Conroy’s Budget: A $400m NBN Blowout & $450M Surplus Fiddle
9 May 2012
The National Broadband Network is at the centre of Labor’s 2012-13 Budget cooked books. The Government’s claim of a meagre$1.5 billion surplus rest on shifting expenses forward from 2012-13 to the current 2011-12 financial year. Almost a third of the surplus comes from Senator Stephen Conroy’s creative accounting with the NBN.
According to the 2011-12 DBCDE portfolio Budget statement, spending on broadband by the Department was forecast to be $57 million this year. But in Tuesday’s 2012-13 portfolio Budget, this figure is revealed as having exploded to $484 million because inducements provided to Telstra for its deal with NBN Co have been brought forward as lump sums totalling $421 million to be paid out before June 30.
The funny money and financial irresponsibility doesn’t stop there. The sum Australian taxpayers are being forced to invest in the National Broadband Network between July 2011 and June 2014 has apparently blown out by $400 million, even though the NBN is at least a year behind schedule in its rollout.
Investment in those three fiscal years is now estimated to be $14.5 billion (according to page 23 of this year’s DBCDE portfolio budget) compared to a projected $14.1 billion in last year’s Budget for the same three years (according to page 19 of the 2011-12 DBCDE portfolio budget).
Yet the network only has 5000 or so customers currently using its fibre network, compared to the 137,000 projected by June 2012 in NBN Co’s Corporate Plan.
So taxpayers are paying far more for a rollout that has delivered a fraction of the promised connections.
The large increase in the equity required by this reckless project, combined with repeated refusals by Julia Gillard or Stephen Conroy to reveal how many households and businesses will actually be able to connect to the NBN network at the time of the next election, point to a blow-out in its expense and schedule.
Little wonder Labor has attempted to frustrate scrutiny of the NBN by Parliament and the Australian public at every turn. It is imperative Senator Conroy immediately releases a revision of NBN Co’s December 2010 corporate plan – fiscal honesty and policy transparency require it.
Sadly, the Government’s surplus fiddles and refusal to admit to spiralling costs for the NBN are not the only waste and irresponsibility in the Communications portfolio.
Not content with cheating taxpayers on what they get for funds invested in the NBN, Labor is also shovelling $20 million to “improve public understanding, address misconceptions and provide updated information about the National Broadband Network (NBN).”
And an additional $20 million goes to a “national online educational portal” to “help students, families and teachers take advantage of the National Broadband Network.”
Given NBN Co has already wasted so much money by hiring a vast public relations team and granting numerous contracts to PR and marketing consultants and other privileged insiders such as Labor’s preferred opinion polling firm UMR, Australians have every right to ask whether these funds will simply result in more pro-NBN propaganda.
Budget trickery and Labor spin aside, the Coalition notes the $158 million in additional funding to SBS to maintain the quality of their services and establish a national Indigenous Television service with Australia-wide coverage. Likewise, we note the $80 million six-month reduction in license fees for the free to air TV networks.
The Coalition will study these measures in detail before making further comment.
6 Responses to “Conroy’s Budget: A $400m NBN Blowout & $450M Surplus Fiddle”
All that matters is if the things that are cut are OK to be cut and that what is being proposed is good.
Then either there is or isn’t a surplus, and it is stupid to say it’s not real if it is not big.
Being in the red or in the black is an important point, not always necessary to be in the black, but the difference is absolute.
As for delivering promised connections, that is a furphy, you can’t expect instant take-up of what is a really new ground breaking offering. Many people are on contracts for their existing connections and therefore you would expect one or two cycles for churn. (24-48 months)
The NBN isn’t reckless – it is in contrast to decades of being taken for a ride by Telstra.
SBS funding increase is good. Licensce fee reduction I am not sure of but there is some logic in a competition from internet argument.
NBN would need less PR if the media did a better job and the Coalition stopped spouting rubbish. Consider your contribution to the waste of everyone’s time and money on the NBN and other issues.
“Not content with cheating taxpayers on what they get for funds invested in the NBN, Labor is also shovelling $20 million to “improve public understanding, address misconceptions and provide updated information about the National Broadband Network (NBN).”
Well, Malcolm, if you’d stop promoting misconceptions, such as the litany in this blog post, the Government probably wouldn’t have to spend so much money correcting your misinformation!
Although, there are some such resources that come at no cost to the Government.
http://www.nbnmyths.wordpress.com
As you well know Malcolm, the accounting for the NBN in the budget is perfectly reasonable standard accounting practise.
As a GBE, NBN Co is treated in exactly the same way as Telecom/Telstra was, and Australia Post is. This has always been the case for both ALP and Coalition Governments.
If I may quote economist Brian Dalzel, who reviewed the NBN accounting in a parliamentary Library note:
“Money transferred to NBN Co cannot be classified as an expense under currently accepted accounting standards. It is accounted for as a financial asset on the balance sheet (an ‘investment in other public sector entities’), as opposed to an expense item on the operating statement. An eventual gain or loss on the government’s equity investment in NBN Co is accounted for in the operating statement as an expense, but this does not affect the fiscal balance measure.”
http://www.zdnet.com.au/govts-nbn-accountability-correct-economist-339329928.htm
And you wonder why the Government needs to spend money to correct the misinformation you spread about the NBN….
Kevin Rudd & Stephen Conroy should be charged with malfeasance in public office.
Any public officer who blatantly disregards basic principals of accounting and governance to the extent of increasing expenditure of public monies by $19 billion (600% more than the original $4.7B) based on a plan drawn on a napkin during a flight would under any other circumstance face criminal prosecution for failing and abusing their fiduciary duty.
Malcolm uses words such as “trickery”, “cheating the taxpayer” amd “misinformation”. Do elected officials have the right to defraud us to the extent?
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I wonder where this oft-repeated rubbish about a napkin on a flight came from?
The fact is that the change from a Fibre To The Node (FTTN) NBN to Fibre To The Premises (FTTP) came after recommendations from an expert panel which included the secretary of the treasury Ken Henry, plus Australia’s foremost telecommunications expert Professor Rod Tucker, amongst others.
With numerous countries around the World now axing their FTTN networks and moving to FTTP, the sense of this decision becomes more obvious every day. Three countries Malcolm Turnbull has previously cited as examples of a sensible broadband rollout (The UK, NZ and Germany), have all since abandoned the technology for the same system as out NBN. Not to mention others such as South Korea, Singapore, Israel, Qatar, huge areas of the US and Canada and much of Europe.
Just last week, the former Chief Technology Officer of British Telecom described FTTN as a “huge mistake”. BT’s FTTN rollout was one of those cited by Mr Turnbull as an example of what we should do, a policy he still advocates.
Unsurprisingly, My Turnbull has been silent on the CTO’s lambasting of his FTTN idea.
http://delimiter.com.au/2012/04/30/fttn-a-huge-mistake-says-ex-bt-cto/
Well Malcolm, maybe you should stop misinforming people as well, and your bandaid approach to broadband.. FTTP/FTTH is needed mate, and your approach will be obsolete very quickly.
The UK and NZ are already considering a change from FTTN to FTTP. So why the hell would you roll out that kind of network here?? (Someone has already given the example of that with BT above.)
Both you and Abbott are a disgrace. I have heard very few policies from you, and a lot of bagging out of the Labor party.
And now you are spinning the BS about new estates not getting it/ Funny that most new estates are getting Telstra FTTP installed, and that will be part of the NBN once rolled out. Think maybe you should get your facts straight before opening your mouth.