Coalition NBN policy goes uncosted

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malcolm-turnbull

Note: This article initially stated that Shadow Communications Minister Malcolm Turnbull had declined to ask the Parliamentary Budget Office to cost the Coalition’s NBN policy. This was untrue: Turnbull did approach the PBO with the policy. Delimiter’s opinion/analysis section on this issue has subsequently been heavily modified.

news The Parliamentary Budget Office has decided the Coalition’s National Broadband Network policy is too complex to formally cost without significant and expensive outside assistance, leaving the veracity of the policy unclear, in the absence of government or private sector examination of it.

Last night on Twitter, Turnbull ridiculed Communications Minister Anthony Albanese for his statement in the pair’s Lateline debate this week that consulting firm KPMG had examined NBN Co’s corporate plan and found that all of its assumptions were “good”. “Don’t believe KPMG approved the NBN business plan, but if they did it raises very big liability issues if Government relied on them,” said Turnbull. “Time to clarify?”

In response to Turnbull’s claim, Simon Banks, director of government relations firm Hawker Britton, which is closely aligned with the Labor Party, asked Turnbull whether the Liberal MP had submitted his broadband plan to the independent Parliamentary Budget Office for costing. The PBO was founded in July last year, and holds responsibility for preparing costings of publicly announced policies on request by authorised members of Parliament.

The role of the PBO is especially important during an election, when many new policies are released. In an effort to provide transparency around the Coalition’s policies, in November 2012 Shadow Treasurer stated that the Coalition would submit all of its policies to the PBO for consideration, with final costings to be released in the last week of the election.

However, Turnbull posted on Twitter: “Not avoiding it. PBO didn’t have or claim to have technical expertise on NBN engineering issues.” In response, Banks posted: “Thank you, @turnbullmalcolm for admitting that there will be no independent PBO costing of NBN Co.”

As a side note, Albanese appears to be correct in that KPMG did examine NBN Co’s initial business plan. A report produced by the firm, along with fellow consulting group McKinsey, was released in May 2010 which closely examined the Government’s approach to the NBN. In general, the report found that the Government’s NBN plan was viable, but also made a number of key recommendations on how it could be improved.

Telecommunications industry worker and commentator Michael Wyres, commented on his blog this morning (we recommend you click here for the full article) that Turnbull was in effect saying he wouldn’t submit the Coalition’s NBN policy to the PBO, because Turnbull believed the PBO didn’t have the ability to evaluate the policy.

“What Turnbull should do is submit it, and let the PBO decide how to handle it,” wrote Wyres. “I’m sure a parliamentary department has the ability to find someone with the ability to make judgements on the policy and its submitted costings. Given the PBO has until thirty days after the election to produce its report on costing for submitted policies, they even have plenty of time to do the work. Frankly, it is just a complete cop out.”

Wyres additionally pointed out that Turnbull had consistently called for the Federal Government to audit the NBN, and had committed the Coalition to a number of examinations of the NBN project as a whole, if it wins power in the upcoming Federal Election. “Turnbull should commit to the same financial standards that he wishes everyone else to commit to,” wrote Wyres. “It certainly appears that what is good for the gander, is not good for the goose.”

However, it subsequently emerged that Turnbull had approached the PBO. Parliamentary Budget Officer Phil Bowen confirmed the Liberal MP had approached the PBO with the policy, but that the PBO had decided the highly technical policy would need significant and expensive outside assistance to examine. Some have argued this afternoon on Twitter, in response to the issue, that Turnbull should have the policy costed by a private sector organisation.

“Our plan has been out for more than 4 months. Nobody has published analysis faulting our assumptions or conclusions,” responded Turnbull.

The news comes as the Coalition continues to come under attack by Labor in general over its refusal to release detailed costings for its policies. In a media release yesterday, Finance Minister Penny Wong pointed out a number of public comments by Shadow Treasurer Joe Hockey in which the Liberal MP confirmed the Coalition had undertaken costings exercises into its policies.

“With less than four weeks to go, it simply isn’t good enough to make Australians wait until the last minute to learn what the Liberals would cut from health and education and infrastructure,” said Wong. “Tony Abbott and Joe Hockey are trying every excuse they can to hide their $70 billion in cuts because they know that if they come clean, Australians would think twice about voting for them.”

“The [pre-election financial outlook] has been released. Their costings are done. There are no more excuses. It is time for Mr Abbott to tell Australians what $70 billion of cuts he plans to make if elected. And he needs to do it now.”

opinion/analysis
Hmm. This is an interesting one. It looks like Turnbull did indeed ask the PBO to cost the Coalition’s NBN policy, but that the PBO, with its meagre resources, avoided the issue as too complex. This isn’t surprising. The two NBN policies we have at the moment are some of the most complex and technical government policies Australia has ever seen. It would indeed require significant work, by technical staff qualified in broadband rollouts, to examine the Coalition’s policy.

Should Turnbull get the policy costed by the private sector, at the Coalition’s own expense? A lot of people probably think the Liberal MP should — after all, if you want to make massive changes to Australia’s largest ever infrastructure project, a project which will see tens of billions of dollars of public money invested, then you had better have a good rationale for that. Personally, I believe that it would be a good thing, and add weight to the Coalition’s NBN case. However, I also don’t believe this is necessary.

Quite a few independent commentators have said that the Coalition’s NBN policy is viable, and it’s certainly massively more detailed than any other Opposition telecommunications policy I’ve ever seen. Turnbull and his team have done their homework here — at least enough to pass initial muster. A format audit of the policy would be nice, but I personally don’t think it’s necessary at this point.

For comparison, I encourage you to examine the FTTN-based NBN policy which Labor, then in Opposition, took to the 2007 election. In no way was it as detailed as the policy the Coalition has now.

Image credit: Office of Malcolm Turnbull

85 COMMENTS

  1. The minor parties need to get their act into gear — clearly they’re not misleading Australians enough at this point.

    Hear hear!

    It’s time ALL Australian political parties adhered to the strictest standards of unethical and misleading behaviour we’ve come to expect of our politicians!

    Down with transparency!

  2. Isn’t the role of PBO to cost policies effect on the budget and fiscal position etc.? I dont think it would be a particularly good use of their time to return a report with a list of $0’s considering the opposition policy is off budget like the current NBN policy. The only numbers treasury (which is where PBO costings ultimately come from) report on the current NBN is existing financial liabilities.

    Oppositions cant enter into financial liabilities from opposition so again, another 0 on the report.

    Anyways Simon Banks has clearly got the spin he wanted out of this already :P

    • Except the fundamental assumptions underpinning the off budget treatment of the FTTN NBN as an investment don’t even stand up to casual scrutiny, let alone a detailed analysis. It can only be off budget if it makes a positive return, but with increased competition and an inferior product you have reduced demand and thus revenue, with powered nodes and copper that needs ongoing maintenance you have increased operating costs. These have a cumulative effect on reducing ROI to the point where it becomes likely that your returns won’t actually be positive. If you’re not making a positive return, not only is that a costly ongoing expense to the government, but the whole build becomes on budget, because it is an expense to the government with no hope of generating a positive return.

      You don’t think a situation like that requires careful scrutiny? You think politicians (any politicians) should be allowed to attain government and halt a crucial and demonstrably beneficial infrastructure project based simply on unverified statements (that even now don’t appear to be based on fact)?

    • @Michael B

      So….NBNCo. have had to have their Business Plan audited….twice. But the Opposition shouldn’t even have their BUILD COSTS audited by the public office charged with doing so because it doesn’t affect the budget??

      Since when did it matter if a policy was on budget or off budget as to whether the figures were reasonable??

      Sorry, that’s just plain weird.

      • NBNco have *not* had their assumptions audited. By anyone. They have had accounts audited to make sure they know how to use a calculator. Thats it. Pointless for the coalition to get a similar audit as they dont currently *have* any accounts to audit. That will happen like it does with any company once their is a detailed corporate plan. Which they need information from Dep of Broadband and NBNco to form.

        PBO never had any role to play in this (something they have now confirmed) as they deal with on-budget effect and effect on the fiscal cycle. Just a bit of spin from labor’s Malcolm Tucker to try and push the “coalition wont do costings” line.

        Every opposition since the dawn of politics takes their time with costings, because the incumbent party can tear it apart, its just the Labs trying to spin their inherent information advantage as incumbents, as a virtue.

          • So not the implementation study?

            I’ve read the implementation study by the same duo and its not bad, but it is pretty high level. A lot has changed since then with how the NBN is being built and some of the conclusions like not requiring a deal with telstra are just laughable.

            The corporate plan and the assumptions in it are influenced by the implementation study but they are far from a carbon copy (wireless network ownership, network topology, same price across all access networks, privatization for starters are all different).

          • @Michael B

            Yes, the implementation study. It’s not a carbon copy….but it’s pretty damn close.

            Wireless network ownership is relatively moot- the wireless network is essentially revenue neutral. Removing it from NBNCo. would only raise prices on that network at a saving of about 6% in CAPEX for NBNCo. Or about $100/premises amortized over the fibre premises.

            Afaik the network topology is the same. Apart from the POIs which weren’t NBNCo’s call.

            Privatisation is irrelevant for coatings of CAPEX and assumptions of growth. Only sale value and ROI AFTER sale.

            I believe the Study gave a number of possibilities for pricing, of which uniform pricing was one. A direct on budget subsidy was preferred for transparency of cost but that was the only reason given afaik.

            You stated no assumptions had been audited. That’s clearly not the case. Most of NBNCo’s assumptions have. A few have not. That is the opposite to the Coalition.

          • The NBN Co Corporate plan is not static it is a moving target, any analysis done is at a point of time, that 2010 plan was made redundant by the 2012-2015 plan released May last year where the costing figures were changed upward and the rollout figures were adjusted downward.

            The rollout figures of that particular plan were made redundant with the revised downward rollout figures released in April this year, there was also an adjustment to what ‘premises passed’ is defined as to ensure the June rollout target scraped in.

            The external report referred to above is therefore redundant also.

            There is a new corporate plan which the NBN Co is in the process of finalising and the Government has a draft copy which will make the 2012-2015 Plan redundant, I bet Labor sit on that before the election if it has too much bad news.

            Apparently any external analysis on a redundant 2010 Labor NBN Co Business plan is still current half way through 2013.

          • @Fibroid

            that 2010 plan was made redundant by the 2012-2015 plan released May last year

            Redundant means no longer applicable. That is not true. ~90% of the assumptions in the 2010 plan carried forward to the 2012 plan. I’d estimate 95% of the assumptions in that one carry through to the 2013 plan.

            You are assuming because some assumptions change the Corporate Plan cannot work at all. That is a false premise. It may change, materially or immaterially, the total passed premises by X date or total revenue/cost by <10%….I'd hardly call that therefore redundant.

            The external report referred to above is therefore redundant also.

            The report tested the assumptions of NBNCo’s CP. if 85% of those assumptions are still true, at least 85% of NBNCo’s Corporate Plan still holds true. It is also dependent on exactly which assumptions have changes as to whether it materially affects the analysis. I think you’ll find, if you read their analysis, the core assumptions:

            1- Revenue base and ARPU assumptions
            2- Passed numbers and therefore takeup by 2016 and 2018
            3- Network topology

            Have not materially changed. Therefore the analysis is still valid.

          • I don’t agree that the assumptions have basically not changed from the 2010 plan, the 2012 Plan changed CAPEX, OPEX and required funding and rollover targets, the April adjustment changed rollover targets downward around 30+%.

            To say any new external analysis done on the NBN rollout with updated figures as at June 2013 would come to the exact same conclusions that were based on the 2010 Business plan is wishful thinking.

            If the new Business plan is released it will have changes to the 2012-2015 Plan , otherwise why would you produce one in 2013 so close to the May release 2012 plan, I wasn’t expecting anything until 2015.

            So what does that end date mean when you produce a NBN Co Corporate plan with the date span 2012-2015 if you are going to produce another one in 2013?

            This new plan when we get to see it will make any external analysis of the 2010 plan even more out of date than they are already.

          • Of course the plan has been tweaked Fibroid, as will MT’s if elected… surely that’s common sense?

            Remember, you initially bagged the corporate plan as meaningless because it was nothing but estimations (strange when something hasn’t started yet and that’s all one has – and from one who wanted a CBA done to bag projections) but none the less that’s what you did?

            Now you bag changes to these ‘meaningless estimations’ as if they were set in stone?

            Seriously, on the one hand you argue any Labor/NBNCo’s changes are bad (always harping on about pre/post 2007) and on the other hand you argue if MT’s plan changes (especially with more FttP) great?

            And then when it suits, the newie appears… /well we won’t know until it’s finished,’ either relating negatively to the NBN or positivity to MT’s plan, (i.e. a twist on the original estimations complaint)…

            My goodness multi-layered, inter-twined contradictions, nice.

            Herein is what is wrong with this entire issue/debate IMO, when some just aren’t sincere and will dismiss common sense, by doing and saying anything, just to push their agenda

            :(

          • Indeed, in “the real world” plans always need adjusting to account for a changing environment, that applies as much to the LBN as it does the NBN.

          • The NBN Co Corporate plan is not static it is a moving target, any analysis done is at a point of time, that 2010 plan was made redundant by the 2012-2015 plan released May last year where the costing figures were changed upward and the rollout figures were adjusted downward.

            No, they aren’t made redudant. You merely need to adjust them account for any changes. For example, anyalsis on core assumptions will not be affected, but anayslis on time to profitibility might. The data retains usefulness, especially if you can use it as a plateform to do a revised review.

            I bet Labor sit on that before the election if it has too much bad news.

            That is, as you would say, “conjecture”.

          • So when do you think they will publish the latest Business plan, and secondly what exactly is the meaning of the 2015 in the 2012-2015 Business plan released only in May last year when they do release a 2013 plan, and thirdly do you think it is ok to still use conclusions made by external consultants based on a plan published in December 2010 three years after it has been superseded twice in 2012 and 2013?

          • First off all, never, ever, ask a triple barrelled question if you actually expect someone to take you seriously. It is very poor form. I will answer each part indivdually before, but next time, if you want to ask someone three questions; ask them three questions.

            So when do you think they will publish the latest Business plan…

            How is that relevant to the current conversation? You said that “I bet Labor sit on that before the election if it has too much bad news.” This is actually a to faceted point that involves the following, indepedent, propositions: a) the plan might be released after the election and b) if it contains bad news.

            Now, your wording implies that B implies A. In other words you think that they might delay the plan because of bad news.

            Ignoring the fact that Labor don’t control when business plans are released, NBNCo does (B does not imply A) now you’re attempting to back me into a corner by suggesting A implies B, in other words, you’re trying to suggest that if the plan is released after the election it must contain bad news, and by extension A iff B.

            Well, just like B does not imply A, A does not imply B. There is no logical relationship between these two statements, so when the plan is released is completely and utterly irrelevant. As such, I am not going to answer it.

            …and secondly what exactly is the meaning of the 2015 in the 2012-2015 Business plan released only in May last year when they do release a 2013 plan…

            The implication here is that a business plan must be followed perfectly and that there are never factors outside a business’ control. This implication is quite frankly preposterous.

            …and thirdly do you think it is ok to still use conclusions made by external consultants based on a plan published in December 2010 three years after it has been superseded twice in 2012 and 2013?

            I’m glad you are no longer using the word redundant. Superseded is a far more precise way to explain what has happened.

            To this I refer to my previous post (with some minor spelling errors corrected), because I feel from this question you have not read it:

            You merely need to adjust them account for any changes. For example, analysis on core assumptions will not be affected, but analysis on time to profitability might. The data retains usefulness, especially if you can use it as a platform to do a revised review.

            From this, my answer is discernibly as “yes, but with caveats”. What those caveats are is again easily discernible.

            So I ask you Fibroid, what was the point of this triple barrelled question? Because unfortunately; I see none, except wasting my time.

          • The implication here is that a business plan must be followed perfectly and that there are never factors outside a business’ control. This implication is quite frankly preposterous.

            Indeed, all companies need to adapt to current conditions or die basically…even under Malcolm NBN Co would still need to adjust settings every so often.

    • Well, The interesting part of the Coalition policy backgrounder is what it doesn’t show. Specifically, the post 2019 cash flows and profit results. All there is is an unquantified statement that there will be operating cash flow post 2021.
      If these figures are actually bad, and given that they aren’t shown it’s a good bet they are horrible, then there would be an on budget impairment expense on the fraudband network.

      These figures would have been prepared as part of the modelling but have been deliberately hidden by MT.

      My guess is that the copper ghetto would burn about $10-15 billion of tax payer money in an impairment expenses or loss on sale, at which point MT would blame labor for “waste” and then fire sale the partially completed FTTN network to Telstra which will be given a soft ACCC rulings to hike prices.

      • The other intereasting part is the coalition plans has not intention to pay back existing NBNco commitment out of revenue, so this will have to go on budget straight away and I haven’t been able to figure out if this figure is included in their overall construction costs potentially adding another couple of billion onto the total.

      • @Lachlan

        ‘My guess is that the copper ghetto would burn about $10-15 billion of tax payer money in an impairment expenses or loss on sale, at which point MT would blame labor for “waste” and then fire sale the partially completed FTTN network to Telstra which will be given a soft ACCC rulings to hike prices.’

        I am glad you qualified all of that with ‘My guess is’, my guess is that none of that will happen.

    • Actually no – it’s not a whole lot of zeroes – the coalition NBN alternative does not meet the requirements for it to be considered an investment. I will quote from http://www.malcolmturnbull.com.au/assets/Broadband.pdf
      * “NBN Co will be required to achieve these objectices while providing a positive after-inflation return on all post-election equity invested by taxpayers”

      Translation: NO return on existing investments, less than bond rate the remaining up to $29.5b

      The coalition broadband policy expects a negative IRR and as such, should be on budget.

  3. I’m not personally even slightly surprised by this, given Mr Turnbull’s backtrack on a CBA post-election if they win.

  4. Give Julian Assange a call and chat to him about these fibs. I’m sure it will be gold to his campaign to be given so much deception to work with…

  5. “You know, I am starting to get tired of the poor and unethical behaviour of our politicians during this election.”

    I give you a salute of respect, if you are only just now starting to get tired of it.

  6. it’s not like any coalition policy’s are costed…

    For a group of people , clambering for an election for the last 3 years, they actually don’t seem to be ready for an election at all.

  7. http://www.twitter.com/renailemay/status/367855946292146176

    “@renailemay: Correction: @TurnbullMalcolm did ask the Parliamentary Budget Office to cost the Coalition’s NBN policy: http://t.co/6qi8oWaKbc

    I have also updated my original article to reflect Turnbull’s most recent tweet on the matter.

    I still believe Turnbull is taking a convenient ‘out’ on this. It’s just now I believe the PBO is taking the easy way out also. Nobody wants a ‘nil-all draw’ on this issue.

  8. Shame the PBO didn’t at least take a “ball park” shot at it with really big confidence bars…

  9. On 14 February 2011 Greenhill Caliburn provided a commercial assessment of the NBNCo 2010 Corporate plan, analysing its key assumptions and potential risks.

    It found that ” key assumptions underlying revenue and cost projections appear to
    be in line with a range of available domestic and international benchmarks, and are consistent
    with the stated policy objectives of the Government with respect to the NBN. Accordingly, we
    believe that the Corporate Plan provides the Government with a reasonable basis upon which
    to make commercial decisions with respect to NBN Co.”

    Specifically, Greenhill Caliburn warned that
    “The principal drivers of NBN’s revenue are up take and ARPU. Rapid up take is important to
    enable the high up-front fixed costs inherent in NBN Co’s business model to be quickly
    spread over a wider subscriber base, while ARPU drives future top-line growth.

    NBN Co is forecasting up take of 56.0% of homes passed by 2015 and 63.4% by the end of
    2020, and ARPU increasing over time driven by increasing usage per customer.”

    Even without adjusting for the nine month delay to the enabling legislation and consequent signing of the Telstra deal, in 2013 we already see 40% takeup, so 56% takeup rates will certainly be surpassed by 2015.

    ARPU on NBN fibre is currently $38 per user, compared to $16 for FTTN, according to Stephen Jenkins this morning.

    If we apply the assumptions behind Turnbull’s bizarre $94 billion claim to his own reheated 2005 Telstra proposal, the $29 billion should be more like $40 billion, compared to the $37.4 billion exposure of the government to the FTTP project.

    With FTTN producing less than half the revenue per user, and competing technologies siphoning some users away, FTTN cannot self-fund. It will require taxpayer bailout. The economics for FTTN on Telstra-owned copper simply do not stack up.

    • Finally, some real figures demonstrating what I’ve been trying to draw attention to since the LNP published their ‘policy’. A Coalition FTTN NBN will be a direct cost to the government, an ongoing liability and a financial dead weight around the country’s neck. For inferior technology that will only arguably be completed marginally faster (if all the LNP assumptions prove true, which is unlikely).

      Renai? This is why I am so fundamentally opposed to FTTN – before you even get into technical or benefits arguments, the plan is fiscally unsound, and will haunt us for decades if not longer.

      Francis Young I could kiss you!

    • @Francis Young

      ‘With FTTN producing less than half the revenue per user,’

      Conjecture.

      ‘ and competing technologies siphoning some users away,’

      Conjecture.

      ‘ FTTN cannot self-fund.’

      Conjecture.

      ‘ It will require taxpayer bailout.’

      Conjecture.

      ‘ The economics for FTTN on Telstra-owned copper simply do not stack up.’

      Conjecture.

      I think that’s BINGO!

        • (I should clarify, a conjecture means “a conclusion drawn from incomplete evidence”. It does not mean “a statement made without included supporting evidence or poor supporting evidence.”)

        • Well, technically, anything about the LBN is also “conjecture” until it’s an actual business plan (despite Fibroid being so sure about it all!).

          • So using your rational about ‘technically’ the Labor NBN rollout was all conjecture until we got the first NBN Co Business plan which was four months AFTER the 2010 election.

          • Of course, until there is a solid business base to a plan, it’s all conjecture.

      • @Fibroid

        ‘With FTTN producing less than half the revenue per user,’

        Conjecture.

        Nope. Turnbull himself said FTTN was based on a “much more reasonable” $16 wholesale charge for his plan.

        ‘ and competing technologies siphoning some users away,’

        Conjecture.

        Nope. Turnbull himself admitted competing networks would affect FTTN revenue.

        ‘ FTTN cannot self-fund.’

        Conjecture.

        Possibly. With the current numbers, it cannot. It is yet to be seen if those numbers change.

        • ‘Nope. Turnbull himself said FTTN was based on a “much more reasonable” $16 wholesale charge for his plan.’

          I don’t see that $16 wholesale charge quoted anywhere in their policy.

          ‘Nope. Turnbull himself admitted competing networks would affect FTTN revenue.’

          So it’s the same risk on revenue as specified in the NBN Co 2012-2015 Business plan?

      • So let’s again use that one sided logic and the typical excuse of, we won’t know until it’s finished, you love to do and reapply it to MT’s FttN (as you hate to do)…

        FttN = $29.5 B
        Conjecture

        MT will use Telstra’s copper
        Conjecture

        The copper will be fine
        Conjecture

        FttN will cost less
        Conjecture

        FttN will be quicker to roll out
        Conjecture

        Shall I continue?

        Seriously.

        • Not sure if the first one is conjecture, Alex.
          $29.5 billion (of public capital) is the rock-hard limit that MT has on NBN Co. (P8 of Policy statement).
          That’s all there is and there ain’t no more.
          Need more? Just cut some more corners or cut some more deals.
          Which means your others are conjectures for sure :)

          What else would we expect?
          Labor’s NBN: built to a standard.
          Coalition’s ‘NBN’ : built to a price.

  10. “Our plan has been out for more than 4 months. Nobody has published analysis faulting our assumptions or conclusions,” responded Turnbull.

    It’s hard not to have a chuckle at this. If he says it enough, does that make it true?

  11. Renai,

    As much as some might choose to label fraudband as “viable” the fact remains that what the Liberals are proposing to do is to borrow just shy of 30 billion dollars and direct NBNco to stop building a future proof network and instead build a temporary network.

    For less than a billion more, we can have a network that lasts 50 years not 5.

    And we’re really stretching the meaning of the word viable when its clear that fraudband will be uneconomic because of ongoing maintenance / remediation bills and will reach obsolescence before it has a chance to begin to repay the debt incurred.

    • There are charades on both sides, but unfortunately even the Coalition charades are uncosted :/

  12. “Our plan has been out for more than 4 months. Nobody has published analysis faulting our assumptions or conclusions,”

    There is not enough details of the assumptions to audit them.

    How many nodes? What average cable length? Cost of acquiring copper? Cost of testing copper? Cost of remediating copper? What nodes will be used? What capabilities of nodes?

    It is impossible to fault something if you don’t know the details.

    • I have to agree with Goresh. The detail isnt there.

      I also believe that Renai’s last point about Labor’s FTTN plan being undetailed is a bit of a cop out. The entire reason for the Coalition’s plan is that they think Labors highly detailed plan is wrong. The only way to prove that is to provide counter details of their own plan. They are no where near doing that.

      In contrast, Labor’s original FTTN plan wasn’t an altenative. It was the only credible path forward. The Coalition had nothing (well nothing comparable at least .. OPEL doesn’t count)

  13. What’s the point of the PBO if it can’t cost big, complex policies? The NBN policies aren’t even that complex anyway – what happens when it comes to actually complex topics like tax and healthcare?

    • Wellllll, I don’t think they are saying it is too complex, by any means.

      The NBN absolutely IS a deeply technical matter, and a few chaps in the PBO don’t necessarily have the technical ability to judge whether or not certain assumptions about the policy are “reasonable” or “unreasonable”.

      It’s clear that they don’t.

      Flat out rejecting to do anything with it despite this? I think it’s lazy, and not commensurate with the transparency the PBO is meant to provide.

      • It would not be possible for the PBO to cost the policy in the detail required between now and September because it would require them to sit down with Telstra and virtually simulate the formal talks the Coalition NBN Co would have with Telstra post a September win.

        The PBO would then have to go to the ACCC and say this is what Telstra unofficially says about rolling out FTTN and making the copper available and the costing involved and freeing up HFC for BB, would you approve all of that?

        Mission impossible.

  14. After all the noise Turnbull has been making for years about Labors failing in not preparing CBA’s etc, Turnbull should be doing everything possible to be the exact opposite and provide theright example. As it stands at the moment, he is doing exactly the same thing that he has criticised Labor so heavily for.
    He is going to take a policy to an election with no CBA, no agreement with Telstra, so no true idea of actual cost. He has picked his technology winners as well, and not let it be set by independent study. Turnbull has only reinforced hypocrisy, not proper process.

  15. @Renai

    “For comparison, I encourage you to examine the FTTN-based NBN policy which Labor, then in Opposition, took to the 2007 election. In no way was it as detailed as the policy the Coalition has now”

    Not a very good comparison IMHO…those details that the Coalition are now using have come for the most part from Labor’s work and 6 years of experience. If you compare the Labor policy of 2007 to the Coalition policy of 2007, I don’t think you will near the disparity that there is today between the 2.

    I find it highly ironic that the senior proselytizer of utter reliance on CBAs is now going into an election without even a costing…

    • @Chas

      ‘If you compare the Labor policy of 2007 to the Coalition policy of 2007, I don’t think you will near the disparity that there is today between the 2.’

      Are you referring to the pre election Labor policy of 2007 which was FTTN to the pre election Coalition policy of 2013 which is partial, FTTN, HFC and wireless or to the massive change that came AFTER the 2007 election in 2008-2009 to Labor policy?

      • @Fibroid

        “Are you referring to the pre election Labor policy of 2007 which was FTTN to the pre election Coalition policy of 2013”

        I am saying that this is not a good or fair comparison…you can only compare pre election policies of the same years. So Labor 2007 vs Lib 2007 is fine, and Labor 2013 vs Lib 2013 is also fine.

        I am just tired of Australia always choosing the least efficient or most dated method of telecommunications for it’s day. The HFC rollout was a financial disaster, FTTN would have been acceptable 10+ years ago, but why oh why can’t we be at the leading edge instead of the trailing edge for a change?

        But I digress…my point is that comparisons that ignore the function of time are just not worthwhile.

        • I am saying that this is not a good or fair comparison…you can only compare pre election policies of the same years. So Labor 2007 vs Lib 2007 is fine, and Labor 2013 vs Lib 2013 is also fine.

          Well, yes and no. Malcolm has all the policy and ground work done on the NBN (and earlier efforts) to help him fine tune his plan.

  16. “For comparison, I encourage you to examine the FTTN-based NBN policy which Labor, then in Opposition, took to the 2007 election. In no way was it as detailed as the policy the Coalition has now”

    And we should bloody well hope so! There is a massive difference in promising a new infrastructure build, to pushing for changing from an existing infrastructure build to a “Cheaper, Faster, Better” soundbite.
    If Labor were in opposition currently and they were promoting an FTTN solution whilst an FTTP build is underway the exact same questions would be coming up from the technically literate; which is as to be expected.

    The real issue is not that there is an alternate proposal; the issue is that too many people have politicised this and think that its worth the downgrade.

    Australia the country where its OK to make stupid infrastructure decisions when in Government, that reduce productivity for Decades if not Centuries.

    • @Non Puto

      ‘The real issue is not that there is an alternate proposal; the issue is that too many people have politicised this and think that its worth the downgrade.’

      Getting off ADSL sooner with FTTN where the alternative is waiting for the much delayed Labor FTTP rollout to pass your residence and you are able to connect, (I thought I should define what pass your residence should mean) is not a downgrade.

          • Good point Fibroid… it is indeed an incorrect claim, not conjecture.

            As one yourself who loves to deal in semantics… the comment was about people “getting off ADSL sooner with FTTN”… (not a direct A/B comparison of FttN/FttP from a specific starting point). As such…

            People who already have NBN FttP and are already off ADSL, prove your comment incorrect.

            Then there are those who are scheduled to soon have FttP and be off ADSL, but if there’s a change of government will have to wait for FttN,. They also prove your comment incorrect.

            In fact the latter group will have to wait longer for an inferior product… and the government monies saved for this inferior product $900m…

            Wow I for one can’t wait :/

          • Yep FTTN is faster to roll out.
            But the rest is just conjecture as the favourite is already out & running well down the track while Turnbull’s hack has yet to locate the Telstra operated starting gate.

          • It’s not conjecture that FTTN is faster to rollout than FTTP, it is a fact.

            It is faster for an incumbent, does that hold true though when it’s a third party trying to build it? As no one else has done it that way, it may well be conjecture (only way we’ll know for sure is if it happens I think, then it’ll be “Wait and see”)

          • The incumbent argument is not a issue, we are talking about the construction speed of rolling out FTTN where much of the infrastructure has been built and is just waiting to be connected to a fibre based node, vs the construction speed of FTTP where everything is new and is all fibre to a wall on the residence.

            Unless there is something unique about the Great Southern Land there is no reason why FTTN as is the case in the overseas experience will rollout faster (and cheaper) than FTTP.

          • In terms of physical rollout time you are correct.

            But the added time for striking a deal for the CAN? That is where things get icky, both in costs and time. Will that time and money swing the CBA in FTTPs favour?

            That added to the other assumptions Turnbull has made which have incomplete or insufficient evidence behind them is why we support the NBN.

            You should know this.

          • The incumbent argument is not a issue, we are talking about the construction speed of rolling out FTTN where much of the infrastructure has been built and is just waiting to be connected to a fibre based node, vs the construction speed of FTTP where everything is new and is all fibre to a wall on the residence.

            Now thats just pure conjecture. The time to negotiate acquisition of the copper should be taken o=in to account, as the time taken to get access to the ducts was for NBN Co…

  17. This is one of the problems of being in opposition – you don’t have the resources to comprehensively detail and cost large scale plans. The PBO was supposed to fix the cost part, but even they are under-resourced when it comes to projects of this size.

    There is nothing that can fix the ‘plan’ part – Turnbull assembled the coalition plan within a shadow ministry office. It makes you appreciate some of the work and plans that have come out of opposition parties in the past decade – knowing that they were put together by small teams of staffers and outsiders contributing their time.

    This gap in the PBO and need for a similar planning office needs to be solved – the best way would have been for the government to allow a $25 million appropriation so that the Coalition could go out and hire their own group of consultants and auditors to do their own version of what McKinsey and KPMG did for the government with the National Broadband Network Implementation Study.

    McKinsey got the contract in mid-2009 and delivered it in May 2010, so it took about 10 months and cost $25 million. For the coalition plan to have received the same level of costing and detail they would have had to of started a year ago, and there would have been all sorts of political forces at play (would Labor want the Coalition to have their plan costed?).

    The other solution would be corporate backing to finance the work, but that might create a perception of a conflict of interest.

    Either way I don’t think it is reasonable to expect the coalition to spend $10 or $25 million to do it themselves, this really requires a proper solution – one that is removed from the government deciding if the opposition should or should not get the funding, etc

    It would have to be an office like the PBO (or an extension of the PBO) that could approve requests for budget allocations that go towards planning and costing opposition policies.

    • @Nic Cubrilovic

      It’s certainly a bit much to ask an Opposition to pay $25 million.

      But- The NBN Implementation study was focussed on all aspects of the NBN- Network topology, regulation, design, revenu, business plan, costings etc etc. All the Coalition need to do is:

      1- Substitute 71% of FTTH for FTTN and associated costings of equipment/savings in civil works
      2- Test their assumptions of wholesale costings based on those costs
      3- Add in CiC information neither the Coalition nor Telstra could release from Telstra about the actual copper condition and likelihood of replacement and % of replacement.

      All other assumptions stay the same. I don’t think that would be an unreasonable task of a month or so. Perhaps 2. And a few hundred thousand. But, if it is, fair enough.

      However- I think the problem I have with this is- The NBN is now on its’ way. Properly. Yes, it’s delayed and yes, it is costing a little more than first thought (about 5%) but it is well and truly going now. I find it extremely unreasonable that an Opposition should swoop in with all these “assumptions” that are untested and just stop work while they see if they’re right. I really feel if they truly cared about the project, they’d continue to work with NBNCo. while they did these audits and adjust the rollout. Not wholesale change 3/4 of it.

      Yes, Turnbull has said “we’re technology agnostic”….well, so is this NBN. Just differently weighted. If Turnbull really was truly agnostic, he wouldn’t have produced a detailed policy and assumptions based on 70% FTTN. He would’ve done a study about which technologies and what % should be used for a more cost effective NBN. I don’t think it’s reasonable to swoop in and say “we know better….even though we’re assuming things that haven’t been tested.” That’s my opinion anyway.

      • No bolding either. Mate, make your points without yelling at people and shoving the points down people’s throats, or I will ban you.

        BE POLITE.

        I don’t know why that is so hard to understand.

          • Mate I don’t want to see emphasis from you right now — I want to see politeness, moderation, and respect for other posters. I’ve warned you several times now — keep it calm, keep it polite, or your presence will no longer be required here.

          • Did I miss something? Have some comments been deleted? Where was 7tech impolite? I thought his comment was entirely reasonable and informative…?

          • It’s been an ongoing saga over the past several days. I’ve warned him several times. He has just been banned for a month after he accused me on Twitter of being “prejudiced”.

    • i dont know how much more or less work it was to do that than to do a CBA but given Malcolm wants a CBA in 60 days and that was in the order of 300 im wondering how indicative the time period is.

      if its expected about the same time and money (the 25 mil) to do a proper analysis then something has to give. either the 60 days goes out or the study gets crammed into 60 days leaving plenty of ground uncovered. it might be there really is only 60 days of work in it – i wouldnt know so im asking. but if 60 days is rather lean to analyse a national undertaking like this i think the time constraint serves us poorly – it is worth getting a proper look over a snatched glance.

      the old idea of haste makes waste comes to mind and while id like actual implementation to step smartly – liberal and labor – because its already in process i neither think the down tools is a good idea or rushing the study. employed people will get kicked by the suspension and if the study and suspension blow out it will hurt more. let people work on what is already in process, at least. if they really feel a change in the network is warranted at the end of the process, at least the sub/contractors wont have been twiddling their thumbs for 2 month waiting on them….. (or however long it turns out to be)….

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