OECD subtly throwing its weight behind the NBN cost-benefit analysis calls

Economic outlook report throws in a call for more rigorous and transparent cost–benefit analysis of investments

Intentional or not, the Organisation for Economic Development (OECD) appears to have subtly thrown its weight behind shadow communications minister, senator Nick Minchin's calls for the Federal Government to do a cost-benefit analysis of its National Broadband Network (NBN).

In its most recent summary report for Australia's economic outlook the OECD noted that while the next couple of years look good for the domestic economy (it tips a rise in GDP growth of 2.5 per cent next year) there are steps the Rudd Government should be taking to up the benefits.

"To maximise the positive impacts of their investment programme, the authorities should submit proposed projects more systematically to a rigorous and transparent cost–benefit analysis," the report reads.

While the OECD has not responded to requests for clarification around which investments it believes should be submitted to "rigorous and transparent cost–benefit analysis", it is reasonable to assume they include one of the most ambitious and expensive infrastructure projects put forward in the last 12 months – the $43 billion NBN. And while the OECD gives credit to the Government for its handling of the economic downturn through its stimulus package, the inclusion of the above statements in what is admittedly only a short two paragraph summary gives some support to the calls made by Minchin.

In recent weeks, Minchin used the publication of a new report into the productivity of high speed broadband to reiterate his call for a full-cost benefit analysis of the NBN.

The report, The Need for Speed: Impacts of Internet Connectivity on Firm Productivity which studied 6,000 New Zealand businesses, found while broadband adoption did boost productivity, no productivity differences where found across different types of broadband.

The implication - that high speed broadband delivered by the NBN may not result in greater productivity than that which is facilitated by current broadband speeds – was seized upon by Minchin as further evidence as to why the Rudd Government must commit to a full cost-benefit analysis.

Although the OECD may or may not be looking to enter the NBN cost-benefit analysis debate and has not offered up any views in its latest report, its view the Government should "submit proposed projects more systematically to a rigorous and transparent cost–benefit analysis" is notable for its inclusion in the half-yearly economic outlook.

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