Wednesday, 26 March 2014
National Broadband Network Select Committee; Report
It is difficult to know where to start after that contribution from Senator Conroy. It continues the parallel universe that those of us on the Select Committee on the National Broadband Network experienced. If you were on that committee and you were to believe the lines being run by Senator Conroy and other non-government senators, you would think that it was the coalition who had presided over the debacle that has been the NBN Co under the leadership of the former government. You would think that it was our fault that there was a blow-out of over $30 billion in the NBN. Senator Conroy's performance here today really just continues the transparent attempt to defend his indefensible legacy when it comes to the NBN. Senator Conroy, of course, is no longer the communications minister and is in fact not the shadow communications minister, but he has spent a lot of time trying to protect his legacy. We saw that today, and we saw that in the committee.
On Senator Conroy's conspiracy theory when it comes to the Strategic Review of the National Broadband Network, I want to just add maybe some facts in and amongst the conspiracy theory that Senator Conroy has put forward. His claim is that the strategic review was all about making his broadband legacy look bad and making every alternative look better. That is the basic summary of what Senator Conroy had to say. But I will draw his attention—and I drew attention in the committee—to one of the assumptions that was made in the strategic review, which was overly generous, I would say, to Senator Conroy and his legacy. That was in relation to contingency. The contingency that was applied to Senator Conroy's ongoing NBN blow-out was 10 per cent, when the contingency applied to all of the other projects was 20 per cent—because that is a more reasonable contingency to apply. That meant that, in the estimation of Senator Conroy's plan, the business-as-usual-plan under the previous government, if we had applied the right contingency, the same contingency, it would have cost an extra $6 billion over and above the headline figure. So the conspiracy theory that he has put out there is ridiculous. This was an exercise in legacy defence, and it was a very poor one.
I endorse the comments of Senator Ruston. Senator Ruston has gone into detail on the lengths that opposition senators went to in order to try and get the result that they wanted, including bringing in their union mates to tell us all about how good fibre to the home would be and to bring us anecdotal evidence in relation to Telstra's copper network. Of course, when pushed on statistics, when pushed on facts, they were not able to provide anything. This was the way it was conducted.
I want to go to some of the facts—some of the facts that the majority report completely ignores and some of what government senators have sought to highlight. That includes that the NBN is yet to meet a single fibre rollout target. We know that, in the corporate plan in December 2010, total houses passed by fibre were to be 317,000 by June 2012 and 1.268 million by 30 June 2013. In the corporate plan of August 2012, the actual result, instead of the 317,000 for 2012, was 39,000. Instead of the 1.268 million for June 2013, the actual figure was revised to 371,000 houses. By 30 June, only 208,000 houses of the 1.26 million originally planned were passed by fibre.
Then we see houses with an active service on fibre, both greenfields and brownfields. The corporate plan of December 2012 proposed 137,000 by June 2012 and 511,000 by 30 June 2013, but by 30 June 2012 only 4,000 houses had an active service, instead of the 137,000 planned. And the 30 June 2013 target was revised down to 54,000, but even that was not met, with only 34,000 houses having an active NBN fibre service by 30 June 2013.
If you had listened to opposition senators during this inquiry, you would not know that any of this had happened. You would live in the parallel universe that Senator Conroy is hoping we will accept. We know that the original NBN target announced by Mr Rudd and Senator Conroy was completion by 2018 at a cost of $26 billion. That was revised to a 2021 completion, but at the time of the last election NBN Co had passed 258,000, around 2.1 per cent of the total. We know that in South Australia, Western Australia and the Northern Territory at the last election just 1,714 premises had active NBN fibre services despite a population exceeding four million people. Senator Conroy, as minister at the time, insisted that the project was on track, but it is clear that it was not and it was never the case.
I will quote from the dissenting report, where we quote Senator Conroy belatedly admitting that there were problems with the project, saying:
We clearly underestimated and … it's fair to say the construction model could be legitimately criticised … We wouldn't have been so aggressive if we'd known how tough it was for the company. So that was an area where we were overly -ambitious … I can understand and indeed empathise with those who are disappointed with the progress on the fibre roll-out.
That is true, but that does not fit very well with Senator Conroy's repeated declarations over many years that the rollout was on time and within budget, such as his claim:
The [corporate] plan being released today confirms the project is on track.
In fact, nothing could be further from the truth.
The chair's report stresses the importance of transparency in the NBN project, yet the previous Labor government were briefed before the election that delays had increased costs by $1.4 billion, and KPMG had warned the previous government that rollout targets were presenting significant risks to the project, yet the then minister, Anthony Albanese, told the ABC that KPMG had found that the time lines and costings were good. That is simply not true. The Labor cabinet was briefed by its own bankers, Lazard, that the project would have a negative net present value of $31 billion. They did not openly disclose that many houses being passed could not be serviced and, instead, leaked it to the media. They released bad news such as the revising down of the 30 June 2013 targets under the cover of the 21 March 2013 leadership challenge to minimise embarrassment.
By contrast, the coalition government have undertaken an independent review, giving the public a true insight into the costs of the project in time and dollars. The NBN Co is now publishing rollout progress and uptake week by week. NBN Co recently held a quarterly analyst briefing where NBN executives took questions from analysts and journalists. The chair of the committee was critical of some of the commercially sensitive information redacted in the NBN strategic review, but it was the Labor government who attempted to force senators to pass crucial NBN legislation without seeing its corporate plan.
The chair's report is silent on the progress made by NBN Co in transitioning to the strategic report's recommendation of multi-technology mix. This approach is predicted to save taxpayers $32 billion and get the NBN finished four years sooner. This goes to the heart of the difference between the coalition and the Labor opposition on this issue. Senator Conroy, Senator Lundy and those opposite would have been happy, if they had stayed in government, to have continued to deliver a flawed model. They would have continued to deliver it behind schedule, and they would have continued to see the costs blow out not just to taxpayers to the tune of at least $32 billion in extra spend. Consumers would be paying for something that they did not need. This is the fundamental difference between the government and the opposition on this issue.
In summary, there was a moment where Senator Ruston talked about how Senator Conroy would ask a lot of the questions. But there were moments, in fact, where he was not content with asking all of the questions and he sought to actually try and answer all of the questions as well, as if he were still the minister. He was struggling to let go. That is what this is about. What we saw in that speech and what we see in the committee report—which is really Senator Conroy's report—is the struggle to let go. It is an attempt to rewrite the history books, when this was disastrously managed. It was concocted on a flight on the back of a beer coaster. Australians are paying the price, and the coalition is cleaning up the mess. (Time expired)
Question agreed to.