Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

At the release of the coalition broadband policy in April 2013, when asked about the independent review and cost-benefit analysis he was planning for the NBN, Prime Minister Abbott said:

Look, it will be a fully independent review. It may be the Productivity Commission although we're conscious of the fact that the Productivity Commission has a very heavy workload. It may be Infrastructure Australia. But one way or another there will be a full independent review of telecommunications going forward, of broadband going forward and that will obviously include a cost-benefit analysis.

Sadly, this has proven to be just another coalition broken promise. The question is: why did they break this promise? It is quite clear that Infrastructure Australia and the Productivity Commission would have been too independent for Mr Turnbull's liking—so independent, in fact, that they would have likely come to the same conclusion that the last NBN expert panel arrived at, that fibre to the node is not a cost-effective upgrade path to fibre to the premise.

The minister knows a bit about evaluating risk and the risk of receiving actually independent advice was clearly too great. What Mr Turnbull needed was someone who would put objectivity to one side and come up with the result that the government and Mr Turnbull wanted. Who could that be? Who could fit this bill for Mr Turnbull? It was none other than Liberal stooge and part-time Australian columnist Henry Ergas. This is the same Henry Ergas whose credibility was shredded by the Australian Competition Tribunal in a judgment made in 2004.This is what the tribunal—whose president at the time was the eminent Justice Alan Goldberg, AO, QC—had to say about Mr Ergas:

Mr Ergas ... appeared reluctant to respond to questions whose answers might have been adverse to the case put by the party calling him … Such an attitude and conduct of an expert witness leads to a conclusion of partiality and an inability to express an objective expert opinion upon which reliance can be placed.

This is the Australian Competition Tribunal saying quite clearly that Mr Ergas has an inability to express an opinion that you can rely on. Not my words; the words of the Australian Competition Tribunal, with the eminent Justice Goldberg as president. If this were an audition for future Liberal Party work, Mr Ergas would pass with flying colours.

Mr Ergas is the person Mr Turnbull has turned to for years to do his dirty work. In 2008, Mr Ergas was hired by Mr Turnbull to do a root-and-branch review of Australia's tax system. It was a review so impressive and of such quality that it has never been released publicly. When Mr Ergas is not writing reviews that are kept in the bottom of a drawer he is writing dodgy NBN analyses. In 2009, in a now notorious paper on the NBN, Mr Ergas predicted that NBN prices would be $133 a month for metropolitan customers and $380 a month for non-metro customers.

Madam Acting Deputy President Stephens, I have some inside knowledge. I know you are connected to the National Broadband Network at your home. Can I ask you: are you paying $380 a month for your service?

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

No.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

No, you are not, thank you. This averages out to around $170 a month nationally. Compare that to actual prices on the NBN today, which start at $29.95, and you get a picture of how inaccurate Mr Ergas' forecasting skills really are—$175 a month versus $29.95. But no, let's hire him. I have not even mentioned that Mr Ergas moonlighted as a Liberal Party booth captain on election day for Senator Seselja. If do not care about accuracy or fairness, Henry Ergas is your man. He is your go-to guy. This is the man that Mr Malcolm Turnbull has appointed to his independent expert panel.

Australian taxpayers are forking out $1,400 a day over six months so that Mr Ergas can provide Mr Turnbull with the answer that he wants. That is $263,000 of taxpayers' money to Mr Henry Ergas since the panel was announced. But most galling is that this money is going to a person who once sat before a Senate committee and said that a cost-benefit analysis of the NBN could be done in three days. That is an effective daily rate for Mr Henry Ergas of around $87,500 a day. What an absolute sham. This is extraordinary largesse that is being doled out, to a booth-captain for the Liberal Party and, from a very obvious cursory examination, another mate of Mr Turnbull's, from the taxpayers' purse.

You might think that that was enough for Mr Ergas and Mr Turnbull. But no. Mr Ergas is not the only member of the CBA panel. What about the others? Let us look at who is doing the work. In those immortal words from The Blues Brothers, Mr Turnbull is putting the band back together.

There is, of course, Dr Alex Robson of Griffith University. Dr Robson was a senior economic adviser to Mr Turnbull from January 2008 to January 2009. And—surprise, surprise—he is also a protege of Mr Ergas. Dr Robson was co-author with Mr Ergas of that ill-fated paper I mentioned that wrongly forecast that you would be paying $380 a month, Madam Acting Deputy President, and averaging $170 a month. He is the co-author of a document so wildly wrong that it is humiliating. Dr Robson, it might come as a surprise to you to hear, Madam Acting Deputy President, also worked at Mr Ergas's firm, Concept Economics, which is on the public record as having gone belly up in 2009—in fact, Mr Ergas was structurally separated from his company. But the Australian taxpayer is handing $44,000 to Griffith University for Dr Robson's work.

Dr Robson is not, unfortunately, the only alumnus of Mr Ergas's firm hired by Mr Turnbull to put together his cost-benefit-analysis stitch-up. Believe it or not, there is more. Cost modelling is being done by Ms Emma Lanigan who has worked for Mr Ergas for many years, first at Ergas & Associates, then at Network Economics Consulting Group and finally, of course, at the failed company Concept Economics.

Ms Alexis Hardin is helping with cost modelling. Guess what? She worked at Mr Ergas's firm for three years between 2006 and 2009 and was chosen for her current role by—come on; you can guess—Mr Ergas. What a shock!

But Mr Turnbull is ever cautious, because that independence can rear its ugly head at any moment. That is why people in support roles must be carefully selected.

A standout is Mr Kevin Morgan; he is such a selection. He is being paid up to $57,000 by the taxpayer to work on the CBA. Mr Morgan is one of Australia's most vociferous critics of the NBN. He is a key member of the Turnbull cheer squad, and perhaps the only person left in Australia who still believes that Telstra should not be structurally separated.

But it does not stop there. I know you will find this hard to believe, Madam Acting Deputy President, because Mr David Kennedy and Mr Nigel Pugh from Ovum Consulting have also been hired, and guess what? Nigel Pugh once worked for—Mr Henry Ergas at Concept Economics, that failed company that Mr Ergas used to own. And what of Mr David Kennedy, you might ask? He was once the chief of staff to former Liberal communications minister Richard Alston. And up to $75,000 of taxpayers' money is being paid for this pair.

But there is still one more base that we have to cover off. It is the peer review. There is no point, really, in going to the trouble and expense of selecting personnel to write the report you want when it could all be undone by a peer review. So Mr Turnbull has handed out $60,000 in taxpayers' money to ensure that the CBA's peer review also comes to the correct conclusion. How do we know this?

One of the peer reviewers is Professor Pincus. He once claimed in the pages of The Australian:

… the NBN is going ahead despite the remarkable premium consumers place on mobility, the huge take-up of wireless technology and the saturation and even decline in fixed network connections.

Unfortunately for Professor Pincus, ABS data on download trends shows precisely the opposite effect. The fact is that the percentage of data downloaded on fixed lines is increasing. It has gone from 93 per cent of the total in December 2011 to 95 per cent in December 2012 and to 96 per cent in December 2013. Last time I checked in basic maths, 93 per cent going up to 96 per cent is an increase. Mr Pincus may be short on facts about the fixed telecommunications sector but he does not let the facts get in the way of criticising the NBN. That is what makes him another perfect recruit for Mr Turnbull.

You might think it ends there, but another of the peer reviewers, Clifford Winston from the Brookings Institute, is also well known to Mr Henry Ergas. They taught a class together at the Smart Infrastructure Facility in Sydney in 2011.

Senator Fierravanti-Wells interjecting—

You love this speech, Senator Fierravanti-Wells. You can sit there smiling quietly. Everywhere you look you can see Mr Turnbull's cronies, past associates and fellow travellers telling the minister exactly what he wants to hear. This is hardly a surprise. From the moment that Labor's NBN was announced, the coalition's only policy has been to attack the NBN. In opposition, Mr Turnbull attacked the need for public investment, the need for an infrastructure monopoly, the presumed need for a cost-benefit analysis, the purchase of the satellites, the management of NBN Co, the board of NBN Co, and NBN Co's performance against its targets. In short, Mr Turnbull has attacked the entire basis of the NBN, an attack that he has continued in government.

Mr Turnbull has launched an unprecedented six reviews into the NBN. This is at a cost to the taxpayer of over $10 million. While the CBA is littered with yes-men and yes-women, many of the other five reviews are also headed or being written by Mr Turnbull's mates. They are all designed to attack the NBN and its implementation by the former government. The Strategic Review, which has been spoken of extensively in the Senate, written by Mr Turnbull's yachting buddy JB Rousselot—he owned a yacht with Mr Rousselot for 15 years, worked with him before he came into parliament—was designed to attack the costs, technology mix and deployment timeframe in the fixed line footprint. The Fixed Wireless and Satellite Review was designed to attack the costs, technology mix and deployment timeframe in the fixed wireless and satellite footprint. Never mind that he had all that extra satellite capacity up there in the sky, he guaranteed that there was, and what was he able to pull together? A measly extra amount which we had already told him was there. The Broadband Availability and Quality Review was designed to attack the deployment schedule of the NBN. The Governance Review was designed to attack the previous board and management of NBN Co. The Independent Audit is designed to attack the policy deliberations and decisions of the previous government.

It may come as a surprise to you, Madam Acting Deputy President, that the Audit's secretariat is headed by another person likely to be well-known to the communications minister. This person is the former Department of Environment public servant who worked on water policy at the department when Mr Turnbull was the environment minister. You will love this one, Senator Bernardi: this gentleman is very familiar with how Mr Turnbull operates. Can you remember the $10 billion Murray-Darling scheme, Senator Bernardi? It was developed by Mr Turnbull, announced by Prime Minister Howard, and not once did it go to cabinet. The Department of Finance said they saw one page of costings only—one page for $10 billion of water policy. Top-notch public policy there.

And of course there is the cost-benefit analysis, which is designed to attack Labor's NBN policy decision more broadly. As I have outlined, the CBA is being written by long-time associates of the minister and people well-known to be hypercritical of Labor's NBN. The other problem with the CBA is that it is clear that it is being put together to provide a post hoc justification for Mr Turnbull's second-rate network. I say post hoc because Mr Turnbull has already given NBN Co its marching orders to roll out this second-rate network without bothering to wait for the outcome of his hand-picked, paid for review. That's right—$1 million and Mr Turnbull has already told the company what they have got to roll out and when they have got to roll it out by. This is a farce.