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National Broadband Network Financial Transparency Bill 2010 (No. 2)
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Stephens, Sen Ursula
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Thursday, 25 August 2011
Senator STEPHENS (New South Wales) (09:31): I rise this morning to speak on this National Broadband Network Financial Transparency Bill 2010 (No. 2), which has been brought here by Senator Birmingham as a private senator's bill. The bill requires the NBN Co. to prepare a business case for the NBN and the Productivity Commission to prepare a cost-benefit analysis of the NBN. This is just yet another example of the opposition's absolute opposition to the NBN in any shape or form and its determination to create as much mischief about the NBN as can possibly be created. It is largely the same bill that Mr Turnbull introduced last year into the House. It was voted down on 19 November.
Now that the bill has been amended in recognition that the government released the NBN corporate plan in December last year, the only thing that this bill now does is require the Productivity Commission to do a cost-benefit analysis of the NBN by 1 December this year. The time frame was ridiculously short when the bill was introduced last year, and again it shows that this is not a serious bill that the opposition wants to debate, because a proper cost-benefit analysis could never be done in 3½ months as this bill requires. It is important, too, to note that the Productivity Commission does actually have a forward work program and budget, and there is no provision there to support this initiative at this time.
Having said that, on the merits of us doing a cost-benefit analysis, we know that on the cost side of the ledger the NBN is an investment; it is not a cost. The corporate plan shows a return on investment of a little over seven per cent and we know from the Greenhill Caliburn report that the assumptions underlying the revenue and cost projections in the NBN corporate plan are reasonable. On the benefits side there is also plenty of evidence already. The OECD, the UN and Access Economics all say that investment in high-speed fibre platforms will generate billions of dollars in economy-wide benefits. Two Access Economics reports that have been released by the government show that the benefit to telehealth on its own in Australia could be between $2 billion and $4 billion a year and that Australia could save between $1.4 billion and $1.9 billion a year if 10 per cent of the workforce tele-worked half the time. The OECD says: 'Effective use of high speed broadband can provide significant improvements in productivity and efficiency across a number of sectors, such as energy, health, education and transport.'
As someone who is a member of the Joint Committee on the NBN, I can say that in our recent visit to Broken Hill we examined the backbone work that has been going on there and the extent to which the whole community of Broken Hill and the region of western New South Wales have embraced the concept of the NBN and its potential. It really reminds us of the extent to which people are waiting with bated breath to engage with the NBN. Wherever we went on those field visits, people were asking us, 'When is the NBN coming to us?' We identify the potential, particularly around the issues of e-learning, e-health and e-commerce, and we know that the NBN is going to provide those opportunities for many parts of regional Australia.
The United Nations says in its report:
Broadband is the next tipping point, the next truly transformational technology. It can generate jobs, drive growth and productivity, and underpin long-term economic competitiveness.
An IBM study in 2009 found that even a fibre-to-the-node network, an inferior network to that which we are building here in Australia, would conservatively boost the NPV of GDP by between $8 billion and $23 billion a year over a 10-year period, and jobs by 33,000 by 2011 in an economy operating at less than full employment. We can see that there is extraordinary potential for the NBN.
This is not a bill that we should be supporting; it is just a half-hearted attempt to throw up roadblocks to the NBN rollout. As I said, it is another piece of mischief by the opposition, who are fundamentally opposed to the NBN and what it represents. The NBN, as we all know and appreciate, is critical infrastructure. It will connect our rural and regional centres to our main cities and the wider world with world-class broadband. It is interesting to note how accepting people here in Australia are about the speed of their broadband connections when, if you travel overseas, particularly in Asia, they have leapfrogged us and have access to high-speed broadband and internet connections which are the envy of us, if we could only imagine that it was so. Here in Australia we are really behind the eight ball in this.
The NBN will deliver affordable high-speed broadband services to all Australian homes, to businesses, to schools and to hospitals, no matter where they are located in Australia. Equity of access is the fundamental principle. As Australia's first national wholesale-only communication network, the NBN will also support genuine competition in the telecommunications sector for the first time, which has to mean better outcomes for consumers. Right now what we have is a vertically integrated, privately owned monopolist—Telstra. The NBN will connect 93 per cent of premises in Australia with optical fibre, delivering speeds of up to one gigabyte per second, which is many, many times faster than people experience today. In fact, the potential of the NBN is yet to be imagined in some parts of economy. All remaining premises will receive next-generation wireless and satellite technology, providing speeds of 12 megabits per second.
We know absolutely that the NBN will dramatically improve Australia's communication environment, and Australians are already lining up for those services. There is an overwhelming level of support in communities. The percentage of households that signed up for a fibre connection in the mainland first release sites averaged about 75 per cent—88 per cent in the first release site near Armadale, 90 per cent in Willunga, 78 per cent in Kiama Downs, 62 per cent in Townsville and 52 per cent in Brunswick. People are really hungry for this technology and are anticipating its potential and the way in which it is going to improve their lives and opportunities. The NBN services were officially launched on mainland Australia in Armidale, a good country town focused on its university community, on 18 May; in Kiama Downs and Minnamurra just a few weeks ago, on 29 July; and in Brunswick on 4 August, only a few days after the NBN committee had been there and inspected the extraordinary infrastructure that has been put in place. It really is mind blowing, and people need to go and see what this infrastructure looks like—how smooth and how unintrusive it is but also what its potential is. It will transform the way people think about internet access and the World Wide Web.
NBN Co. has also commenced construction in nine of the 19 second release sites that were previously announced, which is going to cover 50,000 premises across Queensland, New South Wales and the ACT. I heard yesterday the concerns and the arguments that were raised by Senator Humphries, for example, about the expectations of the people of Gungahlin and other people in the ACT. The point that Senator Humphries was making yesterday, saying, 'Oh, well, we've got TransACT here and that's a good provider,' really does not go to the issue of how competition will improve access to services and reduce the costs over a period of time.
This piece of legislation—as I said, a mischievous piece of legislation, really, to bring us here today—has been seriously considered in terms of its effectiveness. The viability of the NBN has been very clearly examined by the 2010 McKinsey-KPMG implementation study that was released in May last year and again by the Greenhill Caliburn review of the corporate plan, which was released on 14 February 2011. Based on the conservative assumptions of the NBN Co. corporate plan, the NBN will support uniform national wholesale prices that will support affordable retail prices, and the plan shows that the Commonwealth's investment will be repaid with a return that exceeds the 10-year bank rate. Greenhill Caliburn found that the key assumptions underlining the revenue and cost projections in the NBN corporate plan were reasonable and sound and, being a viable business in its own right, the NBN will also have broad economic, social, educational and healthcare benefits, as I have said. The rollout of the NBN will be subject to ongoing scrutiny from a joint parliamentary committee, of which I am a member, and the Freedom of Information Act. This bill is a clumsy case that is about making mischief and slowing down and putting roadblocks up to the NBN rollout.
The definitive agreements between Telstra and the NBN Co. announced in June will also improve the construction process and are providing NBN Co. with immediate access to Telstra infrastructure, such as the pits and pipes in the second release sites. We saw really good examples of that when we inspected those facilities in Brunswick last month. Building on the fibre rollout, on 3 August the NBN Co. also announced the first communities to receive NBN Co.'s high-speed fixed wireless service. The first to receive the service will be homes, businesses and institutions in the less densely populated rural and remote communities that surround Geraldton in Western Australia, Toowoomba in Queensland, Tamworth in New South Wales, Ballarat in Victoria and Darwin in the Northern Territory. I know, from speaking to my colleagues in the Northern Territory, that they are really keen to see that rollout there. It is very important for the Northern Territory, particularly, to have access to improved technology services. Customers will be able to access services over the network which use the latest 4G wireless technology from the middle of next year.
We are now seeing communications often being led by Regional Development Australia or by councils actually preparing their communities to be national broadband ready. The challenges around doing that are about understanding the potential and the capacity of national broadband and the way in which it can be used to improve everything from e-health and e-commerce through to productivity. In Broken Hill we saw the way in which the NBN was going to be used to facilitate the establishment of a film studio—an amazing facility that will enable Broken Hill to capture the opportunities presented. More than 60 films have been made in Broken Hill over the years and it is commonly used to make advertisements. It is very bad luck, as we heard only a little while ago, that the next Mad Max movie is not going to be made there because it is too green. There are many opportunities for that film studio to bring a whole arts precinct to Broken Hill, and without the NBN that could not possibly happen.
On 1 July NBN Co. launched its interim satellite service, bringing forward the availability of enhanced broadband services for regional Australia. I heard yesterday the Minister for Broadband, Communications and the Digital Economy explaining how the whole of Victoria was covered by that service, particularly around Ballarat and Bendigo. As someone who has to use satellite services, I can tell you the frustrations of not having a decent broadband connection. It is very frustrating and it is very expensive. The current service is not very reliable on cloudy or rainy days, and it is critical that we make sure we improve our satellite services in this way. The interim satellite service will be available to individuals and small businesses that cannot access metro comparable broadband services ahead of the NBN Co.'s long-term satellite services in 2015. I am hoping that by then maybe Goulburn's services might extend a little beyond the town boundary and I will not have to use satellite services anymore.
This bill is a frustrating bill. Yet again the opposition is trying to prevent Australians having a world-class, affordable broadband service. In the Joint Committee on the National Broadband Network we talked long and hard about the issues of transparency and scrutiny of the rollout. That is the role of the joint committee, and we have been diligently thinking through how we will be doing our six-monthly reporting to the parliament on those issues. The government welcomes transparency and scrutiny, but continued analysis and scrutiny of one of the most scrutinised projects ever funded by the government is without merit. What the opposition has proposed today is a furphy. It will certainly add further costs to the rollout and it will continue to deny high-speed services for all Australians.
The second part of the bill, which requires the Productivity Commission to prepare a cost-benefit analysis of the NBN, is really calculated to delay the NBN. It follows a pattern we have seen the opposition follow several times in the past. We saw it when we introduced our competition and consumer safeguards legislation in 2009—the opposition did not want to debate the issue until we produced an ACCC report on the original NBN tender process, and we did that. Then they would not debate the bill until the implementation study was released, and we did that too. Then, when the competition and consumer safeguards bill was last debated, they filibustered—they put 19 speakers on the list for debate, so we could not take it to a vote. We have already had a Senate select committee into the NBN, which was extended five times and produced five reports. NBN Co. CEO Mike Quigley willingly comes to Senate estimates three times a year. The government has established, as I say, the House of Representatives committee to examine the benefits of the NBN, and the Joint Committee on the NBN that the government agreed to establish has been holding public hearings. As I said, we most recently had public hearings in Melbourne and Broken Hill. The joint committee has a balanced composition of members from the government, the opposition and the crossbenches, and very broad terms of reference. Of course one of the members of the committee is the shadow minister, Mr Turnbull. Mr Turnbull is getting all of the information that he needs, and he is seeking to do more through the committee process—which is a much more appropriate way of teasing out these issues than seeking to have the Productivity Commission prepare a cost-benefit analysis in a ridiculously short period of time.
It is pretty hard for me to see how the opposition can continue with its dishonest attempt to portray the government as being anything other than open and transparent about the NBN. As I say, now the opposition wants to legislate for a Productivity Commission cost-benefit analysis. But, the shadow minister has admitted that even if a cost-benefit analysis for the NBN came back unequivocally positive, he would refuse to guarantee the opposition's support. So what is it that we are really about here? We could look at whether there are cost-benefit analyses on some of the opposition's plans—whether it be the shadow minister's water plan or the OPEL regional broadband plan. We have never seen cost-benefit analyses on those things.
This NBN process has been the most scrutinised and investigated process that I can ever remember. We do not need to go yet again to the Productivity Commission to burden them in a time when there are no resources and no time available in the forward work program for the Productivity Commission. The opposition have said that regardless of what the Productivity Commission says, anyway, they are not necessarily going to accept the findings. I suggest that this is another mischievous opposition attempt to delay the NBN.