Despite promises made by Prime Minister, Jullia Gillard, a proper costing of the Labor party’s proposed National Broadband Network (NBN) is missing from Treasury documents delivered to the three independent MPs deciding the potential formation of a minority government.
The documents, leaked to press by independent MP for Lyne, Rob Oakeshott, reveal the full Treasury costings of policies from both the Coalition and Labor parties.
Notably, Treasury costings of Coalition policies reveal that the cancellation of the NBN would save the government $900 million in public debt interest savings in the budget over four years if they do win government.
However, no mention is made of the NBN in Labor documents, despite promises made by Gillard.
“Mr Abbott has sought access to a full costing of the Minerals Resource Rent Tax and the National Broadband Network,” she told media at her National Press Club address on Friday, 27 August. “I’ve advised Mr Abbott that those full costings are disclosed in the Pre-Election Fiscal Outlook, but if he seeks to have a briefing from Treasury and Finance for a more detailed assessment of those Budget figures then of course that will be made available to him.”
The outlook, released by the Treasury in July, indicates a provision of $18.3 billion in forward estimates for the rollout of the network, but the document itself conceded that “the exact timing and quantum of Government funding” would only be determined once a final response to the NBN Implementation Study is released by the government and the non-binding Financial Heads of Agreement between NBN Co and Telstra is finalised.
An economic analysis of the costings presented in the outlook by the Australian Parliament House Parliamentary Library shot holes in the costings, finding only $16.842 billion of committed funding in Budget forward estimates, and a $5.5 billion shortfall in the $22.4 billion committed equity recommended in the NBN Implementation Study to be injected by year 5 of the project, or 2014.
Gillard pre-empted the leaking of the Treasury costings from the independents.
“I have indicated to Mr Abbott that it is my view that the Independents should be able to participate in these briefings, what they say publically about the information obtained is then a matter for them.”
She later told the independents directly to release the costings.
"At the end of those briefings, it is my intention to ask the independents if the costings of government policies prepared at their request ... can be released publicly," she said on the day the MPs received financial briefings from the Secretary of the Treasury department, Dr Ken Henry.
"We want to be transparent, we believe those costings should be released publicly."
The cost of the Labor’s broadband initiative has come under constant scrutiny since announcement, with a ceiling figure of $43 billion criticised by the Liberal party as “reckless” and a “white elephant”. The cost has also lead some to proffer cheaper alternatives, such as that presented recently by the Alliance for Affordable Broadband.
Both communications minister, Stephen Conroy, and NBN Co chief executive, Mike Quigley, insist the figure is an absolute ceiling and doesn’t reflect total cost, both have been apprehensive in presenting a real cost.
The government has injected some $662 million on the project so far in both operational expenditure and capital expenditure, setting up the wholesaler and completing the first stage of rollouts in Tasmania.
Quigley has recently indicated the project would require a peak government equity investment of $27 billion - $1 billion more than the figure estimated by consultants in the NBN Implementation Study - with additional debt funding of approximately $10 billion, and potential operational revenue the company generates as the network is rolled out.