Greens wait on NBN Co business case

James Riley
Thursday, 28 October 2010 20:17

IT Policy - Regulation

A cost-benefit analysis may not be the right instrument to apply to the National Broadband Network project, according to Western Australian Greens Senator Scott Ludlam, who says the NBN Company business case will make more relevant reading.

NBN Co will hand its business case to Communications Minister Stephen Conroy as early as this week, and a redacted version is expected to be released publicly soon after.

Senator Ludlam said the business case would provide more relevant detail than the proposed Productivity Commission cost-benefit analysis being called for by shadow communications minister Malcolm Turnbull in a private members bill.

Senator Ludlam said the Greens would not decide which way it would vote on Mr Turnbull's bill - which is expected in the Senate in November - until it had seen the NBN Co business case.

"A cost-benefit analysis is not necessarily the right instrument to apply to a project of this kind," Senator Ludlam said.

"It is relatively easy - and I have spoken on this issue a number of times in here - to quantify and monetise the costs of rolling the network out and even to estimate the net present value of the network once it is built," he said.

"But how on earth do you monetise the estimated future benefits, for all time, for rapid telecommunications when they do not even exist in Australia at the moment?"

Senator Ludlam says a cost-benefit analysis may simply be a red herring of the NBN issue, and not the political weapon that the Coalition hopes it will be. He told the Senate a long term cost benefit analysis would rely too heavily on assumptions of speculative value.

"We need to sit up and take note when somebody like ACCC chairman, Graeme Samuel, says the cost-benefit analysis will not necessary tell us what we need to know."

And while the Greens were supportive of measures to make Government more accountable and transparent, Senator Ludlam wondered out loud at Mr Turnbull's proposed joint select committee oversight of the project.

"In terms of appropriate parliamentary scrutiny, the Senate Select Committee on the National Broadband Network travelled around the country for two years,' he said.

"I am not sure whether Mr Turnbull was aware of that. We have actually done quite a bit of work in the Senate in scrutinising this proposal."

Balance of power senator Nick Xenophon told the Senate yesterday that he was supportive of the call for the Productivity Commission to carry out a cost-benefit analysis, but wants it terms of reference much broader than that proposed by Mr Turnbull to include an analysis of social benefits.

"Fundamentally - and I think this picks up on Senator Ludlam's very reasonable concerns - there should be consideration of nation building; the social and community specific benefits flowing from the NBN, having particular regard to rural and regional communities," Senator Xenophon told the Senate.

"I believe there has been a market failure when it comes to regional Australia in relation to broadband. That is why I believe we do need a national broadband network," he said.

"But for goodness sake, let us ensure that we spend the money that is needed to deliver services to all Australians in a way that has a process of rigour and analysis that ensures that maximum benefit to taxpayers is being provided."

NSW Nationals senator John Williams urged the passage of the Turnbill when it comes to the Senate next month, arguing the Business Council of Australia had backed calls for a rigorous cost-benefit analysis of the NBN project.

"This has been echoed by Reserve Bank of Australia board member Roger Corbett, who said that the Productivity Commission should be asked to review the whole NBN process of budget spending," Senator Williams said.