The Government will now pass its National Broadband Network legislation after Family First senator Steve Fielding pledged his support late last night, following a tumultuous period of negotiations and debates culminating in the release of an amended business plan for the project.
But although the bill is now set to pass through Parliament, along with the crucial telco reform package, the Government has been criticised for its amended business case with opposition communications spokesman Malcolm Turnbull calling the document “inadequate”.
In a statement released last night, Fielding said he would support the NBN legislation so the entire country can gain access to super-fast broadband.
“This is about our future and there is no reason to be treading water when we have a viable plan to bring us up to speed,” he said.
“Super-fast broadband is a vital building block for any advanced economy and if we are to be at the forefront of the global community, we need to have the… infrastructure to support this.”
Fielding is set to deliver a speech on the NBN today in Parliament. The senator also attacked the Coalition, claiming it attempted to delay the legislation as long as possible by throwing “smokescreens” at the Government.
“Stalling this legislation so the Productivity Commission can do a cost-benefit analysis is just a smokescreen by the coalition to hide the fact that they are plain and simple against building an NBN.”
But the Government was unable to pass the legislation yesterday, with Conroy telling ABC Television that delays due to Senate procedures were to blame.
“The Senate has a lot of quite arcane procedures and we’re very keen to progress this debate,” he said.
“This is a bill that has been in Parliament, on the table, for 12 months and yet the Opposition, and they proved it again today, were prepared to talk this out and use every procedure of the Senate they could to frustrate the opportunity to bring this to a vote.”
The Government was already able to pass the legislation after Xenophon agreed to back the bill, by forcing the Government to release an amended business plan.
The document, which is only 36 pages out of the full 400-page document, reveals a number of statistics including a timeline and expectations for a return on investment, but Conroy has admitted full financial disclosure cannot be made until the full plan is released next month.
The amended plan reveals the cost of the network will now drop to $35.7 billion, as opposed to the original $43 billion, due to the $11 billion deal with Telstra. The Govenrment’s equity contribution will come in at $27.1 billion, while the NBN Co. claims that cashflow will be solid enough to repay that entire amount by 2034.
The document also states that the average return will still be above the long-term Commonwealth bond rate of about 5%, but the return on investment could fall by between 0.5-0.8 percentage points if its points-of-interconnect plan is rejected by the ACCC.
The report says the ability to repay taxpayer money also depends on whether the network attracts 8.3 million customers.
“NBN Co. expects to pay cash dividends, beginning in 2020, which in the aggregate would repay the government’s entire investment by 2034, even if no shares of NBN Co were sold to private investors.”
But all in all, the business plan actually reveals very little. Coalition communications spokesman Malcolm Turnbull says the information provided is simply not enough to form an adequate response.
“It does not include any financial statements at all – no profit and loss statement, no cashflow statements, no balance sheets. There are a few numbers. We are told that as a result of paying $13.8 billion to Telstra in decommissioning and infrastructure payments, the estimated capex to build the NBN will be reduced from $37.4 billion to $35.7 billion.”
“And yet despite a significant hike in the headline price, the Telstra deal is stated to be a real positive for the NBN – presumably it results in much lower net operating losses the savings of which justify the $13.8 billion spent. But how can we know without seeing the financial details?”
Turnbull maintains his position that a Productivity Commission inquiry is “vital”, and that it will need to determine the actual cost-effective means of achieving universal broadband.
“The NBN is, so it is claimed, one way of getting there. But there will be others and surely none could be more expensive than this plan.”
“Nobody has trumpeted the need for rigorous cost benefit analyses of major infrastructure projects more than the Rudd and Gillard Governments but on this, the biggest project in our history, they are determined to avoid any scrutiny for fear that the answer they will get will be that this is yet another ill considered, wasteful white elephant.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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