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Transcript of interview with Alan Jones: 2GB, Sydney: 28 August 2013: Garden Island, NBN



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Transcript

The Hon Malcolm Turnbull MP Shadow Minister for Communications and Broadband

Wednesday 28 August 2013

2GB interview with Alan Jones

Subjects: Garden Island, NBN

EO&E...........................................................................................................................................

ALAN JONES: Malcolm Turnbull good morning. MALCOLM TURNBULL: Good morning. JONES: What do you make of this? TURNBULL: Well the Garden Island announcement is just a desperate attempt by Kevin Rudd who’s concerned he’s going to lose his seat in Brisbane. He’s just trying to curry favour in Brisbane with this proposal. What you said is quite right. This idea of abandoning Garden Island and moving the navy base into the north was rejected in the Defence White Paper released only months ago for reasons of cost and I have to say that the contacts I have spoken to in the Defence Force have said that $6 billion cost is probably conservative - JONES: Optimistic? TURNBULL: Very optimistic. So it’s just a classic case - JONES: Brisbane doesn’t even have a deep water port. TURNBULL: Well that’s right Alan. And whether it’s a good idea or a bad idea, the fact is that what Australians are sick of, is this Government on the run. Government by press release. There was a process, there was a Defence White Paper. If you are going to say three and a half months later that that was wrong, then you are going to need to provide a full set of costings and a whole explanation and analysis. But all Rudd does is get up and give a

speech. Why? Because it is all about politics. I mean, look, I was in the heart of his electorate on Sunday with our candidate, Dr Bill Glasson who is one of Australia’s leading ophthalmologists. He and his wife Claire are both outstanding doctors. I was there in the electorate and look, I think it is truly climbing Mount Everest to defeat Kevin Rudd in Griffith, but I have to say the warmth of the reception that Bill Glasson and his wife Claire had when we were there and the very lukewarm support for Kevin Rudd was very, very striking. So I think Rudd is desperate, and you would not know what he would say between now and September 7. JONES: Well I have to say in relation to Bill Glasson, he actually puts Malcolm Turnbull into the Second XI. Because I was driving down New South Head Road and at least on some polls I saw two Malcolm Turnbull posters. When I went into Bill Glasson’s electorate, it was saturated with campaign posters. Everyone knows who he is. I saw two posters of Kevin Rudd and people that I spoke to said he can’t get anyone to work for him in the electorate. TURNBULL: Yeah I don’t know whether that’s right - you know, the second bit. I didn’t hear that. But what I did notice was that we spent about an hour, an hour and a half, at that Bulimba Festival - there must have been about 30,000 people there at the time, it was just packed. We obviously didn’t meet them all. But there was just one group that said, one group of three or four people, who said they were supporting Kevin Rudd. And they didn’t say it with a great deal of enthusiasm. Now I’m sure a great many of those people will vote for Kevin Rudd, I’ve got no doubt about that. But what was interesting is that they weren’t owning up to it. They weren’t saying it with any enthusiasm. The most disappointed people I meet, the most unhappy people I meet about Labor, are not our side, the Liberal voters. Because they didn’t have very high expectations for the Labor Government in the first place. But it is the old rusted on Labor voters. Now I think many of them will vote Labor nonetheless. They’ll grit their teeth and hold their nose and do it. But they are very disappointed by Labor’s dismal performance in Government. JONES: The thing here on most issues - and I’ll come to broadband again but broadband is most probably the metaphor of all of this but this is another metaphor now, Garden Island. There’s no homework done. The Defence analyst Andrew Davies said yesterday there’s a reason the navy is in Garden Island and it’s called geography - a deep water harbour with a low tidal range makes it, quote, ‘ideal for most naval operations’. TURNBULL: Well that’s right. There’s also that huge graving dock. One of the naïve things when people talk about Garden Island is that they say, oh well there is this big chunk of real estate close to the city right on the water. It must be worth many billions of dollars. But when you actually extract from that the public space - you know, the open space, the woodland on the point which was originally Garden Island - and then you take out of that all the heritage buildings. And then you say, well you surely wouldn’t be taking out the graving dock which is the only dry dock in Australia that’s capable of servicing all of our ships and of course has got a big ship repair business going anyway. When you actually take that out of it and then you say there’s not a lot of land left after all of that and of course much of that land that is left is going to have to be decontaminated because you can imagine how much lead and asbestos and chemicals and so forth have been used there over 100 years or so of it being a dock yard. So the idea that there’s some real estate bonanza there I think is very naïve. This is the problem with the Labor Party and this is why if they were re-elected you would be heading towards $100 billion bill for the NBN, probably 20 years to complete it because they just don’t do their homework. They have so little respect for the public that they see the public as

mugs who they can just gull with a press release, with a glib announcement, something that sounds good and they don’t actually care whether it stands up to scrutiny as long as it’s good enough to get them through 24 hours and then they’ll come up with another thing.

JONES: That’s right, that’s right. How would you come up with the massive engineering force available in Sydney, how would you duplicate that anywhere else in the country?

TURNBULL:

Well with great difficulty Alan. That’s the reason why the base is there. I’m not simply saying this because I’m the Member for Wentworth but I am genuinely appalled by the lack of homework, by the lack of any systematic analysis that the Labor Party has had on all of these issues. The NBN is the classic example.

JONES:

I’ll come to the NBN, I just want to ask you one question here because you came into politics from the world of finance, that was your background, now the battler out there in struggle street says well look I thought when Howard left office there was a gross debt of about $58 billion but the net position was in the black, $44 billion. And now we’ve had Rudd, Gillard and Rudd and now under the second Rudd government they’ve added about $1.5 billion a week to the gross debt and so now that’s the net debt now at $184 billion. Out there they can’t get their heads around this. You’re going to be in government, how the hell do you retire this debt?

TURNBULL:

Well you can only retire it by running surpluses. The first thing you’ve got to do is stop adding to it. That’s the first thing. If you’re in a hole stop digging. Get the budget into balance and over time pay it back. It is not going to be quick because we don’t have any big assets to sell, we don’t have a Telstra to sell. You’d have to pay somebody to take the NBN away so I think it will come about -

JONES:

So you’re going to have to increase productivity aren’t you? You’re going to have to grow the cake.

TURNBULL:

And Alan you’ve put your finger on the key point. Growing the cake is the key thing because if you can stop adding to the debt and chip away at it with budget surpluses and at the same time grow the economy then that debt which is either stable or shrinking becomes a much smaller percentage of the overall economy. You know it’s a bit like borrowing a couple of hundred thousand dollars to buy an apartment when your income is X and then in ten years’ time you may still owe that $200,000 but your income is three X. Well it is much more affordable, it is a much smaller percentage of your overall income.

JONES:

Correct. Just coming to this thing that you’re trying to grapple with and well done by the way on that front. You’ve constantly said this broadband if you go the Labor route could cost $94 billion or a lot more. Just in laymen’s language I think the strongest point you make is that the gee whiz, I think you called it the other day, the gee whiz electronics is not what the cost is about. You’re saying it’s because they want to build this thing to the home rather than into the side of the street so they’ve got to dig up the streets, dig up the gardens, drill holes in the wall, make appointments I think you’re words to install electronic kits in houses and flats and townhouses. You wouldn’t be doing that would you?

TURNBULL:

Well no we wouldn’t. We’d do it where it was cost effective. I mean Alan I believe in being absolutely straight and transparent about this, there is no doubt that fibre optic technology gives you the potential for the highest speeds but the question is are those speeds necessary, are they valuable, is there anything you can do with them that you can’t do with a smaller pipe as it were? And the answer to that is -

JONES:

And the smaller pipe is the copper wire?

TURNBULL:

Correct, that’s exactly right. Now the problem with the Labor Party approach is that they specified a particular technology in 2008 and it has been in large measure superseded. Now I’m not suggesting it doesn’t remain, if you like, the ultimate solution, but what’s happened in the interim - and Jennifer Hewitt has a very good piece about this in the Financial Review today - what’s happened in the interim is the other technologies using the last few hundred metres of copper have got better and better and better so you’re now at a point where if you are 400m, say, four or five hundred from one of these nodes, under the technology we are proposing you will be able to get 100 megabits per second.

JONES:

Just explain that because it confuses people. The node you’re basically talking about the street corner and your house is 400m away.

TURNBULL:

Yes, let me explain. If you wander down your street and you will see here and there one of those telecom pillars, Telstra pillars, normally they’re cylindrical grey shape or sometimes they’re like a little box. And that is where the big pipes come in from the exchange and then lots of smaller copper lines go out to all the houses. It’s at those points where you install some new electronics and you hook into that last four or five or two or one hundred metres of copper and what you do there is you save all of that expense of that last section --

JONES:

That’s the digging up of the streets and of the front garden and the drilling of the holes in your house and all the rest of it.

TURNBULL:

Alan that is anything between 75 per cent to 80 per cent of the cost of the project and the point is that there is very little additional advantage or value or utility that comes from doing that given the improvements in technology.

JONES:

So you would deliver these speeds, appropriate speeds, over copper. So on the one hand, yes you’re saying the technology is fine, yes we do need better broadband speeds but you don’t have to take everything right into the house. Take it to the corner of the street then we’ll use copper to get it into the house and we’ll still deliver appropriate speeds over copper.

TURNBULL:

To give you an idea, we have said, and the Labor party attacks us about this. We’ve said by 2016 no-one will have access to less than 25 megabits per second. Most people will have access to a lot more than that. But at 25 megabits per second that would enable you to stream four high definition video channels at the same time. Now I imagine there are some people who might want to watch five high definition channels at the same time. I can honestly say I’m not one of them.

JONES:

Not me either!

TURNBULL:

It’s a lot of bandwidth! You’ve got to concede it’s a lot of bandwidth.

JONES:

Can I just ask you about the dishonesty? Look, you hate talking about this, your opponent Anthony Albanese - he’s the minister - he’s travelling around the country, he’s got a big orange button and he presses it ostentatiously whenever he officially ‘switches on’ his words, ‘switches on’ the NBN in a new area. And he’s pushed this big orange button to ‘switch on’ in his words, the NBN. In Mackay, in Cairns, yesterday in Kiama. But it’s an untruth isn’t it? The switch on is simply when all the design and construction and commissioning and quality assurance activities are completed, there is no broadband - we’re not switching on anything!

TURNBULL:

Well, that’s exactly right. The NBN has been full of dishonest statistics. In the Telecoms world there are two terms, one is how many premises have you got connected. How many premises are sending you a cheque every month as it were? And the then other one is how many premises have you passed with your cable and therefore are in a position to connect if the customer rings up and says ‘I’d like a connection’ and you send someone around to hook

him up. These guys claim to have passed premises which they cannot connect. At the moment they’ve got a third of the 180,000 premises they claim to have passed this is after four years I might add - they cannot connect even if the customer wants it. They have not worked out how to connect people in apartment buildings, they have not worked out how to connect people in office buildings. I mean a good example is Townsville. I was up there the other day with our member Ewan Jones who is an outstanding character I mean really big personality there in the seat of Herbert. They run the NBN cable through the downtown of Townsville and the Chamber of Commerce told me 95 per cent of the premises cannot get a connection. So these guys frankly have embarked on a project that I say it could take twenty years - who knows?

JONES:

And the cost, cost, cost!

TURNBULL:

They don’t know how much it will cost…

JONES:

No, and then you’re arguing and this is the critical surely that the NBN you’re saying is running almost three times over budget and almost five years late and that they have a corporate plan for the NBN and that they won’t release it. Why?

TURNBULL:

Well you don’t have to be you know Inspector Clouseau to work out why they don’t release it… the

JONES:

[Laughs] But how would you have a listed company on the stock exchange, you would be saying we want your business plan or you will be suspended.

TURNBULL:

Well that’s exactly right. What happened is they had a corporate plan out there which is clearly wrong and the company has done a revision of it which they gave the Minister we believe several months ago. And the Minister has refused to release it. Now if this was a listed company in these circumstances the stock exchange would suspend the listing and they would say to the company until such time as the market is fully informed your shares cannot trade.

JONES:

Correct.

TURNBULL:

Here we are…

JONES:

Until the market is fully informed.

TURNBULL:

If you assume Alan that if the shareholders of NBN Co are the voters of Australia, and I think that’s the best analogy, these guys are asking us to go and vote on the board of directors of the shareholders meeting without giving us the accounts. Now how ridiculous is that? That’s what they’re doing.

JONES:

They are asking us to elect them but this vital document is being withheld.

TURNBULL:

Exactly. They’ve refused to release the board of directors’ latest appraisal of the prospects and performance of the company. Now I’m not saying that assessment is correct I haven’t seen it but it is, I’m sure, it paints a much more sober picture than previous reports that have been implanted...

JONES:

Absolutely. We know that contractors are going broke - which they are. You’re saying that revenue is only about $350,000 a week and that there is a cash drought and that NBN are going to have to borrow more money. The rollout is painfully slow, 98% of it is still yet to happen. I mean this is a disaster surely?

TURNBULL:

It’s the most mismanaged project I’ve ever seen in my life. I’ve never seen anything as mismanaged as this and the scale of it is breathtaking. Tens of billions of dollars have been wasted are in the process of being wasted and I can say to you that we’ve estimated that this project will cost $94 billion to complete but we have been very fair and in fact very generous - conservative if you like - in terms of our appraisal of that. A lot of people, I think can quite reasonably say, it will cost a lot more and take decades. I mean the head of SwissCom, which is the Swiss telecom company - Switzerland is a smaller company than Australia and they’re not known for their exaggeration and rhetorical flamboyance - he said that to run fibre to the premise throughout Switzerland would take 30 years which they are using the approach we’re talking about. The approach I’m describing Alan which is simply using whichever technology does the job quickly and cost effectively and quickly is the approach which all the other telcos in the developed world are undertaking nowadays, because it makes sense. I mean the Labor Party is disconnected from reality. At no time did they ever ask the fundamental question: what is it we are trying to achieve? Now the answer to that would be we want everyone to have very fast broadband. The next question would be: what is the fastest, most cost effective and most affordable way to do that? Let’s look at the options and weigh them up. They never did that either. They went for the most expensive, the most

laborious technology option without considering any of the alternatives and they did so without any reasonable basis for knowing how much it would cost or how long it would take.

JONES:

No economic modelling.

TURNBULL:

Completely irresponsible.

JONES:

No economic modelling. Now you’ve got the chief executive, Quigley, has quit months after signing a new five year contract. You’ve got the responsible minister, Conroy, has resigned. Two years ago we were told the rollout would be 6,800 a day. Now it’s 200. Goodness me. I mean this alone is dismissal stuff.

TURNBULL:

Well absolutely. It is one of the great - you cannot image a government writing a bigger blank cheque. You cannot imagine a project that has been more mismanaged. You know there is no country in the world undertaking a broadband rollout in the way this Labor Government has done. I mean if you believe that Stephen Conroy and Julia Gillard and Kevin Rudd have the right approach there it means that every other developed country in the world is run by idiots.

JONES:

Good on you. Good on you good to talk to you.

[ENDS]

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