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

by leave—I move:

That the Senate take note of the report.

This is a very important part of the process of scrutiny and accountability for the National Broadband Network. Senators will recall that this is perhaps the largest infrastructure project ever undertaken by any Australian government, certainly in recent times. Senators will also recall that, in spite of repeated requests by the coalition, there has still not been a cost-benefit analysis of this project.

With the new paradigm in government, and the last election result being so close, the Independents, as part of their agreement with the Gillard government, indicated they wanted greater accountability and scrutiny. A deal was then done so that a Joint Committee on the National Broadband Network would be established with roughly equal numbers of government and non-government members. It was then deter­mined that Mr Oakeshott would become chairman of that committee. I stand to be corrected if I am wrong here, but I suspect that was part of the deal in dividing up the spoils of office for the new government. The terms of reference of this committee were that the committee would more or less take the place of the cost-benefit analysis and would generally look at all aspects of this huge expenditure of taxpayers' money. I continue to say—justifiably, I think—that this is a project which will involve in excess of $55 billion expenditure of taxpayers' money and that it therefore should be very clearly scrutinised by the parliament on behalf of the Australian taxpayer.

The NBN Co. has already been given extraordinary exemptions from parliamentary and regulatory oversight. These include an exemption from review of the Public Works Committee of parliament. That is quite unusual for an expenditure of this amount of money on infrastructure. The passing of the telecommunications legislation amendment bill limited the ACCC's oversight of commercial agreements undertaken by NBN. There is, as I have mentioned, a lack of any cost-benefit analysis by the Productivity Commission or any other competent agency to examine whether the objective of universal and affordable broadband was most cost effectively and speedily achieved by the NBN project. There has been a failure by the government to release the 400-page NBN corporate plan in full. We have got bits and pieces of it but not the full 400-page document. It has also been exempted from freedom of information laws. Therefore it was essential that this joint standing committee set up to oversight the NBN should have the powers to do that. I am a member of the committee and to date we have been stymied in getting the full information that we need to properly assess the NBN and its rollout. In fact, NBN Co. has applied for the right to increase prices on most services, excluding the basic ADSL speed equivalents, by up to CPI plus five per cent per year. By comparison, the price of access to Telstra's copper network has fallen seven per cent each year in real terms since 2000, and figures compiled by the OECD show that between 2005 and 2010 the price of ADSL broadband in Australia fell by 69 per cent in nominal dollars. The recent history of broadband connection shows a downward trend, a falling of prices, but the NBN is seeking permission to increase its prices by CPI plus five per cent per year over the next several years. It appears to the coalition members on the committee—and this is mentioned in the dissenting report of coalition senators—that the government equity injection is explicitly structured to hide the inherent risk of the NBN project from taxpayers and investors in other communications companies, in breach of the competitive neutrality principle supported by both Labor and the coalition until quite recently.

I want to comment on a number of aspects of the joint committee's work, although time will not allow me to deal with all of them. I draw the Senate's attention to the coalition's dissenting report, which outlines a number of problems with the NBN rollout. I will not go into this in full—our report sets out evidence of these problems in some detail—but there have been ongoing delays in the rollout. That is mentioned on pages 62 and 63 of the report. There are also difficulties with what are claimed by NBN to be confidentiality provisions that really do restrict the ability of the committee to fully oversight this infrastructure rollout. There are a number of other issues that I would like to emphasise but, as I say, time will beat me. I do suggest that anyone interested in this NBN rollout have a look at the coalition's dissenting report.

Perhaps the worst problem that I found—and I was disappointed that although I was supported by my coalition colleagues the majority of the committee did not support me when I raised it—was that we wanted an oversight committee to at regular times be given details of how many kilometres of fibre had been rolled out this week or this month, how many connections had been made, how much money had been spent, how much money had been drawn down by the NBN from its government facilities—the sorts of things that we would have expected as an oversighting committee, looking at the expenditure of some $55 billion plus of taxpayers' money, we would be able to get as a matter of course. We are being told by NBN and the government—and regrettably the committee chairman sided with the government—that this sort of information is not regularly available. As I said at the meeting, surely Mr Quigley, the NBN chief, every week gets a report from his people telling him how much has been rolled out and how many subscribers have been connected. They must have that information—why is it not being made available to members of this joint committee that is supposed to be oversighting the whole procedure? We were given some excuse that to my mind did not seem to have any validity whatsoever. It is disappointing that the committee which is supposed to oversight this massive government expenditure of taxpayer funds is not able to do its job because it is not getting the full information that we thought it might be entitled to.

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

I join Senator Macdonald in seeking to have the Senate take note of the first of what are designed to be regular reports from the Joint Standing Committee on the NBN—a committee that, like Senator Macdonald, I am a member of. This committee was intended to be the primary body of the parliament to have oversight of this truly massive area of government expenditure. Let us be under no illusions—the government and Minister Conroy like to proclaim just how significant this project is. We may debate the merits of the project, we may debate whether it is as significant to the future of the Australian economy as Senator Conroy and others opposite sometimes claim, but there is absolutely no debate about the significance of this project for the Australian budget and for the finances of the Australian government. You need only look at the fact that in just this financial year, in the 2011-12 financial year, NBN Co. will receive a $3.1 billion cash injection from the Australian government. That is just this year—just one year of many, many years of multibillion-dollar commitments from government into NBN Co. This year alone, more than $258 million a month of taxpayer expenditure is going to this project.

You would think for that sort of money, especially for that sort of money funded as it is out of taxpayer debt—money borrowed in the name of the Australian taxpayer—there would be a decent level of accountability. That is what this committee was established for—to provide some parliamentary accountability; to provide some parliamen­tary oversight. But it is a disappointment, as Senator Macdonald highlighted, that we are unable to provide the level of oversight which is warranted. We are unable to do so because we have been unable to extract from the multibillion-dollar NBN Co. the most basic of key performance indicators at this very early stage of the committee's deliberations.

A body that has more employees than it has customers is somehow unable to provide a parliamentary committee with the bare bones basics, not even the basic KPIs which might tell us exactly how much money has been provided to it at a given point in time by the Australian government; to tell us how much of that money has been expended at a given point in time by NBN Co.; to tell us on what that money has been expended—how much of it has been expended on massive executive salaries for its bloated workforce versus how much has been expended on actually rolling out fibre or delivering the wireless or satellite options that are also being developed under this proposal; to tell us how much fibre has actually been rolled out; to tell us how many homes or premises that fibre has passed; to tell us how many premises have actually agreed to have that fibre connected; to tell us, ultimately, at a given point in time, how many premises have taken out a service which utilises that connection; or to tell us how many customers this new, multibillion-dollar government monopoly actually has. No, the whole thing is shrouded in secrecy. The whole thing has failed to provide basic answers or to meet the most basic standards of public accountability that we should expect—that we should demand—for the expense of far less taxpayer money than we see NBN Co. expend.

Senator Macdonald was right to highlight, as the dissenting report by coalition members of the NBN joint committee also highlighted, the areas in which NBN Co. has been given some extraordinary exemptions from public accountability already—very extraordinary. Despite being the nation's single largest public works activity, it has been exempted from consideration by the Parliamentary Standing Committee on Public Works. Those opposite may argue that that is why this joint committee on the NBN Co. was established instead. If that is the case, this joint committee should get the types of answers, information and data that the Public Works Committee has long required in helping it determine the worth and merits of Commonwealth public works.

We have seen limitations on the power of the ACCC to oversight NBN Co.'s activities. So this reform, which is meant to be and is argued by those opposite to be a great reform for competition in the telecommunications sector, has, for its success, demanded limitations on the power of the nation's competition watchdog to oversight it. They have actually put a choker chain on the watchdog, telling it, 'No, you are not able to ensure competition in a manner which we would expect to be mandated for a new monopoly enterprise.'

There has, as we know, been no cost-benefit analysis or any decent analysis whatsoever of the merits of the NBN Co.—of whether it meets the basic threshold test of being the best, most affordable, most effective and most cost-efficient way of delivering fast broadband to Australians. As the Deputy Chairman of the Productivity Commission, Mr Michael Wood, observed in evidence to this committee—and this was highlighted in the dissenting report:

As a general principle we continue to believe that cost-benefit analysis is a useful tool. We also make the point that you do not actually rely exclusively on the numbers that a cost-benefit analysis will produce because it is the product of many assumptions. As long as it is a transparent process of identifying the various costs and benefits and it is transparent as to the assumptions that you have made—and there are very many complex assumptions to be made in these things; they are not simple, but they are an instructive methodology—then that is a useful contributor to decision making.

For whatever reason, those opposite decided that having any type of independent analysis of the merits of this multibillion-dollar expenditure was not a useful contributor to their decision making. Far better it was for Senator Conroy and Mr Rudd to sit on the VIP plane and get out the back of an envelope and say, 'This is going to be a worthwhile project,' and announce it to the Australian people from there. Far better it is, they think, to exempt this project from the application of freedom of information laws—once again stifling the accountability that we should see for such an expense of government funds.

Even with regard to the project itself, and even with the limited information from NBN Co. that the committee has been able to work with, we are aware of the reality that prices for all but the most basic level of service will go up and will be higher than has been the case under current arrangements in the telecommunications sector. Consumers who want more than a basic service offering in the broadband space will end up paying more and more over the long run.

We know as well that there are delays to the rollout. We do know that they are not getting the job done on time and that they are not able to let contracts in a manner which ensures the project can be delivered within budget. We know that, in the first lot of major contracts put out, they had to go back to the drawing board and have a second try because nobody came in within budget. Even last week, after this committee had reported, it was revealed that in my home state of South Australia they have had to go back to the drawing board again—they have not been able to let the first major contract for delivery in SA. So we have a situation now where NBN Co. has construction contracts in place in all mainland states—after a couple of goes in some of them, mind you—except for South Australia.

There is no clarity from this government, no clarity from Senator Conroy or from NBN Co., about why SA is the only state where NBN Co. has not announced a contract for fibre rollout. There has been no explanation of what the cost and timing implications of that delay are. How long will South Australians have to wait to see this magical NBN Co. rolled out? And how much more will it cost the Australian taxpayer to roll it out as a result of these contract failures and as a result of these delays? There is no guarantee that people in South Australia will receive the same percentage of fibre services or whether, because of these contract failures, more South Australian premises will end up having to rely on wireless and satellite options than in the rest of the nation.

Why? Why are there no answers to any of these questions? Because the whole project is masked in secrecy and because the government does not want the truth about the costs and expenses and failures of this project, as highlighted in this dissenting report, to come out. I seek leave to continue my remarks.

Leave granted; debate adjourned.