Opposition Communications spokesman Malcolm Turnbull has described a 36 page national broadband network document released by the Federal Government this afternoon as “curiously inadequate document” that does not include “any financial statements at all, no profit and loss statement, no cash flow statements and no balance sheets”.
The document does reveal that the NBN Infrastructure will cost a total of $35.7 billion of which $14 billion has been earmarked for Telstra. This is $7 billion less than first estimated.
Turnbull said “We are told that as a result of paying $13.8 billion to Telstra in decommissioning and infrastructure payments , the estimated capex to build the NBN will be reduced from $37.4 billion to $35.7 billion, yet the Telstra deal is stated to be a real positive for the NBN – presumably it results in much lower net operating losses the savings of which justify the $13.8 billion spent. But how can we know without seeing the financial details”.
The government released the 36-page summary of NBN Co’s 400-page business plan after independent Senator Nick Xenophon insisted he see a summary before voting on key legislation.
Xenophon said he would back the legislation that paves the way for Telstra’s participation in the NBN, after the government gave in and released the business plan.
Turnbull said “The summary acknowledges that the project is a very risky one now requiring a weighted average cost of capital of 25% until the concept is proved over the next three or four years reducing, if all goes according to plan, to an average of 10-11 percent over the 30 year period”
Turnbull claimed that the plan asserts that the NBN will be able to carry debt however he said it was “not clear when and how much debt can be raised, or what cost or whether it will require a Commonwealth guarantee – again a crucial issue unable to be assessed from this inadequate document”
The Implementation Study said that Internet access prices would increase each year in real terms. This document says that the NBN anticipates being able to reduce real prices for all products except the basic service offering of 12 mbps down and 1 mbps up. Since that is the product which experience suggests the majority of households will take up, it seems the NBN is not going to offer cheaper Internet at all and, at least on the basis of this document, has left itself room to increase the cost of the basic service.
However, beyond a few scraps of information and other warm words this is a thoroughly inadequate document.