Interview with Michael Rowland – ABC News Breakfast – Wednesday 27 August 2014






SUBJECT/S: NBN Cost Benefit Analysis

MICHAEL ROWLAND: Let’s now go the Opposition Communications Spokesperson Jason Clare for his view on that NBN Report. Jason Clare – good morning to you.

JASON CLARE, SHADOW MINISTER FOR COMMUNICATIONS: Good morning. Well surprise, surprise Malcolm Turnbull got some of his former staff and some of his former advisers to write a report for him and the report says he’s right.

I think it’s very hard to take the report seriously when three weeks before the last election Malcolm Turnbull said he that he would get this report done by the Government body Infrastructure Australia but instead what he has done is get the most vociferous critics of the NBN as well as former staff to write this report.

It’s like putting the foxes in charge of the hen house.

ROWLAND: Well whose independence are you testing? Henry Ergas, the economist, was on the panel, I give you that he has been a strong critic of the NBN. former eBay Australia chief Alison Deans, the former Australian Communications Authority chairman Tony Shaw, former Victorian public service chief Michael Vertigan. You’re saying they were destined to come up with what the Government wanted.

CLARE: What I am saying is the report is tainted by the involvement of some people like Henry Ergas, Kevin Morgan as well as former Malcolm Turnbull staff who were involved in the modelling –

ROWLAND: But excuse me for interrupting, they are only some members of this panel.

CLARE: Well, the point I am making is the report is tainted by their involvement. When you get somebody to do a cost benefit analysis, who in the past has said that the NBN is a dud and that it would fail a cost benefit analysis then you have to question to veracity of their conclusions in this report. What would have been a lot better is that if Malcolm Turnbull did what he promised before the election and that is get Infrastructure Australia to do the work.

ROWLAND: Okay the report comes up with a net cost to tax payers of the NBN the Labor Party’s version of $22 billion dollars, the Coalition’s version comes in at $6 billion dollars, what is wrong with those figures?

CLARE: Well, it all depends on the assumptions you put into a financial model. What costs you attribute to it, how long you say it will take to build and what revenue will come back as well as what the demand is for the amount of broadband speed. For example now this report says that in a decade they expect that only 5 per cent of Australia will want 45 megabits or more. And we know already that we’ve got more than 28 per cent of Australians ordering 50 megabits per second or more. So the report is already out of date on that front. Another problem with the report is it says the cost of building fibre to the home is going up, when yesterday Malcolm Turnbull said the cost of building fibre to the home is going down.

ROWLAND: How much more megabits per second are – you do point out that the report says 15 megabits per second is the figure that most people would be happy with within a decade, going beyond that I think the Labor Party’s version had up to 162 megabits per second. It is really hard to look into the future given the explosion of video streaming and internet TV and the like – isn’t it.

CLARE: Well what we have to look at is what people are ordering right now. We’ve got people right across Australia that are using the NBN and what we have found is we already have 28 per cent of people that are on the NBN that are ordering 50 megabits per second or 100 megabits per second. Now a couple of years ago Malcolm Turnbull said three megabits per second was going to be okay, last year Tony Abbott said 25 is okay, and I think this is the problem. When you build a network like this, you need make sure that you build for today and for tomorrow and what we are getting from this Government is a second rate network based on the old 20th century copper network.

ROWLAND: The report also finds that it is going to cost taxpayers an awful amount of money to effectively subsidise the rolling out of broadband or greater broadband services to rural and regional areas – is that money worth it?

CLARE: Well this should strike fear into the hearts of all National Party members across the country because what this report effectively says is “don’t roll out the NBN to the bush”. If you go down that path, I think there will be civil war inside the Coalition. The bottom line is that this is a very big, important infrastructure project and it needs to be rolled out in the cities and the bush.

My major criticism of the NBN is that it hasn’t been rolled out fast enough and I’m afraid to say that the NBN is rolling out slower today than it was last year. It’s rolling out slower today than it was before the last election. In the 10 weeks before the last election, more than 4,000 brownfield premises were passed by fibre [per week, on average] and in the last 10 weeks, it’s down to about 3,600 [per week, on average] and that is why my message is – Malcolm Turnbull, you’ve now got six different reports on the NBN and no excuses, the people of Australia want you to get to it and build the NBN.

ROWLAND: Well still the Government would argue that its new multi-platform model will get broadband to more Australians more quickly than Labor’s broadband network by 2020, verses I think it was 2023 – 2024 for your version.

CLARE: Well, under our model it’s 2021. When you compare the two models, you’ll see that the investment by taxpayers, the difference is less than $1 billion, the difference in time to roll it out is about one year and the difference in what people will get, the difference in benefits to all Australians is enormous that’s why I’ve criticised this myopic view of this Government who thinks that the NBN is just about playing video games, that’s what Tony Abbott said in the past.

This is about setting Australia up for the future: that’s why Japan is doing it, that’s why South Korea is doing it, that’s why you see it in China, why you see it in New Zealand, why you even see it in Indonesia – and unfortunately now Australia is going in the opposite direction.

ROWLAND: Jason Clare, Labor’s Communications Spokesman, thank you very much for your time this morning.

CLARE: Thank you.