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Monday, 14 September 2009
Page: 9421


Mr HAWKE (4:23 PM) —It is a great pleasure to follow the member for Cook speaking about some important infrastructure related matters. Indeed, in relation to the Telecommunications Legislation Amendment (National Broadband Network Measures—Network Information) Bill 2009, infrastructure is certainly one of the key issues in my electorate, which is in the outer north-western suburbs of Sydney. My electorate being on the fringes of one of our major cities, infrastructure is perhaps the single most important issue. Certainly there are large parts of my electorate that will benefit from an improvement in the national broadband network. However, I have to record that I share many of the concerns of members in this place about the government’s approach to the proposed national broadband network. While of course I support improved broadband services, I remain unconvinced that the proposal on the table from the government can or will deliver what they claim it will deliver in relation to broadband, especially at a reasonable price.

I have extensive dealings with Telstra and other suppliers in my job as a member of parliament, in attempting to get better outcomes for my constituents, and I see at the moment that the marketplace in my electorate tends to meet the demand that exists there at the current time in a pretty reasonable way. Most households within my electorate find that they can access broadband and can access improved levels of broadband when they push or when we are able to raise specific matters of concern with telecommunications carriers.

This is the first piece of legislation since the government’s NBN mark 2 announcement in April. I get confused about which proposal we are up to, because we had NBN 1, NBN 2 and NBN 3. I am sure there is going to be an NBN 4, an NBN 5 and an NBN 6, because what this legislation shows us is that the government really does not have a clear idea of how it is going to fund a national broadband network. The fact that the relatively minor cost in the original proposal is now up to something like $43 billion and the government has no clear idea about how it will raise most of it leads many members in this place to be extremely sceptical about whether the government can, in this time, raise the capital required from anywhere to fund such a massive expansion to a service.

I think it ought not to be the government’s role, necessarily, to seek to improve everybody’s broadband. The marketplace does work; it is working in my electorate. There is a role for government to expand services into areas where they may not be profitable, areas that a telecommunications company may not be able to reach. Certainly that was the original intention of getting the government involved in something like a national broadband network—that is, to extend the network out to those communities which could not be sustainably covered by the market or by a private telecommunications carrier. However, in this legislation we see that the government is seeking to massively fund a network where market forces already exist and in our cities, where a reasonable level of service—in fact, in some places a very good level of service—can be expected and sustained in a cost-effective way. Therefore, I have great concern about why the government is proposing an unprecedented amount of money—$43 billion—be spent on this kind of project. There is literally no detail on where it is going to find this money.

In 2008 a similar bill was considered and passed that required telecommunications carriers to provide specified infrastructure information to the Commonwealth. That was NBN mark 1. That requirement is another component of this bill. On 7 April this year the government announced that it had abandoned its election commitment for fibre-to-the node broadband and would establish a company to own and operate a fibre-to-the-premises broadband network with a potential price tag of $43 billion. This is perhaps what particularly mystifies many members of this place—why the government abandoned its election commitment for fibre-to-the-node broadband and came up with this very theoretical fibre-to-the-premises broadband network with an explosive price tag, with no clear idea of how it is to be funded. In light of these changed goalposts, there are provisions in this bill relating to the provision of information by utilities as well as telco carriers for the purposes of NBN mark 2.

It is interesting to note at this juncture that, prior to the last election, in announcing their fibre-to-the-node promise the government signalled very clearly to the Australian electorate that they would within the first six months of government have a tender up and running for a national broadband network. Of course, before the election we knew that that was a laughable proposition—absolutely laughable—and that was from long experience in government and knowing all of the practical elements of how you could possibly fund, propose and tender for a national broadband network. Then it went out to 12 months, so they initially broke their promise and their commitment to the Australian people that they would have a tender up and running within six months. Then it went to 12 months, and from there we saw the Prime Minister step in to cover the ineptitude of the Minister for Broadband, Communications and the Digital Economy in this regard and propose a national broadband network mark 2 or 3—whichever one we are up to now. That comes with a $43 billion price tag in a situation where we do not really have a clear idea of how we are going to fund it.

This bill proposes particularly that information about carriers and utilities be provided not just to government for an implementation study but also to the National Broadband Network Co. or its potential subsidiaries or partners for any rollout of the network over the next 10 years. I have some concerns in relation to that, particularly in relation to what rollout will actually occur in the next 10 years. This bill was initially introduced into the Senate without consultation with key stakeholders. It is quite apparent that that did not occur, because this is quite an unrealistic model for how to provide a national broadband network. Of course, the reason you consult and seek the information, the experience and the know-how of those companies in the market that provide these valuable services is that you avoid the problems that we see in this legislation. If you do not consult with those who know how to do it, I do not accept the proposition that the government knows better simply because it is the government. I know that members opposite often say that the government has a superior way of doing things, but what we see in relation to this legislation is another sloppy and poor set of consultative approaches, which means that we have an unrealistic scheme in front of us and we all have grave concerns about how it will roll out. The government certainly has proved incapable, in the 18 months since its election, of meeting any of its time lines in relation to the National Broadband Network mark 1or mark 2, and we know that mark 3 is on the way. The development of this legislation is yet another example of the government’s absolute inability to manage such a massive project.

Thinking about some of the problems in this legislation, in particular there are some concerns that the NBN mark 2 is going to go the same way as the first NBN proposal. The bill for taxpayers is already growing. There is an almost $2 million annual salary for the CEO of the NBN Co., who currently does not do anything. My advice is that an office exists, with all kinds of staff who are producing nothing at the moment. If this were the marketplace or a company that had to provide a service or a good it would be completely unsustainable. But, because the government and, let us be honest, the taxpayers are footing the bill, this tragedy can continue to unfold while the government dithers in relation to providing something practical to people out there.

If you look at the stakeholders who submitted to the inquiry of the Senate Environment, Communications and the Arts Legislation Committee into the bill during the public hearing that was in Canberra, you will see some of that on the record in submissions from Telstra, Optus, the Energy Networks Association, the Business Council of Australia, the Australasian Railway Association, the Water Services Association of Australia, Integral Energy, the Privacy Commissioner and Unwired. The evidence to the committee highlighted a number of concerns about the proposed measures in the bill. There were serious concerns about protection of information and ensuring that nobody had a competitive advantage as a result of this legislation being passed and companies being required to provide their information to the National Broadband Network Co. That is a valid concern, which I certainly share with many of those companies. We ought to note in this place that it is a bad precedent for government to require all of the current providers in the marketplace to provide their information to a government owned entity which then, in effect, can go out into that marketplace and compete with financial backing that is completely and utterly out of their league. If there were to be a $43 billion injection into broadband in this country, it would be such a massive market distortion that you would have to consider very carefully the viability of many of these other operations. The only saving grace in relation to this legislation is that everyone here knows that there is not going to be a $43 billion network put into the marketplace, so we can all rest easier.

The concerns of the stakeholders, in particular, in relation to this legislation focused around the consultation, as I have spoken about, and immunities. I accept that that is another important issue. Under this bill, civil penalties apply for carriers and utilities that do not provide accurate information. Taking this up for one moment, given that many utilities are required to provide information on old assets or assets that they express concern about, their potential exposure is an issue that I accept. They have exposure to penalty under this bill for inaccuracy in information that they are required to provide, when the information that we are talking about could perhaps be used in a way that would be unacceptable to many people in this place. If there are errors in the information or if there is a problem with the quality of the information then that entity ought not necessarily be subject to civil penalties. I think that is a very valid point. It will create a lot of uncertainty out in the marketplace and could potentially put a very onerous burden upon many of those companies.

In addition to those concerns, utilities raised with the Senate committee the issues of the ongoing costs associated with the provision of the information that they are compelled under this legislation to provide the government. Many industry sectors are compelled to comply with various government regulations—I had a series of people in my office today in relation to education—and I think this is another valid concern. There will be costs associated with the provision of this information. If we pass this legislation in this place and in the other place then potentially the cost of the service provision of broadband in Australia will be passed on to consumers, who will end up paying more because of this regulation. That is very important. Not only will the government not have their broadband network up and running—while they have a CEO being paid a big salary in an office and a pie in the sky scheme to raise $43 billion of capital—they will also be increasing the costs of the providers of the existing services to consumers. So I find it very difficult to see how that is a better situation, and certainly those concerns appear to be valid.

In relation to this bill there are also many concerns from industry, and I think they have raised some valid points. Of course, we are all in a heightened state of awareness about the importance of broadband to a modern economy. Certainly there have been many bold claims made in this place, in question time and other times, about how far behind the rest of the world we are. I do not accept that we are as far behind the rest of the world as some people claim. Indeed, there has been a fairly decent provision of telecommunications infrastructure, especially during the lifetime of the last government. I think that is something that has not been well understood and that has been exploited by the government, particularly in relation to the last election and the wild, unrealistic and unsustainable promises made to the electorate about what they could deliver. Of course, once they were elected all of those wild and unsustainable promises fell by the wayside. It is quite clear that they are treating taxpayers with contempt and putting at risk millions of dollars in relation to this legislation.

In its submission to the Senate committee inquiry on this bill, the Business Council joined many commentators and organisations, including the Productivity Commission, who believe that the National Broadband Network does need a thorough cost-benefit analysis. The Business Council of Australia said:

Without a proper consideration and estimation of costs and benefits, it is difficult to see that the government has provided sufficient justification for the proposed legislation.

I think that is another very important point: there is no cost-benefit analysis in relation to the National Broadband Network mark 1 or mark 2. It appears a complete and utter anachronism to say that we are going to spend that much money on establishing a new broadband network without having done an analysis of whether that is going to provide the kind of benefit that we are seeking. Certainly I accept that there may be a benefit for those regional and rural communities who struggle to get access to many of these services, and that is something that I think is a proper function for the government to consider.

The fact that this has not been done clearly and demonstrably exposes the government’s lack of accountability in relation to the National Broadband Network. Having this financial commitment without any cost-benefit analysis ought to alarm everybody in Australia, especially at a time when we are in such grave financial crisis and when the government is already borrowing heavily in order to fund so many of its other promises and its ongoing stimulus measures. It is also important to note that all except $2 billion of the budget of the National Broadband Network will be funded by debt—and the government still does not have a clear idea where it is going to raise that debt from. I think that ought to concern taxpayers in particular.

Speaking on behalf of my constituents today, I feel like anything that would deliver a better outcome for the outer suburbs of our major cities and regional and rural areas would produce support from the opposition. However, when a model for such a major and important piece of national infrastructure is put forward by the government with no clear plan as to how they will fund it and no clear idea about how they will deliver it, and when the government have an ongoing record of failure and mismanagement in meeting their own deadlines then I think it is quite proper for the opposition in this place to retain grave concerns about the operation of this proposed National Broadband Network.