at this stage, given that there is a process in place, I think the joint committee should make appropriate requests of the Productivity Commission for there to be a testing, if you like, of the two competing assertions—not of whether or not we should have a broadband network but of the best way of implementing it. I think that is consistent with the terms of the Prime Minister's letter. So for those reasons I cannot support the opposition's bill. I think there are alternative mechanisms to have a robust level of scrutiny while having a forensic examination of the issues by the Productivity Commission via the Joint Committee on the National Broadband Network. So, again, for those reasons I cannot support this bill.