Scale back NBN to save budget: Palmer

Scale back NBN to save budget: Palmer

Summary: Key minority party leader, Clive Palmer, has said that the National Broadband Network could be scaled back to AU$7 billion in cost to reduce government spending.


Despite the government already investing over AU$7.3 billion in the National Broadband Network to date, Palmer United Party leader Clive Palmer has said that the NBN could be scaled back to cost AU$7 billlion instead of AU$45 billion.

Palmer, a billionaire mining magnate who won the seat of Fairfax at the 2013 federal election will play a key role in whether the government's legislative agenda and budget gets through the senate from next month when Palmer's three senators and aligned Motoring Enthusiasts Party senator Ricky Muir hold the balance of power.

Speaking at the Committee for Economic Development Australia (CEDA) State of the Nation conference in Parliament House today, Palmer said that the government's claim of a "budget emergency" was not real when compared with the debt problem faced by comparitive nations.

"Generally speaking the budget economic criteria that we've got a debt problem is bullshit. It's just rubbish," he said.

"As an Australian, I don't think it's good for our government not to be true to its citizens and set up a policy debate all about nothing."

He criticised the deficit levy, and a number of the other measures contained in the budget to reduce the debt, and said were it up to him, the NBN investment would be the first to be cut in order to save money.

"What would I do if I was the prime minister?

"We've got the NBN, spending AU$45 billion on the NBN to get better internet coverage in Australia. If we have a look at the country, we break it down, there's really only about an AU$7 billion worth of expenditure where we need to go to places where there is no internet coverage for commerce and business and infrastructure to grow," Palmer said.

"If we look at places like Sydney, Melbourne, there is good domestic demand there and industry can meet those needs, and so they should. Government can't be efficient."

The government has indicated that over AU7.3 billion has been invested in the NBN to date, with many contracts already locked in place for additional investment in the project. Under the new multi-techology mix model for the NBN, the Coalition government has also capped its investment in the NBN at AU$29.5 billion.

As the government is also expecting to make a return on its investment in the NBN, the investment in the project is not on-budget.

Palmer also suggested that Australia switches to US submarines, scraps Prime Minister Tony Abbott's paid parental leave scheme, scraps direct action on climate change, and eliminate all duplication between the federal government and the states. He said that this would all total up to over AU$100 billion in budget savings.

"That gives us over AU$100 billion in savings. If our politicians had a political brain in their body, they'd realise any of those decisions I'd just mentioned to you are much more palatable than what we're doing in the current budget," he said.

Topics: NBN, Government, Government AU


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • Obese Billionaire that sleeps at our expense.

    The people that voted for this fool, get what they deserve a guy that's out to feather his own nest at our expense, whilst publicly brandishing a populist sword. He's nothing more than Australia's Berlusconi and bought his seats with a sack of cash.
    Australia is the "stupid nation".
    Kevin Cobley
    • Presumably that would only apply to his own constituents...

      ...and perhaps those who voted for his party's candidates (but the latter should stand and fall on their own merits, not those of their party leader). 3 out of 76 Senators and 1 out of 152 Representatives (I think I got the numbers right) doesn't exactly make him Berlusconi.
      John L. Ries
  • Higher mining royalties now!

    If Palmer can afford to spend his cash in an election campaign he should pay higher royalties, after all he's selling our coal (he didn't "manufacture it" or "invent it") to line his own pockets.
    I'm waiting for the revolution and the guillotine.
    Kevin Cobley
    • Be careful what you wish for...

      ...the head you save might well be your own.
      John L. Ries
  • Clive needs to visit his accountant

    ...and have them explain the difference between recurrent expenditure and capital expenditure.

    The budget is not impacted by NBN spending because it's an investment program and is accounted for as such.
  • Could Save the NBN?

    Scaling back now might protect us from some of the worst of Turnbull's demolition job & perhaps allow for easier remediation of his dog's breakfast following the next election?
  • Give it some thought ..

    The NBN concept is not going to stop just because government stops propping it up with "investments" that are just adding to debt. The only value in the NBN when they try to sell it is going to be the connected customers and the rights-of-way. Why not sell it now ?

    If one follows the international FTTH trade press there are constant announcements of companies announcing investments in new areas, towns etc by the private sector. This is the concept of invest-work-reward(loss) that abbot built his election manifesto on - unfortunately Turnbull has just stuck the flawed labour "nanny state" funding model and fiddled a bit with the technology. Good on Clive - let's hope he pulls government out of NBN build and let's us get on with it.
    • ...just like the electricity distribution network

      I agree. The NBN should be built out to almost every home in Australia by private contractors just like the electricity network was...oh wait it didn't happen that way. I was all caught in your ideological rhetoric for a moment.

      The electricity network was built by Nanny State Inc. and then sold to private organisation because private enterprise only saw the ROI in building the electricity network in a very few large cities.
    • Rossy

      I am in a metro rubbish broadband area, thousands are in metro black spot areas, it has been that way for over a decade.
      Your company had it's chance or were you waiting for government and taxpayer assistance, just another snout looking for a trough
      Abel Adamski
    • Look over there - a flying unicorn

      I can see the flying unicorns now.

      Every piece of major infrastructure (roads, rail, health and education) has been funded and built by the government.

      The nbn will not happen if left up to private enterprise.

      Private enterprise have had 20 years to "do something" and have failed miserably.
      • actually

        I can only think of a couple of road developments in the past decade that were wholly or 50/50 funded by private companies.

        Rail in the US was also partly government funded but largely was built by private enterprise.

        And private enterprise would have built fibre by now if it was financially viable to do so - the fact they haven't should be all the warning signs needed to know that its not a sound investment as far as private enterprise is concerned on the scale of the NBN. That said private enterprise has been deploying FttP for new apartment buildings/estates for the past 5 or so years - and just to highlight how messed up the labor nbn design was - they were planning on rolling new fibre out in those areas as well - instead of just taking over the infrastructure that was already there.
        • damn no edit

          The first bit around roads is that only a couple weren't privately funded or mixed model funded with private enterprise then running them.

          The era of government building infrastructure died off in the early 2000s here and decades earlier in the US. Only labor and its desire to control everything couldn't see that.
  • For once, Palmer is on the right track!

    Western economists refuse to recognise that competition has an immense overhead that literally cripples itself with its own obesity, and starves the surrounding areas of products and services.

    The NBN is focussed on overbuilding an overbuilt metropolitan (Sydney, Melbourne, Adelaide, Brisbane/Gold Coast, Perth, Hobart), when the rest of Australia is in a telecommunications infrastructure desert.

    The original intent of the Universal Telephone Obligation (USO – 1982) was to upgrade telephony telecommunications to our non-metropolitan areas including our primary producers so they could make money for Australia – instead of costing Australia immensely in Social Services, Medical, and associated benefits support.

    With Internet, nothing has changed but the name of the facility, and a range of technologies that frankly were never available then.

    True, a complete overbuild of the telecommunications network in Australia could cost as much as $75 Bn (or whatever figure you want you put on it), but in reality, the NBN does needs to be built exclusively in the non-metropolitan areas.

    Out inept Federal Government is looking to save revenue and this is staring them in the face!

    Here is how to save at least $60,000,000,000 ($60 Bn): NBN to stop building in metropolitan areas. Gift all metropolitan NBN to Telstra. Usurp all non-metropolitan Telstra / Optus / TPG etc network and gift all to NBN. Scrap the Pits and Conduits Rental Agreement. Stop rolling out Satellite connections. Roll out a grid of 27,000 km of 144 strand SMOF cable in the inland ($0.85 B). Use this grid to provide inland City, Town, Village ADSL/FTTP connectivity. Use Non-Urban FTTP (up to 60 km) to Homesteads (far cheaper / faster than Satellites and very short transmission delay). Don’t even think of privatising the NBN – it will break even at best.

    There – that was not that hard at all. Clive is on the right track!