Interview with Marius Benson – ABC News Radio – Wednesday 27 August 2014






SUBJECT/S: NBN cost benefit analysis

MARIUS BENSON, ABC NEWS RADIO: Jason Clare, do you agree now on the evidence that Labor got it wrong on the NBN?

JASON CLARE, SHADOW MINISTER FOR COMMUNICATIONS: Well, surprise surprise Marius, Malcom Turnbull has got some former staff and some of the most trenchant and vociferous critics of the NBN to write a report for him on the NBN, and it says that Malcom Turnbull is right.

I think it’s hard to take this report seriously given that before the election, Malcolm Turnbull said he would get Infrastructure Australia to do this report. Instead what he’s done is get some old mates and former staff to write the report. It’s like putting the foxes in charge of the hen house.

BENSON: But if you don’t accept this report, what about the question of Labor’s own handling of the NBN? I mean it was the biggest infrastructure project in Australia’s history. It was planned, according to all reports, in about 11 weeks without a cost benefit analysis. You should have done a report yourself.

CLARE: Well, it is the biggest and most important infrastructure project in the country. It is going to change the way we live and the way we work. People want the real NBN. They want it, they don’t want this second rate Claytons version that Malcom Turnbull is rolling out. My major criticism of the NBN is that it’s rolling out too slow. I’m afraid to tell you Marius that it is rolling out slower today than it was this time last year. In the 10 weeks before the last election, the NBN rolled past 4,200 brownfield premises [per week, on average]. In the last 10 weeks it has rolled past 3,600 [per week, on average] and that is the problem here. We have a Government that is more focused on the past, political payback and writing these reports, that will cost now $12 million, than they are on rolling out the NBN. We’ve got six reports and Malcom Turnbull’s got no excuses.

BENSON: Just on that question of the rollout pace, that was always a criticism of Malcom Turnbull when you were doing the rolling out – that it was going at a snail’s pace, only a few thousand of the hundreds of thousands of connections that you promise.

CLARE: This is the absolute hypocrisy of Malcom Turnbull. He criticised the rollout in Opposition and it’s now slower in Government.

BENSON: And can I go to the question of the planning by Labor of the NBN itself. You just didn’t do a cost benefit analysis.

CLARE: Well what we did was we got an expert panel to give us advice on the best model. They said fibre to the premises. Then we got KPMG and we got McKinsey to do a detailed implementation study and it said that building the NBN would deliver a return on investment to taxpayers. Then we had a corporate plan developed by the NBN Company that confirmed that, which was then tested and confirmed by Treasury, by Finance and a number of independent financial businesses.

My argument is that if you are going to do this, if you are going to do a cost benefit analysis, then make sure that it is independent. Malcom Turnbull said before the election that it would be the Productivity Commission or Infrastructure Australia, and then he confirmed that it would be Infrastructure Australia. Then he got elected and changed his mind and got mates to write the report.

BENSON: What about some of the specifics in the report, that the 100MB per second pace that the Labor plan envisaged is just way in excesses of what ordinary households need with 15 megabits plenty for most households.

CLARE: Well this is a key point, I’m glad you raised it Marius. The report also says that in 10 years’ time that only 5 per cent of households will want or need 43 megabits per second or more. Now believe it or not, there’s 28 per cent of Australians that are already ordering 50 megabits per second or more on the NBN. It shows that the assumptions that are in this report are wrong.

BENSON: So the report got it all wrong. Are you saying that Labor got it all right? Because, even on the evidence of the rollout, to the extent to which Labor managed it, you were way behind schedule.

CLARE: I have criticised the rollout and said that it was too slow. The problem we have got is that it is still too slow. It’s too slow because the Government has been focused on these reports, on political payback. It’s also broken the fundamental promise that it made before the election that everyone would get the NBN by 2016.

When Holden announced that it was leaving the country in December last year, Malcom Turnbull went into the Parliament and announced that they wouldn’t be giving everyone the NBN by 2016. That’s just one of a number of serious broken promises that this government has made.

BENSON: Jason Clare, thank you very much.

CLARE: Thank you Marius.