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Transcript of joint press conference: 20 December 2010: Sydney: National Broadband Network; border protection



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LEADER OF THE OPPOSITION THE HON. TONY ABBOTT MHR FEDERAL MEMBER FOR WARRINGAH

20 December 2010

TRANSCRIPT OF THE HON. TONY ABBOTT MHR JOINT PRESS CONFERENCE WITH THE HON. MALCOLM TURNBULL, SHADOW MINISTER FOR COMMUNICATIONS AND BROADBAND SYDNEY

Subjects: National Broadband Network; border protection.

E&OE……………………….………………………………………………………………………………..

TONY ABBOTT:

I’m pleased to be here with Malcolm Turnbull. Malcolm as you know is the Shadow Minister for Communications and I’ll ask Malcolm to say a few words in a moment but let me just say by way of introduction that there is absolutely nothing in the document which the Government has released today that persuades the Coalition that there really is a case for going ahead with a $50 billion plus investment in what I have previously called the nationalised broadband network, but which probably should be called the nationalised broadcasting network given the information that we now have. It’s pretty obvious that the main usage for the NBN is going to be internet based television, video entertainment and gaming. Now, as far as the Coalition is concerned there’s nothing wrong with any of this but given all of the infrastructure needs facing Australia - roads, railways, ports, health, education, let alone the problems with voice telephony - it’s far from clear that this really is a sensible investment.

If you look at the documents you see that only 1.7 million households are going to be passed by 2013. Optus and Telstra already pass more households than this with their existing cables that are capable of 100 megabits. If you look at the cost their 12 megabit for $58 a month is comparable to what is already available. If you look 10 years ahead only something like one third of households are going to be using applications that require 100 megabit speeds and finally there doesn’t appear to be any provision in the documents released today for the continued provision of voice only telephony for people who don’t want more sophisticated services, such as pensioners.

Finally, I just want to stress what has been the fundamental Coalition position all along, that a massive infrastructure investment of this kind should not be made without a proper cost-benefit analysis. We’ve been calling all along for the National Broadband Network to be submitted to full cost-benefit analysis by the Productivity Commission. The Government still does not trust its case for that kind of scrutiny. So this remains just as bad an investment for our country today as it was yesterday. Malcolm.

MALCOLM TURNBULL:

Thank you, Tony. Look, this project is already blowing out. They haven’t even started construction on any large scale and the taxpayer’s contribution has gone from $26 billion as at May estimated by Senator Conroy to $27.5 billion. It is going to be burning cash well into the 2020s. This is a monstrously expensive

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investment, the largest infrastructure investment in our country. It’s supposed to deliver universal and affordable broadband and yet the broadband price that they’ve talked about today, as Tony said, is comparable, it’s certainly no cheaper than many comparable prices for 12 megabits per second broadband, ADSL2+, often faster than that, than those prices today. So, this is no nirvana of cheaper broadband for Australians.

There is no evidence in this document that there is requirement for these sort of 100 megabits per second speeds in the household sector and indeed most users of the network for many, many years are estimated to be using speeds much lower than that. So you really have to ask what is the point of this whole exercise.

The other point that I think is important to stress is this. We know in the Coalition that not all Australians have access to fast broadband. There are areas in rural and regional Australia which are under serviced. Had we been elected in 2007 all of those areas would have fast broadband now, delivered through the OPEL Plan which we took to the 2007 election and which the Labor Party cancelled. There are areas in the cities which for historic reasons do not have access to fast broadband. Those black spots can be rectified quickly within a year or two. Many Australians if not most Australians with inadequate services will have to wait more than a decade to get adequate broadband service under this plan. So, this is massively over-capitalised.

It’s going to be too slow in terms of rectifying service inadequacies around Australia and above all, as we have been saying consistently, we are all committed to universal and affordable broadband but a responsible nation and a responsible government and a responsible parliament surely, having committed itself to that objective, would then make sure the Productivity Commission did a careful analysis to work out the most cost effective way of getting there. The Government refuses to do that because they know that this plan simply won’t stack up.

TONY ABBOTT:

Ok, any questions?

QUESTION:

You mentioned the money should be better spent in hospitals, in health. Many technological experts say that with this network it will revolutionise the way that the education sector and the hospital sector will be able to deliver health. You disagree?

TONY ABBOTT:

Well, Malcolm might add something to this. But there is hardly a school and a hospital in our country which is not already connected up to fibre. This is not about connecting up schools and hospitals. They are already connected. This is about connecting up every household. Yet plainly as this study indicates households won’t be using the speeds envisaged by this new network to anything like, well it’s about one third will be using these speeds, even in 10 years time.

MALCOLM TURNBULL:

Absolutely and that really is the key point. The Government has been unable to point to the applications at the household level, which is where the big dollars are being spent, which will require this sort of speed. Where you’ve got a national network, it’s a network of networks over a variety of technologies at the moment. Yes, there are inadequacies. Surely we should rectify those inadequacies and then see how demand develops, see how technology develops. I mean, if you look at the numbers in this business plan and I might say this is not really a business plan. This has just got summary financials. The business plan was 400 pages, this is 160, so this is just a summary. But it does assume that there are going to be very solid cash flows in 2040, 2040. You know, you’re going to have to wait decades for this business to start throwing off serious cash and of course speculating 30 years, I mean it is just speculation.

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I mean, the big mistake the Government is making here is that they are confusing the means with the end. The end, the objective is universal and affordable broadband. Fibre to the home is one means you can put up, but it is only one option. It is certainly the most expensive and their failure to look at other options, less expensive ones, more cost effective ones, means that there are tens of billions of dollars which will not be spent on better public transport, better roads, better schools, better hospitals.

QUESTION:

You mentioned there are ways with which you can patch up the network at the moment to make it viable and then see where technology goes. Isn’t this plan future-proofing basically where technology goes by then having a network in place that will adapt with technology as opposed to having technology and then just playing catch-up [inaudible]?

MALCOLM TURNBULL:

Well, the best way to build infrastructure is not on the basis of ‘build it and they will come’ but ‘build it as they come’, build it in response to demand. Because you run the great risk, and there have been many examples of this, of infrastructure being built, including telecommunications infrastructure, where the demand has simply not materialised and of course, you know, billions of dollars have been lost.

I mean, if you look at what is driving the use of the internet and e-commerce for example, at the moment there’s a lot of controversy about online shopping and its impact on bricks and mortar retailing in Australia, what is driving that is wireless is the fact that everybody has got, well not everybody has got but increasingly very large percentage of the population have got wireless enabled devices, you know, iPads, iPhones, mobile devices of different kinds that enable them to connect to the internet and to do their commercial transactions. So, nobody would have predicted that 20 years ago.

So, to build a piece of infrastructure, technological infrastructure today on the basis that you think you know what is going to happen in 30 years time, you are really having yourself on and there is a very real risk that this massive investment will turn out to be a glorious white elephant, another monument to Labor folly. Far better to get the network up to the speed of the best right across our network, get it up to the best speeds that we have at the moment. You know, as Tony said this NBN cannot function viably without eliminating competition. They have entered into, and with the support of the Independents have got the parliament’s agreement to an anti-competitive agreement with Telstra that prevents it from using its HFC, its pay-TV cable, from carrying broadband. I mean, this is an extraordinary exercise in government re-entering the telecommunications sector in a massive monopoly. Over-capitalised, unanalysed, no cost-benefit analysis and with benefits to the overall community that are very, very hard to identify.

QUESTION:

Mr Abbott, you mentioned that the majority of households will be using the NBN for video or television. How do you draw that conclusion and what is wrong with that?

TONY ABBOTT:

Well, because that is what the business case says.

QUESTION:

And what’s wrong with that?

TONY ABBOTT:

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Well, there’s nothing wrong with that in one sense. The question is should the taxpayer be investing $50 billion in that when there are so many other competing needs - roads, railways, ports, health, education and as I said the mobile phone system which still drops out all too frequently. Now, I want to stress that we are not against using the internet for all these things but do we really want to invest $50 billion of hard-earned taxpayers’ money in what is essentially a video entertainment system.

MALCOLM TURNBULL:

Can I just add to that. The applications that people talk about in terms of productivity, you know, business applications or e-health applications overwhelmingly do not use a lot of bandwidth. The big demands for bandwidth that we’ve been seeing across the internet over recent years are being driven by video, as Tony said. Now, the fact is that there are plenty of internet video services, Fetchtv is one that’s recently in the Australian market, which are operating over the existing network and don’t need anything. You don’t need anything like 100 megs to have IPTV or Fetchtv or Apple TV and Netflix when they arrive, all those things are all doable. But when you look at this and you see, you know, their whole business edifice is built on more and more and more and more demand for interactive gaming and video content and so neither of us have got any problem with that, people want to sit at home and watch lots of movies that’s their choice, it’s a free country. But should the taxpayer be spending $50 billion to subsidise that? Couldn’t we spend that money on a better public transport system just for one example.

TONY ABBOTT:

And this idea that Senator Conroy was on about today that you don’t have to worry about better roads because people will be telecommuting, I mean this idea that you fix every problem by putting an ‘e’ in front of it is just bizarre.

QUESTION:

Ms Gillard has said that taxpayers’ investment will be returned with interest, I think her words were. You obviously don’t have much faith in that?

TONY ABBOTT:

Well, I just think that this is a Government which has proven again and again that it’s much better at wasting money than at investing money and I just think that a Government with the track record of this one, whether it be roof bats, whether it be overpriced school halls, is hardly likely to produce a Triple A rated investment here.

QUESTION:

Andrew Wilkie, Mr Abbott, insists you did make an offer to him of increasing Australia’s humanitarian refugee intake. Did you?

TONY ABBOTT:

We had a very wide-ranging discussion, as you’d expect, but what I proposed was very much in line with the commitment that the Coalition took to the election which was for a modest increase in our refugee intake for people who came in through proper channels, not by boat, in conjunction with much stronger border protection policies.

QUESTION:

His memory is faulty on that then?

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TONY ABBOTT:

Well look, you know, he obviously had a different interpretation of what was, as I said, a pretty wide-ranging discussion.

QUESTION:

Can I just ask, in terms of the ACCC, it’s effectively influenced the Government’s NBN business plan. Do you trust the ACCC to be an effective market regulator when it comes to broadband?

TONY ABBOTT:

Look, I have no reason to doubt that the ACCC is doing its job and I do think that it was very important that we had more points of interconnection if we were going to avoid dudding a whole lot of people who’d built a whole of very important infrastructure.

QUESTION:

Can I ask, the business case released today makes it clear that by the time the next election comes around in a few years there’ll be 1.7 million premises in Australia that have access to the National Broadband Network. What will the Coalition do at that point if it wins the next election? Will it just stop that project, you know, will the rest of Australia get access to infrastructure?

TONY ABBOTT:

Well, we will give you our definitive policy on this at the appropriate time. The point we make at the moment is that there is nothing in today’s document which persuades us that this massive investment of taxpayer dollars is justified and it is just wrong to invest this kind of money in a project like this without a full cost-benefit analysis, preferably by the Productivity Commission which the Government is still running away from.

QUESTION:

But Labor’s looking ahead, you know, 30 years in this project. You guys aren’t even looking ahead to the next election to say what will be the policy at that point.

TONY ABBOTT:

Well, what our policy will always be is to respect the taxpayer and the whole problem with this is that it doesn’t respect the taxpayer. I mean, this is a Government which blew $2.5 billion on roof batts, it got if we’re lucky, $8 billion worth of value for $16 billion worth of spending on school halls. We just don’t trust this Government with this kind of investment, particularly given that they’re not prepared to submit it to the Productivity Commission for a proper cost-benefit analysis. Thanks very much.

[ends]