Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

My question is to the Minister for Communications, Senator Fifield. I refer to the minister who, when asked about the cost of the NBN in May of this year, stated:

Well, the Commonwealth has indicated that our cap on equity contributions will be $29.5 billion. NBN will have to borrow money beyond that, but 29.5 billion is the Commonwealth cap.

Last week, the government announced it would abandon its plans for NBN to source private debt funding instead funding the remainder of the rollout through taxpayer-backed loans to NBN. Why is the government breaking this election promise?

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

I thank my colleague from New South Wales for the question. There is absolutely no breach of election commitment here. I think those opposite are having difficulty understanding the difference between equity and a loan. We have said there would be a cap on government equity contributions of $29.5 billion. It remains the fact that the cap on equity is $29.5 billion. It has always been clear that NBN would be required to borrow additional funds. NBN are borrowing additional funds and they are doing so from the Commonwealth government. We, quite rightly, ensured that NBN obtained an indicative credit rating for the organisation and what NBN received was sound. But we took the very logical decision that if the Commonwealth was able to borrow the funds at lower rates then that made good sense for the taxpayer and good sense for NBN. There has been absolutely no change to the cap on Commonwealth equity of $29.5 billion. Those opposite do not understand the difference between equity and a loan. Let me explain that an equity is different to a loan. We have also indicated that NBN will be required to go to the open market to refinance that loan and that is something that we have been entirely up-front about.

Stephen Parry (President) Share this | Link to this | Hansard source

Senator O'Neill, a supplementary question.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am interested in the truth and not that answer. Can the minister explain to the Australian people why the market rejected his plan for the NBN to source private debt?

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

The market did not reject NBN's status. The NBN did seek indicative credit ratings as they indicated they would. So, based on all of the available information and advice we received, we decided that the best approach for the NBN to secure funding was for the Commonwealth to secure it and loan it to NBN. NBN could have secured financing in the markets—absolutely they could have secured funding on the markets—but we determined, looking at the options, that the best interests of the taxpayer were for the government to provide the loan to NBN.

Honourable Senators:

Honourable senators interjecting—

Stephen Parry (President) Share this | Link to this | Hansard source

Thank you, Minister. Order on both sides! Senator O'Neill, a final supplementary question.

Deborah O'Neill (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Why should Australians have any confidence in Mr Turnbull's economic plan when his NBN plan is a clear failure?

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

The government's NBN plan is going from strength to strength. As I have previously shared with colleagues in this place, in 2013 when this government inherited the NBN it inherited what was a failed project. Contractors had downed tools in four states. Despite $6½ billion having been spent by our predecessors, only 51,000 Australians were actually paying customers of the NBN. I am very pleased to advise colleagues that the NBN is now available to 3.34 million premises nationwide. Isn't that fantastic? That is 28 per cent of the nation. By the middle of next year that will be 50 per cent of the nation, and it will be all done and dusted by 2020—six to eight years sooner than would have been the case under those opposite.