Budget 2021: NBN has repaid AU$5.5 billion of its AU$19.5 billion government loan

NBN Co, in the Budget papers, is revealed to have made a AU$3 billion and AU$2.6 billion payment in past six months.
Written by Chris Duckett, Contributor

Over the past year, NBN has been lining up private debt at cheaper rates to replace its AU$19.5 billion loan from the Commonwealth.

Since March 2020, the company has raised AU$12 billion in new debt, with AU$1.6 billion from Australian five and 10-year bonds, and AU$8.5 billion from banks. In its December debt raising, the company raised AU$1.2 billion at 1%, while its government loan has an interest rate of 3.96%, with interest payments in 2021-22 to hit AU$759 million.

NBN has previously said it would use the new debt to pay down its old debt, but never detailed the full extent of its payments.

In the 2021 Budget papers, the Australian government revealed the extent to which NBN has met its obligations.

"The Australian government has provided a loan of AU$19.5 billion to NBN Co, on commercial terms, which was fully drawn in July 2020. The loan was established in December 2016 and must be repaid in full by 30 June 2024," it said.

"AU$3 billion was repaid in December 2020 and a further AU$2.6 billion was repaid in May 2021, with an outstanding balance of AU$13.9 billion expected as at 30 June 2021. The loan has a fixed interest rate of 3.96% per annum, with interest payable monthly over the life of the facility."

The government added its guarantee to cover NBN payments to Optus for using its cable network has generated liabilities under AU$200 million as of February 28 and the agreement is set to terminate in 2021.

For Telstra, under a similar arrangement covering its agreement with NBN Co, the liabilities reached AU$10.7 billion by February 28, with that guarantee to expire once NBN reaches a specified credit level for two continuous years, and when the company is capitalised to an agreed amount or the Communications Minister has declared the network is built, which occurred in December.

In recent weeks, NBN has amended some of its documents to state it has withdrawn its ethernet multicast functionality, dubbed Multicast Domain and Multicast AVC.

"Multicast is the future of television" a dated NBN document [PDF] proudly declared.

Due to lack of use, that future will never arrive.

Citizen, ScoMo wants to text you

Under the headline of "Building Australia's Resilience", the federal government has set aside AU$1.2 billion over four years to improve how Australia prepares, responds, and recovers from natural disasters.

A small portion of that funding, AU$2.2 million over two years, will be used to design a "cell broadcast national messaging system" that is intended to "provide information to the Australian public concerning events of national significance".

In 2018, a similar system used in Hawaii sent residents scurrying after an emergency alert saying, "Ballistic missile threat inbound to Hawaii. Seek immediate shelter. This is not a drill," was mistakenly sent during an internal test.

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