Treasury costings scant on NBN details


You might have expected that the Treasury’s costings of the two major party’s election policies — released to the Independents and the media late yesterday — would contain a fair amount of detail about how much each party’s wildly differing broadband policy would cost.

Not so.

Despite the Coalition’s pledge to cancel Labor’s $43 billion National Broadband Network project, Treasury analysis of the impact (PDF) showed just a $900 million saving to public debt interest payments over four years if the Coalition was to win Government.

Labor’s document (PDF) doesn’t contain any mention of the NBN at all — a fact that is consistent with Prime Minister Julia Gillard’s statement on Friday that although Opposition Leader Tony Abbott had sought access to a full costing of the NBN, the full NBN costings were disclosed in the Pre-Election Fiscal Outlook prepared by Treasury.

“If he seeks to have a briefing from Treasury and Finance for a more detailed assessment of those Budget figures then of course that will be made available to him,” Gillard said.

The PEFO document — available online — does contain a costing for the NBN, repeating the Government’s line during the last Federal Budget that allocation had been made for the NBN in the Contingency Reserve — an allowance held principally to reflect “anticipated events that cannot be assigned to individual programs” during the budget preparation process.

During the budget process the amount Labor expected to hold in the Contingency Reserve for the NBN wasn’t disclosed — but in the PEFO it was — $13.6 billion wothof future equity investments over three years to the 2013-2014 financial year.

Various other tidbits of funding related to the NBN were also disclosed in the PEFO — for example, the cost of establishing a universal service obligation company to maintain services in the bush — for a total of $100 million in 2012 and 2013 and $100 million a year ongoing from that point. Up to $100 million was also allocated to the cost of retraining Telstra staff under the agreement with NBN Co.

In addition, the PEFO also states that the Government made provision in the last budget of $18.3 billion over the forward estimated (including $18.1 billion of equity) for the rollout of the NBN, based on the recommendations of the NBN Implementation Study.

However, the PEFO also notes that the exact timing and amount of NBN funding — including the Telstra deal — will be determined as part of the Government’s as of yet unreleased response to the implementation study and also the final Telstra agreement.

The exact funding allocation for the NBN has been a matter of some contention even without the involvement of the both sides of politics in the election.

For example, several weeks ago the Federal Parliamentary Library released its own analysis of the NBN funding to date, noting the total expected funding costs of the NBN did not match the identified funding allocation in the last budget, partly because of the ongoing nature of the NBN project.

Image credit: Michal Ufniak, royalty free


  1. The NBN is a policy the ALP took to the 2007 federal election.
    It wasn’t an ALP promise in the 2010 election so why would it be expected to be costed as such?

    (It is worth noting that the projected total cost of the FTTP NBN amounts to about the same price as 800km of freeway construction in Australia, as far as national infrastructure goes NBN isn’t inordinately expensive).

  2. The NBN isn’t a new policy for 2010, indeed as Animal responds, it was a policy that came into being prior to the 2007 Election.

    It’s evolved somewhat from the original Telstra FTTN ‘comeptition killer’ bungle in 2006, but ironically we have the largest Telecommunications provider in Australia to blame for what has all the hallmarks of a nation building excercise.

  3. Obviously the NBN costs are far beyond the $43 billion estimates that the taxpayer will have to pay for. My guess is $80+ billion.

    • NBN is expected to cost taxpayers $26billion with the government issuing infrastructure bonds to allow private investment in the network. $43billion is the total not the total Aus government spend.

      • Labor Party estimates cannot be trusted, especially when they have not yet released any fully transparent costings for the NBN.

        They had costing blow-outs for both the insulation & BER programs, they’re bound to have blow-outs for the NBN, of which the taxpayer will have to pay for.

        • From Comrade – Obviously the NBN costs are far beyond the $43 billion estimates that the taxpayer will have to pay for. My guess is $80+ billion.

          Why only guess at $80+billion!! why not $800billion, that sounds even more wasteful. It is labor’s policy, you can accuse them of any thing. Just use your usual line “they can’t be trusted”.

        • Just like how the Liberals have an $11 billion dollar hole in their budget after refusing several times to have it looked at by the treasury? I know how not to trust :)

  4. This is sounding like another anti-Labor article.

    Where is your costings of Coalition version please?

  5. Alot of people also making assumptions based on information that has vested interested.


    The ALP only have a 5.558Billion hole. Much better than those libs who cant addup. That is of course only if they believe there OWN implementation study.

    The difference between the allocated $16.842 billion in NBN funding (as identified above) and the amount of government funding recommended in the NBN implementation study, for the first five years to 2013–14 ($22.4 billion), is $5.558 billion.

    In addition, the difference between the allocated $16.842 billion in NBN funding so far and the initially proposed $43 billion total build cost for the NBN is $26.158 billion. That is, if the realised build cost for the entire NBN were $43 billion, the Government must allocate/determine an additional $26.158 billion of funding from available sources.

    The Fact is they have no clue how muct the final build cost will be and they really should know.

  7. I love how quickly noting that BOTH parties have huge, multi billion dollar holes in their funding turns in to “BUT THEIR HOLE IS BIGGER!!!11eleven” as if that automatically justifies the other party not being up front…

    Christ, no bloody wonder we have a hung parliament. 38% of the country are dyed in the wool Labor, 44% are dyed in the wool Liberals, and 18% are sick and tired of the lot of em and are looking for an alternative.

    But please continue to slang back and forward over whose hole is bigger as if that were the real issue here…

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