Malcolm Turnbull’s arrogance and incompetence have cost taxpayers billions

Malcolm Turnbull’s arrogance and incompetence have cost taxpayers billions of dollars in returns on their investment in the National Broadband Network.

Malcolm Turnbull recklessly ignored advice in 2013 that switching to his second rate copper NBN would damage the rate of return of this critical infrastructure project.

Under Malcolm Turnbull’s disastrous stewardship of the NBN, the return to taxpayers on their investment has crashed from 7.1 to as low as 2.7 percent.

NBN Co’s input to the Incoming Government Brief in 2013 made it clear that switching to Fibre-to-the-Node would reduce revenue and damage the rate of return:

As the FTTN Network provides lower speed and reliability of services, customers will be less likely to migrate to faster services and will likely not be able to migrate beyond the highest tier, best efforts service…this will likely result in lower Access Virtual Circuit (AVC) revenues, and reduce Connectivity Virtual Circuit (CVC) revenues as data volume growth may be reduced. The lower ARPU growth and resulting lower revenues may be the most significant financial consideration in generating the required financial return in NBN Co implementing the Coalition’s plan.

NBN Co, “Assessment of Coalition’s Broadband Policy,” Advice to Departments to assist with the Incoming Government Briefs, September 2013, p. 67.

Malcolm Turnbull recklessly ignored this advice and went ahead with his second rate NBN. Sure enough, evidence to the Senate Estimates Committee on Thursday night confirmed that the ARPU and revenue from FTTN is lower than from FTTP and the IRR for the project has now dropped to as low as 2.7 per cent.

As if this wasn’t enough, in only two years as Communications Minister Malcolm Turnbull almost doubled the cost and more than doubled the timeframe for rolling out his second rate NBN.

Malcolm Turnbull said he could build his second rate NBN for $29.5 billion and get it to all Australians by 2016. We now know it will cost up to $56 billion and take until 2020 to roll out.

These cost blowouts and delays have compounded the lower returns to 2040 that result from Malcolm Turnbull’s second rate copper NBN.

It will take a Labor Government to fix the mess Malcolm Turnbull has made of the NBN and improve the return to taxpayers.