In tonight’s Budget, the Federal Government has revealed plans to issue $300 million of infrastructure bonds to help fund the construction of the National Broadband Network — but has provided few other details related to its flagship NBN project.
“On 7 April 2009, the Government announced that its investment in NBN Co would be partly funded through the issuance of Aussie Infrastructure Bonds to both household and institutional investors.” the Government said in budget papers released tonight.
“In 2010/11, $300 million of this investment will be financed by Aussie Infrastructure Bonds.”
The budget papers added the NBN bonds would not be separately identified from normal Commonwealth Government Securities at the time they were issued — but would be reported in annual budget statements.
Although the Government stated the funding for the bonds would be provided by institutional and other wholesale investors, it also noted that consideration “is currently being given” to offerings of Aussie Infrastructure Bonds to household investors.
In general, there were few other items related to the NBN project in the budget.
Although the Government is believed to have allocated several capital payments to aid NBN Co with the construction of the network, it escaped having to provide details through listing the NBN project in what is referred to as the Contingency Reserve — an allowance which is held principally to reflect “anticipated events that cannot be assigned to individual programs” during the budget preparation process.
The budget papers note that that the Contingency Reserve includes provisions for future equity investments in the NBN, but said they could not be detailed.
“This is subject to the Government’s final response to the Implementation Study and, accordingly, is not disclosed,” the papers state.
In this year’s budget, the Government appeared to allocate $1.19 billion in total to the Contingency Reserve.
In his own statement, Communications Minister Stephen Conroy outlined some minor funds to assist in paving the way for the NBN — for example, $12.9 million over four years will be provided to his own department and $2.1 million to the Department of Finance and Deregulation to fund policy and regulatory support, oversight of its regional backbone contract with Nextgen networks and to manage the Government’s shareholding in NBN Co.
The Australian Competition and Consumer Commission will get $24.0 million over five years to establish and administer proposed regulatory arrangements or the NBN.
Image credit: Office of Stephen Conroy