Contact Nick

Nick Minchin

Leader of the Opposition in the Senate
Shadow Minister for Broadband, Communications and the Digital Economy
Liberal Senator for South Australia
Nick Minchin


Senator the Hon Nick Minchin

PO BOX 2141
Kent Town SA 5071

36 Grenfell Street
Kent Town SA 5067

Phone: 08 8362 8600
Fax: 08 8362 8579
Toll Free: 1300 301 647
(Toll free in South Australia only,
for the cost of a local call

Parliament House

Canberra ACT 2600

Phone: 02 6277 3004
Fax: 02 6277 5703

Tuesday, April 07, 2009 Printer Friendly Version

7 April 2009

...the tender process for the long-awaiting project was scrapped this morning. Prime Minister Rudd says none of the private consortia tendering for the network met the Governmentís requirements.

Now joining us from Canberra, SkyNews Political Editor, David Speers. So David, how is this plan going to work?

Well, as you mention Jacinta, the original plan has failed. None of the bidders came up to scratch, so the Government has scrapped that plan to have a private operator run this network, instead it said that itís going to build this broadband network itself. Thatís going to cost around $43billion and itís going to take some eight years to deliver the entire network, but it will be a very fast internet speed indeed. They are now talking about 100 megabits per second, thatís at least to 90% of homes and businesses and the remaining 10% will have 12 megabits per second delivered via satellite wireless technology. Thatís still very fast, a lot faster of course than many parts of regional Australia at the moment. The Government will own this company that runs the network, 51% of it at least, and private operators like Telstra will be invited to come in and buy up to 49%. Five years after the thing is up and running the Government will then start to sell down its investment. So it is selling this as a jobs building plan and also a plan to gear Australia up for the 21st century.

As the Opposition reacts to this we are joined from Adelaide now by the Shadow Minister for Communications, Senator Nick Minchin. Senator, thank you for joining us. Can I just put to you what some of your Nationals colleagues have had to say on this, and Nationals Leader Warren Truss says "Regional Australians will miss out, will have to wait years longer than anyone else." Yet the Nationals Senate Leader, Barnaby Joyce says, "How can we disagree with something that is quite evidently our idea." Whatís your reaction to this?

Well I believe that Senator Conroy today has got egg all over his face and I am surprised he had the gall to appear at the press conference today. The policy that he stole from Telstra back in 2007 and took to the last election has just blown up in his face. We are now nearly half way through the Governmentís term and they have delivered absolutely nothing and have now today abandoned the policy that they took to the last election because it was one that they actually just pinched from Telstra and hadnít thought through and then his own department excluded Telstra from the process back in November last year without Senator Conroy having any say in the matter and without Telstra, this whole tender process was inevitably doomed to failure because it was a Telstra proposal that the Government was tendering. So now, after 18 months, $20 million of taxpayersí money spent on this process, we are back where we started. The Government has to start all over again and now itís rushed out a whole new policy, one quite different to the one that it took to the last election, which costs nearly four times as much and relies on them being able to raise $38 billion from taxpayers and the private sector. It's unbelievable what they've done.

The Government says what it took to the election was a promise to test if the market would be able to deliver this broadband plan it was talking about, the market has not been able to deliver that based on the advice of its independent tender panel, so is this really a broken promise as you seem to be suggesting?

Of course it is David. The Government went to the last election and told the Australian people that a Labor Government would build a fibre to the node network to 98% of Australians with the Government putting in $4.7 billion and they'd start construction at the end of 2008. This is a massive broken promise. That policy was one, as I said, that they simply took from Telstra. They misled the Australian people, they deceived the Australian people and now, after 18 months they have nothing to show for it whatsoever. If anything broadband services are worse now than if we had been re-elected because Labor cancelled the contract that we had with Optus and Elders to deliver high speed broadband to rural and regional Australia, thatís been cancelled. Warren Truss is quite right. Rural and regional Australians have been left completely in the dark and theyíll be waiting to see a service for years and years, which they could have had this year if the Labor Party hadnít cancelled our contract with Optus and Elders. So now we start again, the Governmentís going to have a 9 month implementation study, they are going to put $4.7billion of taxpayers money at risk and then try and borrow another $15 billion to have the Governmentís 50% equity and then expect the private sector to come up with $20 billion and yet this process has collapsed because they say the private sector couldnít come up with $5 billion to build the original proposal. So they say oh well weíve got another plan and that involves $20 billion of private sector money. This is a joke.

So you donít think they will ever be able to achieve that sort of private investment under this new plan?

I don't believe they will. I don't think this project will be commercially viable. You have got to remember that $43 billion of investment can only occur if it gets a commercial return. We have no evidence of what the likely demand for this service would be. The prices they would have to charge will probably double what people now pay for internet services. It will have to compete with the existing Telstra network, with the rapid advances in mobile broadband services that are taking place. Construction of this wonít start at the earliest until next year and I donít think thatís the case, and then at the earliest completed by 2018, thatís three Federal elections away. I donít believe they will be able to raise the money because I don't think anyone will have the confidence of being able to get a commercial return on what is a utility investment in a highly competitive market place with a technology that could be left behind by the rapid advances in the whole broadband technology sector.

Confidence is going to be the key to attracting that investment, and as you mention there are going to be three elections before this thing is finally built in its entirety. So what would happen if the Coalition did return to government at one of those elections Ė would you scrap this, would you start all over again, or would you continue with what Laborís laid out today.

Well obviously when we get to next yearís election we will formulate and put to the Australian people a policy on ensuring improved broadband services that takes account of where we are at with the Government and who knows where this Government will be at by this time next year or at the end of next year, but one that will be realistic and affordable and not put Australians into hock. I mean the Governmentís going to put $4.7 billion at risk and then apparently go and borrow in the name of taxpayers another $15 billion to invest in this and then expect the private sector to stump it up, so they are going to put $20 billion of taxpayers money at risk. We wonít do that, we are not going to put Australian taxpayers money at risk. The level of debt which this Government is incurring is frightening. I mean, Lindsay Tanner the other day said that the deficits over the next three years will incur $100 billion in debt and now today they have announced at least another $15 billion in debt on what is, I believe, a highway to nowhere.

Well just to clarify that because if the Government is now asking private investors to come forward, youíre not giving any assurance if you win the next election or the election after that that this national broadband network will continue.

The Government is embarking on what it says is now a 9 month feasibility study to see if this thing will actually stand up, because they donít know, they donít have a clue. I expect at the end of that 9 months, which based on this Governmentís timetables will be more like 12 months, they will find that itís not in fact feasible, that you canít get a commercial return on a $43 billion investment in fibre to the premises in Australia when it has to compete with mobile broadband, HFC, WiMax and the existing Telstra network. So I expect that by the end of next year, nothing will have happened, weíll be back where we were in 2007 when this Government came to office and we will have wasted three more years. Weíll take to the next election a realistic policy proposal that wonít put Australian taxpayers into hock and that we will ensure the realistic delivery of better broadband services.

On the nuts and bolts then of what is realistic and what isnít realistic, do you think 100 megabits per second to 90% of homes and businesses fibre to the door, to the premises, is unrealistic.

Well if you want to waste money you can build anything you like. The question is whether there will be the demand for such a service requisite with getting a commercial return remembering that to make that viable youíve got to earn much more than Telstra currently earns off its network. You would have to charge, as I understand it, probably double the pricing that Australians now pay for broadband services. I doubt that there will be the demand for those sorts of speeds, particularly from residential Australia. And weíve got to look at national priorities. Is this indeed the most significant and important investment of $43 billion that Australia could make? Here in Adelaide we canít even get water to water our gardens, in Sydney you can't get electricity when you want it, our roads are crowded and people struggle to get trains that run on time. I mean, sure, weíd all like better broadband, but there are so many other infrastructure priorities in this country with Labor Governments not able to deliver water, electricity, power, decent roads, is this really the most important way to spend $43 billion on infrastructure in this country.

Iíll just take you back to what Barnaby Joyce has said that ďHow can we disagree with something thatís quite evidently our ideaĒ . He says the Nationals put this forward, he seems to like whatís involved here. What do you say to that.

I haven't seen Barnaby's statement. Barnaby I think is quite rightly concerned about this Governmentís neglect of rural and regional Australia, and that's why Barnaby and the National Party and the Coalition supported the Optus/Elders contract which our Government signed in 2007 and which would by now be delivering high speed broadband to rural and regional Australia. I expect that Senator Joyce and Senator Nash are picking up what the Government has today said about rural and regional Australia, which is really just a copy of our contract with Optus and Elders which of course we support the Government should never have cancelled.


Home | About Nick | Media | Contact | Accessibility | Privacy Policy & Disclaimer | Site by Datasearch
Authorised by Senator the Hon Nick Minchin, 36 Grenfell Street, Kent Town SA | © Senator Nick Minchin 2009