Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Hansard source

And it is waste, as Senator Williams just pointed out—spending too much, waste, borrowing money. And then of course there is taxing: introducing one new multibillion ad hoc new tax after another. That is because we have this waste, because we have inflated costs, because this government wants to put government in charge of everything and because the government does not believe in the benefits of competition and because the government does not want these sorts of services to be provided at the most affordable cost.

It would be very simple to fix. All the government needs to do is go back to the policy statement the minister made back in December 2010: that he is happy to have competition. Competition is good. Compet­ition keeps providers honest. If they know they are going to face competition they know they have to be as good as they can be. NBN Co. would know that it has to perform, because if it does not perform there is going to be a private provider that might be able to do it quicker, faster and with better service. If there is that threat, it might keep NBN Co. on its toes. This government is obviously worried that NBN Co. will not be competitive. This government is worried that NBN Co. will not be able to provide value for money. So what does this government do? It puts a fence around NBN Co. It says, 'No, we don't want pesky private providers to be out there showing us up.'

If we allowed competition, people might actually realise that this white elephant we have set up is not delivering value for taxpayers' dollars. People would realise that it is just another example of waste of taxpayers' dollars and they would be even more upset about all these new taxes they face as a result of this government's persistent incompetence.

As the member for Wentworth, the Hon. Malcolm Turnbull, very astutely observed, this bill is damaging to competition in the market for the provision of new fibre infrastructure, and on this point I quote him:

The regime established by the Bill is damaging to competition in the market for the provision of new fibre infrastructure. Today, as is clear from evidence provided by GFOA there is a nascent but increasingly active market in which CGOs compete to secure contracts from developers to build out fibre networks in their developments. In some cases, the CGO builds the network and then also operates as a retail service provider, providing services over the network to residents in the development.

That is a very good thing. He goes on:

The regime established by the Bill damages competition for several reasons. First, by exposing CGOs to competition from a government funded operator which is prepared to install fibre at zero cost to a developer (once the developer has incurred the expense of building trenches and other ‘fibre ready facilities’), the regime will effectively make it impossible for such CGOs to compete.

CGOs will be at a fundamental cost disadvantage because NBN Co is prepared to install fibre at zero cost, incurring a loss on the installation which it presumably hopes to recoup over time from service revenues.

This is typical monopoly-type behaviour. So you have a company, like NBN Co., which is getting not only the advantage of a 100 per cent taxpayer investment but also the advantage of the government muscle and the legislative muscle protecting its market position. Then, once everybody is sucked in, once everybody is locked in to this arrangement, nobody is going to be in a position to keep the company on its toes to provide the most affordable price and the most competitive service.

That is what this is all about. This is about locking in NBN Co. as the only viable provider, courtesy of significant taxpayer subsidies—multibillion-dollar taxpayer subsidies—and courtesy of protecting its position in the marketplace through legisla­tion like this. Why is that in the national interest? It is a question Senator Mason asked earlier in relation to the carbon tax. Why is that in the national interest? And, I might say, that was a very eloquent contribution in the context of this debate.

With so much of what this government does, there is a real question mark as to why they are doing it, as to why it would be in the national interest to force people to pay more for the services that are going to be provided through initiatives like NBN Co. They would have to pay if the private sector and the competitive market out there were allowed to do its job. Through competition, within the context of an appropriate framework, you do get better value for money—better value for taxpayers' money and better value for the private money people have to pay for services they might choose to access, or might not choose to access. If there is no provider out there that can provide a service at a price people are prepared to pay, maybe there is not sufficient demand to justify the expense in the first place.

The coalition, as constructive as we are, is proposing some amendments to make sure that the current flaws in this bill are addressed. Hopefully the government will see fit to support those amendments. Senator Birmingham, on behalf of the coalition, will be moving amendments to remove the disincentives for developers to use CGOs to install fibre infrastructure. The reason we want to do this is that we want to give developers an incentive to use competitive greenfields operators in the knowledge that, if they pay a CGO on a per connection basis, they will be able to recoup that cost by selling the connection to NBN Co. We want to ensure that developers have additional choices beyond the government's default option so that when they build a new development they will install fibre-ready facilities but there will be no live network installed. We do not want people to be locked into just one option. We want there to be a series of options.

This will impose a cost discipline on NBN Co. because it will require them to purchase connections at a reasonable price, which will be set at a price no greater than NBN Co.'s own average cost of installing a connection. This will mean that, if there are competitors that can build connections at a lower charge than NBN Co., there will be a cost saving to NBN Co. and ultimately to the taxpayer. Surely that would be a good thing. I am hopeful that Senator Farrell will make it his business to recommend to the government that they seriously consider this amendment.

There will be a second coalition amendment to this bill which will seek to address the damaging effects on competition in the market for the provision of new fibre infrastructure.

The overall point is that the government has not learned from its failure around the NBN. It is wasting a lot of money. Because it wastes so much money, it has to borrow more and tax more. It is not good for Australia. It is high time that this government started to learn the value of taxpayers' money and stopped wasting so much of it.