Thursday, 15 September 2011
National Broadband Network Financial Transparency Bill 2010 (No. 2); Second Reading
I thank all senators for their contribution to the debate on the National Broadband Network Financial Transparency Bill 2010 (No. 2). I even thank Senator Conroy for his contribution, no matter how misguided it was, no matter how wrong it was and no matter how misleading it was. I thank him, nonetheless, for that contribution. I want to knock on the head a few of the points that Senator Conroy has made in his contribution, and look at some of the other comments from speakers during the course of this debate.
Senator Conroy extensively argued that we have moved this bill to try and mask issues around coalition policies. This bill is not about coalition policies. It is quite transparently about the government's policy on the $50-plus billion National Broadband Network, and it is about accountability and transparency of whether that network is justified, whether it is a wise expenditure of taxpayers' money and whether it is the most efficient way of delivering fast and affordable broadband services to all Australians. That is the crux of it. That is the underlying question that gets asked again and again in this place by the opposition and that we ask ourselves when we develop our policies. Whether or not it is the most cost-efficient way of providing fast and affordable broadband services to all Australians is not the question, it seems, that the government asks in developing their policies or asked themselves in developing this National Broadband Network—far from it being the question, because transparently this policy is not the most cost-efficient way for this National Broadband Network to deliver fast, efficient broadband services to all Australians.
Senator Conroy said again and again that this bill is somehow a delaying tactic around the NBN, a tactic or a technique to delay the construction and build of the NBN. What a load of codswallop. Honestly, if Senator Conroy actually just looked at the bill he would see that there is nothing in the bill that causes the current build, the current program, to be delayed. The only thing delaying the build of the NBN at present is the inefficiency of this government and the ineffectiveness of NBN Co. They are the only things delaying the build of the NBN to date. They are already running behind schedule, but not because of anything the opposition has done. They are running behind schedule because they could not manage to organise their way out of a wet paper bag.
That is the reality of this government. They cannot deliver any program on budget or on time in an effective manner and now they want to go down the path of building the single largest public infrastructure project in Australia's history. Senator Conroy likened it to the Snowy Mountains scheme. He likes to proclaim it as being bigger than that. That is the scale we are talking about for the Australian public to understand. It is $50-plus billion of build and payments to Telstra and Optus, all of it funded by debt either incurred by the government on behalf of taxpayers or incurred by the government owned NBN Co. monopoly on behalf of taxpayers and all of it funded by debt that taxpayers will have to fork out. Yet, this government wants us to believe that they can be trusted to deliver it. It is their fault that there are delays in their NBN to date.
Of course there are delays because they have their costings wrong. Each time they go out to the market to get a tender to build the NBN, the tender fails and they have to go back and try again because they cannot manage to find people to build it to the costs and specifications necessary for it to come in on budget. The only unfortunate thing about it is that, because the build happens over such a long period of time, it will probably be a very long period of time before the true cost of the budget blowouts and the true cost of the delays are actually clear for all to see.
Senator Conroy argued that the opposition would not be interested in what a Productivity Commission cost-benefit analysis of the NBN said. Why doesn't he test us? Why doesn't he have the courage of his own convictions and faith in his own policy? If Senator Conroy genuinely believes, and the Labor Party genuinely believes, that this NBN is good value for money then put it to the Productivity Commission. Let us see what they have to say on the matter. Let us actually see whether they come back and say, 'It stacks up.' Do you know what, Senator Conroy—if you are listening, wherever you are—if they came back and said that, you would be able to lord it over us if we did not accept it. You would be able to use it against us and say, 'Senator Birmingham and Mr Turnbull brought into the parliament legislation to force this cost-benefit analysis of the NBN. And guess what? This cost-benefit analysis has demonstrated that the NBN economics do stack up. So Senator Birmingham and Mr Turnbull, why don't you accept the findings of the Productivity Commission analysis that you yourselves initiated and asked for?'
Why wouldn't Senator Conroy call our bluff? Because he knows that, if you actually put this to the Productivity Commission, if you did have a thorough cost-benefit analysis of the $50-plus billion National Broadband Network, it would not stack up and they would not come back and find that the NBN was the most cost-efficient way of delivering fast and affordable broadband to all Australians. He knows that because every time a respected economist, every time a respected analyst, actually looks at this matter they come out and find serious flaws in the government's case, serious flaws in what the government has done. That is why he is afraid of it going to the Productivity Commission because he is afraid that once again they will find such flaws. Even just today it has been revealed that economists looking at this policy of the government think it utter, utter madness. The government is scared of having thorough economic scrutiny of its NBN because they know that thorough economic scrutiny will find that it is a bad policy.
Let us have a look at what Professor Joshua Gans and his colleagues said in their submission to the ACCC's pricing inquiry on the NBN. Professor Gans was hand-picked by no less than Prime Minister Rudd to attend the great 2020 Summit that was had at the beginning of the life of this hapless government opposite. Some may remember the 2020 Summit, where the best and brightest minds of Australia got together in a wonderful talkfest to thrash out the direction for Australia's future. If only the government had vacated the stage and left the best and brightest minds to work it out we would be in a much better position than we are today. However, let us look at what Professor Gans, hand-picked by Prime Minister Rudd for the 2020 Summit, said about Labor's NBN policy. He said:
No one at the bargaining table appears to have represented consumer interests.
No-one has represented consumer interests because we face:
… a return to monopoly network provision in telecommunications in Australia.
He is dead right. We certainly face a return to monopoly telecommunications provision. Every bill that Senator Conroy has put through this place on the NBN to date has been about further strengthening and enhancing the monopoly provisions that NBN Co. enjoys.
This paper in particular warns what the agreements with Telstra and Optus mean, the agreements that are so anticompetitive that they prevent Telstra and Optus from using their wireless networks to compete with the NBN Co. They said that those agreements are 'likely to be massively anti-competitive'. Professor Gans said:
Microeconomic reform had moved us away from this type of inefficient financing of government objectives. This proposal would move Australia back.
That is right: this proposal does move Australia back. It moves Australia back to a government owned, government financed, taxpayer underwritten monopoly enterprise for delivering telecommunications services in this country. We will not see the innovation that a competitive market would deliver. We will not see the type of competition that a competitive market would deliver. We will not see the type of price efficiency that a competitive market would deliver. It will be Australian consumers, Australian businesses, Australian industry and the Australian economy who are damaged because of this. The submission by Professor Gans and his colleagues went on to say:
We can conceive of no greater anti-competitive action than the largest mobile service provider agreeing not to compete against the monopoly fixed line provider.
It is a pretty clear statement, and it is a pretty accurate statement at that. I can conceive of no greater anti-competitive action than that which the government has done. There is a multibillion deal valued somewhere—depending on who you listen to—between $11 billion and $13 billion that NBN Co. and the Australian taxpayer are going to give to Telstra to shut down their network so that NBN Co. does not have to compete with that network. You have a situation where, as if it is not bad enough that we are paying $11 billion to $13 billion or so of taxpayer money to Telstra to shut down existing networks, NBN Co. has also forced Telstra to include in the contract of agreement to receive these billions of dollars of taxpayer money anti-competitive clauses that will restrict Telstra from using or promoting their wireless services in competition with NBN Co.'s fixed line services.
Once again, you have to ask what this government is afraid of. What is NBN Co. afraid of? Of course, it is afraid that the private providers of these services will be able to compete far more efficiently with the government and far more efficiently against NBN Co. and therefore it will damage their business model which relies so much on NBN Co. being a monopoly.
Professor Gans went on to state that, because of this anti-competitive arrangement, 'The result will be less innovation, higher prices and less choice for Australian consumers.' That is what Senator Conroy's grand visions are going to deliver. That is what NBN Co. eventually will deliver. Yes, it might put faster broadband out there up and down the streets of Australia at some time over the next decade, but in the long term the way they are going about this will see less innovation, higher prices and less choice for Australian consumers. As they say in this submission, this just future proofs NBN Co. against future competition. Everything Senator Conroy has done has been in the interests of NBN Co. not having to face competition.
Senator Conroy remarkably highlighted the fact that Google are investing in building privately owned fibre networks in the United States, laying out the fibre themselves and deploying it down the streets of the US at their own private cost, using the money of their shareholders and the money they earn through their business activities. They are not looking for taxpayer handouts to do it. They are using private investment in fibre. There used to be private investment in fibre in Australia as well until this government came along and stifled that investment. We have the remarkable situation where Senator Conroy stands in this chamber and highlights the fact that a major company like Google invests in building fibre in a country like the United States. What he fails to mention is the legislation that he had passed through this place on Tuesday night, less than two days ago, that would ban such activities happening in Australia. It would prevent Google from coming to Australia and building and operating a privately owned fibre network in this country. He lauds as an example of why the government should be doing this Google's investment in the United States, yet he forbids it under the laws that he passes through this parliament. Such is the inconsistency of the arguments of the government.
But let me look at some of the other contributions to this debate from the other side. Senator Stephens said the government welcomes transparency and scrutiny. Indeed, Senator Conroy said that the government was committed to a high level of transparency and accountability. If the government believes in transparency, scrutiny and accountability, you have to ask why they are scared of having independent analysis by the Productivity Commission into the NBN. I have heard nobody from the government side suggest that the Productivity Commission is anything less than qualified to do this job. I have heard nobody from the opposite side suggest that the Productivity Commission is anything less than independent and impartial in the way it conducts such work. Nobody has been able to argue that it would not be the best equipped body to undertake such a cost-benefit analysis. Yet the government rejects it, for no apparent reason other than that it is scared of what it might say. Contrary to everything that Senator Stephens, Senator Conroy or others in this debate have said about transparency, scrutiny or accountability, they are the last things that this government wants for the NBN Co.
Senator Xenophon optimistically held out hope that the Joint Committee on the NBN will be able to provide a level of accountability and a level of scrutiny to the NBN Co. build, but the evidence of that to date is not promising. I am afraid that Senator Xenophon has potentially been sold a pup in this regard—that Senator Xenophon was convinced at an earlier stage, when he still held the balance of power in this place, to accept the government's word that there would be decent oversight through that parliamentary committee in return for his support and in return for his not supporting things such as a cost-benefit analysis undertaken by the Productivity Commission of the NBN. But since that committee has been established the government has been less than cooperative with it, less than cooperative about seeing the Productivity Commission work with the committee and provide the information necessary for the committee to do its job and less than cooperative about even NBN Co. providing the committee with benchmark standards and key performance indicators as to how NBN Co. is progressing. So the government is already undermining the work of that parliamentary committee, which is meant to be there to oversee the build. The government is doing everything in its power to ensure that it is unable to do so. I admire Senator Xenophon's hopefulness and optimism that maybe—maybe—we will get something through that committee and maybe we will see some substantial work undertaken by the Productivity Commission for that committee, but every sign to date is that we will not and that unfortunately Senator Xenophon was sold a policy, at the time when he had a vote that really held influence in this place, which is not going to be delivered now that he has a little less influence in the votes of this parliament.
Senator Bilyk made the remarkable claim that consumers understand the value of the NBN and are voting with their feet. That is a remarkable claim because of course the handful of consumers that NBN Co. has to date—and it is a veritable handful—overwhelmingly are not paying a cent. They are not paying anything. It has a very small number of consumers who are not paying anything. I am not sure you can judge at present that consumers are voting with their feet.
It is more likely that consumers are going to be shackled, tied and given no choice because the government is structuring such an anticompetitive arrangement. Most Australians will ultimately have little choice because Telstra will not be able to promote wireless services in competition with the NBN, nobody else will be able to build fixed-line services in competition with the NBN and the old phone service will even be decommissioned under the NBN, so where are consumers going to go? Yes, I fully expect that the NBN will get some consumers because consumers, under the laws of this government, are not going to be given any choice in the matter; they are just going to face higher prices as we go on.
Lastly, Senator Urquhart made the wonderful comment that it would take many years and heroic assumptions to do a cost-benefit analysis on the NBN. Well, nothing-short-of-heroic assumptions underpin the NBN's business model—heroic assumptions that need to be underpinned by government laws that stifle competition, stifle innovation, stifle creativity and will see Australians consumers simply face higher prices and less choice in the marketplace in future. This government proclaims it is a great policy. The truth is that it is just a great con.
If the government has confidence in its policy, if the Greens have confidence that they are right to back this policy, if Senator Xenophon and Senator Madigan have confidence in this policy or believe that this policy of the government's could work, they should all support this bill, because if they are right then the Productivity Commission cost-benefit analysis would prove the government correct. They will not support it because a decent independent analysis will simply show that the government is misleading all Australians. Question put:
That this bill be now read a second time.
The Senate divided. [11:01]
(The President—Senator the Hon. JJ Hogg)
Senator Lundy did not vote, to compensate for the vacancy caused by the resignation of Senator Coonan