Sue Boyce (Queensland, Liberal Party) Share this | Hansard source

I will not be supporting the amendment because I do not support the bill, Senator Ludlam. The availability of accessible and affordable carriage services that enhance the welfare of Australians would certainly be something that the coalition would support. As an object, we would support that. However, I do not believe that we have any more evidence than we had earlier this week to suggest that this piece of legislation will go anywhere at all towards providing that.

I was interested to hear Senator Xenophon say on television last night that he was persuaded by the intervention of the Prime Minister into this case. It is a shame Minister Conroy was not able to carry through his own legislation, which apparently he has such a passion for but which he does not want to share with anybody else. The intervention of Prime Minister Gillard by getting out her itsy-bitsy business plan and showing it to Senator Xenophon apparently was enough to sway Senator Xenophon towards the government’s view. It has not swayed the coalition and it will not sway the coalition. Nor has it swayed vast numbers of the public.

We can see, and it has been commented on, that this summary is very light on—it was referred to as being ‘number light’. Not only is it light on, it is clear that it was put out in such a hurry that it is full of language errors. In the third paragraph—you think they would have got around to checking the third paragraph, wouldn’t you?—it talks about:

… providing more information without comprising the market sensitive aspects of the Business Case …

I think they meant ‘compromising’, but we should know that ‘compromise’ and ‘negotiation’ are not words that this government understand. What we have before us is not an analysis of the costs or an analysis of the benefits.

I note that Greens amendment (2) talks about ‘services that enhance the welfare of Australians’. Yet, if we look through the itsy-bitsy business plan, we see it says nothing on that topic, nothing at all. There are all sorts of comments about assumed usage and assumed speeds, but it does not tell us a thing about what NBN Co. perceive to be the welfare of Australians. There is nothing in here at all about that. It goes on and on about rates of return, which will be a complete shemozzle for them and, in my view, unachievable. It talks about ‘points of interconnect’, which is not yet an achieved deal—and, if that deal is not achieved, this whole business plan is likely to simply collapse. But there is nothing at all about welfare in the summary. In fact, it makes the point, which I found somewhat bizarre:

Telstra will become NBN Co’s largest suppliers of infrastructure and is likely to become NBN Co’s largest customer—

its largest supplier and largest customer. The ACCC might have liked to look at that! The Productivity Commission, I am sure, would have had a view on that sort of material.

When we look at the comments and the number of assumptions they have made about growths in speed and demand and therefore revenue, we find nothing at all, except that they have used projections based on what is happening now and what they hope will happen. They hope that there will be 10.9 million premises in financial year 10 using the new service, and that would be, they hope, 9.6 million residential premises and 1.3 million business premises. They are basing the growth rates, in part, on an average growth of 177,000 new premises every year up to 2025.

Well, we have news for you: building approval rates, particularly in the residential area, have been falling disastrously under this government, and nothing is being done to fix them. So why wouldn’t we expect that to be in the figures? We have no idea what they are talking about, but they go on and on. Their only concern about the future, about what might affect their projections, is that there could be a ‘saturation of usage, slowing growth in online hours and increasing delivery of content on multicast applications’. That is all they can tell us there. They can tell us nothing about genuine welfare, about what this will do for regional Australia or any other aspect of Australian life.

The summary says that fibre to the home is the next generation of technology. Now, the only sure thing is that within the next 30 years there will be several more ‘next generations’ of technology. But have they assumed anything there? Other than under their risk management profile, they do not talk about how they would deal with that or anything else.

Another aspect of Greens amendment (2) is ‘affordable’ carriage services, which is possibly dealt with at greater length than almost anything else in the itsy-bitsy business plan—except, of course, that we do not get any figures. There are no figures. NBN Co. tell us:

The pricing structure and pricing levels have been set to achieve a viable internal rate of return (IRR) based on NBN Co’s estimates of take up of different speed tiers and connectivity capacity usage.

Sorry, but different speed tiers and connectivity capacity usage are very, very strongly related to the price, which they sort of cover in this itsy-bitsy business plan. It goes on to say:

… NBN Co. anticipates being able to reduce real prices for all products and nominal prices for all products, except the basic service offering, while maintaining an internal rate of return above the Government long-term bond rate.

The issue here is that the access to 12 megabits or more per second that NBN are apparently going to offer as their basic service will be the service that most Australians will want to take up. So once again we are back to the fact that, if you want the one with the bells and whistles, you will get a good price; but, if you want the average that this project would offer, you have no guarantee whatsoever about what will happen to prices. The prices will just continue to rise because there is no guarantee at all that real prices will be contained—not in this excuse for a business plan.

The NBN internal rate of return is, again, an interesting effort. They have used a number of assumptions to get to it. But, as they point out, other remaining government decisions could have an impact on that—but, gee, they’ll just have to wait. They are looking at their stocks, the building of new premises and speeds, but nowhere do they look at what might happen over the next 30 years in terms of people’s usage of products that are delivered via fibre to the home. Certainly, a saturation point will be reached, but there is no detail about why they are so confident that this will not be a major issue for them—yet it is something that has been raised over and over again by commentators.

In an article in the Age today there is a view that there is sleight of hand on the figures they use, that it is very clever to have moved Telstra’s expenditure of $13.8 billion to the operating expenses as though that is something that the government will not have to fund. How much are the government going to have to pay over the next few years to get NBN Co. operational? According to their latest figures, it will require $35.7 billion in capex and another $13.8 billion in operating expenses to do the deal that they had to do with Telstra and which is covered in this legislation, of which there has been almost no scrutiny up until now. I am sorry: if you add 35.7 and 13.8 you get to 49.5—that is, $50 billion. If they can explain to me how these expenses will not have to be met by the Australian taxpayer over the next few years, I would love to hear it. But, of course, that is not covered in any way, shape or form in the itsy-bitsy business plan.

The other point made in a column in the Age today is that the government claim that they will have a long-term weighted cost of capital of between 10 and 11 per cent; yet there is nothing here to suggest how on earth they intend to achieve that or how they could possibly hope, in the climate that they have not explained and that we all know is moving all the time, to keep to a long-term cost of capital of 10 per cent to 11 per cent. In fact, Malcolm Maiden in the Age wrote:

However it is configured the project is going to struggle to meet its own long-term weighted cost of capital …

We already have respected people making the point that there is a strong possibility that NBN will be a white elephant. But the government do not want anyone to talk about that. They do not want it discussed, they do not want it ventilated and they do not want to look at it properly. If they could get out such an itsy-bitsy little business plan in an attempt to win support for this legislation, why could they not have put out the real business plan, the 400-page business plan, with commercially sensitive information simply blacked out? They have had weeks and weeks to do that and have chosen not to. There is absolutely nothing in anything that the government have told us so far that gives me any confidence that what we are looking at are accessible and affordable carriage services that will enhance the genuine welfare of Australians.