Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Hansard source

If accepted by the House and the Senate, this motion would enable the creation of a joint standing committee to have continuing oversight of the National Broadband Network. Recognising the current makeup of both houses, in accordance with this motion neither the government nor the opposition would have a majority on the committee. There would be four members from each side of the House, plus two crossbenchers—one from each chamber.

The NBN is the largest single infrastructure investment in our country’s history. It has been subject to no financial scrutiny at all. The government has set up a body called Infrastructure Australia, which it said was designed, and is designed, to analyse, prioritise and assess on a cost-benefit basis—rigorously—infrastructure projects. That is its job, and it has a very distinguished board, chaired by Rod Eddington. And yet the government has refused to let it anywhere near the National Broadband Network.

The government has said that it is committed to competition, and yet it is proposing to enter into an agreement with Telstra which will preclude Telstra not simply from competing with its copper network but from competing on a facilities basis with its HFC cable network. So it is essentially designed to eliminate all facilities based competition with the NBN.

The government would say, ‘Well, that is in the public interest’—fair enough. The judge of whether monopolies and restrictions to competition are in the public interest is the ACCC, and yet the legislation that is before the parliament will actually exempt this new government owned monopoly from consideration by the ACCC.

We know that one of the objectives is to eliminate the vertical integration of Telstra. We know that is one of the objectives of the NBN, and that is one that has been welcomed by many people in the community—particularly in the telecommunications sector. And yet the achievement of structural separation does not depend on the destruction, the closing down and the cancelling out of Telstra’s copper network. It does not depend on the elimination of any competition from the HFC network. If vertical integration is the problem, structural separation is the answer. Again, there is no assessment of why the NBN is needed to achieve that.

We are told that this is required to deliver affordable broadband across Australia. Unless it is suggested—and it is not—that nobody in Australia has access to broadband at acceptable standards then a clear alternative is to consider what it would cost and what the approach required would be to enable those parts of Australia, be they in cities or in regions, that do not have access to affordable broadband at acceptable speeds to do so. It is quite clear that there would need to be upgrades to network architecture in the cities to eliminate pair gains, RIMs and other features of historical network design; and, of course, substantial investment in fixed wireless and satellite facilities in regional Australia.

The truth is that both sides of politics have been in favour of that for some time. Indeed, if the coalition had won the 2007 election, a program—the OPEL program—would already now have provided broadband right across regional Australia. Because of the pending nature of the NBN nothing has been done. The NBN has been a real obstacle to any other investment in fixed line network infrastructure in Australia because people are saying, not unreasonably: ‘Why should I upgrade my network? Why should I invest in a new network, because the NBN is going to come and overbuild me?’

Right now the group of companies that presently provide fibre optic services in greenfields developments do not know what to do. They do not know whether their existing investments are going to be acquired by the NBN and whether they are going to be overbuilt. Developers do not know whether the NBN is going to provide connectivity to their greenfields developments and, if so, when. Telstra does not believe it has an obligation under the USO to connect new developments to the copper network, and instead is helpfully providing people with a mobile phone. This is a massive project that requires real scrutiny.

Another committee of this parliament that is under statute obliged to look at public works is, of course, the Public Works Committee. And yet the government has made a regulation to exempt the activities of the NBN from the Public Works Committee. The parliament will have to consider whether to disallow that regulation. The Public Works Committee’s scrutiny would considerably benefit the operation and the construction of the NBN. The nature of the Public Works Committee is to look at a proposed project and then report on it, but what we have here with the NBN is a project that will be built over a decade, so it is going to require continuing scrutiny over a very long period of time. The issues that the Public Works Committee look at on a continuing basis would be very appropriate for this joint select committee: the cost-effectiveness of the proposal, the stated purpose of the work and the suitability of its purposes.

But, above all, this is the biggest investment of Commonwealth money ever made in infrastructure in our country’s history, yet we do not have a business case and we do not have a cost-benefit analysis. We have a government that hangs its economic credibility on Ken Henry’s shoulders every day, and yet it was Ken Henry, the Secretary to the Treasury, who said that every major infrastructure project must pass an appropriately designed cost-benefit analysis and if it does not then it ‘necessarily detracts from Australia’s wellbeing’. There is nobody better suited to undertake the cost-benefit analysis than the Productivity Commission, and that is of course why just a few moments ago I introduced a private member’s bill in the House of Representatives.

This committee, however, will provide continuing scrutiny. There will be continuing issues, assuming this project is to go ahead, that will arise with the NBN. There will be major issues about competition. We have seen for the last decade telecommunications prices come down year after year after year. If you cast your mind back 10 years, let alone 15 years, the change in the cost of telecommunications is really extraordinary, and we would hope that that decline in prices would continue—in other words, that telecommunications and access to the internet would become cheaper over time. What we have with the NBN, however, is a massive investment that will need to have some revenue generated to support it. Even if it is to achieve an anaemic return—any return—it is going to need to have strong revenues. How can that be achieved without driving up prices?

The McKinsey implementation study—which was not a cost-benefit analysis, which did not look at alternatives and which was precluded from doing so—recommended that wholesale prices for the NBN should increase in real terms, that is to say over and above inflation, every year for the next decade. In other words, in the NBN world we will see internet access prices going up whereas for the last decade or more they have been coming down. People might say, ‘Well, households will be prepared to pay higher prices for greater speeds.’ Anyone in the telecommunications business will tell you that there is no evidence that people will pay a premium for higher bandwidth. History has shown that as higher bandwidth has become available it has been made available to households and businesses at costs that are comparable to, if not lower than, the previous lower speed products. The NBN has been undertaken with little or no scrutiny. This committee is an essential part of the parliament doing its job. (Time expired)

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