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Tuesday, 23 November 2010
Page: 1872


Senator BARNETT (12:53 PM) —I stand today to speak on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 and to make some observations with respect to the government’s processes and also with respect to the rollout of the National Broadband Network in Tasmania and the refusal by this government to release its business plan. It has also refused a cost-benefit analysis. What we now know about the rollout in Tasmania is that the joint venture with the Tasmanian government and Aurora Energy to roll out the National Broadband Network has collapsed.

Before I talk about the collapse and the implications and consequences of that collapse, I would like to place on record my astonishment that the government would refuse to release the business case for this $43 billion, the biggest infrastructure development project ever undertaken by a government in Australian history, and would refuse to undertake a cost-benefit analysis. It is a disgrace. The fact that they are hell-bent on pushing this legislation through without revealing that information and making it available to members of the Senate and, indeed, to the public is, frankly, a national disgrace. They have obviously offered the Independents and senators on the crossbench a sneak preview of the business plan, and they initially offered it on the basis of a secrecy commitment—a confidentiality agreement—that would last for seven years. How absurd is that? Senators and members in this parliament are meant to be representing members of the community—members of the public—and acting in the best interests of their communities and of this great country, Australia, and they are to be bound by this government with a confidentiality agreement which was to be for seven years. How absurd! How disgraceful! It shows how out of touch the government are. They are just not connected. I hope that their heads hang in shame for that and that they stand up and reveal the fact that they are ashamed. They should apologise.

With respect to the National Broadband Network, yes, I have been quite vocal in Tasmania on behalf of the constituents down there about the waste and mismanagement that have been a feature of the rollout in Tasmania. For example, the broadband project has been run back to front. Firstly, the government announced in a media release on 7 April last year that the cost of the program would be $43 billion, but the planning had not been done; they did it on the back of an envelope. This is the concern that I have and that I know others have as well. How did they know the cost? What went into the cost? What was it made up of? That is a staggering amount of money.

Let me just tell you what the $43 billion equates to in broad terms. It is about the market value of Telstra at the time—of course, Telstra has now diminished in value as a result of this government’s efforts and actions—it is twice the annual defence budget and it is almost as much as the federal government spent on health just last year. So there is the equivalence for a $43 billion spend. It is big money, such as we have not seen before in this country. It is over $4,000 per household—closer to $5,000 per household—in your taxes, in your money. That is how much you are putting in, members of the Australian public, to make up that $43 billion. So it is not coming free. If you make international comparisons with other countries around the world, it is up to 100 times what they are paying in other countries around the world. There are the examples of Singapore, the USA, the UK and various European countries. So it is a great shame that the government have gone hell-bent down this path without proper analysis, without a cost-benefit analysis and without a proper review.

Of course the devil is in the detail, and we have been standing up on behalf of our constituents saying, ‘No, we want to know which way you’re taking us, where you’re going to spend the money and why.’ What business would spend its future earnings without thinking about the return on invest-ment? The government commissioned the McKinsey-KPMG report for $25 million—which is not a bad consultancy, is it? You would want to get a good return for your funds invested there. Nevertheless, let us hope the report was well appreciated, because we know that that report says that they need a take-up or sign-up rate of between 80 and 90 per cent. That is very significant indeed. What we know and what the minister, with Mr Quigley, has revealed in Senate estimates under extreme pressure from the opposition and indeed others—I was there asking these questions—is that in Tasmania the sign-up rate is one in 10 to date, or 10 per cent. That Senate estimates meeting was on 19 October, and those were apparently the figures to 30 September, so we would hope they have improved; the government would want them to have improved. But clearly the government is expecting a sign-up rate of between 80 and 90 per cent.

I am happy to comment further on that. Clearly, the mismanagement and maladministration of the process to date has been something shocking. We do know that there will be significant challenges to be faced with the rollout in Tasmania. Let’s have a look at Tasmania and the rollout of the NBN in Tasmania. We know that the current sign-up rate, based on the latest information, is 10 per cent.


Senator Conroy —It is 11 per cent.


Senator BARNETT —It has gone up to 11 per cent.


Senator Conroy —It has always been 11 per cent.


Senator BARNETT —You are saying it was always 11 per cent. Thank you for that. We have the exact figures of course which are on the public record in answer to questions from me and indeed from others in Senate estimates. Let me see what the exact figures say: 561 services have been ordered for 436 premises with only 262 active connections as at Senate estimates on 19 October. They are the figures.


Senator Conroy —That’s over a month ago.


Senator BARNETT —That is what is on the public record and this government refuses to keep us fully informed. The minister interjects and says, ‘That was over a month ago.’ Indeed it was. What are the latest figures? Minister, why do you not reveal that information, why do you not tell us exactly where we are up to?


The ACTING DEPUTY PRESIDENT (Senator Moore)—Senator Barnett, that was through the chair, wasn’t it?


Senator BARNETT —It was through the chair, I thank you, Madam Acting Deputy President, for noting that. The federal and state governments’ joint venture with Aurora Energy has collapsed. It has been abandoned and now that is on the public record. That news, in my view, proves that the rollout is a shambles. There has been no legitimate business plan in the first place in Tasmania and it raises serious questions in my view about the commercial viability of the project in Tasmania. I have been raising these questions about the NBN rollout in Tasmania since its inception but the government has refused to answer the questions.

The minister is sitting here; he could stand up and answer all of the questions that have been put to him and make it clear. He could come clean and put it on the record. We know that the Tasmanian NBN Co. was commissioned in August 2009 with much publicity and fanfare. There were lots of newspaper front-page stories and all the media in Tasmania were involved—TV, radio, the whole works. There was a lot of publicity with Premier David Bartlett on the basis of the soon-to-be established joint venture between the federal and state governments and the state owned utility Aurora Energy. That was in August last year, more than a year ago. After more than a year of meetings there has been no progress. In fact not only has there been no progress; it has been canned. The joint venture to roll out the NBN in Tasmania has collapsed. It has been canned.

What we do know based on a company search that I have undertaken is that at least three directors have resigned or not been reappointed. They lasted one year. Guess when they concluded their appointment? Mark Kelleher and Sean Woellner concluded on 21 August. Funny that; it is a familiar date—21 August was the date of the federal election. Daniel Norton, who I respect and admire—as I do Mark Kelleher—ceased on 31 December last year. You have five directors—let me make it clear, based on the last company search—and only one of those directors of the TNBN Co. physically lives in Tasmania. You have Doug Campbell who is from the mainland, Jody Fassina—who I know is a colleague and friend of Senator Conroy—who says that his address is Tolmans Hill in Hobart, but we know that he lives in Sydney—


Senator Carol Brown —That is not true.


Senator Conroy —That is not true.


Senator BARNETT —If that is not true, I will accept that. You say that he lives in Hobart full time. Thank you, Senator Conroy. Then we have Greg McCann from Wynyard, Alison Terry from Perth, Western Australia and Jean-Pascal Beaufret has just been appointed on 27 August 2010. I did not see any public announcement about the appointment of Mr Beaufret. I know it has been in the public arena, but there was no announcement and I wonder why. Why is the registered office of NBN Tasmania based in Melbourne at the head office of NBN Co. Ltd on level 43, 60 Elizabeth Street, Melbourne? Why is the previously registered office in Canberra? This is meant to be a Tasmanian entity and Tasmanian joint venture discussions are meant to have started in August last year. It seems now that the federal government says it will go it alone in Tasmania without the support and equity involvement of the Tasmanian government.

How much money has been invested to date in the joint venture—firstly, by the federal government, secondly, by the Tasmanian government and, thirdly, by Aurora Energy? What arrangements did they undertake? What contracts did they sign? What terms and conditions applied to those contracts? Come clean, spill the beans, put it out into the public arena. Do not be closeted and set up another secret confidentiality agreement with these key parties. Come clean and tell the Tasmanian public and the Australian public what has happened. This collapse is clearly an embarrassment. The abandonment of the joint venture is an embarrassment to both governments not just the federal government.

The federal government says now it will negotiate contracts and arrangements directly with Aurora Energy for them to undertake work. I would like to know what terms and conditions will apply to those contracts. If they have already been signed, please reveal them. If they have not been, we would like to know what arrangements will be put in place with Aurora Energy. The minister here will no doubt be able to stand up, respond to that, and come clean and tell the Senate and the members of the public. That is what we would like. We would like that rather than this cloak of secrecy around the NBN rollout.

I would like to know: what is the cost of the NBN rollout in Tasmania to date? It is on the public record that I have asked that question and I cannot get a response from the minister or the government. What is the cost to the Tasmanian taxpayers and Australian taxpayers for the rollout to date? What is the cost for the rollout to be completed and the equity injection to date? These questions must be answered. We know there has been a $37 million contract signed for the NBN stage 1, but that is only part of it and the minister needs to come clean.


Senator Conroy —Do you know what this bill is about?


Senator BARNETT —Indeed I do. The minister must come clean and reveal the information. The bill makes many references to the NBN, unlike your interview on Sky News which was a big embarrassment for you, Senator Conroy. I wouldn’t be digging this hole for yourself because you are way down deep in the hole. You are going to have to dig your way out because on national television you embarrassed your good self. I know it was a humiliation.


The ACTING DEPUTY PRESIDENT (Senator Moore)—Senator Barnett, I take it those comments are through the chair.


Senator BARNETT —Those comments are through you, Madam Acting Deputy President, and I thank you for interposing that comment. What are the ISPs being charged by the NBN Co. in Tasmania? Do you know how much it is? What are they charging down there? Hands up? Senator Fifield, do you know? No idea? Is it $30 or $60 a month? Is it $20 a month? No, it is free.


Senator Bernardi —It’s free!


Senator BARNETT —It is a free service to the ISPs in Tasmania for the rollout. This is a great business plan they have, isn’t it? And this will continue through to 30 June next year. Then, of course, the ISPs put on special deals for the consumers of $30 a month or $60 a month. They think they are heroes. They are signing people up for a year or two years. Please, be careful; watch out when you sign.


Senator Conroy —Come on, name the bill!


Senator BARNETT —Senator Conroy, we got that information out of you at estimates; it was like getting blood out of a stone but we did manage to do that. That is the concern that we have.


Senator Conroy —What’s the name of the bill?


Senator BARNETT —Senator Conroy, there are many, many things that I am concerned about with this bill and with the rollout of the NBN. You are getting very sensitive now—through you, Madam Acting Deputy President—as a result of these observations and the criticisms that have been made because you do not have the ability to stand up and answer these questions. You are refusing to do that.

What about new housing estates? We know that developers are being forced to pay under this new arrangements that the government is bringing in. What about the $43 billion cost: will there be any blowouts? We know what the unions have to say; we know there are negotiations taking place and no doubt the government will roll over and the costs will blow out.

I want to ask about the black box for connection to homes in Tasmania. Originally it was a cost to the homeowner, to the householder. One constituent in Midway Point in Tasmania has had the dickens of a trouble trying to get his NBN connected. It was an absolute shemozzle. He is so embarrassed for and on behalf of the government that it has taken him weeks and weeks and then into months to get it all connected. What about the cost of the black box?


Senator Conroy —What’s his name?


Senator BARNETT —John Salmon.


Senator Conroy —The member of the Liberal Party?


The ACTING DEPUTY PRESIDENT —Order! Minister, will you stop shouting across the chamber.


Senator BARNETT —You should contact him—through you, Madam Acting Deputy President—and solve his problems. Likewise, up in Smithton, Ian Heathorn has problems. These constituents are all around, Minister, and—through you, Madam Acting Deputy President—you need to come clean and help fix these problems. In terms of the cost of the black box, the government has changed its business plan and has now agreed through the NBN to pay for the black box as well. What about those people who have already purchased a black box: will they be reimbursed?


Senator Williams —No, they’re suckers!


Senator BARNETT —They may very well be, Senator Williams. And they will be very unhappy suckers because this is a cost that Australians into the future will not have to pay but they have paid in the past. So what we have is one big shemozzle.

The collapse of the joint venture in Tasmania will be on your own head, Minister. You need to come clean and make it clear what future plans you have and put on the record exactly what has occurred to date. That is what we would like to know. I would also like to acknowledge the good effort of iTWire. Gee, they have been on the ball. They have been really sharp and have picked up on many of the concerns of the public. They have noted the lack of a business case. They have noted the collapse of the NBN Co. joint venture in Tasmania. I want to acknowledge their good work.

Minister Conroy has said the Tasmanian rollout of the NBN is ‘on time and on budget’. He has said that many times. Well, how would we know? There is no time line and there is no budget. Nobody actually knows. He is making it up. It is nonsensical and ridiculous. There is no veracity or foundation behind that comment, so how can he be believed? So when will the minister reveal the budget? When will he reveal the business plan? When will he undertake and release a cost-benefit analysis? Those are some very important points. I am very happy to rest my case. I thank the Senate.