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Monday, 15 November 2010
Page: 2399


Mr IRONS (6:39 PM) —Australians have become used to big numbers being bandied around under this Labor government: a couple of billion for the home insulation scheme; a few more billion for the school halls program—it sounds a bit like the whistle effect from The Hollow Men. The Australian people can perhaps be forgiven for having become desensitised to what are significant amounts of taxpayer money.

The government’s NBN proposal amounts to the biggest spend of taxpayer funds for its infrastructure in the history of the Commonwealth of Australia. That is why it is remarkable that this idea has not been subjected to a cost-benefit analysis or properly considered by Infrastructure Australia. In September 2009 the Treasury Secretary, Ken Henry, stated:

Government spending that does not pass an appropriately defined cost-benefit test necessarily detracts from Australia’s wellbeing.

Mr Henry is right. This spending deserves scrutiny. I therefore rise today to support the National Broadband Network Financial Transparency Bill 2010 which will provide this scrutiny. In supporting this bill I recognise the member for Wentworth and applaud his efforts in bringing this legislation before the House today. If passed, this bill will lead to two major outcomes. First, it will require the publication of a 10-year business case for the NBN. Secondly, it will refer the NBN to the Productivity Commission for a thorough consideration. Both are required to provide scrutiny of this major expenditure project. To date the government has relied upon the advice of the McKinsey-KPMG implementation study which, its own authors were keen to point out, was not a cost-benefit analysis. Incidentally, $25 million was spent on this implementation study. As a consequence the government has been unable to justify the economic benefits of establishing such a large monopoly—a monopoly which would possibly be in breach of this country’s competition legislation.

Recently, NBN Co. CEO, Mark Quigley, would not reveal the cost of the rollout of the NBN in Tasmania. Maybe there are a couple of members from Tasmania who would be able to enlighten us, but why all this secrecy? The Australian people—or should I say the Australian taxpayers—deserve to know whether this is the most effective way of delivering high-speed broadband to them. Without the scrutiny called for in this bill, they would not be provided with this information. It is not just the coalition that is seeking the passage of this bill and asking for this scrutiny; some of the most respected business leaders in the country have added their weight to the argument. Only today, a group of CEOs have written to the crossbenchers to urge them to support this bill. In their letter they state:

The NBN proposal now differs significantly from the proposal that was contemplated in the implementation study (which already found that the proposal in its then form was unlikely ever to generate a commercial rate of return). No serious analysis has been done of the changed cost implementations of these differences. Fundamental features of the project remain unresolved.

The voices of concern have not been confined to our shores. The recent OECD report pointedly observes that no cost-benefit analysis has been undertaken and then specifically goes on to suggest that the Productivity Commission is an ideal organisation to conduct a cost-benefit analysis. So if the cost-benefit analysis is sensible, prudent and supported, why is this government so reluctant to provide one? The excuses by the Minister for Broadband, Communication and the Digital Economy of delays and costs simply do not stack up. The rollout is already progressing and will continue to progress, no doubt, whilst the Productivity Commission undertakes this proposed cost-benefit analysis that would also comfortably fit within the commission’s budget.

This bill has interest for my electorate of Swan given the Labor Party’s pre-election commitment to roll out the NBN in the suburb of Victoria Park as one of the second-release sites. Why they did not choose Belmont, I do not know. Victoria Park was probably higher on their agenda to win the seat of Swan. The Labor Party announced along with the Labor candidate—with much fanfare—that the construction of Victoria Park would be at the beginning of the second quarter of 2011. Yet of course there was no proof that they could deliver and no indication of whether it would be an opt-in or an opt-out system. Will my constituents face additional charges? We do not know because there is no adequate business plan. Notwithstanding this, after such fanfare during the campaign, the people of Victoria Park will be expecting the government to deliver on this commitment. I very much doubt that the constituents of Victoria Park will see anything other than just another broken promise, as the focus is now on regional areas.

I support this proposed bill. It is basic economic sense to conduct a cost-benefit analysis. There is overwhelming pressure on the government from the business community for this cost-benefit analysis to be undertaken. The NBN Co. also needs to produce a 10-year business case. The budget deficit stands at $41 billion. For the sake of Australia and the Australian taxpayer we must make sure this spending is justified. As Dirkson’s famous quote goes: ‘A billion here, a billion there, pretty soon it all adds up to real money.’