Coalition's NBN accounting 'more honest': Hockey

Shadow Treasurer Joe Hockey has defended the Coalition's decision to keep the NBN off budget if it wins government in September.
Written by Josh Taylor, Contributor on

Shadow Treasurer Joe Hockey has defended the party's backflip on the accounting methods for the National Broadband Network, stating that the Coalition's NBN being kept off-budget would be "more honest" than Labor's NBN.

Since the last Federal Budget, both Hockey and Turnbull have accused the Labor government of engaging in a "charade" and using "accounting tricks" by keeping spending for the NBN off the budget bottom line, despite approval of the government's methodology from economists. Spending for the NBN is kept off budget because the investment is expected to be returned back to the taxpayer over time as customers begin to use services on the fibre, wireless and satellite network.

The Coalition backflipped on its criticism of this accounting methodology when Turnbull launched the Coalition's alternative NBN policy. Although the policy itself differs significantly from the current NBN Co rollout, which would see much of the fibre to the premise network replaced with a fibre to the node rollout that would use the existing copper line, the party opted to keep the investment into the Coalition's NBN off budget.

The background paper specifically questioned whether Labor's NBN could remain off-budget, while pledging that the Coalition's NBN would be off-budget.

"A significantly less capital‐intensive NBN such as the policy proposed here by the Coalition is the only way to ensure NBN Co can continue to have a legitimate claim to remaining off Budget, in addition to being the only way to avoid very large increases in prices," the background paper stated.

Speaking at the National Press Club in Canberra today, Hockey defended the party's backtrack on the budget accounting, and said it was "more honest" for the Coalition to keep their NBN off-budget than Labor's because it was more likely to make a return.

"Our NBN is more affordable, more deliverable, and more likely to make money than the government's NBN," he said.

It is unclear how the party proposes that their NBN will make a better return while also having lower wholesale costs. The Coalition's own policy document (PDF) suggests that the party would expect to be making less revenue in the first years of the network's operation than Labor's projections — AU$16 billion between 2012 and 2021, compared to AU$23 billion under Labor.

Hockey suggested that the NBN may be costing more than the government has let on.

"If there is a change of government, one of the great revelations will be the real cost of the government's NBN. And when Malcolm Turnbull consulted widely with industry on what they believed to be the cost of Labor's NBN, we took a conservative approach to what they were advising to identify the figure of $90 billion," he said.

This comes a week after Turnbull slammed the government for delaying funding for the NBN due to the delays in the construction of the network. The AU$90 billion figure that the Coalition has estimated Labor's NBN to cost has been rejected by NBN Co CEO Mike Quigley, who has said the project will be delivered on time and on budget.

"We are confident that we can bring in the project in on time at that end date, and on budget," he said in April.

In his National Press Club address, Hockey also indicated that the Coalition would support changes to the tax system to close loopholes that allow big multinational companies like Google and Apple to shift their profits overseas to avoid Australian taxes.

"I share [the government's] concern about multinational companies booking costs in Australia but banking profits in other jurisdictions and I think this is an issue that needs to be properly addressed," he said. "If we are elected, we will continue to pursue that."

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