Business Council Slams Labor's NBN Cost Benefit Analysis Refusal

Monday, October 26, 2009

The Rudd Government’s arrogant refusal to conduct a cost-benefit analysis of its $43 billion NBN Mark II proposal simply cannot be justified the Shadow Minister for Broadband, Communications and the Digital Economy Senator Nick Minchin said today.

In its newly released report ‘Groundwork for Growth’ the Business Council of Australia is highly critical of the Rudd Government for its refusal to conduct such analysis.

“The problem with this sort of decision making is two-fold: first, is the money committed tot the NBN being spent on a project where the benefits outweigh the costs? And second, is it being spent on the best program possible?

“The money committed to the NBN has a high opportunity cost in terms of other priorities it could be spent on. There is of course no shortage of good ideas or projects or programs on which $43 billion could be spent..” BCA concludes.

BCA also raises conflict of interest concerns in “the Commonwealth being the promoter, developer and majority shareholder of the NBN, as well as setting the regulatory framework for it”.

It said it is important that the Government’s NBN implementation study be publicly released, so that there is increased confidence in the proposal.

“Most important, the Government will need to keep an open mind about the future of the NBN and should not feel bound by past announcements if the results of the implementation study suggest a better approach.” BCA states.

“The Coalition has long called for the conduct of a thorough cost-benefit analysis as has the Productivity Commission, inline with the Government’s own supposed commitment to evidence-based policy,” Senator Minchin said.

“Labor’s refusal to conduct a cost-benefit analysis is simply indefensible and is symbolic of its utter recklessness with billions of taxpayers’ dollars.

“The excuses this Government gives for not conducting this analysis are laughable, including Lindsay Tanner’s now infamous claim that there are too many ‘unknowables’ to bother.

“These excuses highlight precisely why a cost-benefit analysis must be carried out,” Senator Minchin said