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News, Telecommunications - Written by Renai LeMay on Friday, July 6, 2012 10:54 - 230 Comments
Australia doesn’t need the NBN, says Abbott
news Opposition Leader Tony Abbott has proclaimed that Australia doesn’t “need” the National Broadband Network project and the billions being invested in the initiative would be better spent on “our roads, our rail and our ports” under a Coalition Government.
“I think that federal and state Labor governments have left us with a serious infrastructure deficit,” Abbott told the ACE Regional Radio Network in Victoria yesterday, “and one of the reasons why I’m so hostile to the National Broadband Network is because it’s a $50 billion investment with borrowed money that we don’t need. What we do need is much more money being spent on our roads, our rail and our ports and that’s what will happen under the Coalition.”
Abbott’s comments this week are not the first time the Opposition leader has called for the NBN project to be scrapped and its funding spent instead on transport infrastructure. “That $50 billion could fully fund the construction of the Brisbane rail loop, for instance, the duplication of the Pacific Highway, the Melbourne to Brisbane inland rail link, the extension of the M4 to Strathfield, and 20 major new teaching hospitals as well as the $6 billion that the Coalition has proposed to spend on better broadband,” the Opposition Leader stated in May 2011, referring the unpopular broadband plan his side of politics floated during last year’s Federal Election.
In January 2011, Abbott described the NBN as “a luxury that Australia cannot now afford”, calling at the time for the NBN’s capital funding to be re-allocated towards the Queensland reconstruction effort following the state’s disastrous flooding, as well as towards similar problems in Victora.
However, the Opposition Leader’s comments appear to run contrary to comments recently made by the member of his cabinet responsible for broadband policy, Shadow Communications Minister Malcolm Turnbull.
In an interview with the Sydney Morning Herald last week, Turnbull stated that a Coalition Government would proceed with the NBN project. “No, the Coalition will not cancel or roll back the NBN,” he said. “The NBN will continue to roll out but we will do so in a cost-effective manner in particular in built-up areas.” The comments echo comments Turnbull made earlier last month, when the Liberal MP publicly gave what he described as a “solemn undertaking” to the Australian people that a Coalition Government would “complete the job of NBN Co”, instead of ripping up the network or abandoning Labor’s NBN policy altogether.
At the time, the comments appear to represent something of a backflip for the Coalition. When Turnbull was appointed to the role in September 2010, the ABC reported that Opposition Leader Tony Abbott had ordered the Member for Wentworth to “demolish” the NBN. At the time, Abbott said he believed the NBN would “turn out to be a white elephant on a massive scale … school halls on steroids”.
However, Abbott’s comments this week will re-awaken fears that the Coalition would scrap the NBN project wholesale if it was elected.
Coalition telecommunications policy broadly focuses on fibre to the node-style broadband, which only requires rolling out fibre to neighbourhood cabinets and using Telstra’s copper network for the rest of the distance to residences and business premises. In comparison, Labor’s NBN policy would see fibre rolled out all the way to premises, in a rollout style which features dramatically greater speeds (up to 1Gbps, compared with an expected up to 80Mbps) and faster network latency compared with the Coalition’s plan.
In a statement in reaction to Abbott’s comments yesterday, Communications Minister Stephen Conroy said the Coalition’s position on broadband was “one of total confusion”
“The Coalition can’t be trusted when it comes to the NBN or delivering fast broadband to all Australians,” he said. “Only under Labor will all Australians get the National Broadband Network. Only under Labor will all Australians get the benefits of fast, reliable, and affordable broadband. The choice for the Australian people is simple: support Labor and you’ll get the NBN; support the Coalition and you won’t.”
Abbott is also believed to be incorrect in his statement that the NBN’s funding could be re-allocated to be spend on transport or other forms of infrastructure.
Most of the funding for the NBN does not appear in the Federal Government’s budget, as, according to accounting standards, it is not an expense as generally understood, but is actually an investment expected to generate a modest return. That return is currently projected to be between $1.93 billion to $3.92 billion. Conroy pointed this out in May this year following Abbott’s budget reply speech.
“In his budget reply, Mr Abbott also pretends that investing in fast affordable broadband should be replaced by additional spending on roads,” Conroy said at the time. “Mr Abbott clearly doesn’t understand that the NBN is classified by international accounting standards as an equity investment rather than a budget expense. This is consistent with long-standing budget treatment applied by this and previous Australian Governments. The equity investment in the NBN cannot simply be shifted to pay for more roads, unless those roads are being run by a government business making a return.”
This refrain was repeated by Labor MP and Minister for Transport and Infrastructure, Anthony Albanese, during a parliamentary debate on the NBN several weeks ago.
“I note that in my portfolio of infrastructure and transport, I am continually hearing demands from National Party members, federal and state, in particular, but also from some Liberal Party members saying, ‘You should take the money from the NBN and give it to build a road, a rail line or some other project,’” said Albanese. “There is a complete economic illiteracy about the difference between an investment that will bring a return to the government on a commercial basis—that is, the National Broadband Network—and the circumstances of a straight investment in a road project that will not deliver a return but is simply a cost to revenue.”
Right now, the greatest problem of Shadow Communications Minister Malcolm Turnbull is keeping the other senior politicians in his party quiet when it comes to the NBN. Abbott, Joe Hockey, Andrew Robb, Warren Truss … every time these Coalition figures talk about the NBN they put their foot in their mouth.
Turnbull, at least, understands the NBN and is gradually building up an alternative policy to be taken to the next Federal Election about it — and he is doing a much better job than previous Shadow Communications Ministers of keeping the Government honest on the issue. But, as Conroy has noted, the Coalition’s approach to the NBN is currently confused. Hopefully the Shadow Cabinet can come to a consensus on the issue before the next election, as it is one of the issues which cost it votes last time around.
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