Budget 2011: scrap NBN for roads, say Libs

Summary:Opposition Leader Tony Abbott has described Labor's plan to invest billions of dollars of equity funding in its flagship National Broadband Network (NBN) project as "reckless", noting in his Federal Budget reply speech last night that the capital could be re-allocated to fund a number of major transport infrastructure and hospital projects.

Opposition Leader Tony Abbott has described Labor's plan to invest billions of dollars of equity funding in its flagship National Broadband Network (NBN) project as "reckless", noting in his Federal Budget reply speech last night that the capital could be re-allocated to fund a number of major transport infrastructure and hospital projects.

In the budget papers released on Tuesday night, the government provided further detail about how it would inject equity funding into the NBN project, allocating $18.2 billion in equity injections to NBN Co over the following years up until the 2014/15 financial year. The payments are instalments towards the government's total equity contribution to the NBN, which is expected to be $27.5 billion — and about $13 billion will also be spent on the government's deal with Telstra.

In his Budget reply speech last night, Abbot said that although the Coalition supports better broadband services, it is not "reckless enough to spend upwards of $50 billion on a National Broadband Network without a cost/benefit analysis."

"That $50 billion could fully fund the construction of the Brisbane rail loop, for instance, the duplication of the Pacific Highway, the Melbourne to Brisbane inland rail link, the extension of the M4 to Strathfield and 20 major new teaching hospitals as well as the $6 billion that the Coalition has proposed to spend on better broadband," the Opposition Leader stated, referring to the broadband plan that his side of politics had floated during last year's Federal Election.

As Shadow Communications Minister Malcolm Turnbull has previously highlighted, Abbott pointed out that broadband speeds of up to 100Mbps are already potentially available to "almost every major business and hospital" as well as most schools and, referring to the hybrid-fibre coaxial cable networks offered by Telstra and Optus, through high-speed cable "already running past nearly a third of Australian households".

The HFC cable networks of Telstra and Optus do run past a large number of premises in major cities like Sydney and Melbourne; however, many residents and businesses are unable to get the service connected in practice, due to specific requirements around multi-tenant dwellings such as apartment and office blocks.

"The smart way to improve broadband is not to junk the existing network but to make the most of it," said Abbott. "It's to let a competitive market deliver the speeds that people need at an affordable price with government improving infrastructure in the areas where market competition won't deliver it."

Abbott also took aim at the government's $308.8 million funding reinforcement for a program that is seeing digital set-top boxes installed for pensioners and the disabled as part of the government's ongoing efforts to switch Australia over to digital television. A number of electronics retailers, such as Harvey Norman and Kogan Technologies, have stated that they believe the amount being spent per household to be above the market rate.

"Government will spend $350 on each pensioner's set-top box when Gerry Harvey can supply and install them for just $168," said Abbott. "Perhaps this program should be called 'Building the Entertainment Revolution'. Pensioners and self-funded retirees deserve better than this."

Topics: NBN, Broadband

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