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Tuesday, 1 March 2011
Page: 1894


Mr SECKER (6:55 PM) —I rise to speak on the National Broadband Network Companies Bill 2010 and cognate bill. I think it is interesting to construct the story about the cost of this huge white elephant. People sometimes get confused about ‘a million’ or ‘a billion’, but as I point out to people a million seconds is about 12 days but a billion seconds is about 34 years. So there is a lot of difference between a million and a billion. This legislation is proposing a $50 billion cost, which will end up being a cost to the Australian taxpayer. To put it in those terms, it is about $2½ thousand for every man, woman and child in Australia, whether or not you use the service. It is about $10,000 for the average family.

The Labor government’s broadband policy is to construct the National Broadband Network—or NBN, as we have come to know it. This will be a Commonwealth owned monopoly. The estimated completion date is 2021. I find it interesting that my friend over the other side, the member for Makin, suggested that they would do it as quickly as possible. Well, 2021 is hardly quick, Member for Makin. It is 10 years—and there is no guarantee that it will actually happen in that time.

Labor believe—and they keep telling us—that when the NBN is completed it will reach all of the nation’s 10 million homes and business. That is poppycock. Connectivity will be provided by fibre optic cable to 93 per cent of premises—but that does not mean that they will actually use the service—and by fixed wireless or satellite service to the remaining seven per cent of premises in regional and remote areas. Of course, that is where an electorate like mine, Barker, will come in. We will be a large part of that seven per cent. A large part of my electorate will be paying for a service, at $2½ thousand per person—man, woman and child—and they will not actually have access to that service. That is hardly fair. Labor’s stated objective is to ensure that 93 per cent of households have fibre to the home. That has become Labor’s so-called single solution and the end of the policy, when it should only be one of several possible means. It is also the least cost-effective available.

It is worth looking at the history of this National Broadband Network. I think colleagues on both sides would understand that at the 2007 election Labor promised a system for $4.7 billion—not $50 billion or $43 billion—and it was going to cover 98 per cent of Australia’s households. We said at the time—before the 2007 election—that that simply was not possible. And guess what? They got into government and after about a year they worked out that it was not possible. So, instead of saying, ‘We can’t do this for $4.7 billion and get 98 per cent of homes covered,’ they said, ‘We’ll have the big bang theory—$43 billion; we’ll go for a $43 billion system,’ even though most Australians, at the rate of five to one, are actually connecting up to wireless as we speak. That is the market. They are connecting to wireless, for the simple reason that those speeds are also increasing and it is far more flexible. More and more homes in Australia are not actually connecting to a telephone line; they are just using a simple handpiece, mobile phone or a dongle on their computer to get a wireless service, because they can take it anywhere and do not have to worry about a hooked-in line.

Fibre networks may be fine if you live in the city or if your business is in a built-up area, but the Labor government are selling this broadband plan to the whole of Australia and, realistically, not all of Australia will be connected to fibre—and they know that. Many of the residents in my electorate of Barker reside in areas that are considered black spots. The NBN will be of no use to these people. It will be of no use to the farmers in my electorate. It will of no use to the people who live in the smaller towns—of which there are many in my electorate. About 100 towns in my electorate will not be able to get fibre to the home, because they are considered too small—villages, perhaps. Most of these residents are already connected to the internet via a wireless service—which, interestingly, was brought about by subsidies that we brought forward when we were in government during the Howard government years. We did that on the basis of equity. We actually had a plan in 2007 that would have been completed by June 2009, and 99 per cent of Australians would have been covered. This government scrapped the OPEL plan and, as a result, we have still got a lot of people out there waiting for connections because there has been no replacement program.

I think it is very instructive to note that Dr Jay Guo, the leader of CSIRO’s Broadband for Australia research theme, says that wireless is eminently suited for regional Australia—I believe so; I have got it at home—since it can be rolled out more quickly and cheaply than the fibre network. As I said, in many places in my electorate they will never have that fibre service—not in my lifetime. Dr Guo said:

In terms of the cost to cover rural regional areas, especially given the fact that most rural regional areas have sparse populations, the wireless solution will be much cheaper.

This is exactly what the coalition had planned. We were not one-eyed when we developed our policy. We looked at what would be most effective and, more importantly, what would be cost effective.

More and more people are using mobile devices. You only have to look around this chamber. Everyone has at least two—and maybe three or four—electronic devices, such as personal computers, smartphones and iPad style tablets. Those are predicted to outsell traditional PCs this year, for the first time. Let us just think about that fact for a minute. In 2011 we are faced with facts suggesting that wireless style computing devices are going to outsell fixed devices, and that trend is growing. Yet the Labor government thinks it is a good idea to push ahead with a fixed-line monopoly that will not be completed for another 10 years.

I cannot begin to fathom why the government would still continue with the National Broadband Network. I am concerned for the residents of Barker, who will be paying for a network for years to come that, on completion, will be outdated and hugely expensive. How can this government present a model such as NBN and promise speeds and advances in technology in 2011 but then tell everyone that it will not be rolled out completely for another 10 years? This solution might be up to date right now, but let us be honest: what are the chances that this model will still be relevant in 10 years time? I would not bet on those chances.

Interestingly enough, Telstra unveiled its newest 4G technology. This will be a significant upgrade to its mobile network that will allow users to obtain speeds similar to home ADSL broadband connections while on the go. This will boost mobile internet speeds in capital cities and some regional areas by the end of the year—not in 10 years time but by the end of this year.

The Minister for Broadband, Communications and the Digital Economy, Senator Conroy, is confident that Telstra’s new technology will not interfere with his fibre-optic plan. He said, ‘Wireless is an important complementary technology to fibre.’ It is complementary, but it is more than that; it is actually taking over. The minister has said that wireless is important; so why has he forgotten all about wireless when developing the NBN policy? Why has he presented this inferior model for the NBN that does not utilise the best technology, which is changing every day?

The technology used in the NBN is not the only problem; it is one of many. The cost is a huge concern. It concerns me, and the rest of Australia should be concerned also. The government estimates that NBN Co. will require around $27 billion in equity funding and will need to borrow a further $10 billion to roll out the network. This $27 billion in equity funding has not been forthcoming. Nobody is putting their hand up and saying, ‘We want to invest in this. We think it’s a goer. We think people would be prepared to pay $200 a month.’ They are not coming the way of the government. If they do not, who is going to pay for it? The taxpayer.

If the NBN Co.-Telstra deal currently under negotiation goes ahead, NBN Co. and the government—hence the Australian taxpayer—will make payments to Telstra worth $11 billion in present-day post-tax terms for the use of its conduits and migration of its customers. The commonly used $50 billion price tag for the NBN adds these together: equity, debt and payments to Telstra. The head of NBN Co., Mike Quigley, has been quoted in CommsDay acknowledging that his construction budget is under pressure from the skills shortage, which has been made worse by the demand for skilled labour to clean up the damage caused by the storms and floods in Queensland. Mr Quigley said:

… we’ve done a detailed analysis of the skills we need in the company in order to build the network … there is a straight issue of will there be enough people to do this type of work in the construction industry? What I can tell you is that the view of the company won’t be such that we will just keep building regardless of the cost—if we find that costs are going up regardless of labor, we will go back to the shareholder and talk about that very carefully …

The shareholder will be the Australian taxpayer. In other words the NBN chief is saying that, if labour shortages mean his construction cost estimates are going to blow out, he will go back to government to get an okay to proceed at a higher cost or, alternatively, slow down construction until labour shortages have eased.

It beggars belief that a government could proceed with the NBN when the cost blow-outs have already made this an outrageously expensive rollout of technology that is very likely to be outdated before it is completed. What sort of arrogant government digs its head in the sand whilst the alarm bells are ringing? Taxpayers have every reason to be worried, as am I, that these problems are a sign of things to come with the NBN. Going by Labor’s track record of ‘easier to beg forgiveness later’, the NBN cost blow-outs could be massive. Will Labor just wait till the project is half rolled out then ask for more money from taxpayers to finish it, essentially giving them no choice in the matter?

I have seen this previously with the Labor government, in schools in Barker affected by Labor’s flawed Building the Education Revolution program. One school in particular had their hall ripped down and half rebuilt before they were told they would need to find half a million dollars of their own money to finish it. This government expected a drought ravaged town struggling to survive to come up with its shortfall. This ruthless government has exercised this sort of careless behaviour in the past; the NBN will be no different. As the price rises, so will the cost for taxpayers.

The problem with the NBN is that the government has kept it secret. Taxpayers should be concerned when a government refuses to let a huge, costly project go under the microscope. Only 160 pages of the 400-page NBN Co. business plan were made public. This is very concerning in itself. Then the government asked MPs who viewed the whole business case to sign confidentiality agreements. This is outrageous. It is deeply concerning. Australia has the right to know what is in those pages. You would not invest in shares without studying their performance and you would not buy a house without looking at the plans, so why is this government asking the Australian taxpayer to fund a $50 billion broadband model that they have no proper details about?

The bills before us today attempts to prevent the NBN from being scrutinised by the Public Works Committee Act 1969. Since 1988 all major government infrastructure projects have been subject to joint parliamentary committees, so why not this one? What have Labor got to hide? This is the first time to my knowledge that such a major project, the greatest project in cost of any government outlook in the future, is not subject to parliamentary scrutiny. Labor, you should hang your heads in shame.