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Analysis, Telecommunications - Written by Renai LeMay on Thursday, January 17, 2013 12:22 - 53 Comments
Fact check: The NBN wasn’t a “media stunt”
analysis Free market thinktank the Institute of Public Affairs recently claimed Labor’s flagship National Broadband Network project was drawn up purely as a “media stunt” to drum up publicity for the Government. Unfortunately, this is a factually inaccurate statement, and here’s the evidence to prove it.
Several weeks ago the Institute of Public Affairs published a somewhat controversial article dealing with the failures of Australia’s media when it comes to reporting on the nation’s politicial scene, drawing extensively from a new book penned by journalist James Button, who was for a short time a speechwriter for then-Prime Minister Kevin Rudd in 2009.
In general I like the article. It’s a salient examination of the many failures of the Canberra press gallery when it comes to reporting on politicians and government in general. It’s true that our journalists didn’t dig deep enough into the issues in the Rudd Labor administration, leaving Australians shocked and surprised when Julia Gillard ousted Rudd in 2009. And there is no doubt that the quality of journalism in the press gallery has declined even further since that point. One need only examine the ongoing state of reporting surrounding the National Broadband Network – a critical infrastructure project for Australia’s future – to verify that fact.
In addition, I want to point out that unlike many commentators, I don’t believe the IPA to be the evil, nefarious organisation that many people seem to think it is. Sure, I don’t agree with its views when it comes to human-created climate change, but on other issues, such as online civil liberties and the benefits of small government, I personally feel the IPA is on solid ground. Just look at the way the thinktank is spearheading opposition to the controversial data retention and surveillance reforms being pushed by the Federal Attorney-General’s Department. Most of Delimiter’s readers would doubtless see eye to eye with the IPA on that one.
However, one section of the thinktank’s press criticism article stuck in my craw: The claim that the Rudd administration didn’t do sufficient research before announcing its revised National Broadband Network policy in April 2009. Let’s examine the IPA’s statement again on this issue:
“Because he had no faith in his ministers, Rudd encouraged his personal staff to make policy decisions without input from ministers and their departments. That was how the tragedy of Labor’s ‘pink-batts’ came about. One of the reasons the National Broadband Network, the largest infrastructure project in the country’s history, didn’t have a cost-benefit analysis applied to it was because the policy didn’t go through any sort of regular cabinet process. It was conceived only as an ‘announceable’-a media stunt for the political benefit of the government.”
To test the IPA’s claim on this issue, it’s necessary to go back several years to the period between January and April 2009 and examine what happened with respect to the NBN policy at that stage. Thankfully, with some assistance from a few helpful sources, I’ve been able to compile a pretty solid record of proceedings.
Until January 2009, the Rudd Government’s communications policy was the same one it took to the 2007 Federal Election. In short, the Government was seeking a private sector partner (for example, a major telco like Telstra or Optus) to help it build a nation-wide Fibre to the Node-based broadband network. The project was to be a public/private partnership, with both the government and the private sector chipping in a few billion dollars to get the job done.
What happened next is very well documented.
On January 21 that year, Communications Minister Stephen Conroy realised that this policy was no longer valid. The reason was that a panel of experts the Government had commissioned to examine private sector bids for the project had sent him its report detailing the fact that none of the bids were satisfactory.
Conroy’s response to this troubling issue – which had the potential to blow up into a huge debacle for the Government — was pretty textbook for a Minister in charge of a huge and very public infrastructure project. He got the Prime Minister involved. We know the particulars of this involvement because of a detailed article published by Sydney Morning Herald journalist Peter Hartcher at the time.
Hartcher tells us that, in order to get a slot in Rudd’s busy schedule, Conroy caught several flights with the Prime Minister, the first between Sydney to Melbourne that same day – January 21. As the flight was not long enough to fully discuss the issue, the next day Conroy caught another flight with Rudd, this time from Melbourne to Brisbane.
We also know, this time from a series of responses to Senate Estimates questions which Conroy’s department filed in May 2009 (PDF), that Conroy wasn’t the only one briefing Rudd on the issue around that period. In fact, Rudd was briefed directly by the then-secretary of Conroy’s Department, Patricia Scott, as well as other staff from Conroy’s office.
We don’t know precisely what the NBN panel of experts recommended that the Federal Government do, because its report has not been released publicly, and the extract from that report which has been released (PDF) is quite vague about what the panel recommended. However, we do know, from statements made by Rudd and Conroy that one of the recommendations of the panel was that the Government investigate a Fibre to the Home network, instead of Fibre to the Node.
So what happened next?
According to both Hartcher’s article and Conroy’s responses to the Senate Estimates questions, Rudd convened what has been referred to as the ‘gang of four’ or the ‘Kitchen Cabinet’, as well as Conroy, to determine a solution to the NBN policy issue.
For those unfamiliar with this group, it was composed of Rudd, Treasurer Wayne Swan, then-Deputy PM Julia Gillard and Finance Minister Lindsay Tanner. For the purposes of the NBN, Conroy also had input in these meetings. This group, which initially was of an informal nature, took on a more formal approach during Rudd’s tenure at the top, ending up with the name The Strategic Priorities and Budget Committee of Cabinet.
Conroy’s Senate Estimates responses state: “The Strategic Priorities and Budget Committee of Cabinet considered the NBN policy on a number of occasions between 29 January 2009 and 6 April 2009. The Government considered a range of options before decisions were taken to terminate the National Broadband Network (NBN) Request for Proposals process and to adopt the NBN policy announced on 7 April 2009.”
And in response to the following question from Liberal Senator Nick Minchin: ‘Having received all of this advice, when did the Cabinet subcommittee conclude its deliberations?’ Conroy’s department responded: “6 April 2009.”
We also know quite a bit more about this time frame from Senate Estimates hearings held on 26 May 2009 (PDF), when Conroy and officials from his department, such as then-Secretary Patricia Scott, took questions from Minchin and others. For instance, we know that Conroy’s department was able to draw on information both from within its own operations as well as external advisors – including technical advisors – to supply information to Rudd’s micro-Cabinet.
In addition, that same session also made it clear that the Department of Finance and Deregulation supplied financial advice to assist with the project. It is apparent that the Department of the Treasury was also consulted, due to its role helping fund the NBN by issuing Aussie Infrastructure Bonds, and Scott also mentions the Defence Signals Directorate, the Government’s peak technology security agency.
More information about this period comes from Lindsay Tanner’s new book Politics with Purpose, which has a whole chapter devoted to explaining how Rudd’s ‘gang of four’ worked. Tanner writes: “In January 2009 we met almost continuously for two weeks, in almost every capital city, to craft the second stimulus package. We later moved on to conduct extensive deliberations on the National Broadband Network proposal, and on complex health reform and tax reform proposals.”
The smaller Cabinet process was not without its difficulties, Tanner noted, and it didn’t handle everything. In fact, most decisions were still being made elsewhere in other Cabinet committees. However, the gang of four specialised in “dealing with the most complicated and difficult issues facing the government”.
The gang of four process eventually deteriorated, Tanner adds, but he describes it as “the crystallisation of an underlying reality of all governments”, being that “all decisions of any consequence need to be filtered through a very small group of people – a handful of senior ministers and public servants. Additionally, he says: “All governments have some form of kitchen cabinet arrangements, and all governments sometimes employ flawed decision-making arrangements.”
We also know when the wider NBN proposal was finalised and taken to the wider Cabinet. Both Hartcher and Conroy’s questions on notice agree that the full Cabinet formally considered the NBN proposal on 7 April 2009 – the very same morning that Rudd and Conroy fronted a press conference to announce the plan. However, Hartcher adds that Cabinet met informally the night before at Kirribilli House to brief it on the plan.
Knowing all of this, let’s go back to the IPA’s original claim: That the current NBN project was conceived only as a “media stunt” – something that the Government could announce to show that it was doing something, but not a policy that had been fully researched before it hit the front pages.
With the benefit of hindsight and the documents that I’ve presented today, we can prove this claim false. The current NBN project was conceived as a very necessary reaction to the demonstratable failure of Labor’s initial NBN policy from the 2007 election. Its formation came about through the recommendations of an independent expert panel and it was examined at length, extensively, by the most important ministers in the Rudd Government and with the detailed assistance of key departments, agencies and external advisors. And let’s be under no illusion: The Government did need to move on this topic. The telecommunications industry had several years ago come to a sticking point regarding its future development, which only government intervention could resolve.
Perhaps the wider Cabinet could have been briefed earlier on the project rather than at the last minute, but then one really has to question what benefit would have accrued from getting input from non-technical ministers on this project wholly outside their portfolios. The NBN was considered in great detail by a much smaller group of key decision-makers – with the explicit assistance of the responsible portfolio minister, in this case Communications Minister Stephen Conroy.
The extent to which you believe this process to be invalid depends on to what extent you believe that Rudd’s kitchen cabinet was invalid. Personally, up until the point where it became ineffective (as Tanner mentions it eventually did), I believe Rudd’s process was effective, as Tanner also states. Personally I believe it to be a complete waste of time for a Defence Minister, for example, to spend a great deal of time considering issues in the Communications portfolio, as happens in the “normal” Cabinet processes claimed by the IPA. In fact, there is a question about to what extent such “normal” Cabinet processes have ever really existed, given that Tanner gives examples of where Liberal Prime Minister John Howard followed a similar streamlined process to Rudd at times, and the several long-running Cabinet sub-committees which make decisions in various portfolios and then get them approved by Cabinet as a whole.
I would much rather see complex issues worked through by smaller committees, as they usually are. In this case, given the importance of the NBN as Australia’s largest ever infrastructure project, I believe it was appropriate that Rudd himself and his most important ministers examined the situation personally, with the assistance and guidance of the portfolio minister responsible, Conroy.
Perhaps most importantly, for Australians themselves, the process worked. As I’ve written repeatedly over the past few months, the NBN has stood the test of time and intensive criticism over its lifetime. There’s still a debate about how well it is being implemented, but early signs are that the policy is sound and will deliver massive service delivery improvements to all Australians, as well as restructuring the telecommunications industry and even delivering the government a long-term profit on its financial investment. In addition, the NBN remains overwhelmingly popular with the electorate.
Now that’s good, soundly considered, popular policy.
I must make one further addendum to this article. In its article, the IPA wrote:
“The odds are firmly stacked against the press faithfully fulfilling its role of informing the public and holding governments to account- particularly those of the left. Far too many journalists allow their ideological preferences to cloud their news judgement … we can expect things to get much worse before they get any better, with the ceaseless expansion of the spin-state and the threat of draconian media regulation hanging over the press. There’s only one thing we can be confident of: the press failed us, and they will again.”
Wikipedia describes a ‘think tank’, or ‘policy institute’ as a group that performs research and advocacy concerning important social topics. A significant aspect of this role is publishing that research and advocacy, as the IPA does through books, its own site, and stand-alone blogs such as its stand-alone Freedom Watch blog.
To me, this means that the IPA, by definition, is a part of the press. Among many other things, it is a media outlet. It publishes news, opinion and feature articles, as well as books. In fact, the IPA’s columns can be found in mainstream media outlets such as the ABC and the Sydney Morning Herald. Ironically, in an article regarding the media’s failures, the IPA has given us an example of the kinds of poor media behaviour it was criticising.
With this in mind, I would encourage the IPA to publish a correction to its article claiming that the NBN was originally announced as a “media stunt”. I hope the evidence I have presented today shows that the project as it was formed in early 2009 was well-researched and went through normal government processes to be approved and head towards implementation. This was effective policy; not mere spin. When the mainstream media makes a mistake in an article, it will generally publish a correction, and I hope to see the IPA adhere to this principle as well.
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