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Thursday, 24 February 2011
Page: 1442


Mr HARTSUYKER (3:54 PM) —I certainly welcome the opportunity to speak on this very important issue. It is all about the efficient and effective allocation of resources. I think that all in this House see the need for improvement in broadband services but the issue is: how do you deliver it? Do you deliver it in a way that is efficient and effective and provides a return on investment for taxpayers’ funds, or do you deliver it in a way which is more about PR stunts and photo opportunities and an endless waste of taxpayers’ money without scrutiny and without reference to economic outcomes?

That is the path that this government is taking us down. If we go back to December 2007, Senator Conroy gave a commitment on spending to ABC’s Lateline program, when he said:

We are committed to spending no more than $4.7 billion.

That was Labor’s commitment on the day we announced the broadband network, and we have never changed it. $4.7 billion was their commitment back in December 2007 and in just two years the price of Labor’s network did not go up 100 per cent, it did not go up 200 per cent—it has gone up 1,000 per per cent. He has broken his promise to the Australian people not to spend more than $4.7 billion. He has broken that tenfold, and he says, ‘Trust me, it will all work out.’ How do we justify that expenditure?

When he had to get on the plane with the former Prime Minister and they were in a bit of jam because they could not find a commercial tenderer, an operator who could make it viable at $4.7 billion, he had to come up with something. They needed to have a major announcement. So they said, ‘Let’s come up with something that is truly spectacular, something that will capture people’s imagination—not something that is financially viable and not something that is actually going to deliver a return on investment,’ and they came up with an announcement that was going to cloak the fact that they could not get a commercial operator to pay $4.7 billion. In the true spirit of Labor, in the true spirit of the nanny state, they blow 10 times that figure in taxpayers’ money purely to provide political cover for their first failed proposal.

It seems incredible that when you look around at what markets are doing, you see a decline in the use of fixed lines. Senator Conroy has for months—in fact for over a year now—been quoting the benefits of South Korea and saying how good the South Korean system is, that it is something we should aspire to. When the Economist Intelligence Unit puts out a report and unfavourably compares Australia’s proposed national broadband network with what is happening in South Korea, he says that that is comparing apples with oranges. So he seeks to compare us with South Korea when it assists his case, and as soon as the very clear differences between the two systems are noted then he seeks to distance himself from that.

It is interesting to note also that in South Korea the use of wireless is outdoing the use of fixed line by two to one. So rather than looking at the overseas experience and gaining from that, looking out in the market and seeing what the trends are, he decides to dictate a solution that involves digging up 10.9 million backyards and providing fibre to the premises, whether that is economically justified or not. It is all about pursuing a political outcome.

How do you achieve that? You do not achieve that through thorough analysis. You do not achieve that through finding the most efficient way to deliver the service. You achieve that through protecting the project from scrutiny. You achieve that by denying the Productivity Commission the opportunity to investigate the matter. You achieve it by denying the Joint Public Works Committee the opportunity to investigate the matter. You do it by denying the opportunity for documents to be sourced under freedom of information. You would expect that they would welcome scrutiny of a project that was allegedly a world leader and was allegedly going to take this country into the 22nd century. You would expect that they would throw open the door, because this project should stand on its own two feet. But instead, they fear scrutiny.


Mr McCormack —What have they got to hide?


Mr HARTSUYKER —Very good, member for Riverina—what do they have to hide? They fear scrutiny, and they fear the fact that the writing is on the wall.

Young consumers today do not want to be plugged into the wall. Young consumers want the flexibility that wireless offers. That is shown in markets around the world, where we see declines in fixed line telephony and declines in the plug-in mentality in favour of getting the internet where you are and when you are. There is the use of mobile devices. We see a massive shift. Any corporate director of operations would be looking at the markets carefully. He would be examining the trend. He would be trying to anticipate what consumers want. But here we have a government that says: ‘I know what’s good for you. I know what the future holds here. We’re going to cause you all to have to plug into the wall.’ Of course there is a use for fibre. It is a very effective medium, but it is just one of a suite of technologies that can deliver the appropriate outcomes for the Australian people.

There is no need to dig up every single backyard in Australia to deliver high-speed broadband. There is no need to spend $50 billion. Rather we should be focusing on fixing up broadband black spots, particularly in regional and rural areas. We should be focusing on the ways in which we can address the shortcomings of the current system. Why is it logical to provide a 100-megabit service throughout Sydney, Melbourne and Brisbane to those properties that are already passed by the HFC network, which can deliver 100 megabits a second through DOCSIS 3 already? Why is it a good use of taxpayers’ money to just ignore that existing technology? Why is it a good government policy to legislate to prevent competition from that alternative medium that could probably provide broadband at a far cheaper cost and could be achieved without having to dig up every backyard in Sydney, Melbourne and Brisbane? It is absolutely outrageous, yet this government continues, protected by that veil of secrecy that is the only thing between them and total embarrassment—that veil of secrecy that is protecting this project from the scrutiny that this project rightly deserves. It is protecting this government.

We have seen in New South Wales a government in place for 16 years, and they ran on a formula of spin. You see the New South Wales people’s reaction. In the long term they are seeing through the spin. Unfortunately, this government is using the same hymn book. They are adopting exactly the same strategies, and they will fall foul of the Australian people because this project does not stack up. This project is buttressed by anticompetitive measures. We have a Competition and Consumer Act 2010 that sees the need for competition as a major way of driving down costs to provide efficient outcomes to consumers. But when we have this project—the largest infrastructure project in Australia—what do they do? They legislate against competition. They legislate against a driver of cheaper prices and better outcomes for consumers. They legislate to buttress their own political position, which is tenuous indeed. It is $50 billion—the largest infrastructure project in the country—and they need to protect it. They cannot champion its virtues; they have to hide it from scrutiny.

We have seen endless promises from this government broken. We have seen endless cases of waste and mismanagement, and this is going to be the greatest case of all. We are going to see not just a few stray billion dollars wasted; we are going to see $50 billion wasted and a huge capital loss that will have to be borne by the taxpayer. We are going to see countless opportunities squandered for alternative infrastructure projects because money is being poured down Senator Conroy’s budgetary black hole. We see in Tasmania that they have had to force people to opt out. With all of the promotion and all of the fanfare over the National Broadband Network, subscriptions were so low they had to encourage people by forcing them into the project. What sort of vendor has to force people to buy their project? The minister responsible is the man who put the con into Conroy. This project is falling apart around him like a leper on a trampoline. It is an absolute disgrace that they are wasting $50 billion of taxpayers’ money. Anybody who believes they are going to achieve an IRR of seven per cent is living in a fool’s paradise. The government knows it. They have to protect the project from scrutiny because they know that when the facts are on the table this project just does not stack up.