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Tuesday, 13 March 2012
Page: 1587


The ACTING DEPUTY PRESIDENT ( Senator Fisher ) (17:27): Is leave granted?

Senator Feeney: Such is our tolerance that leave is granted.

The ACTING DEPUTY PRESIDENT: Leave is on this occasion granted, Senator Birmingham.

Senator BIRMINGHAM: I move:

That the Senate take note of the document.

Thank you, Madam Acting Deputy President. I thank the Senate and of course Senator Feeney in particular for his indulgence and forbearance to allow such debate to take place. It is showing an indulgence of free debate that is not always seen from those opposite in other ways. That could lead me to want to talk about media regulation and all manner of other things, but I will save those remarks for another opportunity.

This is the government response to the first report of the Joint Standing Committee on the National Broadband Network. I could go through how this response demonstrates how shoddy the delivery of the broadband services the government have promised has in fact been. I could highlight the fact that the speed with which we are seeing the rollout of the NBN and the actual delivery of new services to premises around Australia makes the delivery of home insulation by this government look like a veritable success, compared with the way in which, after 4½ years of talking about more broadband connections, faster broadband speeds and more accessible broadband for Australians, the government have managed to deliver it for a veritable pittance of the population and in fact are failing to even meet the very low targets that were set in the corporate plan of the NBN Co.

I want to go to some of the detail of this government response, and I want to highlight some of the contradictions that are inherent within this response and how they relate to the government's NBN Co. policy. Let us take a look at page 9 of the response, where it says:

To remain competitive in our region as the world moves to a 21st century digital economy, Australia needs to maintain the momentum and make this investment.

The most recent OECD statistics (for June 2011) indicate that Australia is ranked 21st out of 34 countries in terms of its number of fixed broadband subscribers per 100 inhabitants.

This, of course, is the doom and gloom scenario that we have heard from Senator Conroy for many, many years. It predates his time of becoming the minister. It is the scenario in which Australia has these terrible rankings for the rate of broadband connection.

But then, if you turn to page 11 of the government response, it says:

Australians are quick to take up technology, with access for household and business internet connections increasing an estimated 80 per cent over 2007-2010, and use of the internet by households, business, and government more than doubling over the same period.

…   …   …

Australia has demonstrated a high level of broadband adoption by businesses compared to the OECD average; with 90 per cent of businesses with 10 or more employees having a broadband connection in 2007.

So we have this remarkable contradiction here where the government, on the one hand, is citing what it claims is a low rate of broadband subscription in Australia as a reason why we need the NBN but, on the other hand, is citing an embrace of broadband connections in Australia as a reason why the NBN will be popular. Of course, you cannot manage to have it both ways. It is because the government has in this debate managed to confuse time and time again what the accurate measure of broadband should be. It likes to talk about the number of fixed-line subscribers per 100 people—which is the first quote that I used there that shows Australia ranked 21st out of 34 countries—because that ignores the number of premises or residences in play, whereas the more relevant measure is how many individuals or business premises have access to broadband through their business premise, household et cetera. That statistic reveals that Australia is doing very well and is ahead of most countries in the OECD. So we have this strange scenario where, even in this one document, the government is cherry-picking its statistics to argue, on the one hand, that Australia is backward and that is why we need this investment and yet, on the other hand, broadband is popular and that is why we need this investment, because there will be this massive take-up rate. It really does demonstrate in stark black-and-white terms the inconsistency of the government's arguments.

Then, if I look at what the government seeks to achieve, it again justifies this massive investment in the NBN by saying on page 14:

Evidence confirms investment in high-speed broadband delivers productivity gains. For example, The Economic Journal provides an estimate of the effect of broadband infrastructure on economic growth in the panel of OECD countries in 1996-2007, suggesting "… that a 10 percentage point increase in broadband penetration raised annual per capita growth by 0.9-1.5 percentage points".

The key word in there is that this alleged growth in annual per capita income was a result of 'penetration'—increased penetration of broadband and the accessibility and availability of broadband. It was not a result of increasing speeds of broadband, which the government's whole focus seems to be on. The primary consideration when it comes to the increased rate of penetration of households in accessing broadband is the matter of the cost of the service. Once again, the government's response does note this. Page 9 of the report indicates:

… OECD statistics indicate that Australians pay more for broadband than most other OECD countries.

They also show, however, that the nominal retail price of ADSL broadband fell between 2005 and 2010 by 69 per cent and that between 1997-98 and 2008-09 inflation-adjusted prices fell 34 per cent for fixed-line telephone services and 49 per cent for mobile services. So we have seen over the last decade decreasing prices in Australia for access to telecommunications products. We have seen competition delivering decreasing prices for broadband access as well as for other telco products, which has resulted in higher levels of adoption of these products by households and businesses, yet the government is charging ahead in putting in place this anticompetitive regime of the NBN, which will see the exact opposite take place, because in the NBN special access undertaking submitted to the ACCC NBN Co. has asked for the right to increase the nominal price of its main products by half the rate of the CPI. So, far from helping with the penetration rate of broadband into Australian households, the NBN will see, rather than the price decline we have had historically, an increase the cost of broadband services, and that will be what hurts the accessibility and penetration of broadband services.

So this report is littered with inconsistencies that highlight the false premises—to use a favourite phrase of Minister Conroy—on which the case for NBN Co. is built and the false arguments used to justify it, and it demonstrates again that taxpayers are being taken for a ride. This is the government's own report demonstrating the ride taxpayers are being taken on in terms of the billions of dollars being spent on the NBN. Unless there are further contributors to this debate, I seek leave to continue my remarks later.

The ACTING DEPUTY PRESIDENT ( Senator Boyce ): There are further contributors, Senator Birmingham.