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Thursday, 18 November 2010
Page: 1664


Senator IAN MACDONALD (4:31 PM) —Having heard that presentation by Senator Carol Brown, perhaps it gives me a convenient place to start and that is Tasmania. Senator Carol Brown has spent some time telling us what great deals you can get in Tasmania. I see a couple of other Tasmanians here too.


Senator Sherry —The state Liberal Party loves it too.


Senator IAN MACDONALD —Senator Sherry, you have got something to do with finance in the government. Tell me what income you are getting for your up to $100 million expenditure in Tasmania at the moment. What revenue is NBN gaining? This is just the point. NBN has spent I think it is up around $100 million in Tasmania already and they are not getting one cent of revenue. Rather than getting any revenue, it is actually paying people $300 to get the connection box fixed to their house. Rather than getting revenue, it is actually costing them to sign people up. For that investment, that is being given away absolutely free.

NBN Co. are not charging iiNet a cent. No wonder iiNet can give these great deals of $89 a month. Telstra were giving the same service at $89 a month long before this and they were not trying to pay off a $100 million capital investment. Whatever you say about Tasmania—Senator Sherry and the other Tasmanians in the chamber, please interject and tell me I am wrong here—NBN is giving away its services in Tasmania. That is what is wrong with this government and that is what is wrong with the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, who is completely out of his depth on this issue. Please let the record note there are three Tasmanian senators sitting opposite me and not one of them by interjection challenges my assertion that NBN Co. is not getting a cent for the huge investment it has already made.

Of course the retail service providers are giving away attractive packages. Why wouldn’t you give away an attractive package when it costs you nothing to present it? I would ask those who have spoken to tell me what iiNet and the others—iPrimus—are going to charge come 1 July next year when NBN actually starts charging them for the use of the fibre-optic network.

Madam Acting Deputy President, you, I and others have asked time and time again until we are blue in the face at estimates committees when is the real pricing is going to come and what is the real pricing going to be, but always we get a wall of silence. We are told: ‘That is commercial-in-confidence. We cannot tell you now, that is a budgetary issue.’ Typical of this government, and Senator Conroy in particular, there is no information because they cannot stand the scrutiny.

Let me make this very clear. Everybody in Australia—and most certainly the Liberal and National parties—is determined to see a broadband network right throughout Australia. If there had not been a change of government three years ago, the National Broadband Network would be up and running today at a taxpayer cost of something like $5 billion. It would have been there using a mix of technologies and it would have been up and running now at a cost to the taxpayer of around $5 billion. Yet the Labor Party alternative came and made a deal before the 2007 election, promised the world, did a deal with Telstra—and didn’t Telstra quickly work out that you cannot trust the Labor Party in making these sorts of deals?—won the election and came in with their first proposal. We then had three or four other proposals after, you might recall, Madam Acting Deputy President, spending $20 million. It is only $20 million—it rolls off the tongue. It is not my money; it is the taxpayers’ money. They wasted $20 million on their first iteration, then they went to several other iterations and then they thought, ‘We have got ourselves into this mess; let’s try and find someone who can give it a semblance of authority and genuineness,’ so they got McKinsey and KPMG to do an implementation study. That was $25 million again spent. Here is $45 million spent by the Labor Party before the first sod is even ever turned. That is the Labor Party. Look, $45 million just rolls off the tongue. I am doing something now I never thought I would do. I am holding $25 million in my hand. That is the implementation study. That is what we taxpayers paid for. In spite of what Senator Conroy said at question time today, this implementation study says:

The ... detailed cost modelling estimates that the NBN can be built for $42.8 billion in capital costs.

Senator Conroy seemed to be unaware of that at question time when he was talking about a figure of $26 billion. The KPMG report said that, in the best scenario going, the government might be able to get away with a $26 billion capital injection and hopefully private enterprise would provide the rest.

Everyone in Australia wants a broadband network that is nationwide. As I say, had the government not changed three years ago, that would have been up and running now, providing fast broadband to all Australians at an affordable price.

What we object to about Senator Conroy’s NBN proposal is not necessarily the proposal itself but the fact that it is costing $43 billion of taxpayers’ money. As I said in question time a couple of days ago, a mayor in the Gulf Country of Queensland, where I come from, Councillor Annie Clarke, said that the $43 billion splurge is a ‘waste’ to people in that part of remote Australia. She said, ‘What we want is a decent telephone service. We want reticulated electricity. We want a road that will get us in and out of our little town in times of wet.’ If you are going to spend $43 billion, spend it on some infrastructure that actually means something to Australians. Not every Australian needs 100 megabits per second to download all the latest movies from around the world. Very few people want that. I get away with what is on my laptop—three or four megabits per second. It is great. That is all I will ever need. I am not going to want to download all these movies so that I can sit there and watch them. That is the point: $43 billion is being wasted. If you going to waste that sort of money, and this government is pretty good at wasting money, at least put it into some relevant infrastructure.

It seems in this instance that everybody else is wrong and only Senator Conroy is right. Everybody else is out of step; Senator Conroy is the only one in step. Communications experts from all over the world have been coming to Australia. They cannot believe that Australians are stupid enough to spend $43 billion of their money to construct something that private industry could have done itself. I mentioned earlier this week in the Senate the Mexican telecommunications tycoon, Carlos Slim Helu, and the Japanese internet industry leader, who both said that a national broadband network could be built by private enterprise without the government having to dip into its ever-dwindling financial resources. Each week we hear stories of people who have done correct estimates of anywhere between $3,000 and $7,000 per connection to have Senator Conroy’s NBN network connected to homes. Which family in Australia can afford $3,000 to $7,000 to get Senator Conroy’s fibre-to-the-home network installed when, I might say, they are doing it pretty tough at the moment under this Labor government? They do not have that sort of spare cash and they are already getting a reasonable broadband service for no capital cost and a cost per month that I guarantee will be cheaper than anyone will ever be able to supply using the $43 billion National Broadband Network that Senator Conroy is imposing upon us.

If this is as good as Senator Conroy says it is, you would think he would be the first one to get a cost-benefit analysis done. Wouldn’t he be out there being upfront about it? He keeps telling us how good it is, how cost effective it is and how it is going to be brilliant for Australia. Why wouldn’t you go out and get someone responsible and authoritative like the Productivity Commission to do a cost-benefit analysis? Then you could prove to the world that you are right, it is good for us. But Senator Conroy will not do that, and why? He knows that any reasonable examination of this whole proposal will show that it is not value for money and that there are better ways of doing it than renationalising the telecommunications system in this country.

By way of recapitulation to put this in perspective, remember—Madam Acting Deputy President Fisher, you may be too young to remember this; regrettably I am old enough to remember it—when Telecom was a government instrumentality? I even remember when the postmaster-general’s department looked after our telephone lines and whatever communications we had. It changed into a government corporation called Telecom. Remember those days? Particularly out in regional Australia, you would turn the handle of your phone and 15 different people would answer because you would be on party lines. This is the sort of service we used to get when the government last ran telecommunications.

Fortunately, Labor and Liberal governments over time have moved telecommunications into the private area. With the benefit of competition—with that innovation that comes when people are competing to get the best system—we have a telephone and internet system now that you could have only dreamed of even 20 years ago. Even when I first came to the parliament one would not have believed that 20 years on we would have the telecommunications we have now. That is the point: it is changing and improving by the week. Yet Senator Conroy is locking us into his proposal, which many experts tell me will in four or five years be outmoded. I cannot argue about that; I do not know the technicalities; but the experts tell me that what Senator Conroy has done to the Australian people is lock them into a system which will be rapidly overtaken. For that, we, our children and our grandchildren will for decades be paying off Senator Conroy’s financial mistakes and irresponsibility. It is irresponsibility, I might say, shared by every member of the Rudd and Gillard cabinets.

The Senate has conducted a long-running inquiry into the NBN. When the inquiry started in 2008 we looked at the government’s NBN proposal, did a lot of work on it and then found halfway through it that the government had scrapped that and the $20 million that it had already spent and brought in this white elephant. We have had a number of reports and very intense investigations into it. The reports are all there to read, and I recommend them to senators. I also recommend to senators that they have a look at this $25 million implementation study because, as Senator Conroy in his one-line glib throwaways would try to pretend it is not, it is a very qualified implementation study. It certainly was not a cost-benefit analysis, and that is made very clear by McKinseys themselves.

It became clear from reading the implementation study that for this to be viable you would need about a 90 per cent take-up. Even in Tasmania, where they are giving it away, they cannot get to 50 per cent take-up. How are we ever going to get to a 90 per cent take-up? I think Holland and the United States were the two comparable countries, and the take-up there after the initial flush has settled down is at about 40 per cent. At the price it is going to cost Australians—somewhere between $3,000 and $7,000 to connect up—you cannot imagine it is going to be much higher than it is in Holland or in the United States.

The implementation study raised all these issues, but a lot of the assumptions they used were not made available in their study. The study came out on 5 March 2010 and here we are eight months later and we still do not have a government response to this. In spite of us trying and in spite of the Senate demanding that we see the government’s response and the business case that allegedly has been done, and which is sitting on the Prime Minister’s desk, we are being kept in the dark.

I was absolutely amazed when Senator Carol Brown told us about the crossbench senators and the Greens getting a private briefing on the business case. What sort of parliament is this? What sort of show are we running here in Australia in this great land of democracy when the government will show things to some senators but not to others? That in itself is the sort of activity that should be blazoned across the front pages of every newspaper in the land. That is the sort of thing that Hitler used to do. It is the sort of thing that all the tin-pot dictators around the world do: you do not tell your opposition anything but you tell your own lot and the people who are supporting your own lot, like the Greens. If it is good enough for the Greens to see it and for Senators Xenophon and Fielding to see it, what is wrong with me? Why can’t I see it?

Senator Xenophon tells us that he is under no confidentiality constraints, so hopefully Senator Xenophon will be able to tell me what the Labor government itself is not allowing me to see. I think that is the most disgusting, undemocratic thing that has happened in the history of the Labor Party. Good heavens, they are renowned for a lot of backroom deals and undemocratic—fraudulent almost—activity over the years in various states! I will not talk about the Labor minister in Queensland who has just been jailed for accepting bribes of $300,000 or $400,000. To me, this is up there in that category. You say to parliament, ‘We have got information. You have paid for it—you and the taxpayers have paid for it—and we are going to show it to our mates but not to you.’ How undemocratic and how appallingly bad can this government get?

I fear for our country, with $43 billion wasted on a scheme that could have been done for about $5 billion. Telstra are laughing all the way to the bank with the $11 billion they racked off this government in a deal that, as I say, has them laughing. Senator Conroy is clearly right out of his depth in this. I just wish he had the decency to get up and admit it, stand aside and let someone else who may have a better understanding into the chair so Australians are not lumbered with this fixed-in-time system at a cost which will have to be paid off over time immemorial. It is a dog of a system, it is a system that is completely beyond the capabilities of the current minister to handle and I do wish that Senator Conroy would do the right thing, confess to his incompetence and stand aside for someone else.