Abbott, Hockey mislead again on NBN funding


news Senior Coalition figures Tony Abbott and Joe Hockey have both this week again made misleading statements about the funding model for the National Broadband Network, separately stating that the NBN funding should be included in the Federal Budget as an expense, although standard accounting guidelines would see it listed as an investment.

In a speech to the Committee for the Economic Development of Australia’s State of the Nation Conference yesterday, Opposition Leader Abbott said that $5.8 billion of infrastructure spending related to the National Broadband Network in the next financial year “should be on budget”, stating that the Government’s “wafer-thin” budget surplus achieved in the past Federal Budget was based on this accounting treatment and similar “fiddles”.

Shadow Treasurer Joe Hockey, in a separate speech in Parliament on the global economy, also directly mentioned the NBN’s accounting treatment in the Budget. Speaking about the current Labor Government, Hockey said: “They are promising a surplus that, looking at their form, they will never deliver. In the current year they said there would be a $22 billion deficit and now we have a $44 billion deficit.

“They are cooking the books in order to promise a surplus next year. The Greeks got themselves into a bit of trouble cooking the figures. We are not on anything like that scale, but the truth is that if you include the NBN expenditure and the Clean Energy Finance Corporation then we are running a deficit.”

It’s not the first time the Opposition has attacked the Government for its budgetary allocation with relation to the NBN; senior Coalition figures have repeated this criticism repeatedly over the past several months. Shadow Finance Minister Andrew Robb raised the issue in February, Abbott raised the issue in May and Hockey and Shadow Communications Minister Malcolm Turnbull that same month. The Coalition has repeatedly stated that the NBN’s funding could be re-allocated to other projects such as transport infrastructure.

Most of the funding for the NBN does not appear in the budget, as, according to accounting standards, it is not an expense as generally understood, but is actually an investment expected to generate a modest return. That return is currently projected to be between $1.93 billion to $3.92 billion.

Communications Minister Stephen Conroy’s department did disclose how much the government is funding NBN Co over the next few years, in its portfolio budget statements. In the 2012/2013 financial year, the Government will allocate $4.7 billion to the project, and more each succeeding year — peaking at $5.6 billion in 2014/2015, and then setting again to $5.1 billion in 2015/2016. In addition, in this year’s budget additional funding was also allocated for NBN-related activities such as a $20 million investment in public education and awareness.

According to a research note recently published by the Parliamentary Library of Australia, Labor is technically correct on this matter, and the Coalition is wrong. “Australia has adopted internationally accepted accounting standards, and these are applied in the budget treatment of the NBN,” the library’s Brian Dalzell, who works in its economics division, wrote in the report (available online here in PDF format).

“While the applied accounting treatment depends on the specific transaction conducted between the Government and NBN Co, this treatment is governed by accepted accounting standards and is applied equally to all government business entities (GBEs). This treatment is not determined by the return generated by NBN Co (or any other GBE).”

Dalzell goes on to provide a great amount of detail around how the Federal Budget treats the NBN, breaking up the Government’s investment in the area into a number of different sections and looking at the differences between cash flow, equity, debt and so on. But all of it only serves to reinforce the impression that the Coalition is improperly defining the NBN initiative as an expense. In fact, the economist addresses this misconception directly.

“Can the NBN be accounted for as an expense item in the budget operating statement?” he asks. “In the budget statement, the NBN is accounted for as a financial asset (equity investment) under the ‘investments in other public sector entities’ line item of the balance sheet. The NBN is not accounted for on the operating statement as an expense item, because it cannot be defined as such under accepted accounting standards.”

Communications Minister Stephen Conroy has repeatedly highlighted this fact as a response to the Coalition’s statements on the NBN budgeting treatment.

“In his budget reply, Mr Abbott also pretends that investing in fast affordable broadband should be replaced by additional spending on roads,” Conroy said in May. “Mr Abbott clearly doesn’t understand that the NBN is classified by international accounting standards as an equity investment rather than a budget expense. This is consistent with long-standing budget treatment applied by this and previous Australian Governments. The equity investment in the NBN cannot simply be shifted to pay for more roads, unless those roads are being run by a government business making a return.”

This refrain was repeated by Labor MP and Minister for Transport and Infrastructure, Anthony Albanese, during a parliamentary debate on the NBN this week.

“I note that in my portfolio of infrastructure and transport, I am continually hearing demands from National Party members, federal and state, in particular, but also from some Liberal Party members saying, ‘You should take the money from the NBN and give it to build a road, a rail line or some other project,'” said Albanese. “There is a complete economic illiteracy about the difference between an investment that will bring a return to the government on a commercial basis—that is, the National Broadband Network—and the circumstances of a straight investment in a road project that will not deliver a return but is simply a cost to revenue.”

Albanese further claimed that Turnbull was “deep down”, “a supporter of the NBN”, adding: “We are in on the joke—that this is better than any of the failed attempts of the government that he was a part of was able to achieve in 19 separate attempts.”

I don’t think there’s a great deal more to say about the Coalition’s ongoing statements about the budgetary treatment of the NBN. It is clear that the NBN investment is an investment expected to make a return, not an expense. This is a fact, and the Coalition should start to recognise this as a fact. It’s not an issue which can be meaningfully debated, without throwing currently accepted accounting standards out the window.


    • Because they believe that only they are entitled to govern and that their view of everything is the only correct view. Any one putting a contrary view is misleading or lying to the Australian people.

    • Great photo there of Malcolm Turnbull.

      He’s getting more like Arfur Daley every day.

  1. This is not a debate – this is accepted accounting rules which have developed over hundreds of years. It is an absurd attack by the coalition and they know it. If they were to apply the same rules to say the tax system, government revenue would virtually disappear.

    The problem here is that the public are not informed. They get their information from NEWS Ltd and other main stream media outlets. Now its very obvious that NEWS Ltd are running an agenda to install a coalition govt.

    So the coalition would (or should) know that this argument is nonsense, its very basic accounting. The problem is that they know they will get a free kick from most of the media and that the public will follow their chosen media outlet.

    This is an example of a failure in democracy because this rhetoric is incompetent at best but more likely to be a deliberate attempt to deceive and manipulate. These people should be getting slammed in the media for this type of behavior but instead they are likely to be installed into government.

      • Renai, you should try ringing up 2GB or 2UE next time they are talking about the NBN, and simply give your perspective as a tech journalist. Would be interesting to see if they air your call :)

        • Why the hell would I do that? It would be like dunking my head into a bucket of bile. I’ve got better things to do with my time than argue with people who have no rational thinking abilities.

          • Fair point, but sadly only a small number of the general population will read articles such as this. News Ltd. newspapers and stations such as 2GB have an influence many orders of magnitude higher than tech sites such as this, so I think it would be worthwhile trying to penetrate mainstream media.
            Although many people have no rational thinking abilities, the misinformation being spread is so ridiculous and down right wrong that it would be very hard to fail to convince them with your arguments.
            The issues surrounding the NBN are essentially black and white, the problem is that people are only getting the wrong side of the story.
            My grandparents are avid 2GB listeners, as conservative and irrational as they come, and I’ve managed to turn them in favour of the NBN.

        • They would never let him on, or if they did it would be a text book ambush and Gish Gallop.

  2. If 99 people back Labor, and 1 person disagrees, you can put money on the Liberals using that 1 person as their ‘irrefutable evidence’.

    I’m sure that somewhere someone has posted a blog stating that the costs incurred building the NBN should be on budget. Some ‘expert’ in accounting. So the Lib’s use that line, feed it through the party favorites ( etc), and give the sheep the misleading info that helps build their case.

    Throw enough mud, it will eventually stick.

  3. 7 T has the right idea, the media is facing a crisis, get the word out among friends and acquantices and link to sites as delimter and alternate sites that present the truth and the facts, leave the media with the conondrum of being believable.
    Abbot and Hockey.
    Either they are economically incompetant or lying through their teeth. Take your choice
    The Private sector will do it better and Cheaper.
    Remember Greenfields are cheaper to provision than brownfields,nbn-co-ditches-fujitsu-for-greenfield-work.aspx
    Note Transact is complaining because they can’t match the NBN wholesale price

    • Cheers Abel.

      I’m trying to get a blog site up and running for now, just dedicated for people to show their support. If I can see there’s enough people who will be interested in an idea like this, I’m gonna try and make a full website and start a group.

      As usual, gotta dodge around work though, so it’s gonna be a work in progress :(

  4. So F’N over this lying sack of shite and the rest of the second rate idiots in the LNP party* – it makes me angry that I used to vote for these morons (although I am still happy I voted for JWH’s GST, that was a good reform).

    I know the Labor party has some issues, but the LNP right now just make me really really angry!!!!!

    *what makes me even more angry is that MT has the potential to be a 1st rate PM but with TA running the show he is allowed to shine and the supporting cast are all idiots, cant see a single decent potential LNP minister atm!

    • True, admittedly we don’t know them all, but out of the major well known ones, none are worth 2 bob, especially the most vocal Nats. They present as ignorant fools needing someone to tell them what to think. A perfect government for Rupert and Gina’s purposes

      • In the comments psyclaw nailed it

        “No doubt Coalition supporters would approve of Abbott’s pugilism, as would some journalists, on the grounds that this is what opposition leaders do, in fact ought to do.

        One thing that irks me profoundly relates to this quote from AA .

        Every time any hint of a negative reflection on Abbott’s conduct arises, the journo will add a gratuitous comment along the lines of “hey! but that’s what the LOTO’s role is, and he’s done it so well”. This reflection and rationalisation is daily, is ubiquitous, is careless, is crap.

        Fact is Abbott has not done to any appreciable degree what the role of LOTO requires. He has been an abject failure as LOTO.

        Here are IMHO some important aspects of the LOTO role:

        * always act in the national interest.
        * keep the government on track by questioning their policies and legislation, and by making constructive suggestions/amendments.
        * as the alternate PM be at the ready to take over, policy wise.
        * recognise what actions of the government are clearly in the national interest and support them.
        * avoid bipartisanship for the sake of bipartisanship.
        * honour the conventions of responsible national leadership eg don’t talk down the economy; don’t talk down industries, and most of all don’t “frighten the horses”

        Can anyone give Abbott even a bare pass mark on any one of these?

        And the irony in all of this is the fact that the Independents only ever gave JG their formal support in regards to motions of confidence in her. They specifically reserved the right to pursue their own policy ends. So the LOTO in this hung parliament would has had ongoing daily opportunity to liaise with the Independents and actually negotiate and pass “opposition” legislation.

        I don’t believe that Abbott did not realise this. “

          • He doesn’t even understand his job, so how can he present as a future leader that will serve his nation and provide the environment for a growing economy. People don’t change from being a negative deceiver to being a statesman or a trustworthy leader . Despotic rapacious ruler yes

  5. Lets start up a class action suit against the intention spreading of misinformation by these turkeys. I for one am getting tired of hearing uninformed morons parroting this stuff mindlessly.

    Someone with a little more time and fewer children should set up a website where we can make pledges. I’ll be in for a C note straight up.

  6. All politicians look the same to me – Joe Hockey looks just like Malcolm Turnbull in that photo.

  7. Yaaaaaaaaaawn, how many times are they repeating the same old incorrect crap. Next please.

    • Remember Hitler and the Nazi’s? (I dont but have watched heaps of Doco’s)

      They kept repeating their propaganda and a compliant press aided them and eventually the propaganda became the truth in ppl’s eyes.

      I know very smart ppl who have fallen for the LNP BS simply because they havent bothered to verify the claims for themselves and the Media let the LNP get away with it unopposed!

    • Thing is Troden, ask the average person about the economy and they will tell you, it sux because Labor sux, as they couldn’t organise a root in a brothel with several union cards and a bundle of cash.

      When the truth is our economy is one of the strongest anywhere.

      Now ask the same average person about the NBN and they will again repeat the Coalition/AJ/Australian buzz words, such as white elephant, waste, extravagance, not affordable and my favourite Ferrari.

      It all comes down to the media drumming in whatever agenda they wish at any particular time and as we have seen, they don’t like the NBN (as it is a threat to them personally) and therefore they don’t like the current government.

      It’s all a big game, but with our lives, these people are playing!

  8. I personally disagree with you in principle Renai, for a company to be earing a 7% RoI (return on investment) when its WACC (weighted average cost of capital) is above this ~10-11% (since the entire project is NOT funded by govt debt) this would be a poor investment. In addition, this is based upon the current business plan which has arguable figures and needs to be updated with current take-up rates and roll-out figures.

    Yes it should be off budget if it earns a profit but it should remain on budget until it shows that it will, not when it predicts it. Every failed startup company has a sucessful business plan. This is public money so let us be conservative, if you want to take risks invest in SME’s or venture capital.

    It is interesting in the NBN’s predictions that its revenue is based off an assumption that real income per customer increases. This is due to the CVC charge increasing due to increased usage. This directly contradicts the previous 5 years where real broadband prices have fallen for speed and data usage. While Abbot and Hockey are wrong based upon current numbers if any of the predictions fall through then the NBN RoI will fall and they will be correct so it is a matter of opinion on the reliability of the underlying assumptions.

    Whether or not the NBN should go ahead is a different question, this is purely about how it should be budgeted. Personally if it was on the books 3/4 of the coalitions arguments against it would be nullified making it significantly easier for labour to promote but then it would be on the budget.

    • Michael that the experts are saying the NBN accountancy IS correct, not would or could be…

      • But they are treating their investment dollars as if they have no lost anything. At this stage, the money that has been sunk into the NBN has been lost. If they had to mark to market the value of the NBN, it would be near $0.

        So until that mark to market actually rises, then the money being pumped into the NBN is either a direct expense or an investment loss.

        • It’s CapEx.

          And again the experts are saying the accountancy is correct.

          So can you disprove them?

        • You only mark the loss on the budget, not the entire amount.

          Right now, it isn’t a loss (they haven’t written it down yet), therefore there is nothing to mark on the budget.

          So… Still waiting for the part where the Gov is wrong.

      • The accounts are based upon FORECASTS for a business plan which forms the basis for a NPV 20 years into the future. If you could predict 20 years into the future please share your skills with me so that we can profit from the stockmarket.

        Sure they are correct based upon current numbers – but the deal with telstra was delayed which has delayed the rollout. How does this affect the profit? Due to the time value of money a 1 year delay in revenue can be a significant loss in RoI. While the coalition may not have released (or have) an alternate plan they have been correct in criticizing the rollout which is behind so far. Judging by labour’s record on project delivery, we have a right to be sceptical that it will all go to plan. See pink batts, green loans, BER, Australia network tender, the boat people deal with indonesia, fuelwatch and grocery watch.

        If it had a RoI of 15% then there is a margin for error, but when it is 0.5-1.5% above the “cutoff” for being classed as an investment, then you have a right to be sceptical about how reliable the numbers behind it are.

        • Herein lies the brilliance of the NBN Michael…

          It’s not just about money. Simple really…

          It, like other government infrastructure, is about providing for the people… but unlike other government infrastructure, the NBN will not only provide for Aussies but also will make a ROI.

          Now the ROI is weighted in such a way (so not 15%) so that unlike almost all other “new” tech, the prices for such a superior product will be on par with current lesser technologies and not only that allows for our country cousins to not be unfairly discriminated against.

          But do you know the funniest thing for a pro-NBNer like me?

          People saying things like “if you could predict 20 years into the future please share your skills with me” and then in the next breath demanding a “NBN CBA…!”

          • I cannot argue against what you say, except for 2 points

            1. Roads, hospital, etc are cited as similar infrastructure in the public good. These are ALL on budget.

            2. The NBN is a legislated monopoly, they can charge whatever they want (allowed to by govt etc). So you have a choice you can have the NBN on the budget and accountability through normal processes or you can pay higer prices for internet and have it hidden in a govt coporation which will give all profits to the government anyway. So in both cases money goes to the government. I prefer to be able to see how MY money is spent by the government.

            Another more efficient method is to split the NBN into two parts.

            1. A profitable company that can charge prices according to marginal cost that competes with copper wires and HFC in the cities. Without the need to build as much infrastruce and cross subside unprofitable regional areas there would be little debate about its profitability.
            2. A public subsidy to the NBN so that regional areas pay the same price as cities. (In the current model there is a cross subsidy so that city prices are higher and regional prices are lower.) A direct subsidy from taxpayer funds to a minimum level of service that is not restriced to one carrier would ensure a level field and internet access for all australians at a competitive price.

          • Thanks for the detailed reply Michael.

            1. Yes hospitals and roads are on budget as the funding is sourced from budgetary allocations (such as general taxation – income taxes) and are not built as a investment with return.


            You will note too that while the government has pledged to allocate $27B – $2.7B p.a. over 10 years towards the NBN, they will spend almost $700B – $70B p.a. (2.5 NBNs in just one year) on health and transport/energy infrastructure.

            Thing is, the $27B NBN is projected to repay itself where as the $700B isn’t…!

            Also the funding for the NBN is not coming from the $137B p.a income tax pool. It is coming from the existing assets such as the BAF, contingency reserve (one of which still has $’s from the sale of Telstra iirc) and AIB’s. So to answer your later question, we are borrowing/selling bonds and securities (some/most of which is coming from overseas investors) to build new Aussie infrastructure, which will repay itself, while the budget covers the annual health, education etc expenditure. It’s actually very clever imo.

            2. I can’t even contemplate agreeing with you, that we should continue to squeeze the obsolete copper and HFC (available only to a select few).

            Plus NBN wholesale monopoly v.s. Telstra wholesale and retail/last mile monopoly, we now have?

            Please don’t try to pass off HFC available to just 30% (iirc) of customers and only available from Telstra and Optus as flourishing Australia wide competition. Or claim a DSLAM or two belonging to a company but which utilises Telstra’s exchange and accesses Telstra’s network, as being infrastructure competition…!

            FTTP is progress, not an impost. We can afford it, it will create jobs and stimulate our economy further.

            Here’s an article (already supplied by others at Delimiter) from ABC/Cisco…

            And from a WSJ (of all places) article –


            Just look at the wiki list of countries rolling out FTTP throughout their nations (some since 1999) and then tell us that Australia with one of the best performing economies doesn’t deserve nor can afford $2.7B p.a. for just ten years, of investor money (so no impact upon roads, health etc).



          • You miss-interpreted what i mean in the second part entirely.

            I never said build more of HFC / Copper, just leave them in private hands and allow them to compete. That means that we will not have to pay compensation since we are not decomissioning any private assets. If preivate companies choose to shut them down that is their choice. In addition it will ensure that prices are at current levels FTTP will be forced to compete with existing technologies (which under current NBN is illegal). If as you and many other so passionately argue that FTTP is vastly superior then it should stand on its own.

            Why are you suggesting / encouraging us to PAY to decommission assets when you claim they will become obsolete?

            To deal with the universal service obligation (USO – serve regional area at same price as cities despite cost difference) i suggested a direct subsidy from the government instead of a cross subsidy incorporated into the price. This would allow it to earn a true commercial return instead of the paltry 7% p.a.

            As a final point to people who say to ignore the cost – look up opportunity cost. If you cannot think of a better use for the 27+ billion dollars (ignore debate about capex vs opex especially before a profit is earnt) thats fine but there are solid arguments for other projects that are just as valuable. Even if it is the best projects, there is still a good reason to critique it and reduce the Capex / Opex so that we get value for money (this is my personal impression of what turnbull is now doing so I think that he deserves credit for trying to improve what has the capacity to be a visionary project or an enourmous white elephant).

          • No I knew what you meant Michael, I just don’t think it smart.

            The government aren’t paying Telstra and Optus to shut down their networks, they are paying them to use their pits and ducts, to migrate millions of customers and as a consequence, compensation for making their old networks obsolete, though no fault of their own.

            That’s what businesses do, they pay for M&A’s. I could imagine the furore if NBNCo were to build and just steam roll over the top of these companies or worse, seize their property for the “greater good” (thanks Hot Fuzz).

            The duct access will allow for a quicker, less disruptive roll out, whilst the migrations will speed up profitability and therefore allow NBNCo to become self sufficient and subsidise the bush.

            I believe you are saying, while current networks should remain, tax payer money should then be gifted (with no ROI) to private companies for rural people to be attended to? Whereas the NBN model has a ROI for both the bush and urban! By not migrating customers, the ROI in urban will be impacted and with no ROI (in fact $B’s spent) in the bush, it will cost more for a patchwork (thanks HC) network, imo.

            Also the USO model hasn’t worked so far. Just ask our country friends what they think of their competitive choices – Telstra… and the prices they must pay for the privilege of allowing Telstra only, to gouge them for 1990’s technology.

            But I do appreciate that you have tabled an alternative. As opposed to some who come here to bag the NBN 24/7 and when quizzed as to a better plan… disappear. So kudos.

            I agree, of course the NBN should be critiqued – like all governments, regardless of who is in power the bastards must be kept honest. But it needs to be done positively and factually, not as it currently stands, with either uneducated claims or out and out lies.

            Also, as mentioned NBN money is being sourced from elsewhere not income taxes and whether we have an NBN or not it will not make an iota of difference to government spending elsewhere, imo.

            So looks like we will have to agree to disagree, good night :-)

          • >I never said build more of HFC / Copper, just leave them in private hands and allow them to compete.

            Why? Broadband is, like other infrastructure (road, rail, electricity, water, etc.) considered to be a natural monopoly. It is so inefficient to operate multiple networks that all the usual benefits of competition are lost.

            >That means that we will not have to pay compensation since we are not decomissioning any private assets. If preivate companies choose to shut them down that is their choice.

            It was their choice to accept compensation too.

            >In addition it will ensure that prices are at current levels FTTP will be forced to compete with existing technologies

            Competition at the infrastructure level is not advantageous for the end users. Google natural monopoly.

            However, competition at the retail level (heavily promoted under the NBN) works very nicely.

            >(which under current NBN is illegal).

            That is not correct.

            There are no laws against operating competing networks.

            However, a competing fibre network would be required to offer open wholesale access similar to the NBN. Competing non-fibre networks have no such requirements.

            Optus and Telstra not decommissioning their networks after they agreed to would not break laws but would breach contracts.

            >If as you and many other so passionately argue that FTTP is vastly superior then it should stand on its own.

            You’re still thinking in terms of running a private business.

            FTTP *is* vastly superior, but a business going for a commercial return would cherry pick only the best areas (high density, high incomes, etc.). Here, the market may be able to support multiple networks. Here, the superiority improves end-user services *and* wins customers.

            The NBN is a national project. The goal is to provide everyone with broadband meeting certain specifications. The goal is not to make large sums of money, just to provide a modest return.

            Trying to run an NBN alongside existing networks would be like trying to run (say) a second power grid while still operating the old one. Even if the newer grid is technically superior (lower losses, “smarter”, etc.) the market would be unwilling or unable to pay off the new grid while still paying off and maintaining the old one. Why leave the old one to die off slowly when you can simply pay compensation and decommission it?

            When you are forced to build nation-wide infrastructure, with a goal of improved service quality (NOT profit), then decommissioning the old infrastructure is the only practical way to get the job done.

            Google “natural monopoly”.

            >Why are you suggesting / encouraging us to PAY to decommission assets when you claim they will become obsolete?

            “Obsolete” doesn’t mean “not a drain on the economy”.

            Any dollar keeping the old networks alive is a dollar that isn’t paying off the new infrastructure.

            If you keep the networks alive…the shareholders might be happy, but the end users suffer *increased* prices from having to pay off a new network AND maintain the old ones. The usual “competition brings prices down” mantra falls apart past certain ratios.

            If you compensate the old network owners, then you can keep shareholders are happy while also capping the amount that can be lost to the old network.

            >To deal with the universal service obligation (USO – serve regional area at same price as cities despite cost difference) i suggested a direct subsidy from the government instead of a cross subsidy incorporated into the price. This would allow it to earn a true commercial return instead of the paltry 7% p.a.

            Why? Why do you want NBN Co to earn a “true commercial return”? Should power and water and rail companies earn high commercial returns too?

            You’re now making it harder (if not impossible) to maintain uniform national wholesale pricing, but you’re probably opposed to that too.

            Cross-subsidisation is normal with infrastructure. Why should it be arbitrarily dialed down (you cannot fully eliminate it), adding more work for the government?

            >As a final point to people who say to ignore the cost – look up opportunity cost. If you cannot think of a better use for the 27+ billion dollars (ignore debate about capex vs opex especially before a profit is earnt)

            That isn’t how accounting works. I don’t feel like explaining it. Read the often-linked article from the parliamentary library.

            >thats fine but there are solid arguments for other projects that are just as valuable.

            Such as?

            The government can invest in them as well…if they are also investments.

            >Even if it is the best projects, there is still a good reason to critique it and reduce the Capex / Opex so that we get value for money


            >this is my personal impression of what turnbull is now doing

            How is he improving “value for money” by replacing a fully costed network with an uncosted plan (that’s very short on detail – it might not produce a return at all!) which seems to focus around a technology with a much shorter useful lifetime?

            Replacing FTTH with FTTN is like building the Sydney Harbour Bridge* with only two lanes. Sure, you cut down the capex and opex….but what happens when you need to upgrade it? That’s right, you fork out more money. Whoops.

            *The conservatives of the time had arguments against it that were surprisingly similar to the Coalition’s against the NBN…

          • @Michael “1. Roads, hospital, etc are cited as similar infrastructure in the public good. These are ALL on budget.”

            There is a simple reason for this, those items are not 100% user pays! the NBN is and will generate a return, public roads and hospitals do not generate a return!

  9. If the entire cost of the NBN should be booked as an asset and this is an undisputable fact, why doesn’t the Government move a censure motion against the Opposition for repeatedly claiming in Parliament that the NBN outlays should be expensed?

    Huh?! huh? huh?!

  10. It’s an expense. Just because they’ve wrapped the expense with a company as a middle man does not make it any less than an expense.

    You could label road expenditure as an asset in the same way as long as your wrap it up in a company first.

    The company does not even have to make profit, just like the NBN is unlikely to turn a profit, for the book cookery to work.

    • If you are happy to charge users to use that road so that that road will mbe clear of debt and be returning a dividend after x years , why not. Businesses do it

  11. Bring back Paul Keating! He wouldn’t stand for this crap, he’d chew Abbott and his monkys up and spit them back out. Poor Labour, they are so weak and useless these days.






  13. …uMMMMMM, has anybody ever thought of asking what a certain Peter Costello thinks of the NBN? Now that, in chess parlance, is what would be called “A CONTRIVANCE!”

  14. A little of plans unfolding, Rupert, Sky Sports, Foxtel. Delivered by Cable – HFC of course and who is pushing taxpayer funded upgrade and extension and which news organization is promoting that taxpayer funded option. And which Political Party is also heavily promoting this “upgrade and extension”

  15. If the NBN had even the slightest chance of being a viable investment it would have been built by the private sector in Australia and in many other countries. But without a plausible business case no one in the real world would touch it. Creative accounting aside it is a massive expense for the taxpayer for a long time to come. An all for the privilege of watching recycled television shows that we have already seen on free to air TV.

    • “An all for the privilege of watching recycled television shows that we have already seen on free to air TV.”
      This shows how much you know about what the NBN is, it is replacing an old telecomunications infrustructure with a new technology that will be able to move any data around. Get out and read what can be moved over the fiber network instead of making un-informed silly statements.

    • @ TerryR,

      “If the NBN had even the slightest chance of being a viable investment it would have been built by the private sector in Australia and in many other countries…”


      ” Creative accounting aside it is a massive expense for the taxpayer for a long time to come.

      Firstly, it’s internationally recognised accountancy, not creative accountancy.

      Secondly, the NBN is not being funded from income taxes.”

      Thirdly, it is being built by private enterprise in many other smaller more populous countries.

      Fourthly, that (as in thirdly) will never happen here due to our opposite demographic/geographic to these other nations.

      That’s why the NBN has been carefully planned for a small but decent ROI, cities subsidising country, migration of current customers from established companies to NBN and the closure of old, obsolete technologies.

      Like HFC, if any other company but Telstra had tried to roll out FTTP throughout our nation, they would have been doomed, with Telstra (and their last mile) undercutting to the point of huge losses, to stamp out the competition.

      Then, if any other company (or government) had rolled out FTTN, with the $’s needed to be paid to Telstra for the copper to use with the FTTN roll out, Telstra have admitted they would roll out FTTP and again stamp out the competition.

      Four Corners (via the Register UK) April 2011…

      Stephen Conroy: “The government could spend $15bn to build a fibre-to-the-node network, pay $15-20bn to Telstra for compensation, and then Telstra could take that money and build a fibre to the home network past you and strand 70 per cent of $15bn on the side of the road,” Conroy said.

      Now safely in America, former Telstra executive Phil Burgess agreed with Conroy’s assessment, saying “that’s the way competition works…”

      Say what you will, but while the NBN isn’t perfect it (unlike any other alternative) covers almost every grey area.

      • The debate about creative accounting is NOT how you record the figures but how you derive them.
        See how gevernment have moved billions of spending out of 2012-2013 financial year. The proof is in how there is a surplus but net government debt is still increasing. Why are we borrowing more money if we are making a profit?

        • Michael we are going around in circles.

          What the evidence from the experts who know says, is – the NBN accountancy is correct. Period.

          You and others can disagree and make arguments against the facts, for whatever your reasons, as you are entitled. But it doesn’t change the facts.


        • Net debt is typically calculated as gross debt minus liquid assets (eg. cash).

          If you borrow money to buy a house at (say) 5%, and the house value is projected to rise at 5%, your overall financial worth does not change even though your net debt does up.

          You only “lose” money if the value of the house rises at a lower rate than the interest rate on your debt.

          If you buy a bunch of houses at very good prices, and these houses rise substantially in value, you can become very wealthy even if you seem to have a mountain of debt. If you rent them out, they don’t even need to rise in value at a rate higher than the interest rate.

          As as been repeatedly pointed out, the accounting for the NBN has been validated by people who understand accounting better than either of us. I am inclined to trust them.

          • 2 points Jean,

            1. Centro had all of its accounts audited anually as it was required to by one of the big four.

            2. It is not whether they followed the correct procedure for classify assets, revenue and expenditures – but whether they made accurate assumptions and forecasts. This is a 20 year project and necessarily it will require 20 year forecasting to formulate the business plan – is it accurate?

            e.g. the NBN inside the business plan contains the assumption that it will have a profit margin of 80% once it has finished construction. Necessary to obtain its RoI, but is it realistic or in the best interests of consumers?

            Re: carbon tax statements: Yes it does matter!. If you havent heard about inflation look up the RBA’s charter and how important inflation is to setting interest rates. If you want to learn about ugly cases of inflation look up Germany in the 1930’s or Zimbabwe currently (hyperinflation).

            In addition with any tax there is a dead weight loss associated with its implementation. So even if it is revenue neutral there is a cost associated with collecting the revenue and distributing it back to the population. According to treasury figures it is about $4 for every dollar of the carbon tax revenue i.e economic actyivity falls $4 for every dollar of revenue the carbon tax earns.

            But peronsally i think that the carbon tax will be revenue negative (especially once it becomes an ETS), as the compensation is largely fixed (i.e household payments will not decrease in nominal terms) but if it works and emmissions reduce then so will revenue.

          • If the problem is the forecasts, then Abbott and Hockey should attack the forecasts.

            Instead, they are claiming it should be on the budget *now* (contrary to existing accounting standards), which steers people away from debating the actual risks of the project.

    • “If the NBN had even the slightest chance of being a viable investment it would have been built by the private sector in Australia and in many other countries.”

      Other countries should follow our example. As for the private sector they have failed dismally and proven why they cannot be trusted with vital communication infrastructure like the NBN.

      “But without a plausible business case no one in the real world would touch it.”

      Good thing we have one. You can thank Quigley for that.

      “Creative accounting aside it is a massive expense for the taxpayer for a long time to come.”


      “An all for the privilege of watching recycled television shows that we have already seen on free to air TV.”


    • “If the NBN had even the slightest chance of being a viable investment it would have been built by the private sector in Australia” Yep – just like the copper network you are currently using…except it wasn’t built by the private sector either. It was built by the government, maintained by the government, returning a profit to the government…then they sold it off. Much like the plan for the NBN…except instead of doing it over 100 years they plan on doing it in 10.

      Then the private companies failed to look after those in the bush and less affluent suburbs. They then spent the minimum in maintaining said network knowing full-well that it is yesterday’s tech, to the point that in some areas people can’t even get a basic braodband connection because the local exchange has no more capacity and there is no plan to upgrade that facility. And to add insult to injury most of the private companies were content to not make waves or truly compete in this captive market that is Australia.

      If this was left to private companies we’d end up with a patchwork system of differing specifications and tech that would hobble a truly national network…much like what occured in the US telecommunications system with proprietary networks that didn’t “play well with others”.

      For example company X lays fibre into suburb A, there is now a disincentive for any competitor to outlay a duplicate system in suburb A. The potential return on investment is greatly reduced because Company A beat everyone to te punch…so it is likely that no one else will lay down their network in Suburb A. Company X might “lease” their cable, but at a price that makes it hard to compete…so Suburb A essentially becomes a fiefdom. Meanwhile Small-town out in the back blocks loses it’s wired broadband because it isn’t profitable and the only option avaiable to them is expensive wireless.

      “But look at mobile phones, they all have towers all over” you say…
      But it is relatively cheap and easy to put up a tower….and you need to provide a seemless transition for those moving while using your network, thus we have overlapping cells.

      The mantra that private enterprise will provide everything cheaper and better is false. Look at banks, look at oil companies, look at the supermarket chains. What they do is provide dividends to the share-holders. They might dress it up nice, but in effect they take “tax payers” money and give it fat cats. At least the NBN which is currently not funded through taxes, will develop a backbone for the future, that when is sold off will provide for the next 100 years.

    • Terry.
      Different scenarios, Note iiNet is complaining that they cannot match the NBN’s wholesale price with their transact product. Volume and scale.
      The private sector has a higher funding cost AND requires a ROI period of 3-5 years PLUS a Profit of at least 20% p.a
      No private company could fund and take on this project and deliver what this will at a reasonable cost to the user.
      It will be an assett for the nation for many decades and should never be placed in the hands of the private sector. It is too important to let the bean counters screw it up for max dividends
      To achieve the full benefit it must be completed as planned, that being the case it will not only pay for itself and obtain an ROI. But the benefits for the economy and the Nation will be massive, increasing GDP and profitability and shareholder return for the companies and businesses that have excellent management. Australia desperately needs to diversify and decentralise

    • Following that logic, if the Sydney Harbour Bridge was viable, it would have been funded by the private sector. Instead, even though it was discussed for decades, it didn’t happen until the government built it.

      There is a clear difference between “financially viable for a government to build” and “commercially attractive”, and you won’t understand the NBN until you understand the difference.

  16. When does the LNP attacks on our economy become against the national interest. They seem to be doing everything they can to paint our economy as a train wreck when it clearly is the opposite.

  17. Renai, your continued one-sided reporting on the NBN makes The Australian look like gospel.

    Either the NBN is going to have a return or it’s not. Don’t you think the private sector might have built the NBN if it was deemed to be the case? Your core argument that the NBN shouldn’t be on-budget and claiming anyone to claim that it should otherwise as being “misleading” is misleading in itself.

    Someone has to pay for all of this infrastructure, right? How are NBNCo’s forecasts under which this supposed return working for them so far? It will be interesting to see their revised corporate plan – I trust that will show who has been doing the misleading.

    As people pay more for just about everything in a couple of weeks time thanks to the Carbon Tax, any argument that the LNP could mismanage our economy any more than Labor through its handling of the NBN is going to have a very uphill battle to gain any traction.

    • JT, coming from someone (me) who isn’t politically motivated, but well and truly NBN motivated, let’s look at what we do know (the evidence)…

      Our (Labor or Coalition) economy is one of the best anywhere.

      The current (well Rudd led) government was lauded by those who actually know, for their swift action in tackling the GFC.

      Swanny for all his nerdiness (and I’m careful in saying that at an IT forum…lol) was voted world’s best Treasurer. Only won by one other Aussie… Paul Keating (iirc). Wank, wank perhaps, but…

      And the last GDP number (4.3%) was extraordinary (according to one average Joe).

      Of course these great achievements are also a credit to previous governments too…

      But seriously, I think this is what Renai is getting at in relation to this forum being evidence based.

      People claiming things such as governmental economic mismanagement, when the evidence is clear (that no matter how much the opposition say it and their media mates repeat it) while the government are clearly disliked, they certainly are not mismanaging the economy…in fact, quite the contrary.

      Same with the NBN, imo…

    • “Renai, your continued one-sided reporting on the NBN makes The Australian look like gospel.”

      LOL. The only ones that could ever even remotely take The Australian seriously or even consider it “gospel” are simpletons and those with an IQ lower than 50. This puts them on par with creationists and flat-earthers… you could understand why they would consider reality “one-sided reporting” as it simply doesn’t fit in with their warped and erroneous view of the world.

      “Don’t you think the private sector might have built the NBN if it was deemed to be the case?”

      They would but they would cherry pick and the other ~60% would miss out, now you see why we need NBNco.

      “Someone has to pay for all of this infrastructure, right?”

      That’s right we call these people “customers” they buy a service from an ISP which goes to NBNco which then pays the money which was spent building the network.

      “How are NBNCo’s forecasts under which this supposed return working for them so far”

      Quite good actually. Ludlam described it as “much more lucrative business” since NBNco originally predicted that most people would choose the 12/1mbps plan however the most popular plan is the 100/40mbps plan, and most are actually choosing 25/5mbps plans and higher, with the faster plans being more popular than the 12/1mbps plan that means NBNco will make all that money back sooner than originally planned so you can stop whining now.

      “It will be interesting to see their revised corporate plan”

      There will be nothing interesting in it at all. Predicted numbers don’t necessarily reflect real world numbers as the case is now and any numbers in a revised plan still have to be conservative.

    • I Agree!

      Reporting is so overrated, why not just make up assertions as this esteemed commenter has done?

    • @JT

      I’m sorry, did your argument just get destroyed by a bunch of other commentators before I even got to it? Yeah. Life’s like that sometimes ;)

    • There are returns and there are returns. See my above comment about financially viable vs. commercially attractive.

      Also, it is foolish to assume that short term setbacks (like the Telstra deal taking ages) causing slippages mean that the long term return is not achievable.

      Oh and re: the carbon tax, you’re ignoring the compensation from the government (you know, the compensation that makes the tax revenue neutral*…hardly how an actual “tax” works…) like most of the mainstream media. They pretend it doesn’t exist when criticising the tax itself, and then go back to accepting that it does exist when they feel like criticising the compensation.

      *If this concept is too hard for you, consider this: if your bills go up by $50, but you pay $50 less in tax, does it matter that your bills went up?

  18. Sounds to me like the writer of this article is a died in the woll left leaning labour voter,

    I dont claim to be an accountant, but I do know accountants in the most part cook books to make them say whatever they want,

    Bottom line if you are spending money it HAS to be part of you budget, what you are saying sounds to me like ” If I buy a Classic car as an investment it is not part of my budget so the money I spend on it does not count” silly question, but if I spent the money surely it had to come from somewhere, if I make a loss for the year it is a deficit,

    I doubt this will get published by a left wing writer but you never know, I maybe shocked


    • @Neil “Sounds to me like the writer of this article is a died in the woll left leaning labour voter,”

      You dont come here often do then do you, Renai frequently has positive things to say about Malcolm Turnbull and is frequently criticised by his readers for giving MT far too much credit/benefit of the doubt!

      • You are correct I dont, not sure if I will after all the dribble that the Author wrote so very biased,

        MT is clever and at least been in the real worol inlike Conroy and his gang, I am not a fan of Stephen (I rule the internet) Conroy

        • and we wont miss you one bit, enjoy your Noise Ltd brainwashing and the rest of us will enjoy thinking for ourselves!

          • I am thinking for myself, it looks like the rest of you are reading Propagander and following the sheep.

            Obviously I hit a nerve cos you got a little angry

          • Thats not anger Neil. If you read through some of the threads with 200+ posts, you’ll see people go at each other over incredibly minor points (me included…). THATS where you see anger, not here.

            As for your stance, the others are right. Renai is perhaps the most neutral of all the IT reporters I’ve seen in Australia for years. Just about every other site has an agenda one way or the other, which taints their opinions and viewpoints.

            Renait doesnt drink from that kool-aid bottle, but calls it as he sees it. There are aspects of the Labor NBN model he certainly doesnt agree with, and comments on that regularly, just as there are aspects of the Liberal stance he speaks out against.

            This is one of those times. The Lib’s are putting misleading numbers out there, and have repeatedly done so. When it can (and has) been proven those numbers are false and misleading, why wouldnt he report on that?

            If the numbers were correct, or Labor was telling furphies, he’d say that too. Its what most of us like about Renai – he’s not tied to one side or the other.

            Unfortunately, as soon as he reports one way or the other, he’s instantly labelled a Lib/Labor shill… Read through a few of his opinion pieces and see for yourself. Seriously. You’ll get a solid impression that he voices opinions for both sides.

          • @Neil I know you’ve been sin binned but i’m not angry, i’m irritated – I fully support the Labor NBN vision, sure there are a few imperfections but on the whole Australia needs the NBN as is, not Tony Abbots patch work quilt of obsolete technologies!

            And dont call me biased or left wing, my voting record speaks for itself:

            Federal: Liberal Votes = 4, Labor Votes =2
            State: Liberal Votes = 6, Labor votes = 0

            Total tally:
            Liberal Votes = 10 to Labor Votes = 2

            Now tell me im biased again!

          • @Jean W yeah anyone claiming to being informed by reading Noise Ltd productions is just highlighting their ignorance! :-D

          • I will move out of my cautiously middle ground (well to the right of middle), and comment on how lovely life must be when you can ignore what you do not agree with so easily.

            I will defend the australian here (no idea about daily telegraph so, not my problem) but i find it amazing that it is regularly accused of bias.

            1. Attacking government regularly and strongly when there was no problem with the BER. Wait…………

            2. Reporting on Kevin Rudd’s chaotic and inefficient leadership style. Where is Wayne Swans media conference from earlier this year……………….

            3. There were No leadership tensions in the ALP in 2010. (Kevin is still our leader right?)

            4. It was and unfair policy to attack and investigate the Wivenhoe dam operators, they did everything correctly and should not be subject to scrutiny…………….

            It is interesting how the left wing newspapers are rarely accused of bias or it could just be that consumers are voting with their feet and these institutions need government funding to survive. Remember as everyone will attest they prefer reading what agrees with their opinion or is close to it, so one could agrue that if no one is reading it, then its position is far outside of the mainstream?

          • @Michael Im not saying all their content is unwarranted but 90% of their NBN coverage is so biased to be beyond belief – see this example from ST:

            for those that haven’t:
            Looks like the CVC issue is being addressed soon :-D.
            Also, here’s the Australian version:
            If anyone can grab the unpaywalled version it’d be great….but does anyone see a slight difference in tone between the 2?…
            SMH: The builder of the $36 billion national broadband network (NBN) is set to alter the conditions of access to its infrastructure for telecommunications providers such as Telstra, Optus and iiNet to ensure it’s affordable.
            Aust: THE ACCC will shortly reject NBN’s access undertaking, demanding it comes back with a more precise information and provision for regulatory oversight.
            ….It’s almost as if the Australian…..has an anti-NBN bias for some reason….

          • I wont disagree on the NBN issue. However with any major project there needs to be effective constructive criticisim. A lack of criticism got us pink batts and green loans and almost (cash for clunkers). However that being said it needs to be accurate and factually based not smoke and mirrors.

            My largest objection is that so many people see the NBN debate as black and white wheras there are many shades of grey.

            You can debate the regulatory framework.
            You can debate the pricing model.
            You can debate the rollout model.
            You can debate the deals with telstra and optus.
            You can debate the finacial figures.
            You can debate the overall pricetag / objectives / technology mix.

            Whether or not you choose to debate these points, you can still be for the project but in a different form, and my main objection to the SMH / Age, is that they tend to report government spin doctors without decoding the spin, which is a black and white picture.

            Personally i think both sides of politics are terrible (journalists in general not much better) in this regard as you are either for or against an issue. There is very little room to take the middle ground on how it is implemented or other subtle variations. This is the type of debate we need and less black and white.

          • Yep, it is a fine line to walk and does depend upon your point of view, however I feel that rubber stamping everything is just as bad if not worse.

          • Michael, we all know what you are saying. The NBN is a big, bold plan and it needs strict accountability … and “we all (well I) totally agree”.

            Where I disagree is, we are not rubber stamping everything as you claim, we are saying, there are projections from a number of recognised sources saying this and that should occur, which will make the NBN a complete success.

            No, no one knows for sure (again proving the folly of calls for a CBA, imo). But all we can gauge from are the numbers, as best we know.

            But we (as in the pro NBNers) are working from a basis of solid estimations (and lets face it every build is estimated, so nothing new here – the NBN is just on a much larger scale) as opposed to those who bag the NBN who really have no basis and work on gut feeling normally associated with their political bias, the fact that they have no idea/vision at all or out and out lies.

            Which category (if not all) do you think this one slots into?


          • This is a big issue for me, a cost benefit analysis.

            Why is it so scary for people who support the NBN?
            If it is relatively simple to complete 200k—>1million? (numbers from nowhere) then this is short change compared to the entire project. If a CBA could deliver a 0.1% savings, that would be 27 million dollars (just of capex) which would far out weight the cost of conducting the CBA.

            If it is superior technology and demand exists why hesitate when a simple project would diffuse critisism (ie save marketng costs) and possible deliver cost savings – what is the problem?

            Is there something they are afraid of?
            Conduct a CBA, release the models to the public and we will judge the validity. I am sure i can find many more government projects that have wasted money far in excess of a single CBA. (let us start with reports into submarines).

          • “This is a big issue for me, a cost benefit analysis.

            Why is it so scary for people who support the NBN?”

            Not scary Michael. I’d happily have Labor do a CBA, even though they don’t want to….but there’s 2 significant problems with that:

            1- A CBA CANNOT take into account the scope of the NBN, it’s impact on society and industry as a whole.

            2- Secondly and MOST importantly, the Coalition have already stated they won’t accept a Labor CBA. Apparently they’re arrogant enough to believe they are the only party who can commission an unbiased, efficient CBA.

            Leaving aside the first one, which is the excuse LAbor use not to do it, the second one moots the entire point. If the Coalition won’t accept the CBA anyway, WHY do one when, even if it IS positive, the Coalition will only use the negatives as attacks, as they do now?

          • The argument that there are many benefits we do not yet know about has always been a weak one. I understand that new technologies and ideas can be discovered but to wager $27bn on it?

            To complete a CBA to account for the benefits you are able to fix the aim of the project – i.e broadband to 93% etc and then minimise the costs. Or it is also possible to do a cost benefit analysis to look at the social benefits which are available currently. Personally i think it would be very interesting to know if there is a real possibility or are we being had.

            If the productivity commission conducted it (I mean what have they done during labour term in office) there would be no questions about the independance or the quality. The assumptions should be made public so everyone understands how the result was arrived at. If this did happen whether or not Abbott accepted the outcome (personally I think turnbull would convince him to) most of the possible avenues for opposition would vanish.

          • You’re a sensible guy Michael. I like to think I am too….sometimes….

            I have no issue, in theory, with a CBA. I think it would have difficulty taking in the scope of the changes the NBN will bring overall, but I’d accept it done by the PC.

            However, the Coalition have, as I’ve already said, repeated that they will NOT accept the CBA, EVEN if Labor did it now. This smacks of petulant 6 year to me. They are WELL aware that a CBA MAY come back in a generally positive light towards the NBN as it stands. And they’re likely to rip ANY negative aspect to shreds and use it as cause, even if it can be modified, to reject the NBN all over again.

            I don’t and never have really objected to a CBA. I object to the idea, because it’s not going to ACTUALLY do anything in the political landscape, which is the biggest challenge the NBN has at the moment. Not the only one, but the biggest.

          • @ Michael imo, one of the strangest parts of those who aren’t convinced about the NBN, is the continual contradictory claims…such as your’s here…


            “The argument that there are many benefits we do not yet know about has always been a weak one…”

            “To complete a CBA to account for the benefits you are able to fix the aim of the project…”



            If as you admit, the potential benefits are unknown, then how can a truly factual CBA, which you also claim can and should be done, actually be done?

            Here’s an interesting comment via the Register 14 June 2012, from Phil Ruthven of IBISWworld…

            “…he said, adding that his own business cannot launch new products for lack of NBN-grade connectivity.”

          • Ahh, It is not contradictory.

            There are unknown or unquantifiable benefits so what you do is fix the service level at a common goal.
            i.e. 100mbits to 93% of the population etc.

            This will ensure that the benefits are the same (or largely similar) under all the options considered. Then to compare options you minimise the costs associated with each plan. This is often advantageous as benefits can be qualitative or vague wheras costs quantitative allowing for much more ease in comparison.

            N.B. The main issue with this approach is when one method offers a solution far in excess of the goal, it does become harder to compare but it is still worthwhile as cost comparison is always valuable due to the opportunity cost of using the funds.

          • Well again we’ll have to agree to disagree, because it is contradictory imo.

            Seems to me the only people who believe a CBA can or should be done are the Coalition and a few people at forums who tend to always side with them (and some who admit to being on the right of politics).

            Here is the view from someone who should be apolitical on the subject (who ironically, generally has more akin with the Coalition than Labor)…


            You will probably need to copy/paste the headline and Google to get the entire article/avoid the pay wall.

            Also I agree with 7T who mentioned that the Coalition even admitted early on, that if a CBA was done and came out NBN positive they still wouldn’t honour the findings anyway…

            So :/

    • I remember Renai being criticised when he admitted to being a small l Liberal, who, to keep the bastards honest, preferences the Greens.

      Neil, because a writer calls those on either side of the political divide, wrong… or goes one further to say they are talking complete bullshit and does so with factuality, does that make the writer incorrect? Or does it simply show the complete sheepish bias, of some of those readers offended, who then try for retribution by making ridiculous, finger-pointing comments?

      • to say that someone preferanced the Greens to keep the Bastards honest shows the lack of knowledge that you/they have, a prefferance to the Greens in most cases is that same as one to Labour.

        I did not see any facts, just accounting mumbo jumbo (if we hide our debt here nobody will see it – so therefore it is not debt but investment) wow some people are a little silly.

        I am not offended in the least,, or biased, I have formed opinions on what I have read and what I have seen, I am not a fan of continually spending money we dont have to build a Telstra mark 2 Monopoly It sounds to me like you think I am a true blue Liberal, that is not true, I just think being 400 billion dollars in debt is not smart. Most educated people would and do agree,


        • If you don’t have even a basic understanding of accounting, how can you comment on this at all?

        • “Most educated people would and do agree,”

          Comments like that give you no credibility. Any sources? Are the Australian government uneducated then? Most educated economists, among the most qualified to comment, say Australia has incredibly low debt and can easily afford to spend on infrastructure.

    • Neil, I’m afraid to say you are showing your own political bias quite well (ie right-leaning).

      How about you have a check back in Delimiter’s archive on topics such as CVC pricing, deconstruction of competition and such. You will find Renai (that’s ‘the writer’s’ name by the way) is quite strong in his objections to some parts of the NBN.

      Have a look at my own blog, or perhaps Michael Wyres, Phil Dobbie on ZDNet, nbnmyths.wordpress. Oh and don’t forget any NUMBER of forums on Whirlpool. These opinions are held by some of Australia’s most respected tech sites and journalists (Renai among them). This is not political bias, it is fact. The fact you believe it is political bias shows where the bias truly lies.

      The NBN is a GBE, not a business. If it were a business, the NBN’s construction would be considered CapEx and the loss written down against forward taxes (ie reducing the ‘operating expense’). There would be no disputing it was CapEx if it was a normal business, even with predictions not yet proved, because CapEx only requires it to be built ‘for the purpose of making an income return’. But apparently, because it is a GBE, like Aust Post (which posted a profit above $200 million last year) apparently writing down CapEx as it is and subsequently having no ‘tax’ on it by staying out of the budget (operating) expense (where other areas must be cut to pay for it, hence the ‘tax’) is not considered the same.

      You may disagree with the NBN. It is a free country. But before you label arguments against Coalition FUD of the NBN as ‘politically biased’, how about you read a bit more about the lies the RIGHT-wing is telling us, as WELL as the left-wing as you’ve been doing….

      • I have no polital bias, I have a bias against fuding figures and hiding thing in different spot and calling them this and that to fudge a bottom line to con the people in to thinking the govt has a clue, that being either side of politics, bottom line we cant afford another Telstra, we cant afford to waste money on what willbe obsolete if it ever get finished etc etc etc,

        I dont need to go back and read previous articles, I was just commenting on this one,

        as they say throw out some bait and the fish will jump on it.


        • By calling it “another Telstra” you are ignoring major dissimilarities.

          I’m sorry if you don’t understand accounting, but I can assure you that it is more complicated than you seem to think.

          Typically, it’s not fair to say that a government doesn’t have a clue (they are certainly more educated in finance than you are), it’s more that they are usually driven by election promises and ideology. *Legitimate* criticism usually relates to the government failing to focus on a particular issue, or focusing too much on something trivial.

          Oppositions are driven differently, and *legitimate* criticism of an opposition usually relates to focusing too much on their strategy to gain power and too little on actual issues.

          Most of the criticism (of both sides, but mainly of the government at this time) is usually not what I would call legitimate.

          However, it is fair to say (particularly in this case) that the Coalition is too focused on destroying Labor, even to the point of ignoring facts to try and make them look bad. Labor isn’t *perfect* but they are mostly doing what they said they would do (eg. they said they would build an NBN…and they are), and they continue to successfully pass legislation and not fall apart within weeks (contrary to what the Coalition kept insisting).

          Tony theoretically has the mental capacity to legitimately criticise Labor, but he seems to be locked in CRUSH KILL DESTROY mode, so it isn’t happening.

          For you to have got the impression that they don’t have a clue suggests that you only listen to things you already agree with. (Confirmation bias)

          • Jean worth noting the agreement with the independents was limited, they are free to act and vote how they see fit, they by their actions have demonstrated their commitment to what they believe is best for the nation and they also take care of their electorates without being caught up in ideology.
            So Abbott has always had the opportunity to craft policy, maybe work with the independents and if they believe it is in the National interest have it passed. They have never even tried.
            All they have been interested is Destroying the Government, the Labor party, the unions and in the process they may well destroy our economic future

  19. Renai, jsut to let you know, the link to the Dalzell report PDF is broken (404 error).

  20. The final irony about all this is. . . the worst thing that can happen for Conroy is if Labor wins a third term in 2013.

    If the Libs win the next elections, they will naturally cancel the NBN (and save Labor having to do it). If Labor wins, they will find themselves in the embarrassing position of having to cancel their own project.

    As much as Quigley is downplaying the failures, there’s already plenty of evidence that they are having great difficulties meeting their original, ambitious targets in both brownfields and greenfields. As time goes by, the difference between hype and reality in terms of delivery on time and on budget is only going to grow bigger. You can blame the ACCC, Telstra, Fujitsu, Homer Simpson and even Malcolm’s pet chihuahua, it doesn’t really matter.

    At the end of the day, this project will end up being scrapped. An electoral loss will save Conroy the embarrassment of having to put down his own puppy as the cash blackhole gets bigger and bigger.

    • Forget about Conroy being embaressed, what about the poor county what happens when we are over 1 trillion dollars in debt ?

      • Alright Neil, that’s enough, it’s not that I object to your views, but some of them are factually incorrect (eg a trillion dollars in debt) and you’re harming the conversation. You’re in the sin-bin for a week.

        • Ohhhh,
          He presents just like that other ignorant opiniated loud mouth ranter Neil M, Scratces head – I wonder ?

        • Depends on what he means by debt Renai. If he’s talking Govt debt then no, we arent $1 trillion in debt. But if he’s talking personal debt as well, (credit cards, mortgages, etc) then I believe that figure isnt too far from the mark.

          Its a sensationalist statement at any rate, personal debt has nothing to do with what we’re discussing, but it may not be as far fetched as you initially thought…

    • I’m sorry Eli, but do you know much about Quigley? How about you have a read of his background. And the fact that he gave his first years salary to charity. And the fact that he has said he will never accept an executive bonus.

      Quigley is part of the NBN because he truly believes this is one of the most important telecommunications projects in the WORLD right now, let alone the country. He says it can be done. The other executives and engineers say it can be done. These are executives and engineers not only from Optus and Telstra, but also from some of the worlds largest Telco companies. They are not here to muck around with some half-arsed plaything of policy.

      The NBN is costing the government between $27 billion and $30 billion. Or less than 8.5% of a single yearly budget over 10 years…or, if you like, around 0.8% of the budget every year. Hell, removing the carbon tax would do more damage to the bottom line than the NBN. Or dropping a single years worth of OTHER NON-investment infrastructure, such as roads, rail and ports. I cannot see how you believe that less than $3 billion a year for 10 years (its actually spread out mostly over the next 5 years, but we are talking about the construction time) is utterly unachievable in terms of money. And to suggest that the NBN will put us ‘$400 billion’ in debt, as Neil has (or even more ridiculously ‘1 TRILLION DOLLARS!’ *holds pinky to lip with evil look*) is also ridiculous, considering the total cost of the NBN, if it were born by the government alone, would amount to less than 20% of the more than $200 billion we’d need to increase debt by to get to that $400 billion.

      Am I suggesting Labor is allowed to spend what they like? Of course not. But in 10 years from today, the network will begin paying BACK that debt. (and whether you believe the NBN is achievable or not, if it is, it WILL begin paying back debt because 90% of Australians who will use the net in 2020 (about 20 million people) will have little choice but to use and therefore pay for, the NBN)

      Use all the ‘Labor never finishes anything right’ rhetoric you want. Labor AREN’T building the NBN; NBNCo. is and they are chartered with doing exactly that in the quickest, best and cheapest way possible. Even I would hesitate in allowing the government to directly build it, ANY government.

  21. Hey Renai, you’ve probably seen this, but for those that haven’t:

    Looks like the CVC issue is being addressed soon :-D.

    Also, here’s the Australian version:

    If anyone can grab the unpaywalled version it’d be great….but does anyone see a slight difference in tone between the 2?…

    SMH: The builder of the $36 billion national broadband network (NBN) is set to alter the conditions of access to its infrastructure for telecommunications providers such as Telstra, Optus and iiNet to ensure it’s affordable.

    Aust: THE ACCC will shortly reject NBN’s access undertaking, demanding it comes back with a more precise information and provision for regulatory oversight.

    ….It’s almost as if the Australian…..has an anti-NBN bias for some reason….

  22. I have mentioned previously about the NBN enabling portability and short term sevices. Of great value to renters, overeas students etc. One of the main points TA and MT used to justify 4G

    Club Telco

    Club Telco’s plans are on a month-by-month basis. However, users signing up to a plan must pay a $50 annual ‘membership’. This membership means users do not have to pay a set-up fee unless a new phone line connection is needed and they receive a 5 per cent discount for bundled plans of internet and phone and a 10 per cent discount if a mobile service is added. The telco also will not charge for any costs involved with setting up a new connection if users move unless a new phone line connection is needed. Computerworld Australia has calculated the minimum cost of the contract on a 12-month basis plus the $50 membership fee.

    I can see once all in , short term possibly even weekly would appear.

    Blows that argument out of the water.

  23. Just an aside
    Looking at that photo there was a nagging familiarity looking at their expressions, the frozen gestures. .
    Those get rich quick scam presentations where they con the gullible into investing their life savings. Been to a couple for fun and time proved my avoidance as having been the smart move

  24. All these arguments and all these numbers when, in the end it is us who pays and I want to know how much and how much am I going to get for it and how much will I have left in my pocket afterwards. I don’t believe anyone about this and won’t until I see my first account.
    I hope my landlord is willing to rewire my home.

    • Have a chat with your landlord. Depends how long you intend to stay there. You could split the cost of running one point to a convenient location near a power point where you can plug in a router. Win Win – he has a more desireable letting property for the future and you get set up cheaper than a home owner. If the cost is more than $100 you are getting ripped off

    • Here’s a simple summary of the NBN.

      It replaces your phone line. The end.

      So all it will do is become the phoneline jack you currently have, and from there you simply run a cable to your modem as you do now.

      I think the modem (and probably cable) will change, but thats about it. How you connect from the modem to the rest of your house will be done in the same way you do it now, whether thats through a fixed line cable, or wirelessly.

      The furphy about needing to rewire your house is very midleading. You can reqire the house if you want to, but if your current setup works, then it will still essentially work the same way post NBN. There will be no NEED to rewire the place.

  25. Well 9f your landlord isn’t, as the anti-NBN people harshly say to our country cousins who do not have decent comms but are wanting… “move”.

    BTW – that’s not my advice, but…!

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