Hockey sharpens axe for NBN and e-health

James Riley
Wednesday, 19 May 2010 18:21

IT Policy - Government Tech Policy

Coalition heavies Joe Hockey and Andrew Robb have mugged the Government's two flagship information technology projects as part of Opposition plans to cut $47 billion from federal spending if it is elected later this year.

The Opposition treasurer, Mr Hockey, said a Coalition government would axe entirely the just-announced $467 million e-health initiative, and says by not proceeding with the National Broadband Network the Coalition will save $2.4 billion in interest payments on the borrowing costs of the $26 billion debt the project requires.

Speaking at the National Press Club in Canberra, Mr Hockey said the NBN plan was a risky punt on a technology that "might become an expensive white elephant" and says axing the broadband network would save taxpayers more than $20 billion.

"The government should not be involved in unnecessary and uneconomic infrastructure projects," Mr Hockey said. 'The federal government must not punt taxpayers' money on particular technology bets that may become expensive white elephants.'

"Accordingly, we will not be proceeding with the National Broadband Network at a borrowing cost of at least $26 billion and an interest bill of around $2.4 billion over the forward estimates," he said.

"Even though the interest bill is not in the Budget papers it is clear that someone is going to have to pay for the money borrowed before a commercial return is achieved. Of course under Labor it is always the taxpayer that ends up paying."

The cancellation of the project would save at least $18 billion in funds Government will not be required to borrow, $2.4 billion in interest and a further $24 million in administration fees.

But the Opposition will not yet say what broadband initiatives it will introduce to replace the NBN, or how much those initiatives would cost.