Labor’s NBN planning ‘chaotic and inadequate’
05 Aug 2014 Joanna Heath
An audit conducted by former Productivity Commission head Bill Scales is damning in its judgement of the policy formation process for the second, vastly expanded version of the NBN in 2009
Labor’s $43 billion National Broadband Network was rushed and improperly launched without necessary preparation or analysis, a report has found.
The audit conducted by former Productivity Commission head Bill Scales is damning in its judgment of the policy formation process for the second, vastly expanded version of the NBN in 2009, describing it as “rushed, chaotic and inadequate, with only perfunctory consideration by the Cabinet”.
“There is no evidence that a full range of options was seriously considered. There was no business case or any cost benefit analysis, or independent studies of the policy undertaken, with no clear operating instructions provided to [NBN Co], within a legislative and regulatory framework still undefined, and without any consultation with the wider community,” Mr Scales wrote.
NBN Co, as the government business entity set up to run the NBN’s construction and operation in only 11 weeks, was not fit for purpose and woefully inadequate for the task, the report found. Governance arrangements at NBN Co had a long-term and detrimental effect on the roll out of the NBN, it adds.
“NBN Co was a start-up company given a job that only a well-functioning, large, and established telecommunications company would have been able to undertake in the allotted timeframe,” Mr Scales wrote.
The report is also heavily critical of the Australian Consumer and Competition Commission, which Mr Scales said “overstepped its authority” when it advised the government ahead of the first NBN plan in 2007 that fibre-to-the-node, the current government’s model, was not a “stepping stone” to fibre-to-the-home.
In order to avoid repeating the mistakes of the NBN, Mr Scales recommends any large infrastructure projects included in election commitments be independently costed by the Productivity Commission or Infrastructure Australia and the full costs made public.
Public infrastructure projects costing over $1 billion should also be subject to a public cost benefit analysis study.
Communications minister Malcolm Turnbull said Mr Scales report suggested “very sound recommendations” that would be considered by cabinet, adding they were consistent with common sense and largely with existing government policy.
He said he was in favour of cost-benefit analyses being made public wherever possible.
“The guts of it should be made public so that the public understands what the government is doing with their money and also frankly the importance of making things public,” Mr Turnbull told Sky News.
Prime Minister Tony Abbott’s $5.5 billion paid parental leave scheme did not fall under Mr Scales’ recommendations because it was not an infrastructure project, Mr Turnbull said.
“PPL was approved by the shadow cabinet although it is fair to say the leader of the opposition as he was then was made it pretty clear what he wanted.”
“That is the policy we took to two elections including the one we just won. We have a clear mandate for it, and it’s not infrastructure.”
Mr Turnbull’s cost benefit analysis of the current roll-out, headed by former head of Treasury Michael Vertigan, is due to be published within months.
Former communications minister Stephen Conroy has already hit the airwaves to defend the Rudd government’s signature project. He said the Labor government “optimistically believed” the construction companies contracted to build the NBN would deliver on time.
“The government has now spent $10 million commissioning six reports that are all a political attack on the NBN,” Senator Conroy said.
He added that there had been alternatives to the $43 billion model discussed in 2009, but Mr Scales was not aware because they took place in cabinet.
Current shadow communications minister Jason Clare said Mr Turnbull was wasting money commissioning reports that told him what he wanted to hear.
“Instead of paying his mates to write reviews and fixating on Stephen Conroy, he should get on with building the NBN,” Mr Clare said in a statement.
The Australian Financial Review