Monday, 04 February 2019 05:11

Labor again hints at NBN write-down if it is elected Featured

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Michelle Rowland: "A write-down needs a trigger and it is not a decision for governments to make, but the possibility of that happening looks more likely." Michelle Rowland: "A write-down needs a trigger and it is not a decision for governments to make, but the possibility of that happening looks more likely." Supplied

The Australian Labor Party has again hinted that it would look at a write-down of the value of the national broadband network if elected, a move that would bring down connection prices and help retail service providers.

Labor Shadow Communications Minister Michelle Rowland said in an interview with the Australian Financial Review that Labor would work to repair the economic issues facing the NBN and give users better connectivity.

Rowland had raised the idea of a write-down in October last year too, saying that the NBN Co, the company that is rolling out the NBN, would not be able to meet the average revenue per user forecast for 2012-22.

Were a write-down to occur, then the NBN Co would be able to lower its costs and allow retail service providers to buy more capacity, which would then allow the RSPs to offer higher-speed packages.

Both Rowland and Labor Shadow Finance Minister Jim Chalmers have been recently contesting claims made by NBN Co chairman Ziggy Switkowksi to Senate estimates, that the network would fetch a price of $50 billion once it was fully rolled out.

The two Labor officials said there was no evidence to back up this claim, adding that the NBN Co had confirmed it had "not received advice from any advisory firm, investment bank, market analyst, or suitably qualified professional, to support the chairman's claims".

In Monday's interview, Rowland said that a write-down would have to be initiated by NBN Co, the company rolling out the network.

"There are some really tough choices on the technology and economics of the NBN and it presents a very challenging financial circumstance for the next government, whoever that may be," Rowland said.

"A write-down needs a trigger and it is not a decision for governments to make, but the possibility of that happening looks more likely.

"For a write-down to occur there has to be some change in pricing or the accounting rules need to be undertaken in a particular way. It is typically done by NBN Co."

During the announcement of its annual results for 2017-18, NBN Co said it was predicting a total outlay of $51 billion on the NBN, the biggest project undertaken by the government.

The figure has risen steadily from the $29 billion that the Coalition Government said it would spend on the network when it took office in 2013.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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