Watching the ALP Conference this week was like watching an episode of Dr Who. There was Julia ‘Dalek’ Gillard giving us the real real Joolia – from the heart – off the cuff – even though she had a pre-written speech in front of her. So much for spontaneity.
Then my jaw dropped when Joolia said Rudd was a man of achievements. Was Joolia talking about a Rudd from a parallel universe? Because the Rudd in this universe has next to zero achievements next to his name – if you don’t count making commitments you can never keep as an achievement and spending other people’s money – $113 billion – on useless stuff.
Then we come to the National Broadband Network. This issue is not about speed, latency, etc… it is about cost and value for money. No country has or could afford to do what the ALP wants to do and roll-out fibre to the node across an entire continent. Not to mention the lack of detail on the final price tag, both capital and operating. Forget the technology, the Federal government just can’t afford it. It is as simple as that. There has to be a better way than a government monopoly.
The private sector has already rejected the idea because the government pulled the plug on the tendering process months ago and the government has done its best to avoid public service scrutiny of the proposal while the NBN is not even in the Federal budget. Gee, I wonder why? The $43 billion price tag will rise like it does for any major IT project. The government has next to no hope of recovering the cost of the system when it finally opens. The government has never really claimed that it will. Telcos in Japan never have on their cheaper fibre to the node network. It is not clear if the NBN will even cover the depreciation on the infrastructure making the network’s asset base worth significantly less than initial capital costs. Is it any wonder that private investors aren’t exactly lining up to hand over their money to Gillard, whose only business leadership experience has been the school hall debacle.
Hey here’s an idea. Let’s sink $43 billion + into a fibre to the node network and get a one-time communist lawyer and rat bag student activist to be responsible for it. Where do I hand over my millions?
We have been here before though. Telstra offered to build the network three years ago but regulatory hurdles stood in its way so the ALP are now offering us a flash from the past, Post Master General Mk II.
People need to join this universe and face up to the prospect of a network that will likely end up costing tax-payers up to $80 billion: capital costs, project cost growth, operating loss, depreciation, interest on debt, opportunity cost, etc… The project is a fiscal time bomb waiting to happen and when the check finally arrives, being able to download movie torrents in only a minute won’t count for much.
Interesting take on the NBN over at the ABC and discussion on the opportunity cost of the system:
The interest repayments on that debt alone would be $2.4 billion per annum assuming that long-term interest rates do not rise.
On a per capita basis, the total cost of the NBN is between six and eighty times more expensive than what Singapore, South Korea and New Zealand are spending on their own lauded NBN solutions. And Australia has similar or higher levels of urbanisation. As the award-winning technology journalist Grahame Lynch recently concluded, the NBN “is the most expensive government intervention of its kind in the world”.