Senator BIRMINGHAM (South Australia) (16:49) I join Senator Macdonald in seeking to have the Senate take note of the first of what are designed to be regular reports from the Joint Standing Committee on the NBN-a committee that, like Senator Macdonald, I am a member of. This committee was intended to be the primary body of the parliament to have oversight of this truly massive area of government expenditure. Let us be under no illusions-the government and Minister Conroy like to proclaim just how significant this project is. We may debate the merits of the project, we may debate whether it is as significant to the future of the Australian economy as Senator Conroy and others opposite sometimes claim, but there is absolutely no debate about the significance of this project for the Australian budget and for the finances of the Australian government. You need only look at the fact that in just this financial year, in the 2011-12 financial year, NBN Co. will receive a $3.1 billion cash injection from the Australian government. That is just this year-just one year of many, many years of multibillion-dollar commitments from government into NBN Co. This year alone, more than $258 million a month of taxpayer expenditure is going to this project.
You would think for that sort of money, especially for that sort of money funded as it is out of taxpayer debt-money borrowed in the name of the Australian taxpayer-there would be a decent level of accountability. That is what this committee was established for-to provide some parliamentary accountability; to provide some parliamentary oversight. But it is a disappointment, as Senator Macdonald highlighted, that we are unable to provide the level of oversight which is warranted. We are unable to do so because we have been unable to extract from the multibillion-dollar NBN Co. the most basic of key performance indicators at this very early stage of the committee’s deliberations.
A body that has more employees than it has customers is somehow unable to provide a parliamentary committee with the bare bones basics, not even the basic KPIs which might tell us exactly how much money has been provided to it at a given point in time by the Australian government; to tell us how much of that money has been expended at a given point in time by NBN Co.; to tell us on what that money has been expended-how much of it has been expended on massive executive salaries for its bloated workforce versus how much has been expended on actually rolling out fibre or delivering the wireless or satellite options that are also being developed under this proposal; to tell us how much fibre has actually been rolled out; to tell us how many homes or premises that fibre has passed; to tell us how many premises have actually agreed to have that fibre connected; to tell us, ultimately, at a given point in time, how many premises have taken out a service which utilises that connection; or to tell us how many customers this new, multibillion-dollar government monopoly actually has. No, the whole thing is shrouded in secrecy. The whole thing has failed to provide basic answers or to meet the most basic standards of public accountability that we should expect-that we should demand-for the expense of far less taxpayer money than we see NBN Co. expend.
Senator Macdonald was right to highlight, as the dissenting report by coalition members of the NBN joint committee also highlighted, the areas in which NBN Co. has been given some extraordinary exemptions from public accountability already-very extraordinary. Despite being the nation’s single largest public works activity, it has been exempted from consideration by the Parliamentary Standing Committee on Public Works. Those opposite may argue that that is why this joint committee on the NBN Co. was established instead. If that is the case, this joint committee should get the types of answers, information and data that the Public Works Committee has long required in helping it determine the worth and merits of Commonwealth public works.
We have seen limitations on the power of the ACCC to oversight NBN Co.’s activities. So this reform, which is meant to be and is argued by those opposite to be a great reform for competition in the telecommunications sector, has, for its success, demanded limitations on the power of the nation’s competition watchdog to oversight it. They have actually put a choker chain on the watchdog, telling it, ‘No, you are not able to ensure competition in a manner which we would expect to be mandated for a new monopoly enterprise.’
There has, as we know, been no cost-benefit analysis or any decent analysis whatsoever of the merits of the NBN Co.-of whether it meets the basic threshold test of being the best, most affordable, most effective and most cost-efficient way of delivering fast broadband to Australians. As the Deputy Chairman of the Productivity Commission, Mr Michael Wood, observed in evidence to this committee-and this was highlighted in the dissenting report:
As a general principle we continue to believe that cost-benefit analysis is a useful tool. We also make the point that you do not actually rely exclusively on the numbers that a cost-benefit analysis will produce because it is the product of many assumptions. As long as it is a transparent process of identifying the various costs and benefits and it is transparent as to the assumptions that you have made-and there are very many complex assumptions to be made in these things; they are not simple, but they are an instructive methodology-then that is a useful contributor to decision making.
For whatever reason, those opposite decided that having any type of independent analysis of the merits of this multibillion-dollar expenditure was not a useful contributor to their decision making. Far better it was for Senator Conroy and Mr Rudd to sit on the VIP plane and get out the back of an envelope and say, ‘This is going to be a worthwhile project,’ and announce it to the Australian people from there. Far better it is, they think, to exempt this project from the application of freedom of information laws-once again stifling the accountability that we should see for such an expense of government funds.
Even with regard to the project itself, and even with the limited information from NBN Co. that the committee has been able to work with, we are aware of the reality that prices for all but the most basic level of service will go up and will be higher than has been the case under current arrangements in the telecommunications sector. Consumers who want more than a basic service offering in the broadband space will end up paying more and more over the long run.
We know as well that there are delays to the rollout. We do know that they are not getting the job done on time and that they are not able to let contracts in a manner which ensures the project can be delivered within budget. We know that, in the first lot of major contracts put out, they had to go back to the drawing board and have a second try because nobody came in within budget. Even last week, after this committee had reported, it was revealed that in my home state of South Australia they have had to go back to the drawing board again-they have not been able to let the first major contract for delivery in SA. So we have a situation now where NBN Co. has construction contracts in place in all mainland states-after a couple of goes in some of them, mind you-except for South Australia.
There is no clarity from this government, no clarity from Senator Conroy or from NBN Co., about why SA is the only state where NBN Co. has not announced a contract for fibre rollout. There has been no explanation of what the cost and timing implications of that delay are. How long will South Australians have to wait to see this magical NBN Co. rolled out? And how much more will it cost the Australian taxpayer to roll it out as a result of these contract failures and as a result of these delays? There is no guarantee that people in South Australia will receive the same percentage of fibre services or whether, because of these contract failures, more South Australian premises will end up having to rely on wireless and satellite options than in the rest of the nation.
Why? Why are there no answers to any of these questions? Because the whole project is masked in secrecy and because the government does not want the truth about the costs and expenses and failures of this project, as highlighted in this dissenting report, to come out. I seek leave to continue my remarks.