NBN sinks surplus to $12b deficit: Turnbull

NBN sinks surplus to $12b deficit: Turnbull

Summary: Shadow Communications Minister Malcolm Turnbull has suggested that the 2012-13 Budget would actually blow out to a $12 billion deficit, if the National Broadband Network (NBN) was on the books.

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Shadow Communications Minister Malcolm Turnbull has suggested that the 2012-13 Budget would actually blow out to a $12 billion deficit, if the National Broadband Network (NBN) was on the books.

In not proceeding with the planned 1 per cent company tax cut, downsizing the public sector workforce by 3000, reforming welfare and tax systems and making $5 billion in cuts to Department of Defence spending, the government is hoping to turn a $44.4 billion budget deficit in 2011-12 into a $1.5 billion surplus for 2012-13.

Despite making a number of cuts, the government is still pumping billions of dollars into NBN Co, as the project ramps up and rolls out fibre, fixed-wireless and — eventually — satellite broadband services across the country.

The government plans to invest $20.1 billion into the NBN over the next four years, but this funding is not included in the Budget's "bottom line". If the government was to include the NBN funding for next year on the Budget, it would end the government's hope of achieving a surplus, Turnbull said.

"The Budget would show an actual deficit of at least $12 billion," Turnbull said during question time today.

In response, Swan said he rejected the "slur".

"The truth is this: we are operating under a charter of budget[ary] honesty, developed by [the Coalition]. We are working with accounting standards that were developed by the previous government and we have accounted for the NBN in precisely the same way as bodies like Australia Post [has] been accounted for forever and a day, and were accounted for, by the previous government, in that way."

Parliamentary Library economic analyst Brian Dalzel has previously backed the government's approach to the NBN's accounting in the Budget. As the government is expecting a 7 per cent return on its investment in the NBN, it appears as an asset for the government, rather than an expense.

This methodology could cause headaches for Turnbull, if he becomes the communications minister after the next election. If the policy for the NBN was to change, and the 7 per cent return was no longer guaranteed, the NBN could become an expense on the Budget. In addition, the Coalition is already facing the prospect of having to pay out at least $1.8 billion, if it cancels the contracts NBN Co has already signed for construction of the $35.9 billion network.

Topics: Government, Broadband, Government AU, NBN

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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Talkback

27 comments
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  • As was cleverly pointed out, one can extend this thinking even further: if you add not just the NBN costs, but also the Future Fund (why not!), then you get a big BOOST to the surplus.

    Or you could add in Australia Post, and see what that does to the mix.

    Or any other random and nonsensical bit of non-accountancy. Hey, you can come up with any figure you like if you start making the rules up as you go along! Which is why accepted national and international accounting standards exist in the first place!!!
    Gwyntaglaw
    • Actually, a special dividend from Aus Post is already part of revenue figures in the 2012 Fed budget.

      http://theconversation.edu.au/accounting-tricks-behind-the-federal-budget-surplus-6822
      AndersonL-e0a14
    • Adding this to the budget doesn't make sense since it isn't coming out of budget money. The money is raised by Govt. bonds. If the Govt. ever has to "pay off" the bonds then it comes from budget money.
      No Tricks - NBNco is a business that makes money, not a charity the Govt. pays for.
      CS-66539
  • Did anyone watch the budget intervirew on ABC by Chris Uhlmann?

    Its amazing how Joe Hockey said he would have handed down a harder budget. When Chris asked Joe what he would cut all Joe Hockey could come up with was 20,000 public service jobs & not a single policy.

    Its amazing how Joe Hockey can talk about what he wouldnt do, but when it comes down to what he would do he had no answer.

    I know this is a little side tracked from this topic but it makes one think, its easy to knock something but when it comes to down to making a policy Joe Hockey had nothing.
    fibretech
    • Between Joe Hockey's "I know nothing" interviews, Tony Abbott's "it just is!" embarrassment and Chris "don't call me wimpy" Uhlmann's shocking unprofessionalism... it's the parade of charlatans trying desperately not to trip over their clown shoes.
      Gwyntaglaw
      • I thought Chris Uhlmann was quite good, he tore shreds off Hockey & did it so calmly that it made Hockey look like a complete fool. Can't help but laugh just a little ;)
        fibretech
  • Well Australian politics certainly is becoming just as embarrassing and cringeworthy as Australian TV and now Turnbull has decide to take the village idiot crown from Abbott... is this a sign of a leadership challenge in the Liberal party? More to the point it's becoming quite clear the coalition clowns broadband policy and debate all revolves around a bunch of "ifs" and "buts". "If this, if that, bu bu bu bu buuuttt but an advance in wireless might make fibre redundant". What a bunch of clowns.
    Hubert Cumberdale
  • It's not volcanoes, or coal-fired power stations, it's the hot air that Malcolm Turnbull and Tony Abbot keeps spewing that's warming the climate.
    DanielB1
  • Oh dear, dear me! Aren't you lot really getting your knickers in a knot as the reality gradually dawns that Julia, Wayne and Stephen are well and truly on the way out.

    In your heart of hearts you all know that this ALP government is the most sordid and compromised mob of incompetents that ever graced the treasury benches. Certainly that is true in my 50 years of following federal politics. You'll need to learn to love Abbott, Hockey and Turnbull because you are going to have them for a long time come September 2013 or, possibly, DV sooner.

    As to your beloved NBN no doubt some form of it will be built and the businesses and institutions that really need it will have high speed fibre. In addition all you propeller heads that want lighting fast responses will also get your fibre as long as you are prepared to pay for it. As for the rest of us "old farts" that just want to do our email, a bit of eBay shopping and book tee times at our golf clubs we'll be quite happy to jog along with slower speeds and much less cost.

    There - that should give some of you the opportunity to thoroughly vent your spleens.
    Brianab
    • Turnbull's comments are just plain unadulterated unhelpful bull as any first year accountany student knows.

      "In your heart of hearts you all know that this ALP government is the most sordid and compromised mob of incompetents that ever graced the treasury benches."
      Very true but the Coalition is the most inept, incompetent and dare I say biggest purveyors of half truths if not straight out mischievous lies in living memory.

      Independants and the Greens at the moment seem to be the only ones who actually care about their electorate and this Nation and are not on a giant power trip.
      Bob.H-819a5
    • ah, the life of Brian, waiting for the messiah, always looking on the bright side of life, and parroting...
      btone-c5d11
    • "blah blah blah reality gradually dawns that Julia, Wayne and Stephen are well and truly on the way out blah blah more political waffle no one cares about blah blah blah"

      So long as the NBN is built as planned I don’t give a rats **** who is running the country. (Though I do have concerns about having someone dumber than George w Bush as prime minister)


      "There - that should give some of you the opportunity to thoroughly vent your spleens."

      Well you certainly vented yours, not sure it'll have the effect you were hoping for though. Awww what's wrong, does all this new technology scare you? Poor baby.
      Hubert Cumberdale
    • You seem to be under the impression that people here support Labour. They do not (AFAIK). You'll find that most people on here are deeply resentful towards politics in general, and Conroy's internet filter is a good example of that.

      What people on here do support is the building of the NBN, a Labour policy/project. As you seem to think this is a political forum, this may be revelation to you, but I don't think the audience on here cares who builds it, as long as it's build. In your own myopic world, you've confused support for a policy with support for a party- an incorrect assumption and one that undermines your point of view.
      RealismBias
  • Oh look Brian's here, hi Brian.

    "In your heart of hearts you all know that this ALP government is the most sordid and compromised mob of incompetents that ever graced the treasury benches."

    Maybe Brian, but Abbott and his swindling liars haven't had a go yet, so we'll see. And I see Costello was rumoured to make a comeback because even the party are sick of Abbott's negativity and nothingness!

    Also, if elected, we'll also see how they cost their $17B, according to Citi, broadband gift (with no ROI and no asset ownership for the nation) to Telstra - woops I mean, private companies.

    Because they would be most hypocritical, if they weren't to put that $17B "on budget" wouldn't they Brian? Due to their plan not being an asset owned by the nation and not paid for by investment dollars etc (so an actuall impost on taxpayers).

    Gee that would mean they will have to make cuts to other budgetary area's like Hospitals, Roads, Education doesn't it, Brian? To pay their $b's in gifts to private companies, doesn't it Brian?

    Oh I almost hope Tony does get in because he really has NFI and it may actually make you chronic rad cons, wake up...

    How silly of me, no it won't, as a life long Liberal member (that's what you told us before wasn't it Brian) you'll support him no matter what *sigh*.
    Beta-9f71a
    • "it may actually make you chronic rad cons, wake up"

      lol :-)
      Hubert Cumberdale
  • The Liberal policy of shifting the expenditure to roads will still leave a 12 billion dollar deficit.
    Kevin Cobley
  • You pro Labor idiots need to wake up. Labor is gone.

    I would suggest that you start lobbying to get the best you can with the Liberal's NBN plan.... but do expect to pay for it if you want FTTH, we will no longer have a nanny hand out state.

    I love all the garbage about "it will be an asset owned by the Australian people!!!". This is pure bull.... once all the Labor cronies had made their sweet little $400K/year, super and golden handashakes, the plan has been to SELL it.... I guess Telstra would buy it :-)
    Backzlider
    • Fred, I don't vote religiously for the same crowd like some people do. In fact I vote based upon policies of the time & right now the coalition has none but to stop everything.
      Thats not a policy, thats stupidity!

      BTW I'd love to see Costello return to federal politics, he actually had a plan - which is more than I can say for Abbott. Maybe Costello could make some sense out of the Liberal Party, cause Abbott does'nt have an IQ capable of doing anything other than saying NO.
      fibretech
    • LOL.. Fred/Frank/Frergers is back with more idiot logic.

      So where is the Coalitions $17b coming for their plan, brainiac...?

      Indeed fibretech, Costello was at least somewhat Liberal, not extreme right.

      Interestingly Liberal Patriarch Malcolm Fraser quit the Liberal party after seeing Abbott's extreme conservatism... if nothing else, that should be a wake up call to all Aussies who want a "fair government"!
      Beta-9f71a
    • Fred, Remember John Hewson & unlosable election, Oh and the GST which we will never have? LOL
      fibretech