The NBN, a litany of failures

Mar 7, 2021

There is no greater example of deception, incompetence, short-sightedness and poor economic management by this government than when it comes to the National Broadband Network.

A litany of failures has plagued the NBN on this government’s watch. The cost blowout—initially promised to be $29 billion, it has now hit $57 billion. Copper is not delivering the minimum speeds as required by law, and the government has purchased enough copper to wrap around Earth. The HFC network, which was supposed to be the great game-changer, is a debacle. And, at the end of all this, this minister admits finally that fibre was better all along. But the piece de resistance came with reports exposing the Liberal Party cover-up for more than seven years when it comes to their failed multi-technology mix.
Australians have always known the original fibre plan would have been far cheaper and faster to roll out and would perform better than what those opposite always claimed. And we know from these reports that the Liberal Party knew that in 2013 and concealed it. They spent seven years falsely claiming their second-rate offering has saved taxpayers $30 billion compared to the original fibre plan. And that $30 billion figure, repeatedly and falsely asserted by Malcolm Turnbull and now by this minister are derived from the cost differential of two so-called rollout scenarios contained in Malcolm’s 2013 NBN strategic review. The first is the review’s claim that the multi-technology mix would cost $41 billion. For a start, it now costs $57 billion. And the second is the claim that Labor’s original fibre rollout would have cost $72 billion. The reports yesterday have destroyed this claim.
Savings worth $850 to $1150 were estimated to be achievable for each existing home attached with fibre …
Now here’s the rub:
If the lowest level of estimated savings was applied to homes in the existing full fibre rollout at the time, peak funding could have been reduced from $73 billion to about $60 billion. Interest rates associated with the debt were estimated at a relatively high 6.9 per cent by 2024. A further $5 billion to $6 billion in savings may then have been achievable due to lower debt overall and with interest rates below 4 per cent.
There’s a truth bomb if there ever was one! Put another way, Liberal shareholder ministers were explicitly advised that fibre could be deployed for between $2,950 and $3,250 per premise, but they kept this figure secret. This is significant. For starters, even based on the government’s own dodgy figures, this adjustment, in conjunction with reduced debt and interest rate adjustments, would take $15 billion to $19 billion off the government’s own figure. Where does this leave the minister’s $30 billion claim? In the dumpster!
There’s only one reason the cost-per-premises figures were kept secret. It had nothing to do with commercial negotiations. It would’ve been a political problem for Malcolm Turnbull had they been in the public domain.
And to add insult to injury, we have $78 million in corporate bonuses being given out during the greatest downturn in the economy since the Great Depression. It is offensive. It is obscene. Let’s remember the Prime Minister effectively sacked the CEO of Australia Post for $20,000 worth of Cartier watches for Australia Post’s highly remunerated executives. Where is the outage for $78 million in corporate bonuses for a project that’s four years behind schedule? It’s gone from $29 billion to $57 billion. It doesn’t work properly. It isn’t delivering minimum speeds as required by law. So where does this government stand?
When this came out—and it only came out because we had an answer to a question that was 47 days overdue, thanks to the minister—he went on radio in the morning. He was very embarrassed. He said, ‘It’s a matter for the board.’ A couple of hours later, the headline was ‘Minister unfazed by $77 million in NBN Co bonuses’. Then he came into question time and blamed Labor for the bonuses. Despite the fact that the Liberals have been in government for seven years, that’s their big defence. By the evening, The Financial Review was reporting that he had taken this wet lettuce to NBN Co and said, ‘No more bonuses.’
Australia now ranks 61st in the world for fixed line broadband. We have a multitechnology mix that has blown out from $29 billion to $57 billion. It costs more to operate, it generates less revenue and it’s more exposed to 5G competition. We had the minister at the end of last year declare: ‘Mission accomplished. The NBN is finished.’ This was met with derision across Australia.
When it comes to ensuring that Australians have the best available broadband, yhat we have an economy set up for the future, all of this was based on a lie. In 2013, Malcolm Turnbull and Tony Abbott said their second-rate version of the NBN would be delivered for $29 billion. Let’s look at the cost blowouts. It blew out to $41 billion in 2014, $49 billion in 2015 and $51 billion in 2018 and, by 2020, it had surged to $57 billion And we’ve got copper failing to deliver minimum speeds. It’s 2021—five years on from the designated completion date that these people said they’d have it done by—and these minimum speeds are still not being delivered over the copper NBN network, and that’s to some 238,000 premises around Australia.
This same party has used taxpayer money to buy more than 49,000 kilometres of new copper for the NBN. It is no surprise that Australians understand—not only as consumers but as small businesses, and not only for themselves—the short-sightedness of this government when it comes to the great cover-up that has put Australia backwards. They know exactly where this concealment lies.

This is an edited version of an article first published on the Parliament’s website – here.

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