Reverse the NBN cost debate: Gillard

Reverse the NBN cost debate: Gillard

Summary: Prime Minister Julia Gillard has dismissed concerns over the cost of the $43 billion National Broadband Network (NBN) project, saying the cost should be "reverse engineered" to see the benefits the network would bring Australia.

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Prime Minister Julia Gillard has dismissed concerns over the cost of the $43 billion National Broadband Network (NBN) project, saying the cost should be "reverse engineered" to see the benefits the network would bring Australia.

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Westpac CEO Gail Kelly, Prime Minister Julia Gillard and Telstra chair Catherine Livingstone (Credit: Josh Taylor/ZDNet Australia)

In response to a question put to the PM at an Australian Israel Chamber of Commerce business leaders lunch in Sydney today on whether the money invested in the NBN would be better off going to hospitals, Gillard said that people should look at the benefits the technology would bring to the country.

"The question about cost needs to be reverse engineered. Can we afford not to have this technology when our competitors do?" Gillard said. "The nations in our region: Singapore, Korea, they are getting this technology. If we leave ourselves behind where does this leave our economy in such a competitive world?"

Gillard reiterated that the $43 billion cost model for the NBN is made up of both government and (hoped for) private sector investment. NBN Co will ultimately end up being the custodian of both lots of money.

"And the technology, we studied hard and we believe that it is future-proof, it will be the durable technology and will transform the way we do business, the way we deliver education, the way we deliver healthcare and so much more," she added.

Telstra chairperson Catherine Livingstone would not comment on the cost of the network, but said businesses should align themselves to begin taking advantage of what the network has to offer.

"Putting in fibre into the ground is just the first step. What we then need is quite a significant degree of investment by business in terms of products and services that can take advantage of the capability that is being put in. Those products and services is part of what Telstra will be doing," she said. "Small business in particular will benefit and will need to invest at the same time to get that capability."

Topics: Government, Broadband, Government AU, Telcos, Telstra, NBN

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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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25 comments
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  • This report is missing something .... Westpac CEO Gail Kelly criticised the NBN as “yesterday’s technology” and questioned the costs of the rollout and its potential to go up to $90 billion. Ms Gillard apparently slammed that as an exaggeration and said she has not heard of figures like that mentioned.

    Maybe Ms Gillard should read here to get an appreciation of an IT consultant's view on the potential for this project to get way out of hand: http://www.theaustralian.com.au/australian-it/opinion/a-rolls-royce-nbn-is-simply-not-commercially-viable/story-e6frgb0o-1225909068539
    FiberLover
  • 'Reverse engineered', now I have heard it all, no one knows what the end benefit will be especially when it comes to putting a dollar figure on it to justify the initial outlay, it's best to use generic waffle like benefits to healthcare, deliver education and other countries have done it so therefore we must, otherwise 'we will get left behind'.

    I assume Gillard has been told to give the term 'national interest' a rest, it's getting worn out, the new politic buzzword for the NBN is 'reverse engineering'. lol
    advocate-d95d7
  • Hi PhillIT,

    She must have said that outside of the presentation because I was there, and recorded it and I didn't hear any such thing. But I hear Turnbull has today quoted her as calling for a cost-benefit analysis. Can't say I heard that.

    An audience member in the Q&A part mentioned that the network might cost $90b and Gillard said she'd never heard that figure but Kelly made no such mention of the network.

    Josh Taylor.
    Josh Taylor
  • Gillard's fanciful ...."Prime Minister Julia Gillard has dismissed concerns over the cost of the $43 billion National Broadband Network (NBN) project, saying the cost should be "reverse engineered" to see the benefits the network would bring Australia." is, clearly out of step with the fast moving technological happenings in the real world.

    VIZ:

    http://www.zdnet.com.au/commbank-airs-plans-for-wireless-offices-339306518.htm

    The real danger is the fact that our $43 billion is burning a hole in her pocket by a whim of 'reverse engineering', whatever that means.

    Wake up, clear thinking, Australians.
    Vasso Massonic
  • Hi Josh, it was reported in today's Communications Day. Maybe I should have put another 'apparently' in there ;)
    FiberLover
  • It's interesting, I've just relistened to the NBN portion of the event and Gail Kelly doesn't comment on the NBN at all (it would have been nice to have had a quote for my story!). So I can't vouch for the Comms Day story, unfortunately.

    Josh Taylor.
    Josh Taylor
  • She is being obscure, but I think in this context I think she means 'you come up with all the good ideas for the use of this thing, and then we'll claim them as our own".

    Is she even aware of the negative connotations that the expression 'reverse engineering' has? It's akin to theft of Intellectual Property in some circles.
    FiberLover
  • This really questions the capability of our prime minister. What does she think a cost benefit analysis is. It is to weigh up the benefits against the costs, that is what business leaders are asking for, what the opposition is asking for and what sensible taxpayers are asking for. We want Labor to SUBSTANTIATE the BENEFITS, not to talk science fiction. To spend $43,000,000,000 on something where the benefits so far are fantasy is criminal negligence. Reverse Engineer the benefits, she has got to be kidding, no wonder she is more comfortable working in front of Kids. This debate is really challanging the maturity of the IT sector in Australia. For people to support something like this on a whim is just unprofessional, we need due process, due dilligence, a proper business case and cost benefit analysis. Nothing else is acceptable.
    david@...
  • In response to the above comments...
    Yes! Who needs to waste money on sealed, multi-lane national highways when our existing dirt tracks will suffice for as long as we continue to restrict all traffic to horse & cart?
    Also when applied to the construction of a National power grid...what's wrong with using lanterns & candles?
    grump3
  • This is the ludicrous argument of supporters of NBN. A cost benefit analysis is not to say we do not want to have broadband, it is about what makes sense. If a road going to a farmers gate has only one user, you do not put a dual lane highway to his door, it is not cost justified, its benefit does not justify the cost. Instead of making out critics of NBN are idiots, answer the question. What are the substantiated benefits derived from NBN and are you definite that this could not be achieved with alternatives for a 10th of the cost. Insulting those who apply scrutiny to something, is not due dilligence. Would you pay pay 80c in the dollar tax for NBN, if not then you are applying a cost benefit analysis.
    david@...
  • Jeez grump3, you left out the discovery of penicillin, polio vaccine and the internal combustion engine from your list, next time eh?
    advocate-d95d7
  • How about applying some common sense to this debate?
    It would appear you are in favour of an efficient broadband service?
    No one is suggesting fibre to the farm. Wireless & satellite still remain an option where applicable.

    But for a large portion of the population including many in densly populated areas currently unable to obtain an adequate service on Telstra's aging & neglected copper, what are the alternatives to the proposed NBN...wireless? With a tower on every street corner due to bandwidth congestion. Perhaps that would be a more suitable target for a CBA.
    grump3
  • I wish common sense was applied in this debate. The question I ask is what are the benefits of NBN and all I get is airy fairy answers, that is not a commercial decision. For instance the common one quoted is allowing doctors and surgeons to remotely treat people. First is that this has already been done on current technology. Secondly the most common requirement for this would be remote communities and military in the field. These will require wireless/satellite technology and would not run at fibre speeds. This does not justify fibre to the home. The NBN plans so far are more expensive for less bandwidth than what I am getting now. This is the sort of nonsense that is occuring with NBN. If people are going to spend $43,000,000,000 of taxpayers money, and one way or another I am going to have to pay for it, am I not entitled to my question being answered.
    david@...
  • Westpac has denied that Kelly made the comments. Apparently Comms Day was quoting one of the people asking questions at the event.

    Josh Taylor
    Josh Taylor
  • That's nothing, there's a person who will pedantically argue (because the Libs and his employer, Telstra told him to) that non-compliant and compliant are the same...LOL.
    RS-ef540
  • Benefits: Some obvious answers:
    A more efficient, reliable communication network.
    A superior alternative to the cost of maintaining/replacing our failing copper.
    Working from home instead of commuting.
    Home schooling/education.
    Delivery of entertainment, radio, TV, movies, etc.
    Look at it this way;
    When the electric light was first invented we didn't need a CBA to determine if we needed a power transmission grid.
    Power could have been supplied by battery.
    But then along came the fridge, electric stove & HWS, microwave, radio, TV, appliances, electric motors, PCs etc.
    Still want to persist with that overworked battery?
    grump3
  • My apologies to Ms Kelly for propagating Comms Day's mis-quote.
    FiberLover
  • Don't worry Phill... we've grown accustomed to you naysayers, mistruths...!
    RS-ef540
  • Trust you to take the bait.
    FiberLover
  • Well...one of us certainly just did...????
    RS-ef540