Senate debates

Thursday, 15 September 2011


National Broadband Network Financial Transparency Bill 2010 (No. 2); Second Reading

9:31 am

Photo of Anne UrquhartAnne Urquhart (Tasmania, Australian Labor Party) Share this | | Hansard source

Isn't it nice when those on the opposite side recognise that we have done something. The National Broadband Network Financial Transparency Bill 2010 (No. 2) is a rehashed version of an old bill that Malcolm Turnbull brought to the lower house last year, a bill that was defeated. Not only is this bill a rehash of a failed bill but it has had to be amended to reflect the hard work of this Gillard Labor government.

The amended bill says to Australians that the Gillard Labor government is getting on with governing this country. It says to Australians that the Gillard Labor govern­ment is not only tackling climate change with a carbon price that will cut pollution, cut taxes, increase the pension and create clean energy jobs; not only putting more doctors, more nurses and more beds into our hospitals, resulting in less waiting and less waste; not only giving Australians a fair share of the mining boom and also boosting retirement savings, providing tax breaks for small business and a company tax cut; not only doubling investment in school education, upgrading facilities and providing more information for parents than ever before; not only taking a serious look at how best to improve aged care to give older people more choice and control; not only investing more than $36 billion in invaluable infrastructure projects that will lift productivity; not only planning the nation's first ever national disability insurance scheme; not only delivering $5.8 billion to flood affected regions across the country; and not only seeing the passage of 185 bills through the House of Representatives and 138 through this parliament, which is more than the Howard government in the same amount of time, but this Gillard Labor government is also serious about providing financial transparency on the National Broadband Network through a corporate plan, which was released on 20 December last year.

The corporate plan, which of course was being prepared regardless of this bill, is sufficient to cover the coalition's demands for a business case for the National Broadband Network. It is sufficient for them to remove half of this stunt bill. However, those opposite continue to make half-baked, semi-serious demands for a full cost-benefit analysis of the National Broadband Network when they know as well as we do that it is not necessary. This is obvious because those opposite seem to think that the Productivity Commission could prepare a cost-benefit analysis on the National Broadband Network by 1 February 2012—that is, 4½ months away from now, and so far less than the date of royal assent and commencement. Although they are only proposing to give the Productivity Commission a few months to prepare this cost-benefit analysis, they have specified 15 matters the cost-benefit analysis must cover—15 matters in a few months.

Add to that the fact that, just as with the next private senator's bill to be heard in this place, the Leader of the Opposition has admitted that even if the result were unequivocally in favour of the Gillard Labor government's policy he would not listen to it anyway. No doubt they would seek to tarnish the reputations of the telecommunications experts just like they do with climate scientists and economists in regard to the need to tackle climate change. The Australian people are finding this constant obstructionism and negativity offensive. We have one morning a week to set aside for private senators' bills and those opposite consider it appropriate to move stunt bills that they know do not have achievable goals. They know they will be defeated, and for the sake of what? To give me a chance to stand here and tell me how silly you look? No, it is because they are about cheap, short-term stunts. Those opposite are not interested in what a Productivity Commission cost-benefit analysis has to say. They know it would take many years and require a range of heroic assumptions for the Productivity Com­mission to do a formal cost-benefit analysis of the NBN. They know that the NBN's potential benefits affect almost every aspect of the economy and society. As one person said to Mr Turnbull at a public forum a few months ago: 'Who are you going to get to do the analysis? The Nostradamus unit of the Productivity Commission?' Australians know that no cost-benefit analysis was done on other major government projects such as the Adelaide to Darwin railway, the privatisation of Telstra or Malcolm Turnbull's very own $10 billion water plan.

Australians understand the benefits of the National Broadband Network. The facts are that the National Broadband Network will deliver affordable high-speed broadband services to all Australian homes, businesses, schools and hospitals no matter where they are located in Australia. As Australia's first national, wholesale-only communications network, the NBN will also support genuine competition in the telecommunications sector for the first time, which means better outcomes for consumers. This is instead of the vertically integrated, privately owned monopolist that currently operates our telecommunications industry.

The NBN will connect 93 per cent of premises in Australia with optical fibre, delivering speeds of up to gigabit per second, many times faster than many people experience today. All remaining premises will receive next generation wireless and satellite technology, providing peak speeds of 12 megabits per second. While those opposite continue to spout negatives, the NBN Co. is getting on with the job of connecting Australia. There is an over­whelming level of support in some communities. For example, the number of households that signed up for a fibre connection in the first release sites averaged 75 per cent, including a high of over 90 per cent in Willunga in South Australia.

My home state of Tasmania has been at the forefront of the development of the NBN. We have seen successful rollouts in Smithton, Scottsdale and Midway Point, with more than 200 kilometres of optic fibre laid at this stage and over 200 people employed during the project. Fibre is currently being laid in Triabunna, Sorell, Deloraine, St Helens, Kingston Beach and George Town, with work soon to begin in South Hobart. Labor is getting on with the job of connecting Australia.

Tasmania has traditionally had lower education achievement levels than other states but, with the NBN, educators like Skills Tasmania have been able to start providing better online resources to help teachers and vocational education trainers in schools across the state incorporate e-learning into their teaching. One major barrier to this resource has been the restricted internet bandwidth faced by many Tasmanians which results in the types of information students and teachers can view being limited by how patient they are or how long they can wait for resources to download to their computer. This is hardly an effective classroom environment. We need to encourage all Australians to continue to upskill, and there should not be a false barrier that isolates remotely located students. The NBN, where all Australians will have access to bandwidth of at least 12 megabits per second, will allow classroom discussions and teacher professional development to be conducted remotely but in real time.

Added to this are the exciting video based opportunities for learning, where students will not be simply sent one package of learning materials in the post at the beginning of a semester but will be able to quickly receive materials over the internet that will be far more engaging and potentially more up to date. The days of downloading files, installing software and worrying about compatibility will be in the past, thanks to the NBN. With the NBN, people will be able to log onto virtual machines where their applications, such as courses, are hosted completely separately from the material they have at home. It will transform the way in which Australians teach and learn.

Remote diagnosis over high-definition videoconferencing is a healthcare benefit of the NBN that will save the Australian government money and save Australians in regional areas who are battling an illness the stress of having to travel long distances to get the best specialist advice and monitoring that those in the cities get. Federal Labor's plans to allow Medicare rebates for these sorts of services will build on these technological possibilities.

The NBN will assist with overcoming the tyranny of distance for work, improving people's ability to 'telework' from home sometimes, allowing greater workplace flexibility that does not result in lower wages, reduced penalty rates and worsened conditions as those opposite continue to purport. The NBN will allow people to seek greater job opportunities and stay in their local regional communities and not have to move to a big city or be constantly travelling. In the Circular Head region of Tasmania, based around Smithton, a major factory closed its doors in 2010. However, some of its displaced workers have been able to harness the power of the NBN and begin re-training without having to leave their town. In difficult times, local opportunities through the NBN see communities united.

An opportunity for Tasmania that would not be possible without reliable network connectivity is a Google data centre. This week it has been reported that Google are looking to build a data centre to service the Asia-Pacific region and they have stipulated that they will look to build only in locations with a high percentage of renewable energy. This makes Tasmania the only viable option in Australia.

In Smithton, I know a number of those workers I referred to. A lot of those workers have had difficulty accessing services in the past. They live in a very remote area of Tasmania. The NBN will provide those people with lots of different opportunities that they have not had in the past. The hydro dams of the mid 20th century are combining with the National Broadband Network of the 21st century to give Tasmania a competitive edge. Both were instigated under Labor governments who did not just look to the past but embraced the future.

It is embracing the future that is at the core of the National Broadband Network. OECD statistics for June 2010 show that Australia is falling behind other developed countries on broadband. Australia is ranked 18th out of 31 developed countries on number of broadband connections. A June 2011 study by Akamai ranked Australia 42nd in the world for internet speeds, on par with Russia and lagging behind almost every single advanced industrial economy, including New Zealand. And yet those opposite want to delay and destroy the very infrastructure project that will kick Australia back up these rankings.

In the area where I live in Tasmania, on the north-west coast in a small farming community, I cannot get wireless. I cannot get good access to the internet. The NBN will be able to deliver that access to me and the people around me. Delay is only costing Australians. The Australian Local Govern­ment Association estimated in its 2007-08 State of the regions report that Australian businesses lost $3.2 billion and 33,000 jobs in 12 months due to inadequate broadband infrastructure. The NBN will fix this, but it will take time to fully connect Australia. This is an important initiative that regions like Smithton and others need.

That is why the Gillard Labor government switched on the new Interim Satellite Service as part of the National Broadband Network in July this year. The service replaces the Australian Broadband Guarantee and provides eligible rural and regional Aust­ralians with access to an enhanced service. The interim service is expected to be in operation until 2015 when NBN Co. plans to launch two purpose designed, high-speed broadband satellites that will provide a long-term satellite solution as part of the National Broadband Network.

The planning and design of the NBN has been about finding the most appropriate service at the right price for all Australians. A project of this scale is simply not possible for a private sector provider. On this side of the House we recognise that markets are not perfect and need strong government policy to facilitate the best outcome for all Australians. We are joined in this under­standing by the chief executive of Singapore Telecommunications, who said:

You do need some level of economic intervention if you want to get a network built ahead of when a business case would encourage (private) operators to build a network.

Furthermore, the UN Broadband Commission report for 2011 provides strong support for Australia's commitment in rolling out the NBN and promoting the benefits of the digital economy in relation to education, teleworking and smart energy management. Most importantly, the report states:

To optimize the benefits to society, broadband should be coordinated on a countrywide basis, promoting facilities-based competition and with policies encouraging service providers to offer access on fair market terms … efforts should be coordinated across all sectors of industry, administration and the economy.


Developing isolated projects or piecemeal, duplicated networks is not only inefficient, it delays provision of infrastructure that is becoming as crucial in the modern world as roads or electricity supplies.

The Gillard Labor government and worldwide leaders in the telecommunications industry recognise the role of government investment in the rollout of broadband networks. We understand that a purely commercial perspective would not be able to take account of the service benefits which are to follow.

The Gillard Labor government recognises that the NBN is an investment in our nation's future. That investment in our nation's future is also an investment in our children's future and our grandchildren's future. The NBN network is important not only for the future of our economy but also for the lives of the people that are coming after us. The corporate plan shows a return on investment of over seven per cent, and we know from the Greenhill Caliburn report that the assumptions underlying revenue and cost projections in the NBN Co. corporate plan are reasonable. The Greenhill Caliburn report concludes that NBN Co.'s corporate plan is what it would expect to see from an Australian blue-chip company with the corporate plan providing:

… the level of detail and analytical framework that would be expected from a large listed public entity.

As recognised by Greenhill Caliburn, and those opposite through their amendment to this bill, NBN Co.'s corporate plan shows the NBN will provide all Australians with world-class broadband on a financially viable basis at affordable prices. The corpor­ate plan shows taxpayers will get their investment back with a return. The NBN will provide a rate of return significantly higher than the government bond rate, and all Australians will gain access to this world-class network.

The National Broadband Network is another reform in Labor's ever-building suite of successful reforms that are about making that better place for our children and grandchildren. This bill sees a continuation of the monotonous negativity from those opposite who seek to delay and destroy one the most valuable infrastructure projects in this nation's history—for what?—because time and time again they seek to put their short-term political advantage ahead of the long-term interests of this nation.

The NBN, as I outlined earlier, is a very important structure in this country. For those people in Smithton—and I will go back to them again because I know them very well—the ability to access and have a fast broadband system is going to change their whole outlook on life. When you are faced with a closure, such as the factory where they worked, your prospects of employment in your particular region are very limited. That is what happened to the people at the factory—200 of them were made redundant. The NBN and its provision in Smithton has provided those people with some opportunities that if it were not there they would not have had. They have access to fast broadband, they have access to better medical provision through the use of the NBN and they have better opportunities for their children to access better education.

Those are the things that the NBN will deliver to not only the community of Smithton but also those other communities like Triabunna, a very isolated community on the east coast of Tasmania, which at this stage is going through some closure of industries. Again, the NBN will deliver the opportunities to those people in that community to access the outside world and get training, education, access to health care and a whole range of things that they would not have been able to have had the NBN not come to their town.

This is a very important reform. The NBN does need to be there. We need to get it up as quickly as possible for all those people in all those communities not just in my home state of Tasmania but in every regional area. Even in the cities we need it. But in the regional areas, because of the tyranny of distance and because of the lack of availability of services and access to those services, we need the NBN for people to be able to have the same opportunities that their cousins in the cities have today. Therefore, this is a very important process that the Gillard Labor government is going through, and to put up obstacles such as those opposite— (Time expired)

9:51 am

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | | Hansard source

I rise to oppose the National Broadband Network Financial Transparency Bill 2010 (No. 2) and want to speak to the reasons why I do not think it is appropriate for this place to pass this legislation. Having just heard Senator Urquhart's very persuasive arguments, particularly as they relate to your home state, Deputy President, I find myself in furious agreement with her on the issue.

The first point to make is that there is nothing particularly new in this legislation. It is very much the bill that Malcolm Turnbull introduced into the lower house last year. The fate of that bill was that it was defeated by the House of Representatives on 19 November last year. This is really the second attempt to get the bill up, starting in the Senate this time. The bill has been slightly amended. It does recognise that the govern­ment did release the NBN Co. corporate plan on 20 December last year. But all of the weaknesses that resulted in the bill's rejection by the House of Representatives last year are still there.

The bill requires the Productivity Com­mission to do a cost-benefit analysis of the NBN by 1 December this year. The time frame is ridiculously short and really shows that the opposition cannot be serious about the bill. The reality is that it simply would not be possible to do a proper cost-benefit analysis in the 2½ months that is required by the bill. However, having said that, in relation to the merits of doing a cost-benefit analysis, we know that the NBN is an investment and not a cost. The corporate plan shows that the return on the investment is a bit over seven per cent, a very good return. Particularly if you look at the share market at the moment, a seven per cent return would be a very good investment. As Senator Urquhart said, we also know from the Greenhill Caliburn report that the assumptions underlying revenue and cost projections in the NBN Co. corporate plan are reasonable.

On the benefits side, there is plenty of evidence already. The OECD, the UN and Access Economics say that investments in high-speed fibre platforms will generate billions of dollars in economy-wide benefits. Two Access Economics reports that we released show that the benefits of telehealth to Australia could be between $2 billion and $4 billion a year and that Australia could save between $1.4 billion and $1.9 billion a year if 10 per cent of the workforce tele­worked half of the time. The OECD says that 'effective use of high-speed broadband can provide significant improvements in productivity and efficiency across a number of sectors such as energy, health, education and transport'. The United Nations says:

Broadband is the next tipping point, the next truly transformational technology. It can generate jobs, drive growth and productivity, and underpin long-term economic competitiveness.

An IBM study in 2009 also found that the fibre-to-the-node network, which is an inferior network to what we are building:

… would conservatively boost GDP by between $8 and 23 billion over a ten year period and jobs by 33,000 by 2011 in an economy operating at less than full employment.

So this is not a bill we should support. It is just a half-hearted attempt to throw up what we now can see as simple roadblocks to the NBN rollout.

The NBN is critical infrastructure that will connect our rural and regional centres back to our main cities and the wider world with world-class broadband. The NBN will deliver affordable, high-speed broadband services to all Australian homes, businesses, schools and hospitals, no matter where they are located in Australia. As Australia's first national wholesale-only communications network, the NBN will also support genuine competition in the telecommunications sector for the first time, which means better outcomes for consumers. The NBN will connect 93 per cent of the premises in Australia with optical fibre, delivering speeds of up to one gigabyte per second—many times faster than many people experience today. All remaining premises will receive next generation wireless and satellite technology. I know that Senator Edwards will have had some of that in the Clare Valley, because there is a great broadband and wireless system set up there already. NBN will improve upon all of that by dramatically improving Australia's com­munications environment, and Australians are already lining up to receive these services. There is an overwhelming level of support in some communities. For example, in the NBN mainland first release sites, an average of 75 per cent of households signed up for a fibre connection. In my home state of South Australia, more than 90 per cent of households signed up. Senator Urquhart went through some of the great achievements of the NBN in Tasmania, but I particularly want to talk about some of those in South Australia. As I am sure Senator Conroy is aware, Willunga, which is in the federal seat of Kingston, held by that very talented and hardworking South Australian MP Amanda Rishworth, will be the first place in South Australia to get the NBN. The town has already been connected for customer trials and the NBN will soon be formally launched there, ahead of commercial services com­mencing in October this year. Every com­munity in South Australia—metropolitan, regional, rural and remote—will have access to high-speed broadband services over the NBN.

Willunga's neighbours, Seaford and McLaren Vale, will get the NBN in the second release. Modbury, which is in the seat of Makin, held by Tony Zappia, and Prospect, which is in the electorate of Adelaide, held by that hardworking MP Kate Ellis—

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

You can always tell who is in your faction, Don.

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | | Hansard source

I have mentioned Tony Zappia.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

He wasn't 'hardworking'.

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | | Hansard source

If I failed to mention how hardworking he is, I want to get that on the record. Like all of my Labor colleagues in South Australia, including Senator—

Photo of Michael RonaldsonMichael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | | Hansard source

You've forgotten the name!

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | | Hansard source

No. Senator McEwen. She slightly distracted me for a moment. I hope you do not give that one to the Australian! Senator McEwen is like all my hardworking colleagues in the Senate and the lower house. They are all hardworking in South Australia if they are in the Labor Party. I cannot say the same for the other side.

Photo of Anne McEwenAnne McEwen (SA, Australian Labor Party) Share this | | Hansard source

They love the NBN.

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | | Hansard source

They do love the NBN. Senator McEwen is exactly right there.

Photo of Michael RonaldsonMichael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | | Hansard source

Have you been asked to fill a gap?

Photo of Don FarrellDon Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | | Hansard source

I find that quite offensive, to be perfectly honest with you, Senator Ronaldson. I am talking about a great project in South Australia and about all the places in South Australia where this project is being rolled out. Another hardworking person whom I have not mentioned is Nick Champion. He has been working very hard, lobbying on behalf of the good people of Wakefield—I see you are leaving the chamber, Senator Ronaldson—to ensure that they get the NBN sooner rather than later. That is because Nick Champion and the people of Wakefield know how important the benefits of the NBN will be.

The NBN is critical for the future of education, small business, the health sector and our ability to work smarter and faster. It is a project of crucial national importance, and its impact on how Australians com­municate with each other and with the world will be profound.

The opposition does not seem to get this, but fortunately most Australians do. We know they get it because of how quick they have been to sign up for the NBN. Willunga is one of five NBN mainland first-release sites. I mentioned that more than 90 per cent of households there had signed up for the connection, which I know is very pleasing to Senator Conroy. In some of the other mainland first-release sites, the take-up rates are 88 per cent of households in the site near Armidale and 78 per cent in Kiama Downs, both of which are in New South Wales.

In addition to the NBN fibre connections, the Gillard government has also committed to fast-tracking the introduction of fixed wireless and next generation satellite services so that regional Australia, including South Australia, can get access to better broadband as soon as possible. These next generation wireless and satellite systems will provide customers with significantly improved services, offering peak speeds of 12 megabits per second. For regional South Australia, the NBN provides opportunities for businesses to connect to distant markets through high-speed broadband.

A number of contractors are interested in the NBN construction work in South Australia and the Northern Territory. Further discussions are taking place between these contractors and NBN Co. NBN Co. is continuing internal planning and design in readiness for a future construction contract, when that is let.

The fine South Australian coastal town of Victor Harbor is a fibre backbone link in the Australian government's $250 million Reg­ional Backbone Blackspots Program. This program is delivering 6,000 kilometres of fibre backbone across regional Australia, benefiting about 400,000 people. The NBN backbone infrastructure in South Australia was completed in March 2011, and new commercial broadband services in Victor Harbor were launched in May this year.

The delivery of new ADSL2+ broadband services for residents of Victor Harbor, Strathalbyn and Goolwa represents a sub­stantial improvement to the ADSL1 services previously on offer. The new fibre infra­structure allows internet service providers to expand their services into many parts of regional areas in South Australia, including Victor Harbor. The investment in South Australia will be $34.1 million, as part of the overall program funding. This includes the $12.6 million allocated to provide a backbone link to Victor Harbor and part of the $70.7 million allocated to provide a backbone link from Broken Hill to Mildura and from Shepparton to Gawler.

As we know, particularly from what Senator Urquhart said in her speech, the opposition has taken every opportunity to prevent Australians from having this world-class, affordable broadband service. This bill is just another attempt to do that. I will oppose this bill when it comes to a vote.

10:07 am

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

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.

10:16 am

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

I thank the members of the Senate who have contributed to this debate on the National Broadband Network Financial Transparency Bill 2010 (No. 2). Let us be clear about the motives of the coalition in reintroducing this private member's bill. It is not to task the Produc­tivity Commission to do a cost-benefit analysis on the NBN by 1 February 2012; it is all about masking the fact that they have now cobbled together over 21 broadband policies, with their latest policy calling for the cross-subsidy to the bush to be abolished and replaced with vouchers, treating people in regional Australia as second-class citizens.

Let me make the government's position very clear. In summing up, I note our speakers have repeatedly demonstrated that there is a uniform, wholesale national price so that all Australians, no matter where they live, can enjoy fast and fairly priced broadband. The Gillard government is delivering world-class broadband infra­structure which will underpin Australia's productivity, prosperity and creativity into the future. There is considerable evidence available on the benefits of the NBN nationally and internationally. The NBN is a reality and work is well advanced across the country and this measure is really all about trying to delay the rollout.

Parliament looked at a cost-benefit analysis and its issues in detail during the debate into the NBN Co. bills and access bills. The opposition wants the Productivity Commission to conduct a cost-benefit analysis, but when you boil it down such a call is just another excuse for delay, another stunt to prevent the rollout of high-speed broadband in this country. The government has already examined the viability of the NBN, including through the 2010 McKinsey-KPMG implementation study, released on 6 May 2010, and the Greenhill Caliburn review of the NBN Co.'s corporate plan, an executive summary of which was released on 14 February 2011. Those opposite are not genuinely interested in what a cost-benefit analysis conducted by the Productivity Commission or any other cost-benefit analysis has to say. It is a purely political stunt designed to cover their lack of a credible broadband policy. I think it was Mr Graeme Samuel, as chairman of the ACCC, who summed up the erroneous claims for a cost-benefit analysis best when in an interview he said the following:

I don’t think there is anyone in the country or in the world that will be able to tell you the benefits flowing from a high-speed broadband network five or 10 years out, let alone 20 or 30 or 40 or 50 years out.

And therefore when people talk about social cost-benefit analyses or cost-benefit analyses, I think that their failure to understand that what we’re talking about here is a visionary project much like the Snowy Mountains Scheme, which I will venture to suggest to you was never the subject of a cost-benefit analysis as has been described, but was the subject of a range of different elements, not the least of which was a vision as to how it might benefit communities in general into the future.

The time frame set out under the amendment requiring the Productivity Commission to prepare a cost-benefit analysis of the NBN proposal by 1 February 2012 is ridiculous and unrealistic. To do a formal cost-benefit analysis of the NBN would take at least 18 months but even then would require many heroic assumptions and would only tell us something that we already know, that Australia needs greater investment in high-speed broadband infrastructure.

NBN Co. is already subject to compre­hensive scrutiny, more so than any publicly listed company and rightfully so given the amount of Commonwealth equity involved in the NBN rollout. NBN Co. is required to appear before the Senate Environment and Communications Com­mittee as part of the Senate estimates process, where a significant number of questions on notice have been received and responded to. But let us be clear: in that forum the opposition continues to cry crocodile tears in claiming they are focused on and care about scrutiny and financial transparency. I say that because the evidence is to the contrary; it completely contradicts their claims. In the most recent Senate estimates hearing for NBN Co.—and, Senator Ludlam, I think you were forced to sit through it—in four hours of testimony, the opposition devoted over 3½ hours to their disgraceful smear campaign on Mr Michael Quigley, the CEO, and no more than 17 minutes to questions on issues to do with the NBN; 17 minutes in four hours.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

How is Mr Beaufret going?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Oh, you are going to smear someone else today, are you, Senator? You are very disappointing, Senator Birmingham. You are a better person than this—but, no, you stooped in the gutter with the rest of them. You can look back on this in the future and say, 'I'm ashamed of myself.' That is what you will think when you look in the mirror—disgraceful!

Senator Birmingham interjecting

He is retiring. Seventeen minutes in four hours.

Senator Birmingham interjecting

Yes, to someone from another a country.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

Do you want to tell us why he's going?

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

He is retiring. The National Broadband Network is Australia's largest infrastructure project in our history. It is a nation-building project that all Aust­ralians both now and into the future will benefit from. It will deliver significant improvements in broadband services for all Australians at affordable prices. It will support a new wave of digital innovation that will change and improve the way Australians live their lives, receive services and connect to the world. It will help to drive Australia's productivity. It will transform service delivery in key areas, such as health, education and energy. And it will connect Australia's big cities, regional centres and rural communities.

The NBN will deliver affordable, high-speed broadband services to all Australian homes, businesses, schools and hospitals, no matter where they are located in Australia. The NBN will connect 93 per cent of premises to a high-speed fibre network, providing broadband speeds of up to 100 megabits per second with capability to provide higher speeds of up to one gigabit per second in the future. All remaining premises will be served by a combination of next-generation fixed-wireless and satellite technologies, providing peak speeds of 12 megabits per second.

While the Gillard government remains committed to uniform wholesale pricing, the National Party have walked away from not only their constituents in rural and regional Australia but also their own policies—and, Senator Ludlam, I am sure you are going to be interested in some of the quotes I am going to read out in a moment. At their states conference in 2005, the Queensland Nationals passed a resolution for the imple­mentation of their five-pillar telecom­munications policy; however, that is now an inconvenient truth for them. This is what they said—this is what their own resolution said:

4. The maintenance of the price averaging basis for the cost of all new telecommunications and satellite Internet connections to ensure all Australians are charged the same basic price for maintenance and new connections …

And what are they supporting now? Vouchers; abolish their cross-subsidy—vouchers. But it gets better. In an interview with Laurie Oakes back in 2005, then Barnaby Joyce, now Senator Barnaby Joyce, was calling on his coalition colleagues to ensure that telecommunications policy, and I quote:

... we're going to give this—the 20 million people who live in such a vast country the ability to have parity of service, parity of price into the future.

He is now going to give them a voucher! It is clear that the Nationals are only interested in talking the talk, because the only walking they do is away from their rural and regional constituents.

The Gillard government remains committed to a high level of transparency and accountability regarding NBN Co. activity. The government recognises, accepts and welcomes that the NBN will touch the lives and homes of every Australian. It will transform and drive massive structural change in the Australian telecommunications market. It will involve the expenditure of billions of dollars of taxpayer funds and, understandably, generate demands for high levels of scrutiny, transparency, debate and parliamentary oversight both here and internationally.

The establishment of the joint committee on the rollout of the NBN, with very broad terms of reference and a balanced membership, demonstrates the government's commitment to openness and transparency for the NBN. The terms of reference include the rollout, take-up targets, service levels, risk management processes and any other matter concerning the NBN rollout that the committee thinks is relevant. The work of that committee is well underway, and they have released and tabled an interim report.

The government supported amendments to the NBN bills, passed by parliament on 28 March, that added NBN as a prescribed authority under the FOI Act and the commencement of a review of NBN Co.'s approach to FOI matters within 12 months of their scheme commencing. There is also the House of Representatives Standing Com­mittee on Infrastructure and Communica­tions, which has examined the economic and social benefits of the National Broadband Network as it relates to health, education, regional economic growth and development, and business revenues and exports, amongst others. This committee held hearings all around the country and has recently tabled its report in the parliament.

There has been significant scrutiny of the viability of the NBN, including, as I have mentioned, the 2010 McKinsey and KPMG implementation study, the NBN Co. corporate plan and the 2011 Greenhill Caliburn review of the NBN Co. corporate plan. NBN Co.'s corporate plan, released on 20 December last year, confirms the NBN can be built on a financially viable basis with affordable prices for consumers. The plan also shows NBN Co. expects a rate of return of around seven per cent, which is significantly higher than the long-term bond rate for the last 10 years of around 5.4 per cent. This means the government can recover all its investment in the NBN and make a return for taxpayers on that investment. The Greenhill Caliburn executive summary, released on 14 February 2011, validates the key assumptions made by NBN Co. and found that the corporate plan provides the government with a reasonable basis on which to make commercial decisions about the NBN Co.

Whilst the opposition continue in their quest to cover up their policy-free zone, business leaders at home and abroad continue to see the social and economic importance of the investment that we are making. Google's chairman and former CEO, Eric Schmidt, speaking earlier this year at the Mobile World Congress 2011 in Barcelona said:

… Australia is leading the world in understanding the importance of fibre. Your new Prime Minister as part of her campaign and now, you know, as part of her prime ministership, has announced that by roughly I think 2015 [or] 2016, 93 per cent of Australians, which I guess are all the folks in the cities, will have gigabit or equivalent service using fibre. And the other 7 per cent will be handled through wireless services of a nature of [Long Term Evolution].

This is leadership. And again, from Australia, which I think is wonderful.

That is the head of Google. But as we saw recently, when those opposite cannot get the experts to agree with them, they start attacking them. Just last week Mr Turnbull described Google as being involved in a conspiracy against the Australian taxpayer. That is what he actually said. He said they just want to use the network and their money is not in it. Ignore the fact that Google are investing their own money in the United States to build a fibre network providing a gigabit. No, here in Australia they are not prepared to put their own money up and they are engaged in a conspiracy against the Australian taxpayer!

Dodo and Exetel say, 'Actually, we are going to deliver services for $35 to $40 on the National Broadband Network.' They are attacked in the other chamber by Mr Fletcher on behalf of the opposition. If you are prepared to put your money where your mouth is—Google in the US, Exetel and Dodo here—completely disproving claims about the pricing of the NBN, you will be attacked by the opposition. It is a conspiracy to defraud the taxpayers of Australia!

What about Mr Craig Mundie, Microsoft's Chief Research and Strategy Officer? What did he have to say? Referring to the NBN he said: 'In the grand scheme of things going on in the world it probably ranks up there at the brilliant end of the scale, certainly in terms of what a government can do to prepare its citizens and businesses for an all-digital world of the future.' He went on to say: 'I think the leadership that has been provided here in Australia with this is far-sighted and one that I commend. It is a bit like ensuring that the population has water, roads and electricity. To some extent I think that broadband is going to become recognised as an essential service.'

But no, Microsoft are one of the conspirators as well according to Mr Turnbull. Google and Microsoft: it is a conspiracy. It is certainly a conspiracy against the policy-free zone of those opposite; that is true.

Mr Patrick Lo, founder and Chief Executive Officer of Netgear, said, 'We have a saying in the US, "If we build it, they will come." I think that applies in the case of the NBN.' Earlier this year another conspirator, Dr Tim Williams, the author of a report commissioned by Huawei titled Connecting Communities that looked into the benefits of the NBN, said, 'It is Australia's chance to not just catch up but get ahead decisively. It will more than pay for itself,'—another con­spirator against the Australian taxpayer.

In conclusion, the government's National Broadband Network will deliver cheaper and faster broadband services and is over­whelmingly supported by the Australian people. Detailed financial analysis has been undertaken in a $25 million implementation study. That study has provided a detailed analysis of the cost of delivering the NBN. It found that a $43 billion total capital cost is a conservative estimate and there are many opportunities to significant reduce the build cost. The Gillard government has revised that figure down through the NBN's own internal calculations in its business plan to $35.9 billion.

Importantly, our investment in the NBN is about future proofing Australia's economic prosperity, international competitiveness and social wellbeing, as well as laying the platform for the health, education and energy efficient solutions of the future. The Greenhill Caliburn report found the key assumptions underlying the revenue and cost projections of the NBN Co. corporate plan to be reasonable. Based on conservative assumptions, the NBN corporate plan shows the NBN will support uniform national wholesale prices that will support affordable retail prices. Do not be fooled by Mr Turnbull, Senator Birmingham and Mr Fletcher. Dodo and Exetel have put prices out there. Dodo is saying less than $40 and Exetel, for the base entry price to the National Broadband Network, is saying $34.95. There is no line rental. Always remember that, when it comes to the National Broadband Network, you do not need the copper anymore. The $29 a month that you pay currently is gone.

Photo of Scott LudlamScott Ludlam (WA, Australian Greens) Share this | | Hansard source

That is outrageous; it's a scandal!

Photo of Stephen ConroyStephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | | Hansard source

Outrageous I know! $34.95 for the base product from Exetel in the marketplace today. So the bill that Senator Birmingham is putting forward today should be seen for what it is: just another delaying tactic by those opposite to cover up their lack of policy when it comes to broadband in this country. I urge all senators to reject this bill.

10:36 am

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

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

Question negatived.