Budget 2011: Govt discloses NBN equity payments


The Federal Government has used tonight’s annual budget to provide further detail about how it will inject equity funding into its flagship National Broadband Network project, to meet its capital requirements over the next decade as it rolls out infrastructure around the nation.

In budget papers released tonight, the Government allocated $18.2 billion in equity injections to NBN Co over the proceeding years up until the 2014-15 financial year. To start with, $3.1 billion will be pumped into the NBN over the next year, increasing in between and then peaking at $6.6 billion in the 2013-14 financial year as the NBN rollout hits full steam and then settling down to $4.1 billion in 2014-15.

The payments are instalments towards the Government’s total equity contribution to the NBN, which is expected to be $27.5 billion.

In addition, the Government has allocated further funding towards other government agencies to assist with the rollout of the NBN and associated matters over the next few years.

For example, Stephen Conroy’s Department of Broadband, Communications and the Digital Economy will receive $23.4 million to support consumers during the rollout, assist the Government and establish an entity to take charge of the Universal Service Obligation ensuring services to the bush. The Australian Communications and Media Authoritywill receive $5.6 million to develop and monitor implementation of “appropriate network standards and codes” to assist with the rollout.

Additionally, the Australian Competition and Consumer Commission will pick up $5.6 million to monitor competition outcomes associated with the telecommunications industry change, while the Department of Finance and Deregulation will receive $1.2 million to help with its role representing the Government as the network’s only shareholder.

The budget papers also note that DBCDE will pick up $34.4 million over five years to support the finalisation of the deal between NBN Co, the Government and Telstra, under which the NBN will gain access to use Telstra’s infrastructure and Telstra fixed broadband customers will be transferred onto the NBN. It appears that some of this funding will also relate to the USO, but it is not clear whether it overlaps with the previous $23.4 million DBCDE injection.

A spokesperson for Minister Conroy was not immediately available to clarify the situation.

Image credit: Philippe Ramakers, royalty free


  1. There is no doubt that the Labor government badly needs the retail market (mums & dads suckers) to buy into the NBN bonds because frankly no institutional investor will.

    • Investors already bought $300m worth on the current FY.

      I’m not even sure if the buyer is aware they’re buying NBN bonds as opposed to general government bonds. They’re treated the same with the same conditions. In other words taxpayers is on hook for the bond obligations regardless on how NBN proceeds.

  2. NBN is a pipe dream. The current government jsut cant deliver a project without major stuff ups. The electorate is well and truely sick of it.

    Once they’re thrown out Libs will get in and the NBN will be dead!
    if it was practical they would be still rolling out in Tasmania.

    • What do you mean the Tasmania rollout would still be going on?

      Why do you hate your government so much? Who do you think built out the copper phone lines you’re using to access the internet right now? Or built out and maintains the roads you use every day? Or regulates the environment to ensure it’s not as disgustingly smoggy and pollution filled as China is?

      Do you even understand how horrific your life would be without the myriad of regulations and maintenance your government does? Have you ever been to Somalia or any other third world country with a weak government?

        • The relationship between a taxpayer funded rolls royce solution FTTH rollout, the smog in China and the Government in Somalia beats me.

          I prefer more rational comparisons like the NBN = the discovery of penicillin for example.


          • Let’s hope NBN = penicillin, because as far as the FUDsters are concerned, the NBN causes every known disease to man, including syphilis…!

  3. whats the current super % rate? or even the average investment folio return %

    if its below 7% (as the expected return on NBN is) then mum and dad ‘suckers’ would certainly be interested, even if institutionals wont. horses for courses and all that.

    300m already taken up isnt a bad effort either.

    as for delivering a project without stuffups, you mean the initial 3site trial in tassie that came in under budget? that was a *trial*, and completed? (and which has been moved on from, to the 2nd stage rollout? i.e. its still practical and still being rolled out in Tasmania?).

    people love to bash the govt and tall poppies, but the former can actually improve ones life a lot more than the latter. from the way some people talk they dont at all believe in govt….. and if you dont believe in govt then move to somalia – they dont have one there as i understand it. you wont have to worry about stuffups there! but here we have an ageing copper infrastructure that is seriously in need of TLC – and which can be replaced with a much better product for the same cost as laying fresh copper would. and a private market that has sat on its hands for the past 15 or 16 years. ive had it with waiting for the free market to ‘solve all our problems’ and look forward to an NBN product that far from being a pipe dream actually fixes some of the long term issues weve had in the sector.

    • ok, I am not an economist/financial analyst or anything of the sort.

      But governments have been offering bonds for decades at interest rates like 7%. It was my impression that governments basically *had* to sell those bonds in order to get into deficit at all. (thats what it means… they sold bonds, putting themselves into a deficit in the budget, because they used the funds from the sale of bonds to do governmenty things).

      Can people stop spreading the FUD that “mums and dads” are the ones that are going to get saddled with “NBN bonds” (as if they were different).

      I didn’t think you could even buy government bonds in small quantity (< $100,000) Or it certainly wasn't meant to be worth it if you did. (but get this, institutions STILL BUY THEM!!) god I wonder why. They must all be going out of business or something, not raking in billions in profit.

      (sure their profit isn't from the bonds, but the bonds offset some of their other investment disasters)

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