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Australian Agenda -

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Interview with Senator Stephen Conroy, the Minister for Broadband, Communications and the Digital
Economy

Sky News Australian Agenda program, 5th September 2010

Peter Van Onselen: Let me start by asking you, Tony Windsor has been a pretty strong supporter of
the NBN. He said recently, you do it once, you do it right and you do it with fibre. Does that give
you a confidence that he's going to go with the Labor Party? And would you be very surprised, I
guess, given some of his strong words on the NBN, if he decided to go with the coalition instead?

Stephen Conroy: I think Tony has understood from the beginning that the best way to end the digital
divide, the best way to open up regions like those that he represents, but also the regions across
Australia, is to give them access to the most future-proof technology that will give equivalence
between living in the city and living in regional rural Australia. So I think Tony has always
understood from the beginning, when we first outlined the national broadband network, that if you
want to give people equivalence in the regional and rural Australia, you need the technology that
can deliver equivalence - and that is clearly a fibre based national broadband network.

Jennifer Hewett: Senator, there's been a lot of talk about costings this week. I take it you have
personally briefed the Independents. If so, did they ask for a cost benefit analysis?

Stephen Conroy: We had a discussion around the costings. All of our costings are out there
publically. They're included in the Treasury calculations. They were in the budget calculations and
we had the $25 million McKinsey's report. So the costings behind the national broadband network
have been out there publically for many, many months.

Jennifer Hewett: So despite the fact that actually even a few mainland homes won't start to be
connected till next year, you continue to resist the idea of having a cost benefit analysis done?

Stephen Conroy: We've actually spent $25 million on a McKinsey's report that was very
comprehensive. What that McKinsey's report found was that we could build the national broadband
network within the $43 billion budget envelope that we'd allocated, and that it would be affordable
for all Australians. We've got on with the job as we promised at the last election of building the
national broadband network.

Michael Stutchbury: Senator Conroy, I think Mr. Windsor also suggested that the $43 billion figure
was fictitious. I think he said this in the week leading up to these negotiations, and he wanted to
see the trail of numbers that led to that number. Have you been able to provide him with assurance
that the $43 billion figure that has been floated around since day one here is really not
fictitious?

Stephen Conroy: Absolutely. What the McKinsey's report showed, what the figures in the forward
estimates of the budget showed, and importantly the deal that we reached with Telstra was able to
demonstrate, is that it will actually cost less than $43 billion. Now the final calculations of how
much less than that $43 billion haven't been released at this stage, but the experts who've
commented on this in the newspapers have suggested that it's between $4 and $6 billion savings to
taxpayers by reaching this deal with Telstra, because clearly if we have access to Telstra's
infrastructure, we don't need to duplicate that infrastructure and pay for it a second time.

Paul Kelly: Senator, on the basis of your talks with the Independents, how important do you think
the NBN is an issue for them in terms of making up their mind on the question of confidence in
government?

Stephen Conroy: I think the single biggest issue that seems to have weighed on their mind is
clearly the $11 billion hole in the opposition's budget. They have a $11 billion hole. This is not
a gentleman's disagreement between Tony Abbott and the Treasury. It is clear that they have a
massive inability to cost their program. But having said that, the NBN is clearly something that
those three Independent country MPs all understand delivers better healthcare in regional
Australia, it delivers better education in regional Australia, it opens up small businesses across
regional Australia to compete across Australia, and compete across the world. It allows us to try
and put smart grids, to allow more sustainable energy usage to be applied across Australia. So I
think it's the enabling factor of the national broadband network that has made the NBN so
attractive to the regional Australians.

Peter Van Onselen: Senator, can I just ask, if you think that the costings blowout in the
coalition's policy is a central reason why the Independents may well go with your side, does that
mean that if there is a blowout in the cost of the NBN in due course if you do win, that therefore
as a result they'll have gone the wrong way, quite frankly?

Stephen Conroy: No. The wild claims by opponents from within the industry as well as from the
opposition about a blowout just aren't being demonstrated on the ground. In Tasmania we said last
October when we started constructing the national broadband network, we would deliver on time and
on budget in July of this year. That was back in October last year. We delivered the first live
services to Australians living in Tasmania from the national broadband network in the first two
weeks of July, and we were 10% under budget. The 6,000 kms of backbone we're building across
Australia for the national broadband network, and this 6,000 kms is just the beginning, have also
been delivered on time and on budget, which is a professional organisation in the national
broadband network company, with one of the world's leading technologists and leading businessmen in
Mike Quigley, who is running the national broadband network.

Jennifer Hewett: Senator, I think so far less than 100 households have been signed up in Tasmania,
and yet even your own implementation study says that only a small minority of households will
actually want or be willing to pay for 100 MB. So why therefore is it necessary to provide access
to every single home? The idea of equivalence is fine, but that's a very, very expensive way of
trying to plug in some holes, isn't it?

Stephen Conroy: That's just not right, Jenny. What the national broadband network will do is enable
equivalent services in health, in education, in entertainment, in smart use of technology for
energy efficiency, right across Australia.

Jennifer Hewett: But many of the hospitals . . .

Stephen Conroy: . . . You need a national broadband network. Well it's not right to say every
hospital. I've been to hospitals around Australia. I've seen where the hospitals are currently
connected and it's the same as saying every school has a fibre connection at the moment. This is
actually not true. So those who keep trying to say it's already done, it's already happened, they
are actually having a lend of you, Jenny, because it's not the case. Australians recognise that
this is not just a piece of technology for today, that this is about future-proofing regional rural
Australia, as well as metropolitan Australia, for the future demands. The opposition's plan, the
reason why it was so poor is because it didn't allow the capacity for the future upgrades to keep
up with what society is going to demand into the future in health, in education, in smart grid
technology.

Peter Van Onselen: Senator, can I ask you about the election campaign? Once this all over, whether
you are given the support of the Independents or not, is there going to be an adequate post-mortem
on how Labor did? And how do you feel about the performance of the Labor Party at the recent
campaign?

Stephen Conroy: We obviously had a number of challenges for a variety of reasons. We obviously had
some problems with information becoming public during the early part of our campaign that really
knocked our campaign off its stride. But Julia's performance was first class, it was outstanding.
In the face of quite extraordinary pressures Julia remain focused and determined to take Australia
forward, to ensure that we highlighted our economic record, in contrast to the flaky proposals put
forward by Joe Hockey and Andrew Robb. Surely at the end of this campaign the opposition have got
to sit down and say, we didn't have the economic team . . .

Peter Van Onselen: . . . But Senator, despite all of that, you went walking backwards in the number
of seats that held and the two party vote . . .

Stephen Conroy: . . . with Tony Abbott, Joe Hockey and Andrew Robb to deliver ongoing economic
performance.

Paul Kelly: If we can just focus on this for a minute, Senator. The Labor government lost its
governing majority. Now it's all very well to talk about how brilliantly the Prime Minister
campaigned. Are you going to have a thorough post-mortem when this election is determined about the
Labor performance?

Stephen Conroy: I think we traditionally always have a review, and we should have, as we always
have, a thorough review of the campaign. I'm sure there are things that we could've done better and
I'm sure there are things that we would like to have been able to change with the benefit of
hindsight. But on balance, at the moment what Julia Gillard is focused on, what all of the Labor
caretaker ministers are focused on, is delivering stable economic management for this country. We
need that stability . . .

Paul Kelly: . . . It seems to me that answer is very complacent . . .

Stephen Conroy: . . . because as you've seen, there are challenges internationally. You've got the
chair of the feds saying, look I'm prepared to intervene further in the US. What we need is stable
government.

Paul Kelly: We're not interested in what the chair of the feds is saying, Senator. It seems to me
that answer is a very complacent answer. This in many ways is the worst result for a first term
government since the 1930s, so I ask the question again . . .

Stephen Conroy: . . . That's not right again . . .

Paul Kelly: . . . Do you think there are fundamental issues for Labor to address?

Stephen Conroy: John Howard lost 19 seats and Kim Beazley got a majority, quite a significant
majority in electoral terms in 1998. It is just not an accurate statement, Paul, to say this is the
worst in 70 years.

Peter Van Onselen: Senator, if that's the case, okay fine, John Howard did worse than you guys did
on the two party result. Is it therefore a campaign problem that you weren't able to sandbag
effectively in marginal seats, and therefore it's a problem with Karl Bitar and the way that the
campaign was run, and that's the issue here?

Stephen Conroy: Look, I think it's been acknowledged that in both NSW and Queensland we have
governments that are weighing down the Labor brand. NSW, despite all of the criticism of the NSW
machine, NSW only lost four seats and two of those had Liberal incumbents. In Queensland we had a
much more complex set of circumstances. We obviously had feelings around Kevin Rudd, the change in
Prime Minister, and we had clearly a state government that has a range of issues across Queensland
that require, and I think Anna Bligh has said, hey we've got the message, we understand that there
are issues in Queensland. But if you look at the result we got in South Australia, a swing to us;
in Victoria, a swing to us; Tasmania, a swing to us; and even in Western Australia, despite all of
the claims about the mining tax, we got a very small swing against us. So what you can see when you
break this down is that there is a whole range of complex issues around the campaign, which Julia
Gillard did an outstanding job of combating to keep us in with a chance of forming government
perhaps this week.

Jennifer Hewett: Senator, you seem to be saying that really it had nothing to do with the federal
government that 'lost its way', as Julia Gillard said, but really was the fault of bad governments
in NSW and Queensland. Do what extent do you take some responsibility as a senior minister in a
government that your own Prime Minister said had 'lost its way'? Why for example did you never take
Kevin Rudd aside and say to him, listen, this government is not performing well, it's actually
dysfunctional? Why not take some responsibility for your failure to do that?

Stephen Conroy: Ultimately the parliamentary party did take responsibility for it, and we made a
change and we put Julia Gillard in as our Prime Minister. So the parliamentary party did take
responsibility. The issues around the problems with the government, I think Julia has identified
publically, she's talked about wanting to resolve the mining tax issue, she talked about wanting to
resolve asylum seekers, she talked about wanting to resolve the climate change issue that had
bedevilled us for many, many months. So those issues have been clearly identified by the Prime
Minister, clearly put on the table, and will continue to be part of an ongoing negotiation and
discussion with the minor parties and the broader Australian public at large, as Julia's indicated
with climate change.

Peter Van Onselen: Can I ask you about one of the consequences of the election result, which is the
Labor alliance with the Greens? One of the reasons that Kevin Rudd had to go we were told was
because he didn't consult. Were you consulted about the decision to go into an alliance with the
Greens? And either way, what do you think of it?

Stephen Conroy: I think what it showed was that we were able to deliver stability. I was regularly
talking with Julia and Wayne over the last two weeks, and I'm able to say that that alliance has my
full support.

Peter Van Onselen: But were you consulted about the alliance specifically?

Stephen Conroy: I have been in regular contact with Wayne and Julia talking about all of these
issues, talking about parliamentary reform, talking about the Andrew Wilkie situation, talking
about the Green alliance. I've been in conversation with Julia and Wayne, I'm the deputy leader of
the Labor Party in the senate, I'm part of the leadership group of the Labor Party and I've been in
regular contact with Julia and Wayne on these issues, and they have my full support for
demonstrating that the Labor government can deliver a stable and competent government going into
the future.

Paul Kelly: I think that's the precise point, Senator. You are part of the Labor leadership group.
Were you consulted about the Labor/Greens alliance document? And did you endorse that document
before the deal was done?

Stephen Conroy: As I said, I was aware from my discussions with Julia and Wayne that we were moving
in this direction. This was a very fast moving thing, so the final words of the individual document
were taken forward once we were all satisfied with the broad parameters that had been set. So I'd
had discussions with Julia and Wayne about the parameters of this document, but the final
negotiations took place between Wayne, Julia and Bob Brown and his team, and I'm very comfortable
with that process that Julia put in place for dealing with these issues.

Paul Kelly: I'd just like to ask you in a broader sense about the Greens. One of the features of
this election campaign of course is the significant increase in the Green vote, the seat of
Melbourne was taken by the Greens from the Labor Party. How concerned are you about the Greens
eroding the Labor vote in the inner cities? And what can Labor do about this?

Stephen Conroy: I think that's a broader challenge, as you said, Paul. The Greens have clearly been
getting not just a movement towards them on the basis of their policies, but clearly they also
capture at times the protest vote, and particularly the protest vote about Labor and what was
described as a failure on climate change. This is unfortunately and ironically part of a vote that
took place in the senate. The Greens voted against Labor's carbon reduction scheme, so Labor
clearly has a challenge, particularly in inner city seats, to articulate and explain the
differences between the Labor Party and the Greens. We needed to explain that we actually put
forward a CPRS that was voted down by Bob Brown and the Greens. So that is certainly a challenge
for us, and in seats like Grayndler and the seat of Sydney, clearly we have to make sure that our
message in the sustainable population, all of those sorts of arguments which we've started to
address, we need to clearly campaign on them harder.

Paul Kelly: Just on that point, how important is it for Labor to legislate a carbon price in the
coming parliament?

Stephen Conroy: What we said is we'll go through a process. We've now established a process with
the Greens . . .

Paul Kelly: . . . Do you think it'll end in a carbon price?

Stephen Conroy: Julia has made it clear that we have a process that we are going to go through, and
we're going to reach a conclusion at the end of that process. I'm not going to pre-empt the outcome
of that process. We have a clearly now established process, an alliance with the Greens to work
through a range of challenges around issues like a carbon price. But Julia I think has made it
clear on the timing and the process now, so we have a timing and process to go through.

Michael Stutchbury: Senator Conroy, the Greens, a lot of their economic policies would undo a lot
of the economic reforms over the past generation. How concerned should voters, the business
community or even the country Independents be, having gone to the threshold on a Green/Labor
alliance, that over the next three years this will shift Labor's economic policy more to the left?

Stephen Conroy: The Gillard government is very proud of the economic reformist policies of the
Hawke/Keating government. They have laid the foundation for the success of our modern economy.
We're one of only I think two countries in the world that has got through the entire global
financial crisis because of the resilience and strength of the Australian economy. Some credit for
that does need to go to the Howard government who continued some of those reforms. I think
Australians should continue to be very, very proud of the way this economy has performed, and we
will continue to drive forward reforms. One of the things that, Michael, you've continually talked
about in the election campaign is there needs to be microeconomic reform. The structural separation
of Telstra is one of the most significant microeconomic reforms in this country in 20 years. It
will drive productivity. It will enhance small business and you've never written a word about the
productivity improvements that will flow from the structural separation of Telstra. So I think that
there needs to be a recognition that the Rudd government and the Gillard government continue to
drive microeconomic reform, and in this particular instance, unlike the luddites in the Liberal
Party who've opposed the structural separation of Telstra, never a word from you, Michael, about
that, never a word ever . . .

Michael Stutchbury: . . . Just on that . . .

Stephen Conroy: . . . Turning their back on the most significant microeconomic reform in this last
three years, it was supported by the Greens. And it's ironic that even Barnaby Joyce and Fiona Nash
and John Williams from the Nationals were supporting it before the Liberal Party monstered them.
And not a word from Michael Stutchbury in The Australian about the need for this microeconomic
reform.

Peter Van Onselen: Senator Conroy, I'm going to have to interrupt you there, because we have to go
to a commercial break. I know that Michael is champing at the bit to respond, but I'm going to let
him do that in the panel discussion. You'll have to watch that when you're off air. We appreciate
your time being with us this morning on Father's Day on Australian Agenda. Thanks for your company.

Stephen Conroy: Good to be with all of you. Thanks.