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

I move:

That this bill be now read a second time.

This bill concerns the largest infrastructure investment in our nation’s history—$43 billion, 3¼ per cent of GDP. It beggars belief that a government could be so reckless as to allow such a massive investment to proceed without the publication of a business case, without the ongoing scrutiny of a parliamentary committee and, above all, without a rigorous cost-benefit analysis. Again and again, this government has stated the vital importance of major projects being the subject of a cost-benefit analysis. In the words of its leading economic adviser, the Treasury Secretary, Dr Henry:

Any major infrastructure project must be subject to a rigorous cost benefit analysis and if it does not pass a rigorous cost benefit analysis then it necessarily detracts from Australia’s wellbeing.

This government even set up Infrastructure Australia for the express purpose of prioritising and analysing major infrastructure projects. An essential element in Infrastructure Australia’s process is a rigorous cost-benefit analysis of the projects being considered, but the largest infrastructure project will not be scrutinised by Infrastructure Australia or anybody else.

Everybody agrees on the core policy objective of universally available and affordable broadband. We believe that this should be achieved in a manner which delivers structural reform to the telecommunications sector and promotes greater competition which is fair to Telstra shareholders and, above all, which imposes the lowest cost on taxpayers. A prudent government would have sought an objective analysis of the various ways and means of achieving those objectives—but not this one. Some people have argued that while the NBN is surely the most expensive way of delivering universal broadband—and I would challenge honourable members to think of a more expensive way—it does at least achieve the objectives I have described. That, of course, is an argument that is only attractive to people to whom cost is no object and who fail to recognise that every billion dollars spent unnecessarily on this infrastructure project is a billion dollars that cannot be spent wisely on an infrastructure project that is of greater real need—be it a road, a school, a hospital, a railway line or a water project. But even the assumption that the NBN achieves those objectives is questionable. How do we deliver a more competitive telecom sector by establishing a gigantic government owned, fixed-line monopoly with which owners of other fixed-line networks will be prevented from competing? Let us not forget this: under the NBN scheme, Telstra will not be permitted to compete for broadband or voice services over its HFC network, which passes 30 per cent of Australian households. That vital piece of competitive infrastructure, which could be deployed to keep prices low from the NBN, will be eliminated purely to support the economics of this government owned monopoly.

Already the NBN is under fire from other telco companies and, most significantly the Western Australian, South Australian and Tasmanian governments for its plan of limiting the points of interconnect to its network to as few as 14—all in capital cities—overbuilding billions of dollars of fibre backhaul infrastructure and essentially rendering it worthless and, as a consequence, reducing the amount of competition in those regional areas which were supposed to be the primary beneficiaries. You do not have to take the opposition’s word for this. This is the Tasmanian Labor government, the South Australian Labor government and, of course, the coalition government in Western Australia making precisely these points, as do a range of other telco companies.

Why do we imagine a new monopoly network costing $43 billion will not seek to recover a return on its investment by using its monopoly power to increase internet access costs? We know they have been coming down year on year for well over a decade, but the McKinsey implementation study states that internet access costs under the NBN will increase in real terms year after year. So we are spending $43 billion of taxpayers’ money to provide universal broadband which will be more expensive than it is today.

This issue of affordability is a critical one. One would have thought that the members on the government side of the chamber would be more alert to this. Only 43 per cent of households with incomes less than $40,000 use the internet at home, according to the latest ABS numbers. There is the digital divide. It is based on income, it is based on affordability, it is based on poverty. Yet the government is proposing to create a government owned monopoly which will be massively capitalised and which will actually increase the cost of internet services, thereby worsening the digital divide and reducing the affordability of internet access to Australian households. I might say that households with incomes of $120,000 a year or more have about 95 per cent internet access at home. There is a massive gulf in terms of income and that is the single biggest fault line in the digital divide in internet access. This government’s plan is going to make that worse.

Only yesterday the OECD expressed its real concern about the way in which the NBN will close out facilities based competition in fixed-line broadband services. Their report states:

Multiple empirical studies have stressed the value of competition … Moreover, such a monopolistic incumbent—

such as the NBN—

could forestall the development of, as yet unknown, superior technological alternatives.

The OECD expressly recommends that competition between technologies be maintained, not suppressed, as is the plan with the NBN. The OECD also criticises the government for its failure to conduct a cost-benefit analysis and expressly recommends that the planning and coordination of public infrastructure be improved by independent, rigorous published cost-benefit analyses.

What is the argument against the cost-benefit analysis that we are seeking, through this bill, to have conducted by the Productivity Commission? What is the objection that Senator Conroy provides? He says that cost-benefit analyses are subjective. If that is a fatal flaw, why does the government advocate their use for all other infrastructure projects? Put another way, if the government believes a cost-benefit analysis is needed for $100 million worth of road infrastructure, why is it not needed for a $43 billion NBN? He says it will be expensive. The most expensive study done by the Productivity Commission last year cost $2 million. It has a $36 million budget. It can well accommodate this study within that budget and yet this minister, Senator Conroy, spent $25 million of taxpayers’ money not doing a cost-benefit analysis with McKinsey. It was something so extraordinary that McKinsey actually flagged in the opening paragraphs of their report that it was not a cost-benefit analysis. Of course, this is a $43 billion project.

He says it will hold things up—absolutely untrue. The Productivity Commission’s work would continue while the building of the network in its experimental demonstration sites goes on. He points to the importance of ending the vertical integration of Telstra’s customer access network with its retail business. That is one of the outcomes of the NBN, but surely this is the most expensive way of achieving it. If vertical integration is the problem, then separation—be it functional or structural—is the answer and it is plain that you do not need to trash the existing customer access network and build a completely new one to deliver that.

Finally, he points to other studies which have extolled the virtues of universal broadband. We all agree with that, but that is like pointing to the general virtues of better public transport as a means to justify any particular investment that has anything to do with public transport. But the case he is putting privately to Independent members is a very different one. He is saying that the Productivity Commission will not give the NBN a tick. He says that he knows the NBN does not stack up economically and that it will fail the Productivity Commission’s test. There is a vital interest in us having real accountability on this project and that is why the objects of this bill—a business case, a Productivity Commission cost-benefit analysis and ongoing parliamentary scrutiny—are absolutely critical if this House is to fulfil its duty of safeguarding the interests of the taxpayers of Australia.

Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

Let us be clear about one thing. This National Broadband Network Financial Transparency Bill 2010 is not about accountability. The opposition cannot come into this House and say they support universal broadband, that they support equality of opportunity, when all that is being done here is simply a deliberate attempt to make sure that the NBN is not delivered to people in Riverstone in my electorate, is not delivered to people who have never had any proper access to internet in their own homes. You cannot come into this place and say that you support these objectives but you do not support the NBN. Why is that? Let us look at the other countries in the world and in our region who are doing this, let us look at how ICT is transforming people’s lives and their economies. I will talk in a few minutes about examples such as Korea. This is the model, this is the 21st century solution—not some 20th century solution for a problem that has not been fixed after 18 attempts by the opposition when in government. I also point out that the member for Wentworth mentioned the OECD report. The day that I take advice from an OECD report that tells us we should increase the GST will be a long day indeed. I also note that during the commentary on this debate we have had a lot of agreement with people like Carlos Slim. We had the richest telco bloke in the world come out and tell us he could build it for a lot less. I am not about to take advice from Carlos Slim, who ran Telmex, which is the only case that went to the WTO for anticompetitive conduct. I am not about to take advice on this point from either the OECD, which advises we increase the GST, or from people who have form in delivering anticompetitive conduct.

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

What about Ken Henry? Put the boot into Ken!

Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

The member for Wentworth interjects. He talked about the affordability gulf. I will tell you what that affordability gulf is. For the regional members here, let us talk about your gulf. Look at the electoral divisions ranked by the proportion of households with a broadband internet connection. I know I have brought this up before, but for the benefit of the member for Cowper, he is still the 20th worst since we were last here. You talk about the affordability gulf. Why is that? It is because the regulatory system in Australia is busted, and it is not going to get better unless we develop a wholesale only, access network—surprise!—which is what the NBN will be. It will be delivering competitive retail prices on a real level playing field that has only been talked about but never done before. This is what will destroy the affordability gulf. This is what will make sure that the member for Lyne does not have the 18th worst electoral division ranking for broadband internet connection. It will make sure that the member for New England does not have the 13th worst. The member for Wentworth has number 144 out of 150. That is one thing I can definitely see—he would certainly be an expert on this because he is the sixth best. We also have the member for Bradfield, who will contribute here; he is, as I have said previously, the best of all.

We come here today talking about what belief we have. The member for Wentworth says that we all believe in the same thing. I do not think we do. I believe in something that those opposite do not. I believe in the transformational power of ICT to drive total factor productivity, to increase educational opportunities and jobs and to actually benefit the lives of individuals. That is the reality of the information age. ICT around the world is driving growth. ICT capital has seven times the impact on productivity than non-ICT capital in nations with lower levels of ICT usage and around three times more in other nations. ICT leads to jobs growth. Firms in low- and middle-income countries that use more ICT have faster sales and jobs growth as well as higher productivity growth. Most telling of all is that, of all telecommunications infrastructures, broadband has the highest impact on economic growth. Where does that leave us? Where is Australia standing today? We are in the bottom half of the OECD countries in terms of broadband take-up. We are paying more for broadband than most OECD countries. We are 35th for quality of competition in internet service provision. We have to do better.

What is the option? The option is to do nothing, according to the opposition. It is a do nothing option. We have not seen any other constructive analysis or constructive plans from the opposition about what they would do to remedy this. I will address at this point the fact that the member for Wentworth talks about the amount of investment. Let us look at the amount of investment in a few comparative telco infrastructure developments in Australia. The estimated cost to the public purse in today’s dollars of the 1870 Overland Telegraph is $0.9 billion. What does that equate to? It actually equates to $5,365 per person. In 1950, the customer access network, the CAN, was built. The estimated cost today of that is $10 billion. The estimated cost per head of population in today’s figures is $1,222. In 2010 the estimated cost to the public purse of the NBN in today’s dollars is $27 billion. That is the public contribution. With an Australian population of 22.4 million, guess what it comes out as? The estimated cost per head of population is actually the lowest—$1,204 per person. So how anyone can come in here and say that this is the biggest expenditure and yet we are not going to get a return on it, simply defies belief. What has been so disappointing in this debate is the campaign of uninformed armchair commentary that we have had about this. No answers and limited analysis. I will point out this: I went to the Liberal Party website today to see whether they had any plan, just to see whether they were going to come out with something new this week in their debate. But no, we still have the same policy—the coalition will cancel the NBN regardless of what happens in any cost-benefit analysis, regardless of what happens with any study. These people will oppose it. It simply will not happen under these people.

This is not about transparency. The opposition has no right to come in here and take the high moral ground. I think it is the ultimate insult to the Australian people, and to future Australians who are going to read these proceedings and write theses on this issue, that this debate about the most significant infrastructure project in Australia’s history has been so lacking and so fixated on 12 megabits per second. The commentary is so fixated on people being asked whether they want faster email or faster YouTube downloads. During the break there was a significant announcement on e-health about technologies and how this government is going to be utilising the NBN to drive the treatment of diseases in people’s homes. They are actually going to be able to deliver health services that simply cannot be delivered any other way. Does this appear on anyone’s radar here? No, it does not.

I also ask those opposite this: how much have they been speaking and listening to young people in their electorates? Well, during the break I did, and I will give one example. I went to St Joseph’s Primary School in Schofields during the break. I went and talked to years 5 and 6. They asked me about the NBN more than any other series of questions. They asked when they were going to get it at home, because they know that Riverstone is the site of the first rollout. They were full of questions about download speeds and how much better it is going to be when they get the NBN. I even had someone ask a question on net neutrality, which is one of the most complex regulatory issues that every regulator in the world is dealing with. I was asked about net neutrality by these young people.

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

Mr Fletcher interjecting—

Michelle Rowland (Greenway, Australian Labor Party) Share this | Link to this | Hansard source

Now if the member for Bradfield does not listen to young people, that is fine but I have been listening to these people and I can go back to my electorate and look these people in the eye and say, ‘Yes, I do want to get this delivered for you. Yes, I do believe that you have a right to have the highest quality broadband services.’ I will also point out the importance of broadband for inclusion and the importance of broadband, through a ubiquitous network such as the NBN, for people with a disability. I quote Kip Meek of the Broadband Stakeholder Group in the UK—and anyone who has met Kip Meek would know of his intelligence in this area—who says that next generation broadband would improve the potential for videocommunication to compensate for reduced mobility and enhance communication for those who are deaf or hard of hearing by providing facial cues and sign language which require high definition and high frame rates. These are things which can only be delivered through a ubiquitous fibre broadband network. For those opposite who think that wireless is the solution, I say it is Physics 101 that nothing is faster than the speed of light and the only thing that is going to carry that is a fibre network. Wireless networks, by contrast, are shared resources with shared spectrum. You will never be able to deliver through wireless the benefits that you will be able to deliver through the NBN. To those who come here and say that this is about transparency and holding the government to account, I say it is not about that at all. If you support jobs, if you support productivity and if you support a 21st century solution for problems that will not go away, then you will reject this bill and let the NBN proceed.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

I welcome the opportunity to speak on the National Broadband Network Financial Transparency Bill 2010. It is necessary for the coalition to introduce this private member’s bill because the government is refusing to subject the National Broadband Network project to independent scrutiny and parliamentary oversight. One would have to ask the members opposite why they fear scrutiny so much. If this project is going to stand up they should be welcoming scrutiny and they should be welcoming oversight but, in fact, we get the members opposite carping about the technological benefits without reference to the actual cost and the return that would be made.

It was interesting to see the member for Greenway talking about the required contribution by the government and the presumed contribution that was going to be made by the private sector. That certainly anticipates that there will be substantial revenues generated sufficiently to warrant private sector investment. Well, let me tell you that the private sector is not going to invest unless the project stacks up. If I were a major private sector investor, I would want to have the comfort of a Productivity Commission inquiry, of a proper analysis of the revenues that this project would deliver and the risks that it would subject my investment to. But this government rejects that notion.

The legislation is not an attempt to delay the NBN. Faster and more reliable broadband has the support of both sides of parliament. It is clear in my electorate and others across regional Australia that better broadband services are needed to improve investment and to lower the digital divide between cities and regional areas. This bill is an attempt by the coalition to ensure that the scheme is financially accountable and targeted to those areas desperately in need of improved broadband. In its first term, the Rudd-Gillard government wasted record amounts of taxpayers’ money. For the home insulation debacle and the BER scheme they have a gold medal in waste and we want to ensure that they do not go for a further gold medal in relation to the NBN project. These programs followed a common theme. They were rushed through without scrutiny and without ongoing oversight of spending.

The recent Australian National Audit Office report into the home insulation scheme issued a warning about how this government spends money and certainly cast very great aspersions on the government’s ability to manage programs. It is vitally important that the NBN program be appropriately managed. But the Rudd-Gillard government has form in mismanagement and has form in waste. Despite the project’s budget and despite the importance of broadband services, the government is refusing to release a business plan, is refusing to do a cost-benefit analysis and is refusing to allow parliamentary scrutiny. In fact, the government has expressly sought to avoid any inquiries into the NBN through the Public Works Committee. Through regulations registered in July, no aspect of the NBN can come before this committee. The explanatory memorandum to those regulations suggests that an inquiry would place NBN Co. at a competitive disadvantage because its plans would be publicly scrutinised. This excuse is nothing more than a smokescreen. NBN Co. is constructing a wholesale monopoly and is systematically removing any competitive threats. There are no competition reasons preventing the government from conducting the NBN rollout transparently and with full scrutiny. In contrast, competition in the industry would benefit from more details of the NBN to ensure regulatory certainty on the telecommunications playing field. The only possible reason for avoiding scrutiny must be, quite clearly, that Labor has something to hide. Perhaps this is why the government is removing potential competition to the NBN, because it knows that the business plan is unviable in a competitive environment.

The OECD reported yesterday, in their economic surveys of Australia, that ‘such a monopolistic incumbent’—that is, NBN Co.—‘could forestall the development of, as yet unknown, superior technological alternatives’. The report went on to say that, given the cost and impact on competition, ‘additional efforts for rigour and transparency would be welcome’. That is the OECD being very concerned about the restrictions that this government is placing on competition in the market. We know that competition will be a major driver of lower prices and improved services, not the creation of a protected government monopoly delivered at great cost to the taxpayer with benefits yet to be determined. (Time expired)

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

Today I speak against the coalition’s proposal , the National Broadband Network Financial Transparency Bill 2010. I have here a map of the member for Wentworth’s electorate showing that so many of the people who live in his electorate live within two kilometres of an exchange. I also have here a map of central Ipswich. Its people cannot get access to the kind of broadband we need. I represent the rural and regional parts of Ipswich as well as the area of Somerset, and I know that is why we need the National Broadband Network.

Before the 2007 election I got Geoscience Australia to provide me with a map which showed the consequences of the failure of the coalition with respect to the broadband plans they took to the 2007 election. Great swathes of my electorate were not covered by their proposals; yet here, with Labor’s proposal in Springfield Lakes in my electorate—and of course in the member for Oxley’s electorate—we will see the National Broadband Network rolled out into that area next year.

But some country towns in my electorate would not get coverage under the opposition’s proposals—places like Coominya, Fernvale, Esk, Toogoolawah, Kilcoy, Lowood. They had 19 failed plans—not interested in the National Broadband Network, always opposed to it. This bill and the member for Wentworth’s other motion in the last couple of weeks are all about his own relevance. He is here to do a job on the National Broadband Network—always opposed to it; that is what this is about. Yet in those country towns and in Ipswich in my electorate, small businesses, farmers, schoolkids and those people that need and deserve a broadband network will get it. The coalition has always been opposed to it.

We had the member for Cowper saying, ‘We’re not trying to delay it.’ It is just nonsense. They are opposed to it. It is in their DNA. It is almost like their opposition to our fair work reforms and trade union. It is like Work Choices. Their opposition to the National Broadband Network is in their DNA. I cannot understand why they are so opposed to it.

We are talking about 25,000 jobs. We are talking about my electorate and electorates across the country being covered by the kind of fibre-to-the-premises that we need. We know we are lagging behind. Those people who have got broadband pay too much for it. Not enough people have coverage. It is too slow. Go to Korea. Go to places like that. You will see how fast the downloads are and how broad the coverage is. Yet in our country, one of the richest countries in the world, the coalition in this place is rolling out what they knew very well was a failed policy of $6.3 billion.

They know this is all about politics. This is not about economic development productivity. This is not about helping regional and rural Australia. This is about making the member for Wentworth relevant. This is about the coalition posing, preening and posturing to help small business. This is about their facade of economic responsibility when in fact they have been economically irresponsible. They parade themselves as the bastions and supporters of small business when they know very well that small businesses will benefit greatly from the National Broadband Network.

What about e-health? Their policy was to scrap e-health. E-health is so integrated with the National Broadband Network and so vital for regional and rural South-East Queensland and across the country, yet the coalition comes in here and opposes it.

Paul Heymans is a businessman in the Somerset region. He has made it very clear—and so have all the councils—in an article he wrote in the Somerset newspaper about why the Somerset region, my electorate, needs a national broadband network. The catchment is simply so important. The local economy and small businesses simply need to be able to compete nationally. Whether you are living in Toogoolawah or Toorak, you need the National Broadband Network because it is vital in helping you to compete. We have got all the councils: the Lockyer Valley Regional Council and the Scenic Rim Council in the electorate of Wright, the Ipswich City Council, and the Somerset Regional Council—all in South-East Queensland—urging the National Broadband Network into their area; demanding we bring it in, yet the coalition simply opposes it. This is not about looking for better costings and value for money; this is about opposition for opposition’s sake. (Time expired)

Joanna Gash (Gilmore, Liberal Party) Share this | Link to this | Hansard source

Firstly, I would like to commend my colleague, the member for Wentworth for his determination in bringing the National Broadband Network Financial Transparency Bill 2010 before the House. The NBN, even from its inception, which I suspect was first scribbled on the back of a serviette as a big ticket item for Labor’s 2007 election campaign, has a paucity of detail. For three years, this government and its minister have nailed the lid shut on a project that is said will cost the Australian taxpayer in the vicinity of $43 billion and take a decade to implement. So far all we have is no more than a mud map.

This bill seeks to unlock the book on what started off as a proposition in 2007 that would only cost $4.7 billion. Is NBN destined to go down the same path as the pink batts fiasco, the gross overspending on school halls and libraries, cleverly yet misleadingly described as Building the Education Revolution or BER? Peter Reuhl, writing in the Financial Review on Remembrance Day, said this of the BER:

The BER has been one of those dogs that just won’t hunt but still needs to be fed.

Will the NBN add to the pack? The cost of the NBN is equivalent to half the debt they generated when previously in government. That is one concern. Of greater concern is allowing this government to exploit their role to create a monopoly which they will be in control of. While this government, straight-faced, rails against the oligopoly of the big four banks and the need for greater competition, they are working hard to create their very own monopoly—a monopoly that will control one of the most vital arteries in the nation’s communication network. Yet Labor, in their campaign manifesto, published in March 2007, which they took to the people, and got elected on the strength of their promises, said this—and I quote directly from the policy document:

A Rudd Labor Government will;

Partner with the private sector to deliver the national broad band network over 5 years.

Undertake a competitive assessment of proposals from the private sector to build the network

Ensure competition in the sector through an open access network that provides equivalence of access charges and scope for access seekers to differentiate their product offerings

Put in place regulatory reforms to ensure certainty for investment; and

Make public equity investment of up to $4.7 billion.

The document goes on to say:

… this commitment will be financed from existing government investment in communications, including the $2 billion Communications Fund and through the Future Fund’s 17% share in Telstra, which will earn dividends and be sold down to normal market level after November 2008.

What started off as a ‘you beaut’ idea, the best thing since sliced bread, is now being marketed as something that may turn out to be considerably less than what was first described. The first revelation that greeted us was that not everyone is going to get it. Any community with less than 1,000 is disqualified. That is a real concern to me because, when that little snippet was revealed, I found Gilmore had about 22 little towns and villages that would be left behind. The latest revelation is that rather than being free, the NBN is going to cost each household that gets it somewhere between several hundred and several thousand dollars per household.

They have also refused to refer the NBN to their own, newly created specialist infrastructure agency, Infrastructure Australia. The biggest infrastructure investment in our nation’s history is not being scrutinized by this body. Why is that? The Governor-General signed a decree that exempted the NBN from being overseen by the Public Works Committee. Why is that?

Residents, organisations and businesses alike want a fast, reliable and competitive broadband service. While I am happy for the 74 per cent of homes in Kiama Downs and Minnamurra in the electorate of Gilmore to be among the first to be signed up to the National Broadband Network, there are still a lot of questions that need to be answered. As a start point, how much is it going to cost each household? By comparison, broadband upgrade in America will cost the government $7 billion. Why does our scheme have to cost so much more?

In Tasmania, where the government’s NBN scheme was trialled, there has been a low take-up rate. NBN’s response to the Tasmanian experience was that NBN advocated compulsory connection, whether the consumer wanted it or not, and forced people to pay for a product they did not want or did not need. Yesterday’s Sun Herald reported that three towns in Tasmania had a take-up rate of only 11 per cent.

Mike Quigley, CEO of NBN Co., claimed in Senate estimates that the rollout of the NBN in Tasmania was on time and on budget. Yet, when quizzed what the cost had been, Quigley would not reveal any facts. The transition of this bill will allow the whole NBN proposal to be analysed and dissected—factually, objectively, openly and honestly. Let it be said on the record that I welcome the coalition’s push to have a joint standing committee oversee the rollout of the NBN and would certainly put my hand up to be a part of it.

I remind the House again that this government does not have a good track record when it comes to developing good policy or rolling it out. The coalition will not delay the construction of the NBN but simply seeks to ensure this enormous endeavour is carried out with the rigorous analysis it deserves. I commend the bill to the House.

Sharon Bird (Cunningham, Australian Labor Party) Share this | Link to this | Hansard source

I do not support the National Broadband Network Financial Transparency Bill 2010. I notice my colleague the member for Gilmore says that something factual and logical in this debate would progress the issue. I welcome that from the other side for once. The argument in this bill is all about a cost-benefit analysis. We know full well the context in which this legislation is being put forward: that the member for Wentworth’s riding instructions on taking on his shadow portfolio were ‘go out and destroy the NBN’. That is the context within which this bill sits.

The reality is that in some seats, as my colleague indicated before, we are constantly contacted by people frustrated and annoyed because they cannot get access to broadband. The fact is that those opposite when in government had 18 attempts to get this right and they failed. I profoundly believe that the ubiquitous rollout of fibre across the nation is the most effective way to go and competition between service providers to provide access to that is the most effective way to go. One of the reasons I believe this is due to the fact that I had a trip to Silicon Valley with a parliamentary committee last year and we met with people at Cisco and Google, and the message we got at that time was that this was definitely the way to go. Why? Because the experience in America with competition on the infrastructure side of the rollout of broadband was that it became a dog’s breakfast. Companies would provide infrastructure in particular areas and it would not be compatible with infrastructure in other areas. What was supposed to be competition on the retail side to provide services was being limited because whoever put in your infrastructure had designed it in such a way that you had to use their retail services.

In time, people will look back at this debate—and I think people like the member for Wentworth know this—and say: ‘What on earth were they thinking? How short-sighted were they being?’ My colleague the member for Greenway outlined the rollout of telegraphic services and telephony services in this country as an example. We would never have seen that happen if the sorts of arguments being put forward now by those opposite had been made at the time. We would all be sitting here without a telephone, without the capacity to telegraph each other, if the short-sighted views on the rollout of transformative infrastructure of those opposite had been in place at that point in time. Sometimes we have to look to the future in a significant way and we have to do it in a way that allows a role for government in laying down the foundations for transformative infrastructure. That is what the National Broadband Network is about.

Only a couple of weeks ago I spoke in this parliament about a local company in my area—an international stock exchange company that operates from a home based business with offices in both North America and Europe. The gentleman who runs the company had spoken to the local paper about his frustration with existing broadband services. He provided a simple example—a telephone hook-up for all his offices around the world. He had all the offices lined up, everybody was in place for the hook-up—you can imagine the challenge with the different time zones—and he had to upload a document for them all to work off. The line kept cutting out and shutting down, and in the end they abandoned the attempt to have a telephone hook-up. Businesses in Australia that want to connect to world trade know that the rollout of a fibre network is critically important. It has the capacity to transform our economies, and no more so than in the regions.

In an area like my electorate, one of the biggest challenges is transport infrastructure, partly because we have one of the biggest commuter bases in New South Wales. My colleague from the Central Coast would have a similar story to tell. Approximately 20,000 people a day commute from the Illawarra to Sydney and to Western Sydney for work. A lot of those are back-office jobs—finance jobs and HR jobs. If those people could get secure, fast network access from home, the reality could well be a transformation in the way they work. They could actually work from home two or three days a week. The National Broadband Network has the capacity to transform the way we live. I think the member for Wentworth knows that and this is his cheap option to attack under instruction. (Time expired)

Paul Fletcher (Bradfield, Liberal Party) Share this | Link to this | Hansard source

Today’s debate is not, as those opposite would have us believe, about whether an improved broadband infrastructure for Australia is a good thing. Of course an improved broadband infrastructure for Australia is a good thing. Today’s debate is precisely about this question: is it a good idea, in advance of committing $43 billion of taxpayers’ money, to require a business case which meets normal commercial standards and to require a cost-benefit study to be conducted by the well-respected organisation the Productivity Commission? That is the question before the House, and I want to make three points in the brief time available to me.

Firstly, to conduct a cost-benefit study is a manifestly sensible thing that should be done with this regulatory initiative as it should be done with every substantial regulatory initiative. Secondly, it is not true that the National Broadband Network Financial Transparency Bill 2010 will involve any slowdown in the building of the National Broadband Network. Thirdly, a circumstance as we have here—where the executive government has manifestly failed to live up to reasonable standards of transparent decision making; where it has manifestly failed to live up to its own standards as to how the case for an enormous project of this kind ought to be made—is surely precisely the kind of instance where the parliament should step in to insist on a higher standard of scrutiny. If the new paradigm means anything, it means that these are circumstances in which the parliament should step in to require that a cost-benefit study be conducted.

My first point is that it is widely accepted that a cost-benefit study is a good discipline to undertake before any major regulatory initiative. I quote the Commonwealth government’s Best Practice Regulation Handbook, which says:

The Australian Government is committed to the use of cost-benefit analysis (CBA) to assess regulatory proposals to encourage better decision making.

The second point I make is that this is not about delay. Let us be clear. To date, 4,000 premises have been passed by the network in Tasmania. A further 10,000 will be passed by mid-July next year. These are tiny fractions of the proposed complete network build of 10 million premises, and on the mainland much less has been done than in Tasmania. So there would be no prospect of this bill materially slowing down the build of the network even if it were the case—as it is not—that this bill in any way required that the build be suspended while the cost-benefit analysis went on. It does not. Simply, this bill is designed to ask: is the way that we are proceeding the most sensible way to build a broadband network? For example, clause 5(2)(b) requires:

a consideration of the different options by which broadband services of particular speeds could be made available to all Australians—

and an—

estimate of the likely time frame and cost of each option;

In other words, the outcome of this work will not be a simple yes or no. If it finds, for example, that the present model cannot be justified in terms of the benefits that are delivered for the costs, there may very well be other models which emerge. It is not at all the case that this is about stopping broadband; it is simply about saying, ‘Before we embark on this huge project let’s do some standard analysis to see whether the design of it is sensible.’

My third point is that this is precisely the kind of circumstance where a new paradigm parliament should step in to insist on a higher standard of scrutiny. I quote what the member for Lyne said on 7 September in talking about outcomes from negotiations he and other Independents had held with the Labor Party:

That is a good and big outcome from this process, and one that hopefully demonstrates this is not going to be a weak parliament, this is going to be a strong parliament.

Those are important sentiments. This should be a strong parliament. Ordinarily when an executive government had manifestly failed to live up to its own standards, to its own stated principles, as to how a project of this scale ought to be carried out there would be nothing this parliament could do. But these are not ordinary times. We do have a parliament which has the capacity to impose the proper discipline on this executive government to require that there be a cost-benefit study before this massive expenditure is committed to, and I commend the bill to the House for that reason.

Craig Thomson (Dobell, Australian Labor Party) Share this | Link to this | Hansard source

I rise to oppose the National Broadband Network Financial Transparency Bill 2010. Madam Deputy Speaker, let us be fair dinkum in this debate: the coalition went to the last election saying they opposed an NBN and all their actions since then have been about trying to frame an argument around how they can demolish, how they can knock off, an NBN. They are very much on their own; they are very much isolated in the approach that they have taken.

We have just heard from the member for Bradfield that if we went through a Productivity Commission review we might actually come up with another model. That would make No. 19. We would have 19 different models if we had another one come from the coalition. They had 12 years in government and what was their solution? It was, ‘Let’s come up with another plan.’ Basically, there is another plan every half-year. They say: ‘Let’s try to put as many plans as we can in place. That will justify us doing nothing in relation to making sure we have fast broadband in Australia.’

The electorate that I represent, Dobell, is on the New South Wales Central Coast. It has over 35,000 people who commute to Sydney every day. We have higher unemployment on the Central Coast than in other areas of Australia. The reason people commute to Sydney is that it is where the jobs are, and one of the reasons the jobs are not on the Central Coast is that we do not have access to fast-speed broadband. One commentator on the Central Coast who is very much a friend of the Liberal Party is now actually leading a campaign to see the NBN rolled out on the Central Coast as fast as it possibly can be. Mr Edgar Adams writes for the Central Coast Business Reviewnot a Labor-friendly magazine by any stretch of the imagination. His analysis of the difference between the parties is quite simple. He said:

There is no question that here on the Coast and across the nation the lack of policies and ignorance of the difference between fibre optic and wireless communications cost the Liberals government.

He is now leading a campaign to make sure that the Central Coast, like other areas of Australia, gets access through the NBN to fast broadband. The alternative we are given is to try to stop, to delay, to make sure that the NBN does not come about. Not only is it the coalition’s policy to oppose the NBN but also they have done everything they possibly can to stand in the way of Australians getting fast access to broadband. It may be all right if you live in the city where you have sufficient broadband access to conduct business, but certainly on the Central Coast—and I know that the member for Robertson, my colleague from the Central Coast, will also speak in this debate—we do not have access to fast broadband and that is affecting our economic development. Businesses avoid coming to the Central Coast because they cannot get broadband access there. The business park at Tuggerah has slow broadband. The answer is to make sure that we get the NBN in place and operational.

In calling for a cost-benefit analysis, the coalition do not come to this argument with clean hands. Where were they in relation to cost-benefit analysis when they were in government? Where were they in relation to the Adelaide-Darwin railway, the privatisation of Telstra or even the OPEL regional broadband plan? Where were their cost-benefit analyses then? The reason they did not do cost-benefit analyses then and the reason they are calling for one now is that their motive is not about a cost-benefit analysis. Their motive is only about delaying and stopping the rollout of the NBN. It was their policy at the last election. They said, ‘We are opposed to the NBN.’ They remain opposed to the NBN. The bill before parliament at the moment is a stunt, an exercise to make sure they can demolish the NBN and deny people from my region fast access to broadband, economic growth that will flow from broadband and jobs that will flow from broadband. The coalition is trying to strangle the Australian economy and the member for Wentworth should be ashamed that he is using this bill to promote his own self-interests when he knows, better than most, that the National Broadband Network is in Australia’s best interests. This bill must be opposed.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I speak in support of the National Broadband Network Financial Transparency Bill 2010. It is about time the facts and fiction of broadband and NBN Co. were set out for the Australian people because the NBN Co. proposal is a charade borne out of politics and spin, borne out of a populist government determined to promise whatever it takes to hold on to power—a grand promise produced to generate votes, regardless of the real cost to the Australian people.

Fact: Australia will benefit from the provision of high-speed broadband across the nation. Nobody disputes this. We support it on our side of the House. That is the policy objective. Fiction: high-speed broadband can only be produced by an outdated monopoly telco model such as NBN Co.

Fact: high-speed broadband can be introduced to Australia’s major cities by private enterprise at little or no cost to the taxpayers of Australia. Just look at the current i3 project in Brisbane, with high-speed broadband up and down and, importantly, open access. And the Brisbane City Council rollout is at no cost to the ratepayers, but still what was Minister Conroy’s first comment? He wanted ‘to see a cost-benefit analysis’. Fiction: high-speed broadband can only be delivered to rural Australia as part of this national monopoly NBN Co.

Fact: the NBN Co. model will involve an increased charge on all city users to fund less profitable centres—cross subsidisation. Fact: responsible government should be prepared to subsidise the delivery of high-speed broadband to rural and regional Australia. We have no fear of supporting those great Australians in rural and regional Australia. They deserve it. It is simply a matter of being honest with Australians, not hiding this subsidy in the spin of promoting NBN Co. Fiction: only by exempting NBN Co. from the competition requirements of the Trade Practices Act can it succeed.

Fact: successive governments—Liberal and Labor—have acknowledged and supported the importance of encouraging competition. This is plain common sense and almost universally accepted, yet this government wants to take Australia back to the dead hand of government monopoly. It is the Gillard government who are the real Luddites in this debate—building an enormously expensive, outdated telco monopoly model that will lack the flexibility and management capacity to adapt to changing times and changing technologies. They do not care. Their eyes are wilfully closed to sensible market driven alternatives. Why? Because their politics get in the way.

This government is in crisis mode. As their promises are broken one by one, sheer obstinate pride prevents them from acknowledging that there are genuine alternatives that will work better and reduce the cost to Australia. This government says to the people of Australia, ‘Trust us,’ but their track record of financial disasters, from insulation to the BER, tells the Australian people that there are very good reasons to be very worried—not just alert but alarmed. When this government says ‘Trust us’ and there is taxpayers’ money involved, the Australian people know that there is something very wrong. The Australian people trusted the Labor government and they have been not just let down but betrayed in every instance—betrayed with waste on a gargantuan scale. And now the Australian people simply ask for, and deserve, some financial transparency. How better to do this than through the Labor government being required to publish a business case for the NBN, to refer the NBN to the Productivity Commission to produce a cost-benefit analysis and to see the establishment of a joint select committee to ensure there is at least some parliamentary scrutiny. Given the Gillard government’s track record, this is not unreasonable. But this arrogant, dangerously spendthrift, government say no! They have grand plans, with other people’s money. That sums up this Labor government.

So the coalition brings forward this simple bill. It does so to answer the very real concerns in the Australian community. It does so to address the very real concerns of the ICT community. It seeks sensible assessment of an extraordinary expenditure of $43 billion. If the Gillard Labor government are afraid of this proposal put forward by the member for Wentworth one can only wonder how bad the project must be. This bill provides for an independent review of one of the largest expenditures in our history against a background of real questions about the wisdom of this expenditure. What could be wrong with that?

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

It occurs to me that getting a bill from the member for Wentworth is something not many people would relish. I can understand why on a number of counts. Nevertheless I am glad to be able to join others today in speaking to this very craftily titled private member’s bill—the National Broadband Network Financial Transparency Bill 2010. That sounds like something that would be hard to argue against, doesn’t it? How could anyone disagree with financial transparency? I am afraid I do, in this case, because what the member for Wentworth is actually trying to do is to build a straw man out of the NBN. He wants to define the success of the NBN in his own terms, terms that would be quite different to those defined by people who live in regional areas like mine—the people who are the big winners under the National Broadband Network.

In his bill, the member for Wentworth says, ‘Give us a business case with a 10-year forecast and give it to us by Friday.’ Then he wants the Productivity Commission to do a cost-benefit analysis and publish it by the end of May next year. It is all deceptively simple. Actually, it is simply deceptive. This is a cynical spoiling tactic designed to delay the rollout. Before you know it, the great hope of regional Australia, the great equaliser of opportunity and access, will have gone up in smoke. And gone with it will be the hopes and dreams of hundreds of thousands of regional Australians.

James Riley, writing for the iTWire website, has belled the cat. Last month after the member for Wentworth introduced his legislation, James wrote that the member for Wentworth:

… is disingenuous—disarmingly disingenuous—when he says he won’t stand in the way of the NBN if it is given a “big tick” by the Productivity Council through a cost-benefit analysis. He will stand in the way because he knows this is a rigged game. And because he opposes the NBN roll-out at the most fundamental philosophical level.

Hard-wired into the Turnbull DNA is the rock-solid, unshakeable belief that Government has no business getting directly involved in a broadband roll-out. That the delivery of such infrastructure is best left to the market, to the private sector …

I am certain this goes to the heart of the member for Wentworth’s problem with the NBN. He is ideologically opposed to the government funding NBN Co. That is despite the abject failure of the coalition’s 18 broadband policies, policies which have seen prolonged lack of access for regional customers in seats such as mine of Robertson. Still the member for Wentworth stubbornly clings to his belief that we are better off leaving things to the big end of town. I am certainly not ready to consign Australia to the digital dark ages by abandoning our future to the market. I am not surprised to hear free market fanaticism from the member for Wentworth or from the member for Bradfield, who, I believe, was a high flyer in the telco world before coming to this place.

But frankly I expect better from those on the other side who come from regional New South Wales. It shocks me to sit here and listen to the member for Gilmore and the member for Cowper parroting their colleagues’ petty quibbles. Why do they not get it? The NBN is the great equaliser. It is the rising tide that floats all the boats, the technological advance that will break down the tyranny of distance for people living in regional Australia. The NBN will finally allow regional Australia to fulfil its promise, to provide services on par to those provided to our metropolitan areas while offering the kind of lifestyle only our regions can.

Last week I caught up with one of the NBN’s biggest supporters on the Central Coast: the chair of Central Coast Youth Connections, Dave Abrahams. Dave and the publisher of the Central Coast Business Review, Edgar Adams, who my fellow member from the Central Coast, the member for Dobell, has mentioned, are together making a comprehensive business case for the introduction of NBN to our region. I am really looking forward to their first business case event later this month. Surely and relentlessly, we are ready to push ahead.

So, what should happen with this bill? I think it is time for some plain speaking. This bill is just a tricky, self-serving bit of argument. It is put forward as a delaying tactic by an opposition that is bereft of vision and is still smarting from the NBN’s role in the formation of this Labor government. We know that the Leader of the Opposition gave the member for Wentworth the job of demolishing the NBN. This bill has nothing to do with public interest or financial transparency. It has everything to do with trying to bring down one of this country’s most significant pieces of nation-building infrastructure. This opposition has no plan and no policy other than to nitpick and find fault with Labor’s nation-building achievements. It does this without pausing for a moment to reflect on its lost decade in office, a decade in which it stunted our productivity growth through a miserly approach to infrastructure. I oppose the bill and encourage others to do the same. (Time expired)

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

The National Broadband Network Financial Transparency Bill 2010 proposed by the member for Wentworth is eminently sensible. The sense of it is echoed in the voice of the OECD, which in turn is the voice of Treasury. The OECD says very simply that there should be an analysis of the NBN’s financial returns, as required under this bill proposed by the member for Wentworth.

The OECD says some very important things that are relevant to support of this bill. It says that the government:

… should not trigger a weakening of competition in wholesale broadband services to protect the viability of the government project. An alternative to this picking-the-winner strategy would be to let the market guide choices between the various Internet service options on the basis of prices that reflect costs, factoring in externalities that ought first to be evaluated. To that end, it would be desirable to maintain competition between technologies and, within each technology, between Internet service providers.

The question is not one of availability of high-speed broadband; it is a question of affordability. An analysis of published figures shows that, of those people earning less than $40,000 a year, only 43 per cent utilise the internet, while for those earning over $120,000 a year, there is 94 per cent utilisation. You can dangle the diamond standard before the people if you wish, but the poor will only be able to look, because they will not be able to afford this very expensive mechanism.

By passing this bill and putting its provisions into action, we would see that the government ought not to be creating a new monopoly and picking winners but allowing the market to operate. We would also see that the Productivity Commission has the wherewithal to be able to give guidance on this. This bill is not a delaying tactic; it is an eminently sensible way to proceed and I thoroughly support it.

If you look at the terms of reference for the Productivity Commission in the legislation, as outlined by the member for Wentworth, you can see that it includes things that one would think any sensible government would wish to look at. It includes an analysis of the availability of broadband services across Australia and the identification of those suburbs and regions where current services are of a lesser standard or provided at a higher price than the best services available in the city. The Productivity Commission would also consider the take-up rate, the economy wide benefits likely to flow and the different options by which broadband services of particular speed could be made available—all eminently sensible.

Debate interrupted.