Infrastructure Australia reveals almost no specific basis for NBN privatisation push


news Infrastructure Australia has revealed it did not consult more than a handful of sources or organisations when making its recommendation in mid-February that the National Broadband Network be split up into pieces and sold off to the private sector.

In mid-February, Infrastructure Australia — Australia’s independent authority on infrastructure — released what it billed as a 15-year Infrastructure Plan and associated priority list, marking what the agency said was 18 months of work (presumably since the 2013 Federal Election). The agency said the “first of its kind” plan delivered a roadmap to “more affordable, innovative and competitive infrastructure”.

In its document (PDF, page 110), Infrastructure Australia stated baldly that over the medium-term period, the Federal Government should “transfer NBN Co to private ownership” and recommends the NBN company be split up into parts along geographical or technical lines.

However, it did not include any specific basis for making this recommendation.

In the wake of the recommendation, Delimiter asked Infrastructure Australia what material it consulted before coming to its recommendation (for example, reports or other reference material), as well as which organisations and individuals it consulted.

In response, IA provided a statement which did not directly answer the question. You can download its full response here in Word format.

Instead, the agency only provided a general statement noting that the recommendation to privatise the NBN should be read “together with other similar recommendations” in its 15-year plan, especially those contained in chapters 5 and 6.

“The Funding and Competitive Markets chapters (5 and 6 respectively) of the Plan provide detail to demonstrate that infrastructure services deliver the best customer outcomes, at the most efficient cost, when they are delivered through a well-structured, well-regulated market,” the authority said.
“Chapter 6 provides detail to demonstrate that more mature market structures ininfrastructure sub-sectors have delivered better customer outcomes. The Plan identifies energy markets and mobile telecommunication markets as more mature structures, with road markets and some sections of the water market as less mature.”
“The full Funding and Competitive Markets chapters, including all sources and empirical evidence, form the basis of the recommended treatment of the NBN and the telecommunications market more broadly.  The references are contained in appendix D.”

Appendix D of the report illustrates that Infrastructure Australia consulted almost no documents relating to the NBN before coming to its privatisation recommendation.

The only directly NBN-related documents referenced in the Appendix related to documents already produced by the Government, such as NBN rollout reports, the Statement of Expectations guiding its behaviour, the NBN Corporate Plan, various reports by the Department of Communications and the Arts and agencies such as the ACMA.

The only document contained in the Appendix which appears to examine telecommunications industry structure is a media release from the ACCC on the topic of broadband competition, dated 2014, and the 2014 Vertigan review of the NBN in that same year.

The Vertigan review of the NBN is regarded as a partisan document driven by the Coalition Government’s NBN agenda, due to the presence on its panel of experts of figures such as long-time NBN critic and historic Liberal supporter Henry Ergas.

The list of public submissions to Infrastructure Australia as part of the consultation process around the 15-year plan includes very few submissions related to the NBN or telecommunications in general, with only the Australian Communications Consumer Action Network making a brief submission on the topic.

Almost all of the submissions and reference documents which Infrastructure Australia appears to have consulted as part of the process relate to non-telecommunications types of infrastructure, such as road, rail, water or electricity networks. Very few relate directly to telecommunications markets, which typically evolve much more rapidly than those other forms of infrastructure, or to the NBN situation directly.

Delimiter is also engaged in a Freedom of Information process of attempting to source a list of documents and organisations consulted by Infrastructure Australia in making its NBN privatisation recommendation.

However, although the FOI Act allows the Government to voluntarily create lists of material to meet a request, Infrastructure Australia has refused to do so and has stated that any documents it consulted in making the NBN recommendation would not be covered by the FOI Act. You can read the current status of the FOI request on the Right to Know website.

Infrastructure Australia did note that it has not consulted with either current Communications Minister Mitch Fifield or his predecessor Malcolm Turnbull before making the recommendation.

“Infrastructure Australia did not discuss or communicate this recommendation with any Communications Minister before the content of the Plan was approved by the Board,” the agency said.
“Once IA’s independent Board had finalised the content of the Plan, IA provided a courtesy briefing to Australian Government Ministers on content relevant to their portfolio, as per our Statement of Expectations.”

Infrastructure Australia refused to disclose the identities of any staff who were involved in making the NBN privatisation recommendation. “The Plan is the view of IA’s independent Board,” it said.

Infrastructure Australia’s board contains very little direct telecommunications industry experience, with the only figures with connections to the industry being Kerry Schott, who also sits on the NBN board, and chair Mark Birrell, who was the Victorian Minister for Major Projects, Industry, Science and Technology from 1992 to 1999.

Image credit: NBN company


  1. It’s pretty simple, really.

    That privatisation of public infrastructure is the right thing to do is a Truth among conservatives in the political and business sectors. There seems to be little regard to actual benefits to the public that may or may not flow from such privatisation, and scant if any regard for such concepts as natural monopolies (where it’s more efficient and effective overall to have provision of a type of infrastructure in the hands of a single organisation).

    While a case exists for privatisation of *services* (such as garbage collection, or catering, or, indeed, provision of retail services over the NBN), with significant benefits flowing from competition, there seem to be very few (if any) case studies able to demonstrate any clear net public benefits from privatising infrastructure that could not be realised with competent management. Most examples I’ve seen indicate lower quality outcomes for the public for an equal or higher cost.

    • Privatisation of state assets requires that major shareholders are afforded significant ROI. ‘Free Market’ ideology posits that freeing up those cash flows out of the hands of ‘bloated’ government into private sector and thus the economy is of significant benefit. But they completely ignore the fact that a government owned enterprise can happily operate at cost – there is no need for profit margin. The lack of requirement to spin a profit dividend removes the need to minimise costs such as maintenance and customer service, improving the product, while margins do not need to be maximised, providing greater value for customers. The People own the asset, they derive the benefit of a high quality service, and are required to pay no more than the service costs to deliver.

      It will be interesting to see what the tipping point is for Australia, if we will ever rebel at the transfer of public wealth into private hands and the indefinite bleeding of the economy to sustain parasitic billionaires. In many other countries they have used the military and secret police to remove dissidents and critics of their Freedmanite restructuring. With our new anti-terror laws we’re not that far from such a reality.

      • The biggest issue and what drive this privatization is that the lack of ability (even interest in) how to measure success in terms of social good. We talk about how much the public service costs but we very rarely compare this cost to the social profit of the public service. CBAs are supposed to do this but they tend to do a very poor job. What would a CBA look like on the social welfare system? Medicare? The Police? A big symptom of the focus on cost and revenue vs the public good is very evident in the use of hidden speed camera. Common sense and actual research tells you that a hidden speed camera does a lot less to prevent road fatalities than a visible police presence focusing on safe driving but where is the focus, in fact there is research shows excessive use of hidden speed cameras increases instances of inattentive driving and resultant traffic accidents? How much speed camera revenue is one death worth, most of us would think there is no amount of revenue is worth but those making the decision only really look at the dollars.

  2. “Infrastructure Australia did not discuss or communicate this recommendation with…”
    does not mean:
    “Infrastructure Australia did note that it has not consulted with…”
    Be careful of tricky wording. Not discussing the recommendation that was put in their report does not mean they didn’t consult with the Minister.

    • Either way, the preferences of the Minister and the former Minister are obvious to anybody with half a brain. Even to Infrastructure Australia.

  3. “We only referred to sources that were pre-confirmed to align to our mandated conclusion. As such, all sources were in 100% agreement, therefore further sources were deemed unnecessary as mere repetition of effort.”

  4. The pre-determined “case” is beginning to be made. We are going to do it, regardless of whether we have good reasoning or research behind the decision, only because we conform to a particular ideology within political theory that says companies should operate telecommunications networks no matter what the pros and cons. Also, there’s money to be made!

    Shouldn’t this be regarded as misappropriation of public assets (theft)?

    • Selling it at some point isn’t so terrible (because invariably the LNP will want the shiny $$$) … doing it on IA’s timeframe is though as we’ll be making a rather large loss.

      • Actually, there are many of us who think it *is* so terrible.

        The LNP may want the shiny $$$, but they’d be getting them by selling property that doesn’t belong to them.

        Look at the backlash against privatisation wherever gov’ts have floated it (especially Qld in the last state election, where it was, arguably, one of the issues that led to the downfall of the Newman LNP gov’t – and possibly the Bligh Labor gov’t before it).

        There are many people who look at governments privatising public property as a form of misappropriation – the money is usually spent to benefit the party in power and their supporters, while the private buyers extract significant profits from taxpayers at large.

        • There are many people who look at governments privatising public property as a form of misappropriation – the money is usually spent to benefit the party in power and their supporters, while the private buyers extract significant profits from taxpayers at large.

          That and the pollies usual end up as directors/advisors/lobbyist for it on very large salaries, while the price to the consumer pays for the product they sell goes through the roof…

  5. With Mark Birrell releasing such books as:

    The Young Liberal Way: The History
    Organisation, Policies and Purposes of the Young Liberal Movement of Australia

    I don’t think you need to look to hard to see where the justification came from for a sell off (hint: I’m pretty sure it was an ideological choice, not one based on fact).

  6. The NBN, the largest infrastructure project in Australian history has been totally fumbled by Infrastructure Australia, this body hasn’t a clue. Ever since Tony Abbott has come onto the scene this countries government, advisors and some of its peak bodies have gone looney or maybe they were loonies to start with. Add least under Labor if they were unsure of the subject they would appoint a body with experts in field and listen to their advice, even if they didn’t always follow it.

  7. Civilised nations have anti-monopoly laws, and tough investigatory bodies.

    At the risk of (once more) offending some contributors here, I’m a notorious anti-Labor voter. However, it’s blindingly obvious the Liberal-Nats Coalition would rather die than introduce anti-trust legislation, but Labor is too stupid (without the Greens) to do the job properly. Actually I think even with the Greens they’d find a way to stuff it up.

    We (that’s Oz citizens/electorate) need an authority which can do a Microsoft or AT&T on Telstra, and later on NBNCo. IMHO that’s what democracy is all about.

    Where’s the Soc-Dems?

    • Democracy is about grass roots pre-selecting who represents them, not factional representation as we currently have with the major parties. Even the greens seem to be heading that way :/

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