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Home Government Technology Regulation Brandis outlines cost of data retention

Brandis outlines cost of data retention

We now belatedly know the Government’s estimate of the cost of its data retention legislation. The capex is $250 million, the opex is $160 million a year. At least.

Under questioning in the Senate Attorney-General George Brandis has at last given some indication of the Government’s estimate of the cost of its data retention scheme.

The Government has been reluctant to give out the numbers, ignoring requests by industry and refusing to answer questions on the matter. Now Brandis has given some numbers, but they are highly qualified and there is still no indication of how much of the cost the Government (meaning taxpayers) will have to bear. That will be revealed in May’s budget.

Listen to Brandis in the Senate yesterday. “Industry will have certainty, because, at the appropriate time, the Government will announce the proportionate contribution that it will make. On 30 October 2014, Mr Turnbull committed the Government to making a substantial contribution to the capital costs.

“The determination of what the capital costs are will be informed, among other things, by the range estimated by the PwC report of between $188 and $319 million. The Government will make a substantial contribution to an appropriate figure within that range.

“What that substantial contribution will be has not yet been determined, but it is close to being determined. That determination has been informed by long discussion with industry. It is part of the budget process. The budget is being delivered on 12 May.”

Brandis said the PwC review had estimated that the average cost – taking any Government contribution out of the equation – of the scheme over ten years would equate to between $1.83 and $6.12 per customer per annum. “The estimate equated to a median figure of $3.98 per customer per year” said Brandis said.

From this we can do some sums. There are around 40 million mobile phone, fixed line and and Internet customers in Australia (many more than the number of people, because many people have multiple services - Telstra alone as more than 27 million customer accounts). Multiply this by $4, and that is $160 million per year. That is on top of the set-up costs – let’s take the average of the upper and lower limit that Brandis mentioned in Parliament, which is $253.5 million.

So that is a capex (capital expenditure to set it up) of around $250 million, with an opex (running costs) of around $160 million a year. Brandis said in Parliament that he considered this to be a quite a reasonable cost – not mentioning that last year he and Prime Minister Abbott were saying the scheme would cost virtually nothing because telcos and ISPs were already collecting the data.

And those numbers are of course the average of the higher and lower limits of the Government’s estimate. At the higher range of the estimates – which may well be the more realistic figure – the setup cost is $319 million and the annual costs are $245 million a year. Over ten years – nearly $3 billion.

For that money Australia gets a restrictive mass surveillance regime, with minimal oversight, that has been proven to be ineffective for its stated purposes but will have a chilling effect on the freedom of the press, on the ability of whistle blowers to remain undetected, and on the confidence of average citizens to be assured of the privacy of their personal communications.

Welcome to 21st century Australia.


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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.