Labor’s NBN Faces More Cost Blowouts

August 16, 2013
Transcripts

TRANSCRIPT OF THE HON MALCOLM TURNBULL MP

DOORSTOP INTERVIEW
SYDNEY

Topics: Cost blowouts on Labor’s NBN
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MALCOLM TURNBULL:

Well today Anthony Albanese and Kevin Rudd’s credibility on the NBN has been completely shattered.  As David Ramli has revealed in the Australian Financial Review just a few minutes ago the NBN Co’s chief operating officer has told his top executives that their construction costs have blown out by $5 billion.  Now we didn’t find that out because Anthony Albanese has told us the truth.  He’s been telling us for weeks that the NBN Co is on time and budget. 

 

We didn’t find out about that because the NBN Co published the latest version of its business plan because he’s been sitting on that and won’t release it before the election.  He wants people to vote on the NBN without actually knowing what’s going on.  We found out about it because someone at the NBN Co had to ‘fess up to the facts about the bad shape this project is in to their colleagues.  Now Labor has been telling lies about the NBN and the Coalition’s plans for the NBN all week.

Let’s just go through a few of them.  They said that Labor’s NBN will be free.  Well of course it won’t be free – not free to the taxpayers, not free to the people who want to connect to it.  They said that we will disconnect the NBN.  In fact, we will complete it.  We will complete its construction sooner, cheaper and more affordably.  And for those people wanting to sign a petition on Twitter to save the NBN, they really should be voting for the Coalition.  Because they can see the way this project is being so comprehensively mismanaged by Labor there is no prospect of the Government finishing this project at all. 

Finally, with respect to Tasmania they have said that we will not honour the contracts that have been entered into in respect to Tasmania.  Let me just say again whether it is in Tasmania or anywhere else:  The NBN Co is a Commonwealth Government-owned business.  It will honour every contract it enters into – full stop.  And if you think about it the alternative would be to spend a lot of time in court.

And much as all as I have affection for my former profession of the law, I don’t want to make it my business to line their pockets even more.  Every contract the NBN has entered into will be honoured in accordance with its terms.

JOURNALIST:

He also said in that article with restructuring and re-engineering, they could claw back that cost blowout and more. 

MALCOLM TURNBULL:

Well you’ve got to ask yourself if the management that until yesterday was saying everything is hunky-dory and on-budget is going to be able to make up for this massive blowout.  The fact of the matter is this.  The NBN Co is not managing this project well.  It is way behind schedule, it is running well over budget. 

Right now they have managed in four years to connect 33,000 premises to their fibre network.  They have basically completed in four years, two per cent of the project,  And they want us to believe they will be all completed by 2021.  The NBN’s business plan, its corporate plan, as is currently published, has no credibility at all.  And the revelations in the AFR today have blown it asunder.  The AFR have blown it asunder. 

Now there is a way to save a lot of money on constructing the NBN and we have outlined an approach to that in our alternative plan.  And if we are elected to Government, we will have a regime of complete transparency on the NBN.  We will publish very quickly an analysis of how much, in dollars and years, to complete the NBN on the current plan.  Anjd then what we can save in dollars and years by making certain changes to it. 

And that will all be set out and Australians will understand what choices are being made.  But this Government – remember, Anthony Albanese until today was saying this project is on time and on project.  Wrong.  That was false.  And the big question we’ve really got to ask is do we really believe that Ralph Steffens and the NBN hadn’t told the Minister the fact of the matter before they told their top NBN executives yesterday.  What is in the business plan that Albanese is so reluctant to release?

JOURNALIST:

So this has been revealed publicly by the Financial Review.  So who should have revealed it and why?

MALCOLM TURNBULL:

Well the Minister should reveal this.  The lack of transparency, the lack of honesty, on behalf of the Government has been shocking.  I mean, the NBN Co revises its business plan every year.  They have given a revised business plan to the Government and the Government refuses to release it. 

And now little facts, little bits of it are starting to leak out about it already.  You’ve seen already an acknowledgement of a $5 billion blowout.  How can we be sure it’s only $5?  How do we know it’s not $10 or more?  What confidence can you have in this Government and this project when we have been told so many falsehoods about its progress?

JOURNALIST:

Your NBN plan relies on many of the same assumptions.  Can you guarantee yours won’t increase from $29.4 to something higher?

MALCOLM TURNBULL:

No, David, our assumptions we have applied to their plan and to our plan.  But one of our major differences and we’re being vindicated by our announcement today, one of our major differences is we have said is NBN Co has underestimated their construction costs. Well clearly we’re right about that. There may still be differences as to the extent to which it’s been underestimated but the proposition that Albanese has been pushing that they are on time and on budget is clearly false, that has been blown apart.

But insofar as there are assumptions about timing and costs and revenues and they have been applied equally across our version and our assessment of Labor’s version.

JOURNALIST:

The fact checking website Politifact rated your plan that Labor’s would cost $94 billion as only half true. Are you guilty of exaggeration?

MALCOLM TURNBULL:

No I think if you read what they’ve said they’ve basically said that our conclusions are reasonable but they’re unverifiable and certainly unverifiable by Politifact and this was the point the Parliamentary Budget Office made to us quite some time ago earlier in the year that the real issue with any of these business models is what are the assumptions, you know it’s very hard unless you’ve got engineering and network experience to be able to form a judgement about that.

You’ve got to remember that as far as costing is concerned we have not come out and said baldly we can do it for $29.5 billion, Labor’s will cost $94 billion. We have said this is why we think Labor’s will cost $94 billion and the reasons in considerable detail so that people can assess them so that they can form a judgement about them and Peter Martin has run through them in some detail in his analysis. Equally we have done the same thing with our own assumptions. So our model on the NBN is fully costed.

We have fully costed it and set out all the assumptions so they’re very transparent and if you think we’re wrong, if you think that $3600 is not the right number for the average cost of connecting a premise with FTTH and it should be $3400 well that’ll give you a different outcome, somewhat different outcome. And you can change any of those assumptions but we’ve been very very transparent and bear in mind we published that four and a half months ago and nobody has since published despite a lot of expertise in the field, no one has since published a counter analysis that demonstrates that any of those assumptions are other than very reasonable.

JOURNALIST:

But that $94 billion assumes that everything goes wrong, doesn’t it? You’ve overreached.

MALCOLM TURNBULL:

No it doesn’t. It assumes to be fair it assumes all of those four parameters are less favourable than what the Labor Party has hitherto assumed but you’ve got to remember that their assumptions today have been blown up by the mouth of their own chief operating officer. But I have to say to you subsequent to publishing our plan in April we assumed that it would take four more years to complete the construction of Labor’s NBN.

I think that would be very optimistic if we had to redo that, look at that again today I think it would be a miracle if they could complete it in only four extra years given where they are and the delays they’ve experienced. So you can see we’ve been completely transparent, there is nothing that anyone analysing our plan needs to have to assess it beyond what we have provided, we’ve put all the assumptions out there.

JOURNALIST:

Mr Albanese wants you to put your policy before Treasury as well. Will you do so?

MALCOLM TURNBULL:

Look our policy is available to Treasury. He has not asked Treasury to vet the business plan of the NBN, he has not asked them to do that and he has had our policy out there since April. If the Treasury want to have a look at it I’d be delighted to sit down with them and discuss it with them but it has been a public document for four and a half months. The real questions to Mr Albanese is why hasn’t the Treasury ever assessed your document Mr Albanese, that’s the real issue. Because they have not. I’m sure they’ve seen a copy of it but they have no assessed the validity of the assumptions.

So let’s be quite clear Albanese’s credibility on this issue is shattered. Everything he has said about the project this week has been proved to be false. Now the only questions is is he a fool or a nave? Did he know that that blowout was happening when he said the project was on time and on budget?

Did the NBN Co really not tell their shareholder the Minister about it before they told their own executives or is he so foolish that he didn’t take care to enquire of the NBN Co management as to what their latest assessment was before he said it was on time and on budget? I mean Albanese has no credibility on this issue at all, that was ended on the front page of the AFR website today. OK thanks very much everyone see you soon.

JOURNALIST:

Mr Turnbull one more question?

MALCOLM TURNBULL:

Ok, just one more.

JOURNALIST:

You were voted the third sexiest politician, do you think that’s fair?

MALCOLM TURNBULL:

[LAUGHS] I should have kept walking. Well I’ll just say this. Everyone says that politics is show business for ugly people so being included in a list like that you’ve got to accept as a compliment and I’m very flattered but I don’t think given the line of work I’m in it’s a particularly big wrap.

ENDS

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