Interview with Kieran Gilbert – Sky News AM Agenda – Wednesday 27 August 2014






SUBJECT/S: Cost Benefit Analysis; Metadata

KIERAN GILBERT: This is AM Agenda thanks very much for your company, with me now the Shadow Communications Minister, Jason Clare. Mr Clare you heard what Malcolm Turnbull has had to say. He’s basically saying that Labor’s in no position to be criticising this independent cost benefit analysis done of the NBN because you didn’t even do one when in government.

JASON CLARE, SHADOW MINISTER FOR COMMUNICATIONS: Well I heard what Malcolm Turnbull said this morning. He said that he never promised that he’d get Infrastructure Australia to do this report but Kieran I went back and checked. On the 16th of August last year Malcolm Turnbull said, and I quote, this is in IT News: “We are going to do a rigorous analysis, we’ll get Infrastructure Australia to do an independent cost benefit analysis”.

This is the point I’m making. If you are going to do a cost benefit analysis it’s got to be independent. He promised, three weeks before the election that he’d get the government body, Infrastructure Australia to do it. What he’s done instead is released a report today that’s been done by former staff and former advisers and some of the most vociferous and trenchant critics on the NBN and this is what you get as a result.

GILBERT: Mr Turnbull says his policy document, the Government’s policy document was to have an independent inquiry, not one done by Infrastructure Australia, he said they didn’t have the capacity to do it anyway.

CLARE: Well why did he say that on the 16th of August. All I’m doing is holding him to his words. Just like Tony Abbott promised no cuts to education and no cuts to health and then he’s broken all those promises. Malcom Turnbull, three weeks before the election said he’d get this independent body to do this report, what he’s done instead is put the foxes in charge of the hen house. He’s got people who hate the NBN to write a report saying how terrible it is.

GILBERT: Well in terms of the report itself you’re talking about individuals like the former head of the Victorian Treasury Department, why is someone of that capacity, of that calibre not appropriate to do the job?

CLARE: I am making no criticism of Mr Vertigan but I’m say the reports tainted by the fact that it’s been prepared and modelled by people who used to work for Malcolm, who used to advise Malcolm or used to work for Mr Ergas. When you do that you are not going to get the independent report that Malcolm Turnbull promised.

GILBERT: But aren’t you criticising them, because you are saying that they haven’t been able to come up with independent work?

CLARE: When you do a report like this it all depends on the assumptions you put in it, what sort of result you get. What you say it’s going to cost, how long it will take to build, what sort of speeds people are going to need, and if you dive into the report you’ll see that it says that they expect that in a decades’ time, the median house is only going to require 15 megabits per second or demand it.

Well already, the majority of people on the NBN are ordering more than that. They’re ordering 25 megabits, 50 megabits, 100 megabits, so the information in regards to demand is wrong. The report also says that they think building fibre to the home is going to cost more. Malcolm Turnbull said yesterday that the cost of it is going down.

GILBERT: I’ll get to some of those specifics a bit later but isn’t Labor’s criticism here undermined by the fact that when in government, announcing the biggest infrastructure project in the nation’s history you didn’t do a cost benefit analysis. Surely now you look back at that as a mistake.

CLARE: This is the biggest and most important project in the country.

GILBERT: So there should have been an analysis done.

CLARE: People want a real NBN, they don’t want a second rate, Claytons’ one like we are getting here. We had an expert panel look at it and recommend fibre to the home. We had McKinsey and KPMG do a detailed implementation study that said if you do this then you’ll get a return on investment, in other words you’ll get more money back than it costs to build, and then a business case, a corporate plan by NBN Co that confirmed that. That was verified by Treasury, by Finance, independent financial houses.

My point today is if you are going to do a cost benefit analysis, then make sure it’s independent. Malcolm Turnbull promised that Infrastructure Australia would do it but what we’ve been given instead is a report written by Malcolm’s mates.

GILBERT: Your position would be a lot stronger today if your predecessor in this portfolio, when in government, actually did do a cost benefit analysis.

CLARE: Kieran my major criticism –

GILBERT: You can have as many reports as you like but if they haven’t done an analysis based on the alternatives what’s the point.

CLARE: As I say, if you are going to do it, make it independent. But my big criticism of the NBN has been that it hasn’t rolled out fast enough and it’s disappointing to say that the NBN is rolling out slower today than it was a year ago. When you look at the speed of the NBN rollout in the 10 weeks before the election, it was rolling out on average past 4,200 brownfield premises on average a week. Now in the last 10 weeks it’s rolling past 3,600 brownfield premises a week.

So the NBN is rolling out slower today than it was a year ago and that’s because Malcolm Turnbull, Tony Abbott and the Government have been focused on political payback, been focused on six reviews worth $12 million dollars. Malcolm Turnbull’s now got six reviews and no excuses. The people of Australia just want him to get on with it and build the NBN.

GILBERT: You pointed out that the report suggests that the demand will be 15 megabits per second in many years from now, when the demand already, well the acquisition is greater through NBN. Malcolm Turnbull’s point was often people buy more than they need and that’s what you’re seeing, hence the discrepancy between what this report suggests will be the actual demand, what people will use as opposed to what they are buying at the moment. What do you say to that argument?

CLARE: The whole model in the report is based on what it calls WTP, willingness to pay, and we’ve got hard data on that. We are seeing what people are willing to pay and people are ordering higher speeds right now.

There’s a reason why Japan, South Korea, Singapore, Google in the United States, New Zealand, Indonesia as well is rolling out superfast broadband, why they are building fibre to the home and fibre to the business because they know this is going to set their countries up for the future and it will be a disadvantage for countries that don’t have this. That’s the point I’d make here today is that we are now going in the opposite direction.

GILBERT: I want to ask you about the counter terrorism laws. There’s a suggestion that Labor is not convinced on the reverse onus of proof. That’s certainly the suggestion from Mark Dreyfus, that he’s got some concerns about it, there’s a chance then that with the support of the cross bench that that element of the counter-terrorism law could be blocked. You saw the poll yesterday, nearly 80 per cent of people support this measure. Will Labor in the end err on the side of caution here?

CLARE: It’s essential that our law enforcement agencies and our national security agencies have got the right powers and the powers that they need. We will work closely and constructively with the Government on this. We’ve received a number of briefings already, I expect we will receive more.

There is a high bar to jump when you reverse the onus of proof. That doesn’t mean that you never do it. I proposed laws when I was Home Affairs Minister of a case where you would do that but there is a higher argument that you need to make and pass in order to do that. The Government is talking about designated areas, we need more detail of what that means as well, to ensure that there are no unintended consequences of a law like this.

GILBERT: What about the metadata requirements? Yesterday apparently, the wish list of the Attorney General’s Department has gone to the telcos, are you comfortable with what you’re hearing, seeing on this as the Shadow Minister?

CLARE: Again, metadata is very important. Law enforcement agencies and national security agencies use it all the time to keep Australian’s safe and have for a long time. We need to make sure that we get these laws right. Unfortunately George Brandis made a mess of it a couple of weeks ago. When they bring forward the legislation we need to make sure that they know what they are talking about and that they get the model right.

GILBERT: Jason Clare, appreciate your time.

CLARE: Thanks Kieran.