Malcolm Turnbull hasn’t just announced one new NBN tax – he’s announced two.
The first is a new $900 tax on new home buyers. The second is a new competition tax.
Malcolm Turnbull has also announced plans to axe universal wholesale pricing. This will mean that people in regional Australia stand to pay more for broadband than people in our big cities.
On page six of the Government’s policy document that was snuck out yesterday, it has announced:
“The cross?subsidies which are currently embedded in NBN Co’s wholesale prices will be replaced by transparent funding provided via contributions sourced from owners of high?speed broadband access networks that target residential and small business customers – i.e. the NBN and networks in commercially viable areas that are comparable to the NBN.”
TELECOMMUNICATIONS REGULATORY AND STRUCTURAL REFORM – 11 DECEMBER 2014
Malcolm Turnbull’s decision to encourage facilities-based competition has the potential to blow a hole in the side of NBN Co’s business case. Yesterday the Government announced that it will tax cherry pickers to stem the bleeding.
In their April 2013 election policy, Tony Abbott and Malcolm Turnbull said:
“The Coalition will remove or waive impediments to infrastructure competition introduced to provide a monopoly to Labor’s NBN.”
COALITION BROADBAND POLICY – 9 APRIL 2013
In response, ten days after the federal election, broadband company TPG announced that it would cherry pick lucrative customers in inner city areas in competition with NBN Co.
Malcolm Turnbull’s decision to encourage facilities-based competition means that NBN Co now has a revenue problem. As NBN Co Chairman Ziggy Switkowski said on 12 March 2014:
“If organisations like TPG capture perhaps 500,000 high-value customers, that would have an economic impact at the five to 10 per cent level in that case alone….if you amplify that with the inclusion of other infrastructure based competitors, the economics of NBN would be severely impacted.”
NBN CO CHAIRMAN ZIGGY SWITKOWSKI – NBN SELECT COMMITTEE – 12 MARCH 2014
Broadband is a utility. Like electricity and gas distribution networks, fixed broadband is a natural monopoly. This underpins the NBN business case—a universal wholesale network with strong retail competition. Densely populated, high revenue areas subsidise sparsely populated, low revenue areas.
The Government has a dilemma. If they stop TPG outright, they are hypocrites because they said they would support infrastructure competition. But if they allow TPG and others to roll out fibre to apartment blocks and wealthy suburbs before NBN Co gets there, it will severely impact the revenue that NBN Co makes and returns to taxpayers.
So what do they do? They create another new tax. A competition tax. They want competition but not too much. It’s Claytons competition. The competition you have when you don’t want competition.
This is a mess of the Government’s own making. They encouraged TPG to compete with NBN Co. This could severely impact NBN Co’s business case.
Now they have imposed a new tax to plug Malcolm’s revenue hole.
FRIDAY, 12 DECEMBER 2014
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