Press Conference – Canberra – Thursday 12 December 2013





SUBJECT/S: NBN Strategic Review

JASON CLARE: Another day, another broken promise. This is a day that the Government will rue for a very long time.

Today, the Government is breaking one of its biggest and most important promises.

It’s breaking its promise to provide everyone with access to the NBN by 2016. This is a government that’s barely been in office for three months, not even a hundred days yet and they are breaking promises left, right and centre. They’ve broken promises on debt, on boats, on education and now today on the NBN.

This is a betrayal, this is a broken promise that will hang like an albatross around Malcolm Turnbull’s neck.

Before the election, the Prime Minister said, people will remember this press conference with Sonny Bill Williams almost there, “Under the Coalition, by 2016…there will be minimum download speeds of 25 megabits… We will deliver a minimum of 25 megabits…by the end of our first term.”

Today the Government is breaking that promise.

Before the election, they said they would be a Government of no excuses. Today they are coming up with the worst of all excuses to break this promise.

Before the election they said there’d be no surprises, well this is an awful surprise just before Christmas for people around the country who they were going to get the NBN by the end of 2016.

The Prime Minister said just after he was elected:

“I don’t intend on making promises that I won’t keep”

Well he’s just broken a whopper. He’s just broken one of the biggest and most important promises that he made during the election campaign.

And what does all this mean? Breaking promises after less than a hundred days, on debt, on boats, on education and now on the NBN. It means nothing this government says is worth two bob.

Today I am going to release the truth.

Today I am releasing the real Strategic Review into the government’s second rate NBN.

This document here is the unadulterated, unamended, uncensored view of NBN Co of the Coalition government’s second rate dodgy NBN plan.

This was written before Malcolm Turnbull sacked the experts building the NBN at NBN Co and put his mates in to give him the report that he wanted.

This is the report that the Minister doesn’t want you to see.

It’s the secret advice handed to Malcolm Turnbull just first weeks into job, used to prepare the incoming government minister’s brief. It hasn’t been released until now.

The Minister said this is old advice. This is dated the 20th of September this year. It is a 154 page document. Very detailed. And funny enough it doesn’t say what Malcolm Turnbull said today.

It paints a very different picture. It is scathing of the Coalition’s dodgy second rate fibre to the node plan.

It says seven things that I want to draw to your attention now. First is says that building the NBN in two stages is the wrong approach and it’s “not recommended”. It says that would cost more and take longer. It says that would cost more and take longer.

Second, it says that the Coalition’s promise that all Australians will have access to 25mbps by 2016 is “unlikely” to happen. We know this report is true because the Minister has just told us that today. He has broken the promise he made to the Australian people before the election to give everyone access to the NBN by 2016.

Third the report says the Coalition’s plan will result in lower revenues of up to 30 per cent which will impact on the ability of NBN Co to raise debt.

Fourth, it says no one knows how much it will cost to fix Telstra’s old copper network so that it can be used for the NBN – not Telstra, not Government, not NBN Co itself.

It also says the cost of maintaining the copper network is estimated to between $600 million a year and $900 million a year – to put that another way that is between $6 billion and $9 billion over the next decade.

Six, It says that the Coalition’s promise of minimum speeds of 50 megabits per second can’t be guaranteed using copper.

Seven, It says that the Coalition’s slower speeds would compromise the provision of tele-health, distance education and other business applications.

All up, what this report says is that the Coalition’s plan for a second rate NBN is a dud. It was a dud when they announced the plan in April this year and it’s a dud today. Worse than that, it’s a broken promise. The promise that everyone would have access to the NBN by 2016 has now been broken.

So what we know from this report and what we know from what the minister has told us today is that their promise to build the NBN by the end of 2016 has been broken, that the NBN will now make less money than promised, that it won’t meet the needs of business and it won’t meet the needs of families and in the end its going to be up to Labor to come back and finish the job. I’ll hand over to Michelle to say a few words then happy to take your questions.

MICHELLE ROWLAND: This is indeed a broken promise and in doing so, in breaking this promise, Malcolm Turnbull has pulled the plug on millions of Australians having access to high speed broadband.

He has pulled the plug on high speed broadband for people who need it most and left them in broadband limbo.

And what we are left with in this announcement today by the Minister is effectively a patchwork. A patchwork of copper. A patchwork of other technologies which are not suitable for the high speed economy that we need to develop in Australia.

And I say this because you need to cast your mind back to when the Liberals were last in government. And for something like twelve years they had nearly twenty different broadband plans, none of which worked, all of which left Australia in a broadband backwater compared to our regional neighbours and the rest of the world.

It was this untenable situation that required Labor to act, to devise a truly ubiquitous National Broadband Network.

This is indeed Fraudband.

It is a fraud on the Australian people who again today have been betrayed by another broken promise.

One of the reasons why it is so bad for Australia is because the NBN was supposed to, and was indeed designed, on a policy premise of getting rid of the digital divide.

Not only between regional areas and urban areas, but also within metropolitan areas by delivering equivalent wholesale pricing. How are you going to do that under this patchwork of Fraudband? It is completely beyond anyone.

So in this broken promise today we have a government that is clearly not committed to developing the economy we need for the 21st Century – and today of all days when we’ve seen the effects of an economy in transition. We need to have a government that plans for the future, that is forward looking, that keeps to its promises, and actually delivers what Australians and the Australian economy needs.

JOURNALIST: (inaudible)

CLARE: Well, it’s very different. That’s the unadulterated, uncensored, unamended truth. It tells us that it’s impossible to, or at least very unlikely, that the government is ever going to be able to implement its election commitment. Now the government has known this.

Everyone I’ve spoken to since I became Shadow Minister has told me the chances of the government implementing this promise are near zero. They must have known when they told the Australian people in April that they wouldn’t be able to meet this commitment.

But they went to the Australian people making a promise they knew they couldn’t deliver.

And this is not the only broken promise this government has made.

We’re not 100 days into this government and they’re breaking promises like it’s going out of style. Breaking promises on debt, breaking promises on boats, breaking promises on education, and now breaking promises on the NBN.

This is like going down to the shop and getting a bottle of milk. It says the use-by date is the end of the week and you think this will be okay. You go home, you taste it, and it’s already off. This government is already off. It’s breaking so many promises that people are losing trust in it already.

JOURNALIST: (inaudible)

CLARE: Well I think it’s important that people know the truth. I tried only moments ago to table this document in the Australian Parliament and Malcolm Turnbull refused to let me. Now if Malcolm Turnbull was really interested in transparency, really interested in making sure people know the truth, he would have allowed me to release this document. If he was really interested in people knowing the truth about the NBN he would release his incoming Minister’s brief. I asked him to do that in the Parliament and he’s refused to do so. So this is a government that’s not interested in transparency at all. One of the most secret governments in the history of the federation. You just have to look at others. John Curtin released more information related to national security during World War II than this government is releasing in relation to the boats. Everything is secret. Nothing is released and this is more evidence of it.

JOURNALIST: (inaudible)

CLARE: A lot of the information in this report has already been reported in the Sydney Morning Herald and The Age, but there’s new information in this report and I thought that it was important to bring it to people’s attention. One of the things I’ve been telling Malcolm Turnbull is that you can’t move from a fibre to the premises model to a fibre to the node model unless you know how much it’s going to cost. The only way to know how much it’s going to cost is if you know how much it’s going to cost to maintain the old copper network.

Remember they’re building fibre to a box in the street and then they are going to use the copper all the way to people’s houses. Now the reason Malcolm Turnbull’s report fails today is because it doesn’t tell us how much that’s going to cost. It relies on assumptions and international comparisons.

This report that I’m releasing today tells us how much it’s going to cost. It says it’s between $600 million and $900 million a year. That’s an awfully large figure. Six to nine billion dollars over the next decade, of tax payer’s money to be spent on keeping an old copper network going when it could be spent on building fibre to people’s homes.

JOURNALIST: The Strategic Review which was done by NBN Co and independent consultants was quite damming of the previous management of the rollout of the NBN. It said that their targets were widely optimistic and that the financial estimates were in some cases incorrect. Do you accept any responsibility as the previous government in charge of it for those findings?

CLARE: Well Joanna I’ll say two things. First we’ve got two reports here. You’ve got the Corporate Plan 2013 – 2016 that says the cost of the NBN, the CapEX cost – $37.4 billion. Then you’ve got the report that Minister’s released today that turns the numbers around and says that 73.

This is a report that’s been prepared by NBN Co, approved by the Board, including two members that are still on the Board, verified by Treasury and Finance, KPMG and Ernst and Young as well. This report has been drafted and prepared by a man that Malcolm Turnbull owns a yacht with. Now I know which report that I trust.

In relation to the rolling out of the NBN, I’ve made the point two or three times that construction has fallen behind and it needs to be fixed. But fix it we must. Not throw it out. This is the right project for Australia’s future. It’s infrastructure of the 21st century. Tony Abbott says he wants to be the infrastructure Prime Minister. Well you can’t be the infrastructure Prime Minister if you are going to tear down the NBN and that’s effectively what they are doing here in this report.

JOURNALIST: Do you think the authors of the Strategic Review were biased?

CLARE: Well, I asked a question in the Parliament yesterday. I said, do you think it’s really right that someone you own a yacht with should be in charge of writing a Strategic Review into the NBN and if the Minister was interested in transparent information then he would have allowed me in the Parliament today to release this other document that tells us that the Coalition’s plan for the NBN is a shocker and it can’t be implemented.

JOURNALIST: So just to confirm, this is the Ministerial Blue Book?

CLARE: This is the advice prepared by NBN Co and given to the department to prepare the Blue Book.

JOURNALIST: Is there commercially sensitive topics inside and what steps have you taken to make sure that they are not in there?

CLARE: To the best of my knowledge it doesn’t.

JOURNALIST: Have you redacted any information?

CLARE: No. It’s in your hands now.

JOURNALIST: Do you have a view on changing the priority to turn it around to areas that are under-serviced now?

CLARE: You won’t get any disagreement from me about prioritising areas in greatest need. I’ve visited places around the country where they can’t even get ADSL and they were supposed to get fibre to their home before Christmas. They’ve been taken off the NBN rollout map. These are places where work should be continuing but it has stopped and this is part of the problem.

Now what we find out is not only has Malcolm Turnbull broken the promise to deliver the NBN by the end of 2016 but he’s also broken the promise to provide fibre-to-the-node to almost nine million households. Now what he said was, we would provide access to the NBN via the HFC network over the next three years and then build over that by building a fibre-to-the-node network for all of Australia – nine million households. He broke that promise today. He is no longer going to do that. That means for many Australians who live in Sydney and Melbourne and Brisbane who’ve got the Foxtel cable that’s running down their street, they’ll need to rely on that now for the NBN.

There are problems with that. There are gaps in the network. Is it going to be an open access network where all RSP’s are going to be able to provide a service to Australians who want the NBN? Who will pay for the Coax cable from the telegraph pole to the house? They are all question the Minister needs to answer.

JOURNALIST: So you concede that Labor probably didn’t have its priorities right in the way it rolled out the plan?

CLARE: No. No. If you ask the NBN Co, what they will say is that they rolled out the NBN in a way that engineering, in an engineering sense, was the way it needed to be implemented. There are about 120 points of interconnection and it’s been built around the points of interconnection. The point I’m making is that there are places in Australia which can’t even get ADSL at the moment that are now in limbo because of the decisions this government has taken.

JOURNALIST: In terms of fibre-to-the-node as the Coalition has made out was going to be their plan pre-election, do you welcome the fact that they are going to have 25 per cent fibre-to-the-premises?

CLARE: It should be more than that. It should be 93 per cent and this is the main problem I have with this Government. Not just that – the fact that they promised one thing and their doing another. You’ve heard Labor members, Labor Shadow Ministers say day after day that this not the Government they said they would be. Whether it’s on debt, whether it’s on education, whether it’s on boats or whether it’s on this, the NBN – they promised one thing and they are doing another.

They promised they would roll out the NBN to everyone by 2016 and now they are ripping that up and throwing it away and the people of Australia should hold them to account for that.

JOURNALIST: It’s looking like it’s just going to business communities, the fibre-to-the-premises part?

CLARE: Well you know my position on this. Labor’s policy is that fibre is the answer. Fibre is the end game. Ask most experts in this area and they’ll tell you the same thing. Fibre is the end game. The question is do you do it in one stage or two? We have adopted the approach that it should be done in one stage. The Governments view is that it should be done in two stages. Ask Malcolm Turnbull, ask Ziggy Switowski and they’ll tell you that fibre is the end game. The question is when do you do it? Our argument is, it makes sense to do it now.

JOURNALIST: The Minister has said fibre was the end game but it was fantasy land because of the high cost of putting fibre to every home. So you think the cost is worth it?

CLARE: I’ll take my advice from something Mike Quigley said this last week. Where he made the point, and this is a point that has been made in the past, it’s not easy to convert fibre to the node to fibre to the premises. When you do this in two stages you’ve got the cost of fixing and maintaining the old copper network. You’ve got the cost of all of the wasted investment, something like 60 to 80 thousand boxes that have got to be built in people’s streets. You’ve got the loss of efficiencies of scale, two builds not one and then the loss of productivity. People not being able to use the NBN for what they might of, for teleconferencing, for distance education, for telehealth.

I think about my own experience in the construction industry. I think about the M5 East project in Sydney. People who know the M5 East know that it was built too small. Two lanes in each direction. Two tunnels. As soon as it opened peopled realised they had made a mistake and it was already congested. It clogged up the road system and it limited productivity. Trucks would be providing more services to and from the port if they could move freely through that corridor.

Now the New South Wales Government and the Federal Government now admit that that was a mistake and they’ve come up with WestConnex, which is designed to fix that. That will take ten years before that comes to fruition.

So I make the point here, we need to think not just about today but tomorrow because it will come sooner than we think.

JOURNALIST: Are you expecting any consequences from releasing this today?

CLARE: Well the consequence I’m expecting is that there will be a lot of angry people around Australia who thought they were getting the NBN by the end of 2016 and now know they can’t trust anything this Government says.

JOURNALIST: Do you think people will be thinking that after this political debate, really they are never going to see NBN in most areas of Australia? It’s so bound now by politics.

CLARE: It’s not politics that’s the problem here. It’s the fact that you can’t trust what the Government has said. A couple of weeks ago I made the point that we had won this debate. Three years ago Tony Abbott said that Malcolm Turnbull’s job was to demolish the NBN. They have moved a long way. Their election promise was 15 times what they had promised to fund in 2010. They promised to keep the NBN. I made the point at the time that this issue is a bit like Medicare. The Government knows it’s too popular to destroy but they are doing almost everything they can here to destroy it and it means we are going to get a second rate NBN from this Government. That’s why people will be angry.

JOURNALIST: Today they released the terms of reference for the Cost Benefit Analysis and one of the terms of reference was to look at the role of Government in continuing the rollout. Do you think that there may be a situation where we see the private sector becoming more involved in rollout and perhaps Government ownership of the NBN Co being reduced?

Clare: We’ll wait and see. We’ll see what comes of that. We’ll watch the Cost Benefit Analysis with interest.

Ok. Thanks everyone. Merry Christmas.