The former Chief Executive of Woolworths Roger Corbett who is also a Reserve Bank board member and Chairman of the Fairfax media group has backed demands by Malcolm Turnbull that the Productivity Commission should conduct a rigorous cost-benefit analysis of the proposed $43 Billion dollar National Broadband Network a move that Federal Communications Minister Senator Stephen Conroy has slammed.
“I believe the NBN is a vast sum of money and should be subject to appropriate review,” Corbett told The Australian newspaper.
“Laying cables in and between the major cities is one thing, but the cost of laying cable to secondary areas is enormous. Is it justifiable? So I am all for an independent assessment, and I ask is laying cable the most effective way of delivering these services in these areas, or is there a better way?”
Former prime minister John Howard yesterday branded the NBN a “colossal waste of money” and said Communications Minister Stephen Conroy had undermined the project’s rationale when he said not everybody needed the network’s top speed of 100 megabits a second.
Also calling for a review of the cost of implementation is the Business Council of Australia, which represents chief executives from top-100 companies. They claim, that a rigorous cost-benefit analysis of the project was needed and, subject to its outcomes, “alternative options for meeting the objectives of the government may need to be considered”.
The Australian newspaper reported Conroy as saying that it was a “great furphy” that all Australians would want to buy the 100Mbps capacity, when asked about revelations by the NBN Co that about two in every three consumers who were taking up internet services under the NBN were choosing the cheapest, slowest package.
Senator Conroy’s office said yesterday the minister had made clear that people would choose a package that best suited their needs, whether this was a phone line-only or mega-fast broadband speeds. The comments come as the opposition sharpened its attack on the NBN, with communications spokesman Malcolm Turnbull introducing a private member’s bill into parliament that would require a 10-year business case for the NBN to be published and for the Productivity Commission to conduct a cost-benefit analysis.
Mr Turnbull said the $43bn cost of the NBN was “truly unprecedented expenditure anywhere in the world”.
The Coalition spokesman on communications, Malcolm Turnbull, has told Parliament there will be no commercial return from the National Broadband Network. In a speech to the Parliament yesterday, Turnbull claimed that the NBN would not deliver enough of a commercial return to justify government support.
In introducing a private member’s bill to push the Productivity Commission to conduct a cost-benefit analysis of the $43 billion project, he told Parliament this would not delay its rollout.
However independent MP Tony Windsor says he won’t back a cost probe by the commission. “If they’d done a cost-benefit analysis on the Snowy Hydro Scheme … it would probably show up that it wouldn’t be a viable operation,” Windsor told ABC Radio.
The New England MP has been a strong supporter of the NBN, citing it as one of the reasons he backed a minority Labor government following the August 21 election.
Another crossbencher, Queensland’s Bob Katter, has signalled he won’t support Turnbull’s move either.
Meanwhile the Australian Competition and Consumer Commission has also weighed in, with chairman Graeme Samuel questioning the value of any cost-benefit analysis of the NBN, saying the many assumptions required would make it almost useless. “Even the best economists in the world will tell you that, if the assumptions are being queried, what you do is you raise a whole range of scepticism over the value of the cost-benefit analysis,” he told ABC Radio.
“What happens is you have a cost-benefit analysis done by whoever it might be, but then someone says ‘yes, but we don’t agree with that assumption’, and therefore that makes that cost-benefit analysis somewhat worthless.”
Turnbull says his bill would “provide Parliament with an appropriate level of financial understanding of this, the largest expenditure of taxpayers’ fund on an infrastructure asset in our nation’s history”.
He says the first purpose of his bill would be to require NBN Co, the government company charged with rolling out the network, to publish a “detailed 10-year business plan, including key financial and operational indicators”.