Turnbull commits to all current NBN contracts

Turnbull commits to all current NBN contracts

Summary: Australian Shadow Communications Minister Malcolm Turnbull has ruled out altering any existing NBN contracts, including for construction of the network.

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Australian Shadow Communications Minister Malcolm Turnbull has responded to claims that the Coalition would cancel construction of the National Broadband Network (NBN) in Tasmania if it wins the September federal election.

It was reported this morning that Tasmanian ICT CEO Dean Winter said that Turnbull has only committed to honouring NBN construction contracts where construction is already underway. This would mean that once construction of the fibre-to-the-premises network has been completed in a certain area, those workers could potentially then be tasked to begin building the Coalition's proposed fibre-to-the-node network.

Communications Minister Anthony Albanese seized upon the suggestion, and said that 85,000 premises in Tasmania would be "denied" fibre broadband under the Coalition. He proceeded to list the Tasmanian suburbs that the Labor Party believed would be affected.

Under the current project, Tasmania is set to be the first state where NBN Co completes the construction of its network in 2015.

Turnbull has previously said that he would seek to honour the contracts in place by NBN Co, but conceded that the party may look to terminate contracts where it is viable.

We're not about breaking contracts, even if they've been entered into unwisely. Where contractual commitments have been made, the Commonwealth has to honour them," he said in May 2012. "If there are termination provisions in some contracts, I suppose that's something you could look at, if it made more sense to terminate something than to continue with it. But really, I don't anticipate that happening."

After the release of the Coalition's alternative policy in April, Turnbull blamed the existing contracts in large part for the reason why the Coalition's alternative broadband policy is priced at AU$29.5 billion, and today said that all contracts entered into would be honoured by the potential future Coalition government.

"This is not just a commitment to honour contracts where construction is underway — but all contracts which have been entered into," he said.

The announcement potentially locks the Coalition into a number of construction contracts that NBN Co has announced since the election was called two weeks ago. The contract extensions have so far only been one year long, and the Coalition's policy currently allows for existing construction to continue until 2014.

It comes as Turnbull has also faced criticism over the revelation that the Coalition had decided not to have its alternative NBN policy costed by the Parliamentary Budget Office (PBO). Turnbull had suggested that the PBO did not have the expertise to cost the policy.

The Charter of Budget Honesty allows parties to use either the Treasury or the PBO to cost policies, but not both. As the PBO has been ruled out as an option, Albanese said today that the Treasury or the Department of Finance and Deregulation could cost the alternative policy.

"This is just another Coalition excuse to conceal their real plans from Australians," he said in a statement.

"If Mr Turnbull has nothing to hide, he should provide his policy for independent scrutiny."

The PBO could not confirm at the time of writing whether any other Coalition policies had also been deemed "too complex" for the office to evaluate.

This afternoon Turnbull said the PBO ruled out costing the Coalition's policy "quite some time ago earlier in the year".

"The real issue with any of these business models is 'what are the assumptions' and it is very hard unless you have engineering and network experience to be able to form a judgement about that."

He said that the Coalition's alternative policy and its forecast that Labor's policy could blow out to AU$94 billion have been fully costed.

"Our model on the NBN is fully costed. We have fully costed it and set out all the assumptions so it is very transparent," he said.

"We published [our plan] four and a half months ago and despite all the expertise in the field, no one has published a counter-analysis that demonstrate that those assumptions are anything other than reasonable."

Topics: NBN, Government, Government AU

About

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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44 comments
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  • The blowout confirmed

    "NBN Co has discovered a $5 billion blowout in its construction costs, partly caused by contractors demanding more money.

    The Australian Financial Review understands NBN Co chief operating officer Ralph Steffens briefed senior executives at the company about the surprise construction cost increase on Thursday."
    http://m.afr.com/p/technology/contractor_demands_cause_billion_2mtA80DzIsfpCsngike2aI

    Still "on scedule and budget";-) ROFL

    In a desperate attempt to save back role money they're reengineering the design to remove reduncdancy; for fibre networks that'll be a disaster.

    Another day, another NBNCo disaster hidden from the public. Go delimiter fanboys;-)
    Richard Flude
    • All of which could have been avoided

      had we stuck with dial-up
      hmmm,
    • persistent?

      you persist until you bore, Mr Flude
      did you bid for a contract on the NBN and have it declined?
      or do you have links to the liberal party? Direct or once / twice removed?
      or ...?
      i'm trying to understand why your vehemence seems almost evangelical
      khsharpe
      • Some of us concerned about the cost

        A $5b blowout is clearly of no interest to you, nor the $44b min peak borrowing. Nor the delays, ...

        Alex (RS) previously made the same accusations; completely unsupported.

        Some of us are concerned for the massive waste of money; knowing it'll be our pockets raided to pay for this (and other) follies.
        Richard Flude
        • Of course other such follies

          include the Sydney opera house, the sydney harbour bridge, the Snowy Mountains project. All of these monumental wastes of taxpayers money with serious delays created such horrible products that I vote we should tear them all down.

          Why would any country in the world want to be able to boast to have the best internet infrastructure in there is in the age when people are moving away from twitter towards analogue phones and carrier pigeons?
          Darren.Bennett
  • Another Fairfax publication joins the attack

    "Mr Turnbull has gone further and quantified those doubts. His estimate may be on the high side, it may be on the low side.

    PolitiFact finds Turnbull's claim that Labor's NBN would eventually cost $94 billion possible but unverifiable. It rates it "half true"."
    http://m.theage.com.au/federal-politics/fact-checker/will-the-nbn-cost-94-billion-20130816-2s154.html

    "Half true" because its obviously going to cost far more than the last two corp plans (third sitting on Albo's desk until after the election), we're waiting to find out by how much.

    We'll be paying for Labor for generations.
    Richard Flude
    • Interesting they didn't rate Labor's $44b claim

      "On time and budget" would receive a farcical rating!
      Richard Flude
    • Is Politifact really the fact?

      Politifact is an Australian company which checks claims made by politicians. It's not allied with the US Politifact, nor does it claim to be unbiased. "Funding for PolitiFact Australia comes from a variety of sources, including media partnerships, advertising, donations and sponsorships. We will not receive political funding." (from its website) but it does not disclose who does provide the money or support.

      It appears their analysis is reasonable, but their conclusions are inconsistent.


      When they analysed Labor's claim that the Coalition would have to make $70 billion worth of cuts (http://www.politifact.com.au/truth-o-meter/statements/2013/aug/04/penny-wong/coalition-return-federal-budget-good-position-gove/) they concluded:
      "Frustrated by the Coalition’s reluctance to release a thorough costing of its election promises to date Labor has come up with one of its own. It's attempting to do the Coalition's own job — and frame the economic debate during the campaign.

      Conveniently it totals $70 billion, which is a figure the Coalition itself has tossed around in the past, a couple of years ago. We do not yet know if $70 billion is the number.

      But looking at Wong's own statement, some $20 billion of it shouldn’t be there, and billions more are the result of guesses, not all of which may turn out to be right.

      We rate the statement False."

      Compare this with how they deal with the Coalition claim that Labor's NBN will blow out to $94 billion. Their 'ruling' states, in part:
      "Labor's NBN would end up costing $44.1 billion if everything goes right. So far a great deal has not. Turnbull's estimate of $94 billion is perhaps high, but it's certainly not in Pants on Fire territory as some PolitiFact followers have suggested.

      Senior telecommunications analysts have doubts about NBN Co's projected cost. Turnbull has gone further and quantified those doubts. But he has also overreached somewhat. If he had merely stated it was highly probable Labor's NBN would end up costing more than the claimed $44.1 billion then, based on what is known he would be hard to fault.

      Turnbull might be taking things out of context, but based on our research and analysis, there's more than enough of a legitimate challenge to NBN Co's corporate plan in his estimate to push it out of False territory.

      We rate it Half True."

      So not all of Labor's guesses about the Coalition's figures may turn out to be true (though at least half probably are), so the entire claim is labelled FALSE, but Turnbull's $94 billion claim "is perhaps high" yet is rated as HALF TRUE.
      Both claims are exaggerated, but they are much harder on the Labor claim than the Liberal claim.

      Surely they are both FALSE or both HALF TRUE.

      I think a reasonable person would rate Politifact BIASED.
      What do you think, Richard?
      MaudeLynne
      • No I don't see bias

        The reasons for rejecting Wong's statement are clearly outlined in their reponse. Her claim was unsubstantiated, much of the evidience provided wrong. They didn't simply guess, they fabricated the figure.

        Labor's $44b claim is clearly wrong; clear for post above. They've even tried to claim even less; somehow they believe if money is borrowed by NBNCo directly it somehow doesn't count as taxpayer guaranteed.

        In relation to MT's $94b claim the modelling is declared. Many of the variables not unrealistic.

        As with News Ltd below you appear quick to assume bias by those that don't agree with your position. You're not the first here (RS,HC,AA, et al). Rather than claiming bias (given I've provided links from Fairfax, delimter and ABC as well) I'd recommend you post why you believe the content is incorrect.
        Richard Flude
        • Biased rating, not analysis.

          I'm not disputing Politifact's analyses ('though others may do so), and I'm prepared to accept, for the sake of the argument, that NBN costs are increasing.
          Politifact did not say there was NO 'black hole' in the Coalition's costings but they did say that Wong's estimates were based on guesses, not all of which my turn out to be right. Granting the Coalition the benefit of the doubt, simply because they refuse to release details, is not reasonable. Yet that is what Politifact's has done by ruling Wong's statement 'false'.
          Politifact's own analysis indicates Wong my be half right (like Turnbull) so, to be consistent, they should call it 'HALF TRUE', not false.
          The problem with one or two word assessment (rating) is that is often all people focus on. Few would read the accompanying analysis.
          Just to be clear, I believe the analyses may be reasonable, but the ratings are inconsistent.
          Rating both HALF TRUE would be more accurate.
          MaudeLynne
          • no it wouldn't be more accurate!

            Wong was wrong. Her analysis torn apart by the very article you quoted. Your quote from it was selective, in full:

            "But looking at Wong's own statement, some $20 billion [of $70b] of it shouldn’t be there, and billions more are the result of guesses, not all of which may turn out to be right."

            That's why she was given a false.

            The above statement doesn't apply to the coalition NBN modelling.
            Richard Flude
          • Yes. And no

            When do estimates become guesses. Because the policies can't and haven't been fully costed, nor are they likely to be ever fully costed, all we can do is estimate based on what we do know.

            Is 70 billion a guess or estimate. I believe it is an exagerated estimate. But then which pollies dont do that. Surely not Abbott ;-)
            Darren.Bennett
          • Not so keen on "CopperNet". I learnt about fibre vs copper > 10 years ago

            Well, let's face it. Any estimates by Abbott would depend on whether it was "scripted" or an "off the cuff' remark.
            How does it go again? The only things Abbott says that you should take as "gospel truth" are the things that are scripted, rather than spoken "off the cuff", for example in a tv interview (?!) Or is it the other way around.

            Oh well, as someone with at LEAST some technical knowledge, I have to say that (even before considering other political issues) - I like many would vote Labor ahead of Liberal on the NBN issue alone.
            I don't want TurnBullcr*p's new CopperNet. Poor guy - he's smart, but he's being asked to sell a Lemon.
            idodds
          • If "guesses" rate a false

            How did the Coalition get away with a "half true" guessing the NBN will cost 94bn? Unless Malcolm has travelled back from the future, any future costing would just be a guess.
            Tinman_au
        • Coming from the man

          Who refuses to see bias in Murdochs' Australian newspaper. Who fails to see the bias of his own agenda/comments and fails to acknowledge his own bias at all.
          Darren.Bennett
          • For plebs

            Perhaps he could find something useful in the following. It's actually written for plebs such as Mr Flude.
            Oh and the author is quite happy to disclose his affiliations, unlike Mr Flude.

            http://howfastisthenbn.com.au/
            idodds
          • Great post

            Wedding photos uploaded to Facebook, download a film before catching a bus, puppy footage to YouTube.

            The productivity improvements; expected to offset the $60+b spend to 2021 breakeven?

            Oh the engineering firm will have the option of fibre on demand should they require it (I suspect not). And they'll get it years before they see any FTTH.

            Good work;-)
            Richard Flude
          • Very effective missing of the point, there.

            To be fair, I agree with you that they are not the best examples of NBN usage.
            Perhaps they should have illustrated scenarios like remote control of medical procedures for countryfolk, and so on.
            But then, I guess you have not have grown up in a remote town like myself, so you're not familiar with some of the communications infrastructure dramas we face.
            And we know the Libs wouldn't really care too much about those who live in the country, apart from the token pre-election spin they would give to their Nat party nutters.

            I would encourage you (and Tony and Malcolm) to learn the technical differences between fibre optics and copper, especially in terms of the upgradeability - or lack thereof, of each medium. Proper investment in the fibre optic network now would prevent us many years and many dollars in the years to come of attempting to hold together an ancient communications medium (copper) with bandaids.
            idodds
          • It was your link

            Not mine. What remote control of surgery? Why does that need FTTN to 93% of premises (are these to be performed at home?;-).

            I grew up in regional NSW. The Nats been the greatest supporters of rural Oz of any party.

            I understand the difference. I use both all the time; costs however are important as is delivery. FTTN has many advantages, NBNCo is one disaster after another (so many links the fanboys are complaining; though not providing any of their own to counter).
            Richard Flude
          • FttN

            Only has advantages in cost and build time. And even those would be brought into question because of all the time, drama and cost associated with changing the current plan. Had they went with FttN 5 years ago when the government first started suggesting this we might have had a network that you would now be a) attacking as a great waste of time and b) people would be complaining about its limitations. (slow upload and unreliable and variable speeds).
            Darren.Bennett