DOCUMENTS;National Broadband Network – Select Committee;Consideration – 04 Sep 2014

I rise to speak tonight on the Australian government response to the Senate Select Committee on the National Broadband Network. The committee in its report pointed out that the government’s strategic review of the NBN relies on the flawed and disordered assumptions in NBN Co’s revised outlook. These include inflated assumptions of the cost of fibre deployment and delays to the rollout schedule, pessimistic revenue assumptions for Labor’s NBN and failure to account for the higher operating expenditure and reduced revenue that would arise from the government’s second-rate network. The committee quite sensibly recommended that NBN Co submit a revised strategic review that provides transparent assumptions and corrects distortions and deficiencies. The committee also recommended that the NBN Co take account of the costs of upgrading the multitechnology mix network in the future and that the review should be independently scrutinised.

The committee made three other recommendations: that NBN Co accelerate the fibre-to-the-premises rollout while further analysis is undertaken, that governance processes between NBN Co and the minister be investigated to determine how a document with the deficiencies of the strategic review was produced and signed off by the NBN Co board and the minister and that the Senate amend the committee’s terms of reference to enable ongoing and robust parliamentary oversight of the NBN.

The government rejected all four recommendations of the committee with barely an explanation, and this response is completely unacceptable. It shows that this government will do whatever they can to avoid any independent scrutiny of their plan to hobble the Australian economy by delivering second-rate broadband. The strategic review is part of the expensive political exercise this government have engaged in around the NBN. So far the Minister for Communications has spent about $12 million appointing hand-picked mates to write various reports giving him the answers he wants. He seems to have adopted Sir Humphrey Appleby’s advice that one should never hold an inquiry unless they know what the answer will be.

The latest of these reports is the cost-benefit analysis—the one the government promised before the election would be independently conducted by Infrastructure Australia. Instead the minister picked well-known critics of the NBN Henry Ergas and Kevin Morgan, his former adviser Alex Robson and former Liberal Party staffer David Kennedy to write the so-called ‘independent report’. This report ludicrously concludes that 15 megabits per second will be sufficient for most businesses and households in 2023, dismissing the fact that already more than half of NBN Co’s fibre customers are choosing speeds greater than this and 28 per cent are choosing plans of 50 megabits per second or greater.

Even the CEO of NBN Co, Mr Bill Morrow, does not agree with this finding. On Radio National recently he said:

I suspect…when they talk about 15 megabits per second being sufficient for people today, I think that that likely is taking a snapshot in today’s environment. What will tomorrow be, what will next year and the next decade require, I think is really the question.

Let’s not forget that when Mr Abbott appointed Mr Turnbull to the communications portfolio he ordered him to demolish the NBN. So far he has done a good job following that order. The NBN rollout is slower today under Minister Turnbull’s watch than it was this time last year.

It is now almost a year since Mr Turnbull was handed responsibility for the NBN. All we have had from him are political paybacks, broken promises, delays and jobs for the boys. And, speaking of jobs for the boys, I would like to bring to the attention of the Senate—for those who might have missed it—the bonuses and contracts for the boys involved in NBN. In the 10 weeks prior to the election the NBN rollout was passing an average of 4,290 brownfield premises per week. The 10-week average has now plummeted to 2,707 premises per week. I want people to keep that in mind when I point out that it has been alleged—I think quite seriously—that the NBN Co has doubled its spending on advisory fees in the last year. This is once again as a result of Mr Turnbull putting his mates in charge of a number of reviews focused on political payback. The advisory fees have almost doubled in the last 12 months, and they are up $34.7 million. If there really is a budget emergency or a budget crisis, or whatever those on the other side are calling it today, I fail to see how that can be the case.

NBN Co executives in charge of the rollout of NBN have also been paid large bonuses despite the fact that the NBN is now rolling out so much slower than it was this time last year. The key executive in charge of the negotiations with Telstra, funnily enough, was also awarded a bonus of $104,600 despite the fact that this agreement is now more than two months late. They have awarded a contract to one of its own board members. They have been playing great political games, and I think it is high time that Mr Turnbull stopped playing those political games and started to deliver the NBN that Australians want, need and deserve.