Russell Trood (Queensland, Liberal Party) Share this | Link to this | Hansard source

I have received a letter from Senator Fifield proposing that a definite matter of public importance be submitted to the Senate for discussion, namely:

The Gillard Government’s refusal to subject the National Broadband Network to appropriate parliamentary and economic scrutiny including independent cost benefit analysis.

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

It is a pleasure to speak on this matter of public importance, and indeed this is an incredibly important matter for Australia because there is $43 billion of money on the line here and potentially a world of debt, pain and repayments at the end of this. It is incredibly important because there is every likelihood that this government is sinking money into the National Broadband Network with no real knowledge as to how far it is going to sink and how much will ultimately be blown on the proposal. Today’s MPI is to note:

The Gillard Government’s refusal to subject the National Broadband Network to appropriate parliamentary and economic scrutiny including independent cost benefit analysis.

We are blessed in this chamber to be in the presence of the Minister for Broadband, Communications and the Digital Economy. Indeed, on Monday during question time in this very place, the minister said in response to a question:

It is important that robust business cases are prepared to support the investment of very large sums of public money.

Those were the words of Senator Conroy in question time in this place just two days ago. Anybody listening to or reading them might be forgiven for being a little confused, because isn’t this the same Senator Conroy who vehemently argues that a cost-benefit analysis for a $43 billion expenditure is not necessary? Let me just check again the words that he said he in this place on Monday. He mentioned ‘very large sums of public money’ and ‘robust business cases’, and if $43 billion is not a very large sum of public money, I do not know what is.

Mitch Fifield (Victoria, Liberal Party, Manager of Opposition Business in the Senate) Share this | Link to this | Hansard source

It ain’t what it used to be.

Simon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | Link to this | Hansard source

‘It ain’t what it used to be’, says Senator Fifield. Indeed, under this government, as we see the cost of living for Australian households skyrocketing on a daily basis, $43 billion will not go as far as it used to go. But $43 billion is still a very large sum of public money. Senator Conroy has the gall to come into this place and argue that farmers seeking grants to upgrade their irrigation infrastructure, who might be spending millions of dollars at the most—and potentially they are spending only tens of thousands of dollars—should be subjected to a ‘robust business case to support the investment of very large sums of public money’. Yet Senator Conroy and the government can happily charge ahead and spend billions of dollars—$43 billion in total—on their National Broadband Network flight of fancy without giving the slightest consideration to doing a cost-benefit analysis or having any type of robust business case that supports this investment of a very large sum of public money.

Every day we see Senator Conroy come in here and receive a not-so-well-prepared question—a dorothy dixer—from the Labor Party backbench that reads, ‘Senator Conroy, can you please explain to us the importance of the National Broadband Network?’ And every day he bounces up with a shriller example of why we should support it. Today he basically resorted to reading his correspondence: ‘Dear Senator Conroy, we think this idea of free, hugely fast broadband is a fantastic idea. Love from an anonymous Labor Party member who happens to reside in a particular suburb.’ That was pretty much the crux of his justification today for the $43 billion. There was no business case and no cost-benefit analysis, but he had a letter from a constituent saying that the National Broadband Network is kind of popular. That was today’s response.

Yesterday he stood here and argued for the National Broadband Network on public health grounds. Senator Conroy sounded like some kind of dodgy quack selling a magic potion as he stood there arguing that this $43 billion investment in the National Broadband Network was necessary for Australia’s public health system and for regional health in particular. That is interesting, Mr Acting Deputy Speaker, because you know what? There is always a choice when it comes to government spending. One area of expenditure is the opportunity cost of another area of expenditure, and when you choose to spend $43 billion on a national broadband network you are choosing not to invest it elsewhere. You are choosing not to invest it in—say—hospitals, health services, mental health services or aged-care facilities. Those things could provide a very direct, immediate and obvious public health benefit, but Senator Conroy wants us to believe that his $43 billion National Broadband Network is going to be of public health benefit.

I agree that, as with motherhood, there is a need to provide a universally available, decent level of broadband access to Australians. The coalition agree with that. We have long advocated that. But that does not mean a blank cheque. Senator Conroy seemingly attempts to portray the fact that we question his $43 billion investment as some type of opposition to fast broadband when the truth is that we support it. However, we believe that as parliamentarians it is our responsibility, and particularly the responsibility of the government and the executive, to ensure that when public money is spent it is well spent on wise things. If money is spent—particularly, to use Senator Conroy’s own words again, ‘very large sums of public money’—it should be spent in a cost-effective way.

In this debate we are looking at the most cost-effective way to deliver universal broadband services of a reasonable speed to all Australian premises. That is the objective. How do you get there? You can get there by what is Senator Conroy’s route, which is to pluck a figure out of the air—100 megabits per second is the latest, although there was some talk of something even higher than that during the election campaign—and say: ‘This is what Australians need and so we’re going to give it to all of them regardless of the investment that is already out there, regardless of what the private sector may already be doing, regardless of the fact that there may be no demand for this, no market failure already in delivering to the overwhelming majority of at least metropolitan areas. We’re just going to roll it out everywhere, give it to everyone whether they like it or not, whether they want it or not, or whether they’ll pay for it or not.’

Never mind the fact that in the United States the Federal Communications Commission has recently published a national broadband plan. It states that across America they are aiming for download speeds of four megabits per second. The coalition have argued that we think 12 megabits seems reasonable. As a minimum, 12 is what the government is proposing to roll out to seven per cent of Australians who will not get fibre-to-the-home, so why not say 12 is your starting minimum and then let us see what the private sector and investors will deliver to the rest of the country, where they are already delivering far faster speeds in many instances?

The reason the government is scared of a decent independent cost-benefit analysis of this is because we all know the $43 billion National Broadband Network was cooked up on the back of an envelope on a plane ride that Senator Conroy had to hop on to with Mr Rudd when his fibre-to-the-node proposal, the government’s first broadband plan, fell over when they could not get tenderers to build it and deliver what they had promised at the 2007 election. So rather than accepting that they had a flawed plan, they went double or nothing. In fact they went 10 times or nothing. They took a $4 billion plan and made it a $43 billion plan. They took fibre-to-the-node and made it fibre-to-the-home, and all of this was cooked up on the back of an envelope on a plane ride. That deserves decent analysis before $43 billion of taxpayers’ money is wasted. (Time expired)

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Before I begin my contribution, I would like to remind Senator Birmingham that the back of the envelope processed that he described are the same processes that Mr Turnbull employs. I am sure Senator Birmingham would remember Mr Turnbull’s $10 billion water plan. But regardless of the opposition’s desire to tear down the NBN, the Gillard Labor government is committed to bringing Australian broadband services into the 21st century. That is why during our last term we began the task of building the National Broadband Network.

The National Broadband Network and the proposed reforms to the telecommunications sector will revolutionise the communications market for Australian consumers. The rollout of the NBN is putting communities and businesses such as those in my home state of Tasmania on the map and ensuring that Australia remains a player on the international stage. All Australian homes, businesses, schools and hospitals—no matter where they are located in Australia—will be able to benefit from affordable, high-speed broadband services. This access will be at a rate which is 1,000 times faster than that which many people have experienced today.

As well as improved services, the construction of the NBN is supporting 25,000 jobs every year on average for the eight-year lifespan of the project. And on the subject of jobs, let us not forget that the Australian Local Government Association estimated in its 2007-08 State of the regions report that $3.2 billion and 33,000 jobs were lost to Australian businesses in that 12-month period due to inadequate broadband infrastructure. The NBN will fix this.

Perhaps most significantly, the point must be made that the NBN is already being built. Notwithstanding the progress that has been made, the opposition seem determined to demolish the NBN. The question is why? Why go backwards? Why put Australia further behind the rest of the OECD? The only argument that those opposite seem to be able to pedal is that we need to wait: wait for more reports, more parliamentary scrutiny. They want us to sit on our hands. It is the same strategy they had to combat the global financial crisis—that is, do nothing!

We know that no Australian city is in the top 100 cities for average internet connection speed and Australia is last in the OECD for fibre penetration for broadband. So Australia waits while the opposition have not even settled on their own policy. Mr Turnbull said they would review their policy but Mr Abbott said they would not. The opposition is grasping at every opportunity to prevent Australians from having a world-class, affordable broadband service. That is what this call for a joint committee-Productivity Commission review is really about. It is about delay.

When we introduced our competition and consumer safeguards legislation in 2009 they did not want to debate it until we produced an ACCC report on the original NBN tender process. We did that. Then they would not debate the bill until the implementation study was released. We did that. Then they said their patchwork policy was better. But their policy was universally rejected. Now they oppose the NBN, calling for a cost-benefit analysis. And guess what? Even if the cost-benefit analysis gets a big tick, they still will not commit to support the NBN. This call is a big con.

I want to remind those opposite of the landmark study conducted by McKinsey and KPMG. This study confirmed that a high-speed broadband network can be built on a financially viable basis with affordable prices for consumers. That is why we are delivering the NBN—because under the watch of those opposite Australia’s broadband speeds lagged behind the rest of the developed world.

This government, however, is committed to building the $43 billion National Broadband Network over eight years. This is a large-scale infrastructure project which will deliver growth and stimulus to the Australian economy. We know that the NBN is critical for small business, crucial for our future healthcare delivery and vital to ensure the quality of education of our young people, and that it will connect communities, promote jobs growth and ensure that we are able to work cleaner, smarter and faster. Most fundamentally, we know that this critical infrastructure is being rolled out as we speak. In my home state of Tasmania three towns, Smithton, Scottsdale and Midway Point, are already receiving high-speed broadband services for the first time. In fact, the Prime Minister came to Midway Point, just outside Hobart, to switch on the first customer to the NBN. We now have a take-up rate for fibre connection that exceeds 50 per cent, after only a few months. The take-up of these services already exceeds the annual rate that the McKinsey-KPMG implementation study concluded would be needed to make the NBN viable with affordable prices for consumers.

NBN services are delivering previously unseen levels of competition and choice in Tasmania. Among the first retail service providers who are working with NBN Tasmania to deliver broadband services are Primus, Internode and iiNet. Telstra has now also signed on to test its services over the NBN and a fifth provider, Exetel, has also signed up to provide services. One of the first NBN customers, IT technician Mr Robert Pettman, from Midway Point, said:

It’s awesome. It’s a major speed increase on what I had before, which was a 1.5 megabit per second ADSL service. Since it went live … I’ve done speed tests and have seen a few peaks of 80 megabits per second, although it mostly hovers around 50Mb/s, which is what I ordered.

In Tasmania we are already undergoing planning for the stage 2 rollout. On the mainland, construction work has begun on the first five release sites in Armidale in New South Wales, Townsville in Queensland, Willunga in South Australia, Minnamurra-Kiama Downs in New South Wales and Brunswick in Victoria. The government’s plan is for 19 second release sites to have fibre deployed in 2011 in areas such as Coffs Harbour, Toowoomba, Bacchus Marsh, Casuarina and Geraldton. After all this progress and all this planning, what is the rationale for stopping the NBN and backtracking over the same issues that we have already dealt with?

The government welcomes transparency, but the continued analysis and scrutiny of one of the most scrutinised projects ever funded by government is without benefit and just a cover-up for the opposition because they want to tear down this project. They want to destroy it because it is popular out in the community. I repeat: Mr Turnbull says that, even if a cost-benefit analysis came back unequivocally positive, he could not guarantee the opposition’s support. This beggars belief. He cannot offer that guarantee because the opposition are not interested in what the Productivity Commission has to say; they just want to delay the NBN and deprive Australians of better broadband services.

Earlier in the year we also saw Telstra and NBN Co. announce that they have entered into a financial heads of agreement. This is indeed good news for consumers, who stand to benefit from cheaper and faster broadband. The agreement with Telstra will also mean that the NBN can be rolled out more efficiently as it will avoid infrastructure duplication. I know those opposite will start mud-slinging, but need I remind the opposition that they were the ones who presided over a decade of failed broadband plans? The National Broadband Network will rectify Australia’s lack of world-class broadband infrastructure, which is the result of a long series of patched up initiatives by those opposite which have delivered only short-term solutions. The opposition left Australia with a legacy of 18 failed broadband plans in 11 years. They took their 19th plan to the electorate only a few months ago—a plan to deliver broadband to Australians with a patchwork of old technologies that would have seen Australia fall even further behind. However, the Labor government is committed to turning Australia’s broadband performance around. We need to build infrastructure that will put Australia back in the fast lane of the information superhighway, and the National Broadband Network will deliver this.

The government is determined to increase effective use of the internet by consumers and all businesses to drive higher productivity, growth and community participation in the digital economy. We believe that the National Broadband Network will help drive Australia’s future in the global digital economy. We need to position Australia so it realises the full benefit of this network—(Time expired)

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

In addressing this matter of public importance, I am pretty cheesed off that there is in fact a necessity to rise to protest the Gillard government’s continued refusal to subject the National Broadband Network to parliamentary and economic scrutiny, but here we are. Just because something sounds good does not mean that it is good. Just because a national broadband network sounds like a good thing to do does not mean that the government’s National Broadband Network is the right thing to do.

16:59:06

The government has continued at every turn to refuse to prove that its National Broadband Network is a good thing and the right thing to do. It released a $25 million taxpayer funded implementation study that said that, based on a range of untested and thus far unproven assumptions, the government’s NBN can be built. The implementation study did not look at the question of whether or not the NBN should be built, because McKinsey, the consultants who did the study, were not asked to do so. In fact, a senior officer at the relevant department, Mr Quinlivan, said in answer to Senate questioning, ‘Why do a cost-benefit analysis of a policy promise that the government has already made and said it is going to do anyway?’—hence, supposedly, the reason that the government says, ‘We don’t need a cost-benefit analysis; there’s a business plan.’

The NBN Co. has a business plan. Senator Conroy told us at Senate estimates the time before last that, once the business case was to hand, the public would not see the business case—not then, not ever. He seems to have modified that position, because at estimates just gone he said:

A whole range of information within the business plan will be made available.

When we asked him questions like ‘What? Your selectively edited version? Is that right—your edited version with bits blacked out?’ we got no further information. So we stay tuned for the NBN Co.’s business plan.

Meanwhile, the government oppose the member for Wentworth’s private member’s bill to send the NBN off for examination by the Productivity Commission from an economic and social perspective. So what is the government hiding? Surely the only reason that they are failing to subject the biggest infrastructure spend in this country—$43 billion—to economic and parliamentary scrutiny is that they have something to hide. Perhaps they know or believe that it will not be proven to be commercially viable.

They are already hiding. They used a mechanism to avoid the Public Works Committee, which has the terms of reference of looking at any public works valued at $15 million or more. They used a route to get an exemption from that process. With two previous NBN exemptions, they went before the House and sought exemption on the grounds that it would supposedly slow down the NBN and got exemption through the House. But not this time. This time they went directly to the Governor-General. The government went running to the Governor-General with an argument that, because NBN Co. was competing with the private sector, supposedly, it ought to be exempted—again, avoiding immediate scrutiny by the House of Representatives.

What does the government have to hide? What does the government have to hide with the universal service obligation and the realisation of that? Why, when the government announced in June this year that they would be implementing some sort of universal service obligation, have they only just released a discussion paper to that end—a discussion paper that they are leaving open for consultation for, oh, an entire two weeks about the performance of an obligation to ensure that each and every Australian has fair and equitable access to this National Broadband Network? What does the government have to hide when it allows the ACCC to only now publish its point-to-point discussion paper—the discussion paper about where NBN Co. and the NBN connect to existing networks. It has just been released now—and, again, for a two-week consultation period. What does the government have to hide when the finalisation of the universal service obligation and the finalisation of the point-to-point arrangements both affect the cost of the NBN? How can NBN Company. do its business case with any sort of certainty without knowing the results of both of those two things? Unfortunately, this government have plenty to hide as far as the NBN goes.

It is sounding too good to be true that most Australians will, through the NBN, get access to faster and cheaper broadband. It is sounding too good to be true that the NBN will increase Australia’s productivity and somehow miraculously improve health outcomes for disadvantaged Australians. And it is sounding too good to be true that, at the end of all of this, taxpayers will recover their $43 billion spend through private investment in the network. It is simply sounding too good to be true. And you know what? It probably is too good to be true, and that is why the government continue to hide from any sort of real parliamentary scrutiny and, more importantly, any sort of independent economic scrutiny.

There is an interesting parallel with water, which Minister Conroy effectively fessed up in question time two days ago when he said:

The government is determined that the investment in rural water infrastructure will result in value for money: fit-for-purpose projects which best provide for a viable and sustainable future for irrigation industries. Comprehensive due diligence assessment of business cases is necessary and involves rigorous analysis against technical, socioeconomic and environmental data.

That to me sounds like a cost-benefit analysis of water—the infrastructure spend of which is less than a 10th of the $43 billion NBN spend. A spend of some $3.7 billion for water necessitates that sort of analysis but not a tenfold spend on the NBN. On water, the government belatedly realised, ‘Oops! It sounds good for the environment but maybe it is not good for everything and maybe it is not good for all users of the river. Better look at social and economic issues.’ So too late comes the day of reckoning and the MDBA is made the fall guy for the government’s failures.

When will be the day of reckoning for the NBN? Let us wait and see this government make NBN Co. the fall guy for this government’s belated realisation that they should have done a cost-benefit analysis of their reckless $43 billion spend. (Time expired)

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Senator Fisher is right about one thing. Senator Fisher is right about the NBN sounding good—because it is good.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Prove it, Senator Farrell. Show us the numbers. Show us the analysis.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Senator Fisher, I was quiet for the whole duration of your—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Because you had nothing to say about it.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

I was quiet because I was giving you an opportunity to fairly put your case. I think it was a disappointing case and an untrue case. Had you gone to the trouble of investigating what those in your home state of South Australia thought of the NBN you would know that 85 per cent of people in Willunga—and people in Willunga are going to be the beneficiaries of the first tranche of the NBN in your home state—have already indicated that they are prepared to sign up for this fast—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Eighty-five per cent of whom?

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Eighty-five per cent of the people who are going to be the beneficiaries of the—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

And who are they?

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

They are ordinary South Australians, Senator Fisher. They are real people, Senator Fisher, who are interested in joining the digital revolution. They do not want what you want, which is to put us in the digital Stone Age. They want—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Value for money.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

How many government programs have been investigated the way the NBN has been investigated? I would be very concerned, Senator Fisher. Let’s look at the last election and your $10 billion black hole. You could not even work out the costings of your own policies.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Where are your costings?

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

How are you going to deal with the costings of the NBN? You would not even be able to work it out. The bloke who is going to do this, presumably—

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Order, senators! Direct your comments through the chair.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

My apologies, Madam Acting Deputy President. I was trying to make the point to Senator Fisher—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Fail.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

No, I have not failed yet. You have not even given me the opportunity of completing my arguments on this, Senator Fisher. What we know is that, even if we did another financial examination of this, the people on your side of the House, Senator Fisher, would not be able to work out what it all means. Senator Fisher, through you, Madam Acting Deputy President, you would like to keep Australians—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Fisher interjecting—

The Acting Deputy President:

Senator Fisher should be reminded that her interjections are disorderly.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Thank you for that protection, Madam Acting Deputy President. The reality is that, even if we were to conduct another inquiry into this, I do not believe the opposition would be able to understand the financial aspects of this scheme or be able to work out the benefits for ordinary Australians, and in particular South Australians. This is the key factor that Senator Fisher continues to miss. The first place in South Australia where the broadband is going to start is Willunga. I am sure Senator Fisher knows where Willunga is. It is a great part of South Australia—a very beautiful area with lovely vineyards and it is close to the coast.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Are you going to dig them up to deliver fibre?

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

We are going to deliver what ordinary South Australians want. Eighty-five per cent of the owners of premises in Willunga have requested an NBN connection. I know it is significant. I can see you nodding, Madam Acting Deputy President Pratt, and you are nodding because that is a very significant figure. Although the opposition does not understand the importance—

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

She’s dozing.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

No, she is not dozing, Senator Fisher; she is paying attention, like you ought to be, to what I am saying about the NBN. Perhaps if you listened, Senator Fisher, you would learn something about what ordinary South Australians feel about—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Through the chair.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Yes, I am speaking through the chair. I am directing all of my comments—

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

Madam Acting Deputy President, I rise on a point of order. I sat here and listened to Senator Fisher and I am desperately trying to hear Senator Farrell’s contribution. I urge you, through a point of order, to call Senator Fisher to either be quiet or go off and annoy someone else.

The Acting Deputy President:

Senator Fisher is reminded that interjecting is disorderly, and there must be a standing order against saying things about the chair that are not true.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

The reason that Senator Fisher does not want to hear what I am saying, and the reason she is constantly interjecting, is that deep down she does know that South Australians do support the national broadband rollout. We know that because we have the figures already. Eighty-five per cent of owners of premises in Willunga have already indicated that they want national broadband. Ordinary Australians understand what Senator Fisher would appear not to understand, and that is that we have to move from the digital Stone Age to the digital future. That is what the national broadband delivers. It is a historic infrastructure project. It has been said in the past that the railway was the great infrastructure development of the 19th century. Our NBN is the great infrastructure development of the 21st century. It is going to connect towns like Jamestown. Jamestown will eventually be one of the towns that are connected. I know you have a strong connection with the town of Jamestown because you grew up in outback South Australia.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Outback?

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Yes, Jamestown is outback—way outback. Even South Australians in Jamestown will eventually benefit from the system. Ninety-three per cent of the Australian  population, Senator Williams, will eventually benefit from this very progressive national broadband program.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Fisher interjecting—

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Senator Fisher, please desist with your interjections.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

I didn’t even understand what that interjection was about, Madam Acting Deputy President. if there are going to be interjections they ought to at least make sense, and I cannot make any sense of that. I know Senator Fisher does not want to hear these things, but she ought to listen to what the NBN is all about. It is about delivering to 93 per cent of the Australian population. We have talked about Willunga, and it is going to come to Jamestown.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Who else?

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Other places. I can list some of the other places. It is going to Seaford—that beautiful seaside town in South Australia in the electorate of Kingston. Kingston is very lucky, in fact. I am glad that you asked me that question, now that I think about it, Senator Fisher. Kingston is very lucky, because their federal member of parliament is Amanda Rishworth.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Never heard of her.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

You should have heard of her, Senator Williams, because she got the biggest swing of any Labor Party candidate in the last election. She got a big swing for lots of reasons. She is a very good local member, but one of the reasons she got such a big swing was because she went out to the people in Willunga, Seaford, Aldinga—all of these areas in the beautiful south of South Australia—and told them what we are planning to do. What we are planning to do is to introduce a national broadband system. They had two choices at the last election. They had that cobbled-together collection of antiquated broadband policies that you were trying to sell to the Australian public, Senator Fisher, and they had our national broadband plan—a transparent plan that the Australian people had plenty of time to look at, because there was extensive debate about it during the course of the last election. I am sure that Amanda Rishworth went around to all of the places that I mentioned, and probably the entire electorate, to tell them exactly what it was that we were proposing to do with broadband, and they made a very clear decision in Kingston. They made the decision to support the Labor Party. They dramatically increased support for Amanda Rishworth, and one of the many reasons they did it was because they want national broadband.

This MPI is all about trying to delay what the Australian people want. It is very clear that Australians want to move into the digital age. They see it as the future, not the past. They see the Labor Party as the future, not the past.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Fisher interjecting—

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

You are all about taking us backwards, Senator Fisher. We want to go forward. We want young Australians in particular to have the benefit of this system. Even if you do not want the benefit yourself, Senator Fisher, you should not be denying it to the bulk of Australians who want to move into the modern digital age.

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

Prove that you’ll deliver it.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

I have proved it, Senator Fisher. Eighty-five per cent of those people who have premises in Willunga want this system, and you are stopping them. We have told them everything about this system. This has been one of the most scrutinised programs that this government has ever introduced. It has been scrutinised and scrutinised. All you are doing now, Senator Fisher, is delaying what the Australian public said they wanted at the last election.

David Bushby (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Senator Bushby interjecting—

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Senator Bushby from Tasmania—one of the great beneficiaries. I was listening to Senator Carol Brown earlier today talking about the progress that we have made down in Tasmania. I know that your side would like to keep us in the digital stone age—

Honourable Senators:

Honourable senators interjecting—

The Acting Deputy President:

Order, Senators! I am sure that Senator Farrell can deal with one interjection at a time, but coming from the whole chamber it is a little bit too much, so please desist with your interjections. Please continue, Senator Farrell.

Don Farrell (SA, Australian Labor Party, Parliamentary Secretary for Sustainability and Urban Water) Share this | Link to this | Hansard source

Thank you for that protection. I know why they do not want to hear what I am saying. It is because they know that what I am saying is true. The Australian public want national broadband, and they do not want it in 20, 30 or 40 years time, which your program would take; they want it now.

They made it very clear in Tasmania at the last election that they want national broadband and they want it now. Tasmania was lucky; that is where the program started. I imagine that lots of other places in Australia would have wanted it. Western Australia would have liked it but Tasmanians were the lucky ones. They got it first and we know how much they appreciate it. We know from the results of the election down there that Tasmanians very strongly endorsed our national broadband program. I have talked about how they supported it in Willunga. Willunga is just one small section of beautiful South Australia, but Tasmanians have had the benefit of being the first group to receive it.

Ninety-three per cent of Australians are getting this national broadband system. It is optical fibre, and it is going to deliver one gigabyte per second. What that means is that it is going to be 1,000 times faster than what ordinarily occurs at the moment. So it is going to be a dramatically faster system, and it is going to be delivered by the NBN. Of course, the NBN is a national wholesale communications network. It is the first time we have had such a network, and it is going to provide genuine competition. This is something that the opposition really ought to be interested in. They are always talking about competition; the Labor Party is delivering it. It is delivering fast broadband and it is delivering it through a wholesale company, and it is delivering it in a way that provides extra competition.

I have talked about Willunga. There are many other parts of South Australia that are ultimately going to receive it. The two areas that will be next on the list are Seaford and McLaren Vale. After that, there will be some rollout in Modbury and Prospect. I know, from talking with local members of parliament in South Australia, how much they are supporting it and how much their constituents want it. It is going to be important for the future of education and for small businesses. The Liberals and the Nationals used to claim that they supported small business. Small business is right behind the national broadband system. They have made it very clear to us that they do not want to stay in the digital stone age. They are supporting it. Even businesses in Jamestown, I bet you, are supporting a move to the digital future, because they know—(Time expired)

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I rise briefly to point out that the motion before us relates specifically to the question of an independent cost-benefit analysis. Senator Fifield’s motion talks about appropriate parliamentary and economic scrutiny. I will address each of those three issues but I will confine my remarks mainly to the issue of cost-benefit analysis, which I think has dominated the debate up to this point. In terms of appropriate parliamentary scrutiny, the Senate Select Committee on the National Broadband Network travelled around the country for two years. I am not sure whether Mr Turnbull was aware of that. We have actually done quite a bit of work in the Senate in scrutinising this proposal.

The Greens and the coalition voted to compel the Australian government to hand over the $25 million McKinsey-KPMG economic study. That is now somewhat dated, but that document was put into the public domain as a result of the scrutiny that this chamber has been placing on the national broadband network project. So I think it is a little disingenuous for the opposition to suggest that nothing has been happening when in fact they have played a part in holding this project to account for the last couple of years, as have the Australian Greens.

As I said, the McKinsey-KPMG study cost taxpayers $25 million. It is unfortunate that the opposition did not like what it said, but that document was put into the public domain as a result of the Senate doing its job. It is time that document was updated. It is time we saw the proper business case. When Mr Turnbull’s bill comes into the chamber, sometime in November, the Greens will decide how to vote on that bill based in part on the business case which Senator Conroy insists will be in the public domain—Mr Quigley and NBN Co. is handing that to the government as early as this week.

I am very interested in that business case, because it will tell us whether NBN Co. is going to be a viable organisation. We might have a debate about whether it needs to be. Hospitals do not make a profit for the taxpayer, neither do roads and neither do electricity networks necessarily. We should have a conversation about whether world-class telecommunications need to provide a profit or not. As it happens, the McKinsey-KPMG study says that the NBN Co. will return seven per cent or thereabouts back to the taxpayer, which is a reason we believe it should be held in public hands. But those numbers need to be tested and gone through forensically. That cannot happen until we get the NBN Co. business case.

So, for the Australian Greens that document is of vastly greater importance than a cost-benefit analysis. A cost-benefit analysis is not necessarily the right instrument to apply to a project of this kind. It is relatively easy—and I have spoken on this issue a number of times in here—to quantify and monetise the costs of rolling the network out and even to estimate the net present value of the network once it is built. But how on earth do you monetise the estimated future benefits, for all time, for rapid telecommunications when they do not even exist in Australia at the moment? The way you do that is by making numbers up, and that is the reason a cost-benefit analysis is not likely to be the political weapon the coalition thinks it will be. We need to sit up and take note when somebody like ACCC chairman, Graeme Samuel, says the cost-benefit analysis will not necessary tell us what we need to know.

The coalition is looking for something similar to what Professor Henry Ergas put into the public domain in August 2009—an attempt to monetise the benefits, a magic number calculated using a variety of mathematical tools. Professor Ergas’s magic number was $17 billion, beyond which, he said:

… it is irrational to spend more than $17 billion on the NBN, even if the alternative is a world in which the representative consumer cannot obtain service in excess of 20 Mbps…

To his credit, at least he had a go at doing a cost-benefit analysis. But this number came out of very complex and difficult to critique mathematical formulae—no sensitivity analysis and no idea about what assumptions were plugged into it. How do you put a dollar figure on the estimated future benefits of the NBN?

We need to tread very carefully before we say that a cost-benefit analysis is the final piece of evidence on which the case should rest. The business model is important; it will tell us whether this thing is going to make a profit or a loss to the taxpayer. I think the cost-benefit analysis, if we are not very careful, runs the risk of being a very serious red herring in this debate. So we will see what the government and NBN Co. put into the public domain before we make a judgment call on the value of potentially wasting the Productivity Commission’s time with a six-month cost-benefit analysis.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I would like to pick up on the comments made by my colleague Senator Ludlam. I think it is important that we see a business case; some would say it is long overdue. But this is a $43 billion investment, the nation’s biggest single infrastructure investment since the Snowy River hydro scheme. It is vital that we have all the checks and balances, the relevant scrutiny, to ensure that the benefits of such an investment is truly assessed. As a parliament we would not be doing our job if we did not have a high level of scrutiny applied to this massive project.

Having said that, I think it is important that we have a national broadband network that is efficient and effective and that delivers what Australians deserve. Australia needs to keep pace with the rest of the world, and the rest of the world is speeding away when it comes to broadband technology. When it comes to telecommunications, Australia seems to have been left behind for a number of reasons. One of the reasons is infrastructure. We also need to look at the structural separation of Telstra, because that could hold back the development of telecommunications in this country. I urge the coalition to reconsider their views on blocking the structural separation of Telstra, because that is an essential reform that we need to have.

There are issues in relation to what Senator Ludlam said. My view of a cost-benefit analysis is somewhat broader than that of Senator Ludlam. He made some very good points, but the fact is that the Productivity Commission does have the capacity to provide a cost-benefit analysis that also includes the issue of the social benefits of such a network. In answer to a specific question on this issue during Senate estimates last week the Productivity Commission acknowledged frankly that they have been asked to look at the social benefits of particular projects in particular industries and in particular sectors. They have done so very competently in relation to aged care and they have done so in relation to gambling, and I think it is important that they also be given an opportunity to do so in relation to the National Broadband Network. I believe that the terms of reference need to be much broader than those proposed by the coalition in the bill that has been introduced.

It also needs to include an analysis of any impact of any exemption from the Trade Practices Act in terms of competition and consumer laws in this country. It also needs to look at any potential technological advances and the likely impact on the NBN, including whether future technologies may be superior. It also needs to consider the likely take-up rate of NBN services, having particular regard to international experience. Also, fundamentally—and I think this picks up on Senator Ludlam’s very reasonable concerns—there should be consideration of nation building; the social and community specific benefits flowing from the NBN, having particular regard to rural and regional communities. I believe there has been a market failure when it comes to regional Australia in relation to broadband. That is why I believe we do need a national broadband network. But, for goodness sake, let us ensure that we spend the money that is needed to deliver services to all Australians in a way that has a process of rigour and analysis that ensures that maximum benefit to taxpayers is being provided.

I would have thought that the Productivity Commission could play a very valuable role in relation to that. Given that the government will release the business plan in the not too distant future, I would see the work of the Productivity Commission as supplementing and augmenting the information contained in the business plan. I think we have an opportunity to get it right. Perhaps I could paraphrase the member for New England: we should do it once and we should do it right. But I believe that also involves having a reasonable cost-benefit analysis that, of necessity, ought to include the social benefits of having a national network and also looking at issues of market failure, particularly in regional Australia because regional Australia has waited too long to have decent broadband in this country.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Just following on from when Senator Xenophon paraphrased the member for New England when he said, ‘We must do it right and we must do it the first time,’ we must also have a vigorous assessment of the value for what this program is going to cost.

I refer to Senator Farrell, who spoke earlier on about outback Jamestown. I am sure the people of Jamestown would not be very pleased to think they live in the outback. To me outback South Australia would be somewhere like Innamincka, Marree or Coober Pedy. I am sure that many call 200 kilometres out of Adelaide a different term from ‘the outback’.

First of all it was $4.7 billion. That was the plan taken to the election in 2007 by Mr Rudd; fibre to the node for $4.7 billion. Then someone came up with the dreamt-up figure of $43 billion to take fibre to the home, ‘We will run it all over Australia and run it into the houses,’ at an average cost of about $5,000 a house. The original plan of $43 billion was going to have $21 billion from the private sector invested into the National Broadband Network. Where is the $21 billion from the private sector? It is not there. Why is it not there? The private sector knows what a risk it would be, and that the risk of a return on their investment would be huge. That is why there is no private sector investment in it.

Senator Conroy’s plan is for a 100-megabytes per second download. The first question I ask is how many will use the 100-megabytes download—the fast lane—with this system? We know that in places like South Korea and Japan, that have had the 100 megabytes download per second system for 10 years or so, just 35 per cent have taken it up after 10 years. Most are happy with the 12- to 20-megabytes download.

This week I experienced Telstra’s ability to provide video facilities for medical services with just four megabytes of download. Just four megabytes will give you the video conferencing which would be so welcome for regional areas and so good in medical facilities. You do not need 100-megabytes download: four will do it. I saw it firsthand with Telstra here in Parliament House last week.

The minister gloats that 87 per cent of people in the Armidale area have taken up the free offer of hooking up the fibre to their homes. There was media story after media story and in the latter days of it they finally convinced people to say, ‘Hey, this is free. You had better take it.’ They were giving something away and people were not adopting it—they were not going to take it up. It took the media a huge selling exercise to actually get people to take it up.

But how many are going to hook into the 100 megabytes? I would think perhaps 10 per cent if they are lucky. We do not know the cost. We do know that people are hooked into the 12- to 20-megabytes download at a cost of $50 or $55 a month, as Senator Conroy said during a Senate estimates. Those are introductory prices. But we could be looking at $1,200 to $1,400 a year for those households who want to have the 100-megabytes download installed to their premises.

What happened in Tasmania when they kicked it off? Instead of having the opt-in system they had to change it to opt out. When it was opt in and people had to notify NBN Co. to say, ‘Hey, hook the fibre up to my home,’ 16 to 25 per cent were having it done. So they had to go to the opt out system: ‘We will put it to your house unless you tell us not to.’ People were simply not taking it up.

Just this week, the Business Council of Australia said that a rigorous cost-benefit analysis of the NBN was needed. This has been echoed by Reserve Bank of Australia board member Roger Corbett, who said that the Productivity Commission should be asked to review the whole NBN process of budget spending et cetera. Let us hope that shadow minister Malcolm Turnbull is successful in getting a proper Productivity Commission study into the return for dollar invested in the NBN Co. Or will it be just like the ceiling batts situation, where hundreds of millions of dollars were rorted and wasted? Or will it be like the school buildings fiasco under the Building the Education Revolution program, where we have seen billions wasted? It is amazing: I went to a school on election day, 21 August, at a little place called Kingstown. There was a building of about 10 metres by eight metres with a little kitchen in it. It cost $330,000! That would build you a huge, four-bedroom brick home, but it just gets you a little building under the Building the Education Revolution program. Is it going to be the same with the National Broadband Network? Is there going to be more waste, like in the green loans fiasco, which in the end had to be pulled due to the simple waste of millions of dollars in that program?

This is the point: we all want fast broadband. We know technology is changing, week after week. We know that now, with wireless broadband, Telstra have introduced a 44-meg download. You can take your laptop with you and use it anywhere you want to where you can get a phone signal. They have 44-megs but, no, we are going to roll out fibre to every household in Australia at the most enormous cost. That money will be borrowed—you can bet on that. Just like the $100 million a day, seven days a week, that the government is borrowing, it will be borrowed, and someone is going to have to pay. It might be free to your house now. You might get it hooked up for free, but nothing is free, and the taxpayers or the users will pay for it in the long term. This is a concern. That is why we need this study into the whole NBN to see what return for dollar investment is actually there. If we do not have this—and no doubt some will not support it—it will be simply another dream of the federal government and billions of dollars will be wasted once again.

Louise Pratt (WA, Australian Labor Party) Share this | Link to this | Hansard source

Order! The time for the debate has expired.