Interview with David Speers – Sky News PM Agenda – Thursday 12 December 2013






Subjects: Broken Promises; NBN

David Speers: Welcome back to the program. Prime Minister Tony Abbott is pretty fond of saying this is a government that’s not going to break promises, no excuses. However, today the government has had to acknowledge they’re not going to deliver one of their key promises on the National Broadband Network.

It was a promise to deliver to 90% of Australians broadband speeds of at least 50 Mbps by 2016. After a Strategic Review of the NBN that’s been underway for the last few months they’ve now determined that can’t be met and that it’s going to be pushed back to 2019. 65% of the population by then will have speeds of up to 100 Mbps, 90% will have the 50 Mbps, so it is going to take longer, it is going to cost more as well.

This Strategic Review has also found that if they’d stuck with Labor’s plan, connecting fibre to the home, well that would have cost $29 billion more, a whopping $73 billion all up, and taken an extra 3 years than what Labor was talking about.

Well Labor responded to that today, by releasing a report of its own, it was a bit of dueling reports today. This was a report that was put together by the former NBN board, before they were replaced or most of them anyway. And it found that amongst other things, the Coalition’s plans of 25 Mbps by 2016 were unlikely to happen, that no one knows how much it’s going to cost to use the copper network for the NBN that the cost of maintaining that network would cost about up to $900 million a year. This argument from the Shadow Minister, Jason Clare, therefore being that the Coalition should’ve known all along they couldn’t deliver the promise that it made. Have a look.

Jason Clare: It paints a very different picture and it’s scathing of the Coalition Government’s dodgy second rate fibre to the node plan.

Malcolm Turnbull: Mr Clare is placing his faith in a document written by an executive team that were wrong the first time, the second time, the third time, and the fourth time. On the other hand, we have a new and experienced board, we have new and experienced management, we have leading consultants, KordaMentha, BCG, a thoroughly independent report and one that is not being asked to reverse engineer a political statement or a policy.

David Speers: Well, Jason Clare is with us now. Thanks for your time. Just on Malcolm Turnbull’s point there. The report that you’ve released today which was put together by the old NBN management team and ticked off by the board, that it did get it wrong time and time again on the roll out of the NBN, do you accept that?

Jason Clare: Well he would say that, wouldn’t he? Now what that report is, that’s the unadulterated, uncensored advice from NBN about the Government’s dodgy second rate NBN plan, and it get is right, it gets it right, David. It says that they won’t be able to implement their promise to give everyone access to the NBN by 2016 and the Minister proved that today, by breaking that promise.

David Speers: What did that old NBN management team, which did get it wrong on the roll out projections, what did they say about your version, your model of the NBN at the time?

Jason Clare: That report that I released today is about the Government’s plan. It’s part of the Minister’s incoming brief that he’s refusing to release, and it’s a 145 page document that goes through the problems with the Government’s plan and how to try and fix them.

David Speers: But correct me if I’m wrong, there are incoming briefs and briefs also for a Government should they be returned, so presumably they would’ve looked at should Labor be returned what the projections were?

Jason Clare: Well look they might have, David, I haven’t seen that document. The document that I can point you to is the corporate plan that the Financial Review released in June that says that the NBN was on track and on budget for 37.4 billion of CAPEX as well as on track to complete the project by 2021. There’s a new version of that called ‘Version 13 of the Corporate Plan’ it’s on Malcolm Turnbull’s desk, he’s refused to release it but it has exactly the same figures in it.

David Speers: Well, he has released the Strategic Review today conducted by the new NBN management team and board, it’s also had input from Deloitte, the Boston Consulting Group and KordaMentha, can you dismiss it that easily?

Jason Clare: Well, we’ve got a choice here, you’ve got two reports. You’ve got the Corporate Plan that’s been ticked off by Treasury, by Finance, it’s been reviewed and verified by KPMG and Ernst and Young, and it says the cost of Labor’s NBN is 37.4 billion to roll out the CAPEX part of that project. And then you’ve got a report that the Minister released today that’s been written by a man he owns a yacht with. You know if you’ve got the choice of those two reports, I choose the Corporate Plan.

David Speers: Well to be fair, it’s been written by the new NBN management and board and as I say, with input from Deloitte, Boston Consulting Group, and KordaMentha. It’s not just Malcolm Turnbull’s mate.

Jason Clare: Well, he’s headed it up. The man that Malcolm Turnbull owns the yacht with is in charge of the report, and government bodies, Treasury, Finance, as well as KPMG and Ernst and Young, not just once, not just twice, but over the course of the last few years, have repeatedly said the project is on track for $37.4 billion of CAPEX. Now suddenly, the experts at NBN are being sacked, other people are being brought in, and surprise surprise, the information in the report has changed.

If you want to know what’s going on here, it’s worth having a look at what Brad Orgill said only a couple of weeks ago, and Brad is a former board member of NBN, he said it’s not hard to change the numbers in these reports, just change the assumptions and you get a different result, and that’s what I suspect that’s happened here.

David Speers: But surely things like the asbestos problems which caused a great delay in the NBN roll out, construction costs, labour costs, there have been unexpected changes here that would’ve pushed up the cost of your NBN.

Jason Clare: The asbestos issue has led to a delay of 6 months. I suspect I’m right in saying that Version 13 of the Corporate Plan that is on Malcolm Turnbull’s desk, that he hasn’t released, has led to a 6 months delay from the middle of 2021 to the end of 2021.

There have been construction problems, the argument I’ve made, the argument Labor makes, is fix it, don’t break the NBN. You’ve got to build it, don’t break it. And what the Minister is doing today is effectively breaking the NBN by breaking the promise to deliver the NBN by 2016.

David Speers: So are you saying, that it would be, if anything, even cheaper to stick with your plan of fibre to the home, rather than the hybrid model of Malcolm Turnbull of having some fibre to the home, fibre to the street corner, and the HFC cables?

Jason Clare: David, what I’m saying is that we’ve got to build for the future. We’ve got a myopic, short-sighted Government here who wants to build for today or for the next few years. On a day when we’re seeing Holden workers losing their jobs, we’ve got to think about the future here. We need to think about what are the industries that we’re going to grow in the future, what is the technology that we’re going to need to set us up for the future to enable us to compete in Asia. I can’t think of a better example of that than the NBN. We’ve got to make sure that it’s fit for purpose, and that it’s built not for the rest of this decade but for the rest of this century, and that’s what fibre to the home and fibre to the business is all about.

We found out today, David, that not only are we not getting fibre to the premises, but most people won’t get fibre to the node either, they’ll have to rely on the Foxtel or the HFC cable that’s going down the street. We don’t know under that model whether all RSPs or ISPs, to use another acronym, will be able to get access on that. We don’t know whether customers are going to have to pay for the COACS to go from the telegraph pole to the house, or whether the Government or the NBN Co. will pay for that. We don’t know how to fix the gaps in the HFC network. There are lots of questions left unanswered here today.

David Speers: Alright, Shadow Communications Minister, Jason Clare, thanks for joining us this afternoon.

Jason Clare: Thanks David, Merry Christmas.

David Speers: And to you.