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Thursday, 19 March 2015
Page: 1975


Senator CONROY (VictoriaDeputy Leader of the Opposition in the Senate) (15:44): I do have to respond to some of the quite misleading claims that have just been put on the public record—quite misleading statements. Let's us be very, very clear about this—

Senator Ruston: Mr Deputy President, I rise on a point of order: I seek clarification through you as to whether Senator Conroy is accusing me of misleading the Senate.

The DEPUTY PRESIDENT: I think he is; I think that is what he has said.

Senator CONROY: The claims that this committee is meeting an extraordinary number of times—

Senator Ruston: Mr Deputy President, I rise on a point of order: I would seek that Senator Conroy withdraws his comment that I am misleading the Senate.

The DEPUTY PRESIDENT: Senator Conroy can, if he chooses to, but I am not going to ask him to.

Senator CONROY: I withdraw; I would not want to offend Senator Ruston. Let me be very clear: so many meetings of this committee are needed, because not one single answer has been given to the committee on the simple fact of: how much Mr Malcolm Turnbull's dog of a network is going to cost—not one answer to that question no matter how many times we ask it and no matter how many times we sit there and ask the simplest and most straightforward questions.

We do not know how long it is going to take to build. We do not know what it is going to cost. We do not know what its revenue forecasts are. We do not know what the expenses of its teams are—simply stonewalled every single time.

At the last hearing, I think I commented that nearly 80 per cent—that is eight, zero per cent—of the questions that I asked were taken on notice. Over a five-hour hearing, 80 per cent of the questions I asked were taken on notice. It will come as no surprise to you, Mr Deputy President Marshall, that when we get these answers heavily doctored by Minister Turnbull's office, we will need to ask the same questions again, because the officers of NBN are not allowed to answer questions.

We had the quite extraordinary example at the recent committee hearing, when I asked a very straightforward and simple question to the expert of HFC technology—the newly-hired one, $800 million a year—the chief executive leaned over and said out loud: 'Don't answer that question.' Just leaned over—it was that blatant.

Mr Turnbull used to laugh and make jokes about the Kremlin when it came to NBN before. The Kremlin is a beacon of transparency compared to the gulag at NBN headquarters in North Korea that is being run by this government.

After 18 months, the public of Australia do not know the cost of Mr Turnbull's dog of a network—not a single cost, not a single revenue, not a single expense and not a single contract. In fact it is so absurd now on this committee that, when you ask them: what is the cost of the contract with this company?'—a major public company? They say, 'We can't tell you.' I say, 'But this company have released this information to the stock exchange, because it is material to them. Can I read you their press release to the stock exchange? Can you confirm this is the truth?' And they say, 'We can't comment.

So do not come in here and cry crocodile tears about the number of meetings and the number of hours when these officers are directed by the minister, the chair and the CEO of NBN Co in front of the committee to refuse to answer a single question.

You might find it funny but there are times when you will not always be in government. You are breaching every possible informal rule that we have about how we deal with public servants. 'I won't

tell you the cost of a contract. 'But it is released to the stock exchange.' Or: 'I can't comment on that.' 'Is it true?' 'I can't comment on that.' 'So are they lying to the stock exchange?' 'I can't comment on that.'

Abusing the committee processes of this chamber is a disgrace. The minister stands condemned. The board of NBN Co stands condemned. The executives of NBN Co stand condemned for treating the committee of this parliament and the people of Australia with open and cold contempt—and then they laugh about it while they sit there in front of us.

I also want to speak on the second interim report. You will recall that the first interim report found that the NBN's strategic review contained financial manipulations and other irregularities. That was no great surprise as I talked about last time: it was put together by Minister Turnbull's yachting buddy of 15 years—they actually jointly own a yacht on Sydney Harbour. You have to put someone in place that is your best mate to give you the dodgy report to start with.

But time has proven that the committee was right in its statements. NBN Co management have been crab-walking away from this disgraceful, dodgy report prepared in 11 weeks and they will not endorse it—they just cannot get away from it fast enough. That has left the minister with a couple of problems: first, it was on the basis of this dodgy report that he used this fig leaf to say that fibre to the premise was too expensive to build; and, second, he no longer has a platform to say that fibre to the premise is too expensive to build. So what does he do? He has another review—his seventh review in 18 months. This minister is very fond of providing his mates with a steady stream of income on the taxpayer dime but not so good at actually rolling out a network by 2016. The latest review makes wildly inflated estimates of the cost of fibre. Internationally, the estimates by NBN Co executives are a joke. People laugh openly when they see the fabrications and constructions used to inflate these numbers.

The minister has engaged in some creative accounting here. Let us be very clear about this. First, even though NBN Co use this figure as an expense internally, inside NBN Co, he has decided to capitalise opex to Telstra for its ducts. So you take an expense that is an internal expense. You say: 'No, no; that's not good enough. The numbers are not high enough to back up the numbers we've claimed for the last two years, so we've got to actually take an expense from a different part of the accounts and capitalise it and add it to the numbers to try and bloat up the fibre-to-the-premise costs.' So $737 of the alleged cost of NBN's fibre-to-the-premise rollout is entirely a dodgy fix—from one set of the accounts in NBN Co to an external claim that it is part of the cost. No other country in the world, no other company in the world, tries to pretend that those sorts of opex expenses are part of the cost of an FTTP build—none of them. Shame on you, Minister. Shame on the board of NBN Co for having to prop up its dodgy decisions with absolutely fabricated numbers like this.

Second: 'Let's throw in some opex costs from internal labour. There's another $170. Oh my goodness; we still can't get the number high enough to justify wasting $30 billion of taxpayers' money on this dog. Let's just say: all of those people sitting in that corner—all of those people and their wages—we're going to capitalise their costs for the purposes of NBN Co's fibre-to-the premise rollout.' Again, no other company in the world tries to account for its fibre-to-the-premise costs like this. It is totally and utterly a disgrace.

Third: 'Give in to delivery partners' ambit claims. Pay them whatever they want.' A whole bunch of disputes arose during the course of the rollout, and this board, this management, rolled over and just paid out as much money as it could to deliberately inflate the cost of the rollout to date. It rolled over and paid out hundreds of millions of dollars of taxpayers' money, just for the purpose of being able to pump up the numbers on fibre to the premise that was being rolled out. We have not been able to finally get a number on that one. NBN Co is hiding it.

Fourth: 'Direct officers inside NBN Co to stop rolling out cost savings.' That is what has gone on in the last 18 months. My time is almost up. I seek leave to continue my remarks later.

Leave granted; debate adjourned.