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December 15th 2013 print

David Flint

Time To Pull The Plug On The NBN

The Coalition had the right idea going into the 2010 election: leave the cable business to the private sector. Then something changed, with Abbott & Co. signing up to produce their own "Labor lite" version. Yes, it's cheaper, but little else can be said in its favour

cableThere is a time when it’s sensible to cut your losses. Especially when national debt is heading towards half a trillion dollars, all due to the wanton profligacy of the Rudd and Gillard governments.

Surely it is time to stop pouring money into that socialist monstrosity the NBN, the National Broadband Network. We can hardly suggest that it be sold, and certainly not at a decent price. The money spent so far might just as well have been poured straight down the drain.

Labor notoriously would never submit its grand scheme, drafted on the back of an envelope by Senator Conroy,  to a proper cost-benefit analysis. When the government did commission  a report from investment bank Lazard’s three years ago, the findings were so bad they were  hidden it from the public gaze. If those responsible had been company directors, they would be heading for court on serious charges. Perhaps there ought to  be another Royal Commission into this trail of deceit. After all, we all paid for the Lazard report, which would have cost a pretty penny.

A typical socialist project, it was made worse by Kevin Rudd’s typical refusal to follow proper government process. Conceived on the back of an envelope by Senator  Conroy, he was eventually granted an audience with Prime Minister Rudd on the presidential jet, the project was always doomed to financial disaster.

In the 2010 election the Coalition sensibly indicated the project would be wound up and left where it should be, with the private sector. The private sector could be guaranteed to develop the services that people want, and most importantly, are willing to pay for.

Unfortunately, the Coalition must have decided in 2013 that a large number of people were so dazzled by the wild promises of Conroy and Rudd that they might change their votes if told the truth. So Malcolm Turnbull and Tony Abbott, posing beside a life-size hologram of Rugby League footballer Sonny Bill Williams, promised to deliver the NBN themselves. It would, however, be a sensibly modified and cheaper version using all technologies, including the existing copper wire. They were going to do this, they insisted, for a modest $29.5 billion.

The most recent review comes to the conclusion that the project will need a lot more money than that — $11.5 billion more than that, in fact. So the coalition’s slower version of the NBN is now going to cost $41 billion while taking longer to deliver.

Still, we can of course thank our lucky stars were not getting Labor’s version. The review finds that that would have cost  $73 billion.

As Malcolm Colless  argues, Labor planned to re-socialise Australia’s communications network, with Telstra being forced to decommission its copper network. This, it was claimed, represented something the private sector simply could not do. Moreover, the argument continued, it would put Australia at technology’s cutting edge, well in advance of most countries.

But as  Colless notes, governments are notoriously bad at second-guessing technology. So why doesn’t Malcolm Turnbull and the coalition government just cut their losses – or rather the taxpayers losses?

Why should taxpayers pour one more cent into this hopeless venture?

David Flint’s latest book, written with Jai Martinlovits, is Give Us Back Our Country