Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

The committee is considering amendments (1) and (2) on sheet 7006 moved by Senator Ludlam. The question is that the amendments be agreed to.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

The Senate is still debating the objects of this legislation. It is timely that Media Monitors have provided me with a story from my home state of Tasmania—which Senator Conroy has relied upon so heavily in relation to the rollout of broadband. This is something that was posted around about quarter past one o’clock today. It is headed ‘First school superfast broadband “not reliable”’. Here we have the hapless Tasmanian Premier up there in north-west Tasmania visiting the second Tasmanian school to be hooked up to this superfast broadband. Great cause for celebration! Unfortunately, just down the road, the first school to be connected says that it is struggling with connection speeds that are less than a third of those promised.

The Principal of Circular Head Christian School, Patrick Bakes, says the internet service provider has been trying for months to fix it. If we think about ‘months to fix it’, it would suggest that it was a problem around the time of the last election. It is, of course, like the three monkeys: see no evil, hear no evil, speak no evil. You squeaked through the election without having these problems exposed to the Australian public. The principal of the school said, ‘It was sounding to me like it was an infrastructure problem’—an infrastructure problem that had been around for months on end. Do you know what the Tasmanian Premier said? He said that he is not aware of any problem.

It is really great. It is a bit like Senator Conroy, isn’t it? You are not aware of any problem if you do not read your bill, or your explanatory memorandum, or the business case, and then you can honestly say to the people, ‘There is no problem.’ Why? Because you ensure that you are not clothed with any information that might actually make you cognisant of the difficulties that are being faced. This is a problem in the showcase of Tasmania that has now been around for months, unable to be fixed. I wonder who is going to bear the cost of fixing it? We were told that the rollout in Tasmania was coming in under budget. No wonder it was coming in under budget, because they have got only one-third of what they paid for. Of course, one wonders what the actual cost is now going to be. This is the program that the Greens, the Independents and Labor are going to just wave through the Senate over the next 24 or 48 hours—without any concern for what is already happening on the ground. We are seeing what is happening on the ground: things are falling apart. The broadband is not working as promised.

Let us turn to the NBN Co.’s so-called ‘business plan’. It is very interesting, isn’t it? Key conclusions on page 18 state, ‘NBN Co. has developed a rigorous process to ensure an attractive product.’ Could you imagine NBN Co. going to the marketplace with a business plan and saying that they have got an ‘unattractive product’? Of course not. It is just meaningless verbiage.

NBN Co. is so attractive, when they give it away for free in my home state of Tasmania, do you know what the take-up rate is? It is 11 per cent. It is so attractive they cannot give it away to 89 per cent of the population. Those over there in the Senate, the Greens, the Independents and Labor, will be waving it through without citing the business plan and ignoring what is happening in my home state of Tasmania. Broadband is in disarray, collapsing, not working as promised and only being taken up by 11 per cent. Does the business plan reflect the actual on-the-ground experience in Tasmania? Not a word of it. Why? Because it does not suit their cause.

Let us go further into the business plan. On page 33, under the very important heading ‘Risk Management’—and listen to this very carefully on the crossbenches:

NBN Co is seeking to develop a sound system of risk oversight.

They still do not have a risk oversight system in place, yet we are supposed to be passing this legislation in the next 24 hours. They are still ‘seeking to develop’ it. Once they have developed it, once they have told us what it is, we might be in a position to give serious consideration to the plan. Until such time that these fundamental foundation documents are provided to us and the real detailed information is provided to us, it would be an abrogation of our responsibility to support the proposals that have been put to us.

Let me move to an open letter to Mike Quigley, the CEO of NBN Co. Ltd. This is an open letter from the Alliance for Affordable Broadband. They love broadband, they support broadband and they want affordable broadband. They tell us this about the business case summary:

... the Summary appears to raise more questions than it answers.

No investor or lender would lend money to open a milk bar based on a document with this little detail. It continues:

Yet Members and Senators seem to think this suffices to spend over $50b of taxpayers’ money.

They are wrong on that one. There are some responsible senators in this place who do not think it suffices to spend this much money on such a flimsy business plan. They go on to highlight what Senator Macdonald did in his question that the costs are actually higher than they were expected to be. They go on to indicate that the price of the basic package will not decrease over time but is likely to increase. They say:

• the project is only viable if it is a monopoly in the last mile and in backhaul facing no competitive pressure as to price ...

Of course, ‘no competitive pressure as to price’ means no competitive pressure on innovation or efficiency either. These issues simply are not responded to.

There is a whole host of issues raised here, including the one raised by Senator Ronaldson on the missing interest cost. There is no reference in the business plan as to how they are going to pay interest or what the interest will be. It makes the business plan look great. I wish I could have done that when I submitted to the bank to be lent some money to set up my legal practice all those years ago. If only I could have said: ‘Look, don’t worry about interest payments. Do not worry about that but I think we have got a great business case. Please bankroll me, but don’t talk about the interest rate.’ Of course the interest has to be included in any sensible business plan.

This is a real kicker, especially for the Labor Party, who pretend to champion the cause of low-income earners. This is what the Alliance for Affordable Broadband say:

By this statement, NBN Co expects to decrease the real—

whatever that means—

prices for products able to be afforded in homes with higher incomes, yet households on low incomes who can only afford the most basic service will not see any similar improvement in affordability and in fact, it would appear that it is NBN Co’s intention to make this productless affordable over time.

Those opposite pretend to be the champions of the low-income earners. They have a business plan and, not satisfied with the increased cost of living that they are putting on every Australian, they are now going to whack them with increased costs for the NBN as well.

We turn to today’s Australian editorial which says in part ‘the promises that high-speed broadband will improve national productivity’. I assume the minister will not scoff at that suggestion. I assume the government accepts that it will increase national productivity. We do not get a response from the minister, so I suppose that question is still in the ether. That is what he has been saying. The government has been claiming day after day, week after week that the national high-speed broadband system will improve national productivity.

If they are so convinced the NBN will increase national productivity, surely it would be a no-brainer to submit it to the Productivity Commission and have it confirmed. But they will do anything within their power, including doing all sorts of deals with the crossbenchers, to ensure that their claim about increasing national productivity cannot be tested by the pre-eminent authority in this country that could actually put the ruler across that assertion, namely, the Productivity Commission. They will do everything to avoid that scrutiny. Why? I think we know the answer: because they doubt the claims they have been making.

If I had been making such bold statements all the time, week in and week out, and actually believed them, and the opposition said to me, ‘Come on; submit this to the Productivity Commission,’ my response would have been, ‘Be my guest; we will do it for you because we are confident in our assertions.’ The fact that they refused to submit this to the Productivity Commission tells us everything. They are not confident, even in their own rhetoric, because they know how flawed their assertions have been.

This is a major infrastructure project for our country. It deserves proper scrutiny, and it cannot be properly scrutinised until we have the full business plan. I repeat, with great respect to my friend Senator Xenophon: you cannot say that there has been a public release of the ‘full summary’ of the NBN. It is like saying, ‘I’ve got a full half-glass of water.’ A summary, by definition, is not full. Unfortunately, Senator Xenophon has adopted the mantra that, undoubtedly, the Labor Party developed in some sort of focus group. They gave it to Senator Xenophon and he faithfully put it on the front of his media release. I hope I am wrong as to that; I am sure I am. More seriously, we have not been given the business plan, we have not been given the government’s response to the implementation study, we have not been given the Greenhill Caliburn investigation into the business study and we have not been given any opportunity to have a Productivity Commission investigation into this—and so the list goes on.

That which has been rolled out so far in my home state of Tasmania is breaking down as we speak. The Tasmanian Premier, the minister and others pretend they know nothing about it, even though this problem has been in existence for months. Many answers need to be provided by this minister and this government. They have been refusing to provide those answers. That shows that they do not have the robust documentation, the robust support material, that a project of this size deserves.

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

Seeing these are my amendments that are being debated, I thought it might be worth putting a couple of things on the record, particularly while we have the Leader of the Opposition in the Senate present, as I have a question I want to put to him. I am extremely grateful that the opposition has seen fit to subject amendments (1) and (2) to such an extraordinary degree of scrutiny. So far, I am taking it as a compliment. They are good amendments; several coalition senators have complimented me on the quality of the amendments while indicating that they will be voting them down.

We have approximately 20 pages worth of amendments to get through and we have been on my amendments, (1) and (2), for four or five hours, yesterday and today—not counting the time that the opposition wasted with procedural motions earlier today. I am seeking some guidance from coalition senators. When we finally vote on my amendments, whether or not they get up, Senator Birmingham is, I believe, bringing on 65 amendments, on sheet 7004. Does the coalition have any intention at all of submitting this bill to actual scrutiny, or do you intend to simply tie us down in this pointless filibuster? Several coalition senators have managed to get a pink batts reference into the debate on my amendments. Is there actually a will to debate the amendments, or are you simply going to waste our time until very late this evening?

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I am more than willing to respond to the senator. This shows the close Labor-Green alliance that has developed. The issues that we have been raising since the committee stage of this bill have required the minister to respond, and he has refused. He walks around the chamber, he leaves the chamber, he sits elsewhere, he plays on his mobile phone and he treats the questions and issues we are raising with absolute and utter contempt. What we need, I say to Senator Ludlam through you, Mr Chairman, is a response as to how anybody can responsibly vote for this legislation and consider the amendments in the context of us being denied the fundamental documents that we need to make a full, proper assessment.

Yes, Senator Ludlam, we do use the pink batts analogy. You and the Greens bear responsibility for that disaster, that debacle, as you waved that legislation through the Senate without giving it the sort of scrutiny that we in the coalition sought to give it at the time. It went through, and you bear the responsibility for not putting those matters under proper scrutiny. I know the pink batts matter was only $1 billion. To me that is a huge sum of money, but this is 50 times as big. Having not learnt your lesson from the pink batts debacle—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Abetz, you must address the chair.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

Quite right, Mr Chairman. The Greens, not having learnt their lesson in relation to the pink batts debacle, are now going to try their luck on a project that is 50 times the size. They are just going to wave it through with the same lack of scrutiny.

I have indicated to the Greens and the crossbenchers what has been happening in my home state of Tasmania, where broadband is collapsing as we speak. Still they say, ‘Hear no evil, see no evil, speak no evil—just pass it through the place.’ We will not. Because we are sound economic managers, we believe that we have a duty to the Australian people to be responsible. Until the minister provides us with the fundamental information we are seeking, we will continue to raise the questions which we have a duty to our electors and other Australian taxpayers to raise.

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

I will be very brief, and I thank Senator Abetz for his response to my question. I have no problem at all with the opposition voting against this bill. I think it is irresponsible and politically self-defeating, but it is entirely their right to come in here and vote against it. But Senator Abetz must have a pretty warped idea of the notion of scrutiny if this is what he calls scrutiny. This is filibuster; this is a complete waste of the chamber’s time. I will merely wait until I get the opportunity to put my amendments, and I guess we will see a number of other coalition senators giving us the benefit of their views. All I would say, on behalf of everybody who may well be listening in with some sense of disbelief as to what on earth it is that the national parliament is debating, is that we have approximately 20 pages of amendments to get through and the coalition has tied us down for five or six hours on the first two. Can we just stop wasting time and get on with the substantive debate?

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

I want to respond to that rather sanctimonious comment by Senator Ludlam. Yesterday, as the first speaker after Senator Ludlam moved his amendments, I asked him some questions. He walked out of the chamber. He was not here for the entirety of my speech. Here I was asking him questions and they were falling on deaf ears. So Senator Ludlam should not be so sanctimonious. We did ask him questions, but he chose to leave the chamber—and he is leaving again now. If I want to ask him questions now, how can he possibly answer them because he is walking out of the chamber when I am about to ask questions? I know Senator Johnston has questions as well. But why bother asking Senator Ludlam when he leaves the chamber whenever we asked him a question? What sanctimonious claptrap!

David Johnston (WA, Liberal Party, Shadow Minister for Defence) Share this | Link to this | Hansard source

Prior to question time I was addressing Senator Ludlam’s amendments, and I was saying why the opposition had no confidence in this minister, particularly in the face of what has gone before with virtually all other ministers: mining resource rent tax, climate change, health, asylum seekers, water in the Murray-Darling, pink batts and school halls, just to name a few. And when I turn to this minister, it is impossible to have any confidence in him. This is the minister who single-handedly has vaporised $30 million. The Australian National Audit Office put a $30 million price tag on the failed National Broadband Network tender process, blaming the department and the minister for that loss. Very few ministers in our Federation’s history have been able to achieve the vaporisation of $30 million of taxpayers’ money. But this minister has an outstanding and infamous track record in that regard. No wonder the opposition is taking every opportunity to scrutinise every walking, living, breathing movement of this particular minister. The fact is we simply do not have any confidence in him. He has not even read his own legislation. He was caught out by Senator Joyce last night saying things that are not accurate. I want to get to the bottom of this costing.

These amendments that have been put forward by Senator Ludlam all relate to ministerial discretion and to strengthening accountability of the government. But the point that I am very interested in is these new numbers that we now have. The $43 billion has gone back to $36 billion with an implementation tag of $13 billion. Does that mean that once upon a time the actual cost of this project in, maybe, 2010 dollars or 2009 dollars was $56 billion? My question to the minister is: was, at some point, the total cost of the capital and implementation of this project $56 billion? I think that is a legitimate question that he needs to answer.

When this government released the guidelines for Infrastructure Australia in 2009, it said:

… all initiatives proposed to Infrastructure Australia …should include a thorough and detailed economic cost-benefit analysis … In order to demonstrate that the Benefit Cost Analysis is indeed robust, full transparency of the assumptions, parameters and values which are used in each Benefit Cost Analysis is required.

That is in their own guidelines. But for some reason this minister clearly is outside those guidelines. He thumbs his nose at them and at the same time thumbs his nose at this parliament. Why so secret? Why is this minister so secretive? What is this all about? Could it be that the CEO of NBN Co. is on $1.95 million annually as a salary? Could it be that reason? Could it be that Mr Mike Kaiser, a former Queensland Labor MP who had to resign after his involvement in vote rigging, has been appointed by this minister to NBN Co.? All of these things are reasons the opposition is so concerned. Indeed, when there are so many amendments then that sends a very, very clear signal.

In closing, the parliament must be the first port of call in a project of this magnitude. If this project is so good and has such a robust analysis, then the parliament needs to be engaged and the parliament needs to see where the government is going. All we have here so far from a very incompetent minister has been obfuscation and secrecy. This has been simply and utterly unprecedented for the amount of money involved and is an absolute disgrace.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Mr Chairman, I thank you for the opportunity to put my questions in this particular debate. Already we have seen the scant regard and courtesy with which this minister, Minister Conroy, holds this place, and I will refer to that in a few moments. This time last year we were debating the ETS and Minister Wong , with carriage and responsibility of that legislation at that time, had the courtesy to sit in this chamber for all of about 56 hours and to answer questions, to engage with senators and to give us the benefit of her input and knowledge. This minister, Minister Conroy, has been spectacular by his absence, and what a tragedy it is.

In my many years in business and running government enterprises I had one overriding principle: the best indicator of future performance is past performance. Senator Ludlam asked why it was we were expressing such concern. The past performance of this government has been a joke, reprehensible. Senator Ludlam asked why we mentioned pink batts. The reason for mentioning pink batts, as has been eloquently put, Senator Ludlam, was the billion dollars of waste without it ever having been the subject of any scrutiny and, regrettably, the four deaths that we know about to date—and all of the other costs that we do not yet know about with pink batts.

I sat through the hearings into the Gillard memorial halls and once again saw the gross incompetence that was visited upon this country as a result of it. Senator Ludlam and his colleagues would know well about the failed Green Loans scheme that cost so many small-business people their livelihoods and for which there has been no restitution from this government. We saw the issue with the allocation of funds for Aboriginal housing in the Northern Territory of some $300-plus million. Before the first roof was on the first building the Northern Territory government had accumulated for itself a figure in excess of $30 million for no action at all. Only this afternoon we heard in Tasmania of the very first school in Smithton linked to this famous new NBN and, unfortunately, it seems as though they are having infrastructure problems because it has not yet met anywhere near its objectives.

I suggest to my good colleagues—Senator Ludlam and his colleagues and Senator Xenophon—before it is too late, before you are party to the next failure, to take a good, long look at the first performance of this NBN, which has in itself failed, along with the other projects that we have seen in the three years.

We return to costs. I look at this document that was forced, kicking and screaming out of government in the last couple of days. It is a project of $50,000 million of borrowed money to be repaid by the Australian taxpayer, and in ‘6.6 Funding’, we have not even three lines but 2½ lines:

6.6  Funding

NBN Co’s funding requirement is driven by the Company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) and Capex profiles, including working capital.

That is the sum total we are to learn of funding for a $50 billion project. Senator Sterle would not lend 50c to his sons or daughters if that was the best they could come up with in terms of a funding activity.

We were told originally the project was $43 billion. We were then told it was $26 billion. When you add $35½ billion to $13.8 billion of infrastructure spending, it comes to $50 billion. And for those of you with calculators, that is—before we link up a business, before we link up a home—$2,272 for every man woman and child in this country. That is before you start adding debt. That is before you actually link up to this project and to this process.

But what is going to be the cause to increase it? I did some quick figures on that $50 billion and at a six per cent average interest over the next 11 years, because we were told that it would not top out until 2021. That, if you don’t mind, is a cool figure of $1.6 billion per annum at six per cent, which until 2021 would be $17.8 billion added to the bill.

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Don’t do a Barnaby!

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

That would be added to the debt, Senator Cameron.

Doug Cameron (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Don’t do a Barnaby!

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! I want some order on my right! And I would remind senators, particularly those who might not be listening, that it is disorderly to come into the chamber eating. Read your standing orders.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

I refer again to the cost of borrowing as the first factor that will increase it. Between now and 2021 at six per cent we are looking at nearly $18 billion added to the cost. At seven per cent, a mere one per cent more, we are up over $20 billion. That is the cost of borrowing. The second concern I have would be the likely industrial conditions. The other side could not answer a question in question time yesterday as to what is going to be the blow-out effect over the time. The third—and I will come to it in a moment with regard to Tasmania—is the take-up rate. The fourth, of course, will be, if they are allowed, any competing technologies. If we think of the advances in technology over the past eight years ago—2002 to 2010—and if we project that forward another eight years, heaven forbid, where do we think we will be with internet connectivity and various IT activities? This is tying this country up. It is locking us into aged and already outdated technology. By 2018 we have got no idea where it will be.

Therefore, what are the risks? The risks of this project are incredible. As has been said, only now do we see, Senator Ludlam, that NBN Co. is seeking a risk oversight, risk management and internal control process. Back in March of this year in this place when I spoke to this issue I spoke about the need to develop a business plan before you get started—where you have a cost-benefit analysis, where you do a risk management plan, where you do a SWOT analysis and when you look at likely competition. It was ignored. It was ignored by this arrogant minister, who does not even have the decency to be in this place to respond to his lousy legislation—legislation he has not even read, explanatory memorandum which he does not understand.

That allows me to come to Senator Conroy, but before I do I hope my Greens and Labor colleagues from Western Australia take careful note of this. If you address yourselves to page 7 of this lamentable document you will see that it involves only towns with more than a thousand people. Senator Evans, if he were here, Senator Sterle, Senator Bishop, my two Greens colleagues and I know that more than 80 per cent of towns in Western Australia will be denied access. Research from the Parliamentary Library tells me that 80 per cent of Western Australian towns have fewer than a thousand people.

Honourable Senators:

Honourable senators interjecting—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! I will have order on my right. Senator Back has a right to be heard.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Only today did I obtain the information necessary to make the comment about towns in WA with fewer than 1,000 people. It may well be that nationally 97 per cent of the population are going to be linked up to the NBN. It simply shows the lack of regard that this Labor government—

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

That’s 97 per cent, you dill.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! You will withdraw that comment, Senator Bishop.

Mark Bishop (WA, Australian Labor Party) Share this | Link to this | Hansard source

I withdraw that comment, Mr Chairman.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

Unfortunately this speaks of the lack of regard this government has for the state of Western Australia, the state that is providing the greatest level of economic input to this nation. Yet we are going to see most of the communities in the Kimberley denied the opportunity to access this service. We see it in the goldfields, the southeast, and through the southwest, the wheat-belt areas of the state. It is a joke and the two Greens senators from Western Australia will not stand up to it.

I turn again to Senator Conroy who is still not here to respond. On national television last night, Senator Conroy described the Senate as being ‘arcane’. I rushed to learn the definition of ‘arcane’ and it is most interesting. The definition is:

… requiring secret knowledge to be understood; mysterious, esoteric; information—

Senator Cameron will be interested in this—

that is known or understood by a limited number of people.

Inadvertently, Senator Conroy was quite right when he used the word arcane—but it is not the Senate that is arcane, it is Senator Conroy. He is mysterious, secret, hidden, esoteric, cabbalistic with the information. What do we see now? Conroy the cabbalistic, the master of mystery, the archangel of ‘arcaneity’. That is who Senator Conroy is. He is a person who cannot appear, who is hidden. He is prepared to share information with some in this place. He had to be overruled even to come up with this summary of the NBN business plan. What an insult it must be to the Secretary of the Treasury, Dr Ken Henry—I would have thought there would be some respect for him—who said when asked about this project:

Government spending that does not pass an appropriately defined cost-benefit test necessarily detracts from Australia’s wellbeing.

The government’s Secretary of the Treasury is being totally and utterly ignored. I ask of Senator Conroy, in his absence, these questions, and I ask those on the crossbenches and the Greens to reflect on the responses. When the program was piloted in Tasmania, how much did it cost people to connect? Was it free of charge, as we have heard? How much did service providers pay to be connected? Was it free of charge for them? Is it true that even when it was given free of charge, less than 12 per cent of those to whom it was given for nothing bothered to sign up? Of the 11 per cent who signed up, to what use have they put this new technology? Have they simply downloaded videos a bit more quickly or has it been a complete waste? How often have they logged on? All of the interviews I have seen, in luminous places like Midway Point, have been with young people who have used it for computer games and to download movies. What will we get from this facility that will cost 50,000 million dollars plus interest?

I conclude with what I regard as the reprehensible abuse of process in this chamber this morning. To see the Greens party and the two Independents gag debate to the extent they did was an absolute disgrace. I recommend that they go back to Odgers Australian Senate Practice and read chapter 1 which relates to the Senate and its constitutional role as ‘an essential of federalism’. It says the functions of the Senate are:

To ensure that legislative measures are exposed to the considered views of the community and to provide opportunity for contentious legislation to be subject to electoral scrutiny.

Another function is:

To provide protection against a government, with a disciplined majority in the House of Representatives—

In this case, read the majority gained through the Greens and the Independents—

introducing extreme measures for which it does not have broad community support.

All I am doing is reading from the constitutional objectives in Odgers Australian Senate Practice. Another function listed:

To provide adequate scrutiny of financial measures, especially by committees…

I thank you for the opportunity to speak.