Opposition would consider cancelling NBN Co vendor contracts

Opposition Leader Tony Abbott renews calls for NBN Co funding to be used on transport infrastructure

Opposition Leader Tony Abbott

Opposition Leader Tony Abbott

The Federal Opposition would consider cancelling some of the $7 billion worth of contracts signed between NBN Co and networking vendors upon taking power, Opposition Leader, Tony Abbott, has said in a radio interview.

According to Abbott — who would not be drawn on whether the Opposition would cancel the National Broadband Network and dissolve the NBN Co — said the Opposition was committed to “not throwing good money after bad”.

“Well, we’d have to look at exactly what the contracts entailed. We’d have to take legal advice, obviously,” he said. “But even if that money turned out to be wasted it would be this government’s fault not ours and, as I say, you don’t throw good money after bad…”

Abbott reiterated calls made in his reply speech to the 2011-2012 federal budget in May to use funds allocated for the NBN on building transport infrastructure.

“[The NBN funding] could build the Melbourne to Brisbane inland railway, that’s about $4 billion. It could build the Brisbane rail loop, that’s about $8 billion. It could finish the duplication of the Pacific Highway, that’s about $6 billion. It could connect up the M4 at Strathfield to the CBD in Sydney, that’s about another $6 billion,” Abbott said.

“It could build on top of that 20 major teaching hospitals at a billion dollars a throw and you’d still have enough change left over to spend the $6 billion that the Coalition was proposing to spend on better broadband at the last election.”

Abbott’s comments follow NBN Co’s striking of a deal with Australian construction company Silcar, a 50/50 joint venture between Leighton subsidiary Thiess and Siemens, to install the cable that will link premises to the network.

The contract — worth $380 million over the next two years, with the option of a further two years at an additional value of $740 million — will cover Queensland, NSW and the ACT, representing almost 40 per cent of national construction activity planned over the next two years.

Speaking in May Abbott argued speeds of up to 100 megabits were already “potentially available” to “almost every” major business and hospital, to most schools, and through high speed cable already running past nearly a third of Australian households.

“The smart way to improve broadband is not to junk the existing network but to make the most of it,” he said. “It’s to let a competitive market deliver the speeds that people need at an affordable price with government improving infrastructure in the areas where market competition won’t deliver it.”

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22 Comments

gnome

1


If Tony Abbott could be less populist and start to think about what he is saying, he might realise that it is nonsense to claim that NBN funding could be diverted to non-commercial infrastructure projects like the ones he has carefully selected around the country.

NBN will be a commercial enterprise so the cash income will repay the borrowing costs. Hospitals, schools and roads are funded with allocations from consolidated revenue, are not expected to generate income, and nor should they be.

In other words, the funding for NBN has no direct effect on the provision of publicly funded infrastructure, and it is ignoring the facts to suggest otherwise. Mr Abbott probably knows this very well, which makes his reported comments somewhat curious.

Not Again

2

100 Mbit - where? And how will I get 1 gbps when I need it in a reasonable period of time, say 5-10 years? They should get Michael Caton onto an advert for this to "tell 'em they're dreamin'"

Rational

3

Ahh Gnome, you've found the proverbial pot of gold? or maybe you work in Swan's office?

Unfortunately reality is a little different.

Assuming you work and you are in Australia, WE as taxpayers own NBN Co. The pump has to be primed, the money has to be provided from somewhere. To date it is Govt money that you and I and other taxpayers have provided. I haven't seen anything about NBN CO borrowing money and assuming they aren't making any revenue/income (which they aren't) they can't pay any interest repayments - and wouldn't be until mid-late 2012 when they finally release some products.

You also assume that NBN Co will receive income over and above its costs (gross profit)... which is a gross assumption, particularly as the takeup to date (admittedly few test sites) has been anything but stellar.

In Budget or out of it, NBN is currently is a drain on the public purse, and I suspect will be for the foreseeable future.

The Liberals would be right to totally review the project when they come to power. If it is as you say a money maker then it would probably proceed - if not, then they have some big decisions to make.

As a taxpayer I insist on them wisely spending the money I give them, something I have serious doubts about over the last 3+ years of Labor.

Murdoch

4

Rational, you missed where Labor, after it's spending, has retrieved $22 billion this year, and is on track to be in surplus by next year.

Would suggest that if you are that concerned with Labor's spending habits that you actually examine them first.

Raymond

5

@ 4 and what planet are you visiting from? where did you get the $22 from? I know! what you are not saying is there is $27.5 bill against your $22. So what planet?

Gary Khol

6

@4 and @3 the methodolgy of the finiacing of the NBN has been warped and lied about by T Abbot in the attempt to convince the masses that there is some how a 20 to 45 billion "pot of gold" laying about in the NBN project just begging to be used for something else.
Now that is a given, he has used this arguement many many times, and its total BS, as the NBN is 4 and 3 all to well know arnt being finiaced via a pot of gold.

HUH

7

The above article clearly shows that Abbot still just doesnt get it, or is being his usual lying self, as someone else pointed out does he really believe there is a mystical pot of gold to draw from within the NBN, maybe he is praying real hard for one as it appears thats how he comes about his finicial figures.

Bob

8

The NBN Co is being funded by government borrowings which will incur interest. These borrowings will be repaid over time by income earnt by the NBN Co. There is $27billion in government borrowings being contributed (over time) to the NBN Co. Abbott can build his wish list using these same funds, however they will be built from borrowings not from consolidated revenue. So we have two options, one NBN Co which will repay the money via income earnt or two more motorways and hospitals which wont return (directly) be able to repay the debt. If Abbott & Co are serious about their debt fears then surely they wouldn't borrow $27billion to build roads and hospitals and add to this debt. You can't have it both ways. @Rational so they can't make any interest payments until 2012? So what? The NBNCo will be around for decades to come so plenty of time and income to pay the debt especially considering NBN co revenue forecasts are extremely conservative (ie. they have flatlined the growth in data downloads which are trending north rather quickly elsewhere around the world). We spend around $30 billion per year on defence yet can't spend $27billion over 10 years on a broadband network?

ozimarco

9

Funny how Abbott never mentions the many benefits and opportunities the NBN will bring to individuals and business for a number of decades. He really is a grumpy old Luddite, firmly rooted in the 20th century along with his mentor.

John Nixon

10

I am a senior experienced IT engineer. The NBN HAS to be built. The copper phone network has had its day. The 100 mbps target will long be obsolete once the NBN has reached a certain extent of installation. The fibre installed will NEVER be replaced by another alternative, we have no idea what the limiting bandwidth is with fibre. Wireless has very finite limitations, only so much spectrum available, and limited modulation bandwidths.
NBN in any developed country is not a question of IF, but a question of WHEN and how.
I shrink when I listen to Malcolm Turnbull's bleats. The copper network served the world well for 100 years, it's now dead! Vive the fibre network for the next 100 years!

Francis Young

11

Tony Abbott says a third of Aussies can get fast broadband now, and he's right.

The NBN is about delivering fast broadband to the third of Aussies with nothing at all, then to the third with slow broadband, and finally to the ones whose fast broadband will be considered slow by the end of the decade.

As others have noted, the NBN will be built from funds borrowed for the purpose, and repaid over 15 years by NBNCo's profits. It is "off-budget", that is to say, it does not take money from other budget programs. Over its fifteen year build-and-repay cycle, it is in fact self-funding.

But it is also an enabler for regional Australia, which will have to be built sooner or later, and right now we are looking at the best way to fund it and right now is the best time to get on with it.

Garth

12

Building other infrastructure does pay for itself even if its not tolled. For instance if Melbourne removed all the Free ways and railway lines how do you think that would help the economy for the state?
Working in the construction industry myself, to try and accomplish this size of projects in the time frame they are proposing will lead to cost overruns.
Demand Will outstrip supply!
Take it easy slow down, deal with the towns with nothing at all, its not a race.

Baz

13

Pulling out a functional HFC and copper network to replace it with a fibre one at such an enormous cost....madness. i'm sure all of the old dears in my suburban street are looking forward to having fibre connected. After all they don't need health care and other stuff like that.

Ah well the NBN will be fantastic for all of the stay-at-home nurds to download serious quality porn and how about the speed of the games.
Most "business" and hospitals in the major towns and cities already have fibre. Currently there is plenty of fibre running around our cities, why duplicate it?

gnome

14


No, (ir)rational 3, I don't work in the office of any polititical potentate or pissant. And I don't fondly imagine that I have discovered any unique pot of gold.

But as somebody who sees what is going on in the industry, I can get pretty peeved at the apparent absolute ignorance of people who (a) clearly seem to not know what they are talking about on tech issues; and (b) will say and do anything simply because it is the opposite of what 'the other side' are saying.

And that goes for all of them, including the sainted Greens who are no better than any of the others.

Gary Khol

15

@3 had to laugh at your missive seeimg as your name tag is well known for the last 12 months and Gnomes tag has been very well known for a number of years, I found the entire content of your post to be complete garbage.

RS

16

@ 5...

Gee I have been away for many months... come back to see my prophecy still 100% correct...

Raymond's continued idiocy is simply ignored (he blurts out his typical cretinism and no one cares, they just move straight past him) and rightly so..

Just as prophesied...LOL....

See ya stupid!

Raymond

17

@ 16 and we all know where you have been D H

Out on parole are, after being caught up with for those incidents!

Do we still work for the Aztec's ?

T.Brown

18

@17 Creepy just plain creepy and @16 why? what is with the troll baiting?

Back to topic, with the events in the Middle East and the Med, surely our polictical system can get a big fat kick up the backside to stop this pathetic BS from both sides

However I am going to have to lump a bit more scorn on Mr Abbott however for being the cream of the crop for sheer snake oil baffoonary by appealing to the bottomfeeders fears ALL of the time, and just plain either being very stupid or with intention lying and fudging every single figure he is given, the NBN being just one case in point.

I still cringe at last elections announces about broadband, not just one but all of them by the Libs and there is still very plainly still no improvement on their perception of the service Australia gets or will require in the near future.

Then we have the failure to debate ANYTHING in this country because we have to be so polarised all the time which shoots any chance of ANY reasonable sensible outcome in the head before its even seen the light of day, these forums are just a microcosom of the debating standards we now have.

RANT OFF.

gnome

19


@T.Brown, +1 for realism and common sense.

There is another reason it seems hard to sustain a rational debate about the value of NBN. Apparently News Ltd feel that their corporate interests are threatened by the advent of ubiquitous high-speed access - at least, that is what could be assumed from their relentless opposition.

It's one thing to raise any legitimate questions relating to the national interest, but their current iteration of seeming endless innuendo against NBN employees is another matter entirely.

Political type ordure should be directed against politicians, who are able to use parliamentary privilege in response, not against employees who are unable to respond in kind.

ibolya

20

Poor old Tony.

Even he has admitted he is not good with numbers or technology.

He most likely thinks the NBN is about delivering higher quality access to facebook period.

What it is really about is enabling true business to business electronic commerce and providing services such a electronic medical diagnostics for remote areas of Australia (and potentially anywhere in the world), remote control of mining and other equipment in harsh conditions, and networking into the global digital economy. The applications are potentially endless.

Frankly I don't know why the NBN proponents don't start selling or even mention these benefits.

Tony Abbott

21

Errr, ibolya, what is this "Face Book" thing you mentioned?

Malcolm T

22

Tony don't you know anything?

Just pick up the tin can and loudly and clearly ask, is this the Face books?

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