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Tuesday, 15 June 2010
Page: 3277


Senator IAN MACDONALD (5:42 PM) —by leave—I move:

That the Senate take note of the report.

The fourth interim report of the Select Committee on the National Broadband Network was tabled out of session and today marks the first day that we are able to comment on that report. As chairman of the committee, first of all I pay regard and express thanks to the committee secretariat for the work it did to produce the report, particularly Mr Stephen Palethorpe who was the secretary during the time of this fourth report, and Ms Fiona Roughley who was a member of the committee. We were particularly fortunate to have Ms Roughley on this secretariat. She is a very talented lawyer and her expertise in the communications area was particularly valuable to the committee. I also want to thank officers of the Parliamentary Library and all the Hansard operators who travelled around the country to support the work of the committee in delivering this report.

The committee looked at a number of issues in this fourth interim report. The committee has been going for quite some time. One of the reasons is that the government keeps changing its mind on the National Broadband Network. Quite clearly the government and the minister had little comprehension of broadcasting, broadband, communications and telecommunications issues, and they have been bumbling through it since they first became the government.

The committee started work looking at iteration 1 of the National Broadband Network. You will recall, Mr Acting Deputy President, that the government found that their initial proposal was as stupid as we all told them it would be. After spending some $20 million on a request for tender process they just cancelled it and started again. Twenty million dollars—the words just flow off my tongue. That is $20 million of taxpayers’ money just wasted, just thrown away. We have just been talking about the money wasted on Labor Party advertisements that the taxpayers are paying for. Money means nothing to the Labor Party. Most of them, with respect—they are all lovely people, I have to say—have not had any experience in business in their life. Very few of them have ever worked for themselves or in an area where, if you do not get out and do the work, you do not get paid at the end of the week. Most of them have worked for the unions or for the Labor Party or as staffers for some other politician and they just do not understand the value of money. Sure, go ahead, spend $20 million on a system and then just throw it away. That is why this committee has now issued four interim reports—because the government keeps changing its mind or it cannot come to a conclusion or it brings in legislation that is clearly unworkable and wants to get some help in finding out what is correct.

The committee, in its fourth interim report—and what we thought would be the last—looked at things like the implementation study, which, at the time the hearings were held, had not been released publicly. The committee made some comments about the fact that the government had had the implementation study for more than three months but would not release it to the parliament and to the public. The government paid $25 million of taxpayers’ money to get the implementation study done, but when it was given to them they would not make it available to the people who paid for it—the taxpayers of Australia. The committee had a bit of a look at that. We looked at the exposure draft and made some comments. We looked at the business progress. We looked at some progress on wireless and satellite. We also looked at Tasmania.

We think that the implementation study was done very well by McKinsey-KPMG. It should have been done well—after all, we paid them $25 million for it. I think it was probably worth that money. It should have been made available to everybody, not just to the government. Despite repeated calls for the release of that report, it was not released until 6 May 2010, having been handed to the government several months before that. The implementation study itself made it very clear. The implementation study says that it does not:

  • Evaluate Government’s policy objectives;
  • Evaluate the decision to implement the NBN via the establishment of NBN Co;

and, most importantly:

  • Undertake a cost-benefit analysis of the macro-economic and social benefits that would result from the implementation of a superfast broadband network.

Because the implementation study did not evaluate the merit of the government’s policy objective—because they were told not to—it provides no analysis of whether the NBN is good policy for Australia. It simply does not address the fact of whether or not the NBN should even proceed. The implementation study made it clear it was not a cost-benefit analysis. For all of those reasons and several others, the committee’s first recommendation was that the government should abandon the National Broadband Network project.

The committee made several other recommendations to try to assist the government if they were pig-headed enough to go ahead with a scheme which I think everybody accepts will not be a commercial operation. This report of the committee looked very carefully at a lot of the issues. Mr Rudd’s original comments were that this was going to be done in partnership with private enterprise, that there would be private equity and private involvement in the NBN network. Even McKinsey-KPMG acknowledged in the end result that, if it is ever privatised, it will be well down the track—10, 15, even 30 years down the track.

In the couple of minutes left to me tonight I want to highlight that, in speaking to NBN Co. and NBN Co. Tasmania in the last couple of months, the committee kept saying to them, ‘Are you going to start in Tasmania on 1 July?’ ‘Yes, we are.’ ‘Tell us what you are doing. Tell us what prices you are going to charge.’ How can anyone possibly sign up when we do not know what the price is going to be? I only mention this today because Senator Conroy was prattling on about this in question time. Good luck to the Tasmanians—I hope they get something out of it; it should be good for them. We found out at estimates that NBN Co., this commercial operation that Mr Rudd said was going to make a profit, is giving the NBN network to the three retail service providers. The three retail service providers are all doing a great job competing but they do not have to bother in their costings for what they are paying the NBN Co., who is providing the network for them. It is incredible. In estimates we were told that all that the people who were signing up would have to pay is $300 to get the box in. But that is not a payment to NBN Co. for what has been provided by the taxpayers at the cost of millions and millions of dollars. They are getting that all free. Why wouldn’t someone sign up to this in Tasmania when you are getting it for free? I think, as a colleague of mine from Tasmania pointed out, they are connecting up as they go past or they are being connected as they go past, but that does not mean to say they are actually going to buy the service. Senator Conroy’s statistics, as always, are completely dodgy and bodgy, and I think his efforts in question time today demonstrate that.

How can we treat the government with any credibility at all when they keep telling us how successful this is in Tasmania but they are not going to charge the RSPs for the provision of the network? Again, it has all the hallmarks of a third-rate government in trouble, thinking they are living in a third-rate country with a third-rate political and legal system. I think Mr Rudd is about to find out that Australia is not like that. In Australia we expect things to be done properly and we expect them to be done in a way that does not cost the taxpayers money. I seek leave to continue my remarks later.

Leave granted; debate adjourned.