David Havyatt
July 3, 2016

The economy and the NBN future

Election 2016

The economy and the NBN future

Malcolm Turnbull: There has never been a more challenging time to be Prime Minister

Prime Minister Malcolm Turnbull’s last pitch to the Australian electorate was to secure the economic future by electing a stable Coalition Government. The voters ignored him.

More counting through the week of postal and absent votes will provide greater clarity but it is unlikely the Coalition will have a majority in its own right. The Senate looks likely to be a mess with eight independent/minor party Senators growing to 11.

Assuming that the Coalition forms Government it is faced by the outcome that was going to threaten Mr Turnbull’s plan for a Strong New Economy. Exactly what parts of it are at risk?

Most of the Coalition program is supported by Labor. That includes the innovation and science program, the defence industry plan and cracking down on tax loopholes and avoidance and guaranteed funding for health, education and roads. Labor would go further on some, particularly in science and refund the CSIRO.

There is also no dispute with free trade agreements (which the plan calls export trade deals – both sides can be misleading). However the only major deal left on the horizon is the Trans Pacific Partnership (TPP) which is dying in the US and is miniscule in terms of additional economies included for Australia.

What’s left is the tax cuts and the ABCC. The latter’s impact on growth is tenuous at best; both are not only at risk but dead.

Given there is so much agreement on the economic plan, why has it been rejected?

Of the eleven seats the ABC is already saying have been lost by the Coalition, three are in Tasmania (Lyons, Bass and Braddon) one the NT (Solomon) two on the Qld coast (Longman and Flynn), three on Sydney’s fringe (Lindsay, Macarthur and Macquarie) and one in regional NSW (Eden Monaro).

These ten seats at least are ones where the idea that we should be excited to be Australians and that we have a technology led future clearly has no resonance. (Dobell, Paterson and Barton aren’t counted as Labor gains because they were notionally Labor following the redistribution).

There is no doubt that innovation is necessary to find our way in the new economy. There is no doubt that science and technology are at the heart of innovation. But the innovation needs to generate jobs for people where they live.

But a narrow focus on tech startups isn’t going to create growth. Unicorns create wealth for their investors; they don’t create jobs for society. Clever applications in ‘fintech’ do little more than increase the already negative financialisation of the global economy.

There is, as always in public policy, a dilemma. If we don’t focus on these opportunities, someone else will. But Australia does have the opportunity to focus on so much more.

That is why the Coalition failure to deliver a full updated National Digital Economy Strategy (NDES) was such a wasted opportunity. A moment of delicious irony was delivered late in the last week of the campaign when the Prime Minister announced funding for “ten more Headspace centres and at the same time using smart phone and other technology to make these services more accessible.”

One of the very first NDES ‘digital productivity initiatives’ at the Kiama NBN first release site was funding the Illawarra Shoalhaven headspace (youth mental health service) to trial the use of NBN-enabled technologies to deliver their services to young people living in Kiama.

The evaluation of the project by the University of Wollongong found that “Clinicians who used the video conferencing technology reported that they could build a therapeutic relationship with clients using the technology with some important provisos.”

As is well known in the telehealth community one of those provisos is that the videoconferencing works well in the uplink, one of the essential reasons for building the NBN.

But Mr Turnbull wanted to have the benefits of telehealth without building the infrastructure for it.

Another core aspect of the NDES, one that Mr Turnbull shared, was to have Government model the embrace of digital disruption in its own services. Yet for the single biggest set of services, those that are lumped as ‘human services’ the government agenda was outsourcing – including of Medicare transactional services.

So on the one hand the Government was investing in a Digital Transformation Office, and on the other hand seeking to outsource the bulk of its work.

And finally we come to the NBN itself. Despite the fact that Mr Turnbull describes himself as loving technology and innovation he wasn’t ever an innovator himself. He was only a banker, a part of the self-same canker of financialisation.

His strategic review used every trick in the book to make assumptions about revenues and technology costs to justify his predetermined solution. The review was flawed and the technology choice based on it was flawed. We won’t have a multi-port NBN that could have allowed a householder to only have a 12/1 service but their health provider still deliver an application over a second port 25/5 service. We won’t have an NBN built for the future rather than the past.

Despite the NBN being crafted as part of the stimulus package in 2009 Malcolm’s technology choice was to reduce the labour requirement (civil works) and local manufacturing (fibre) and to increase the imported technology.

Worse, the jobs of NBN Co themselves are being either exported offshore (design work by TATA, a “copper assurance manager” role to be based in India) or filled by staff on 457 Visas (adds in Ireland for copper jointers).

Unfortunately because of the election Christopher Pyne had to miss the OECD Digital Economy Ministerial. Hopefully Departmental officials did, and they read Stimulating Digital Innovation for Growth and Inclusiveness which stated “The rapid diffusion of broadband is one of the fundamental enablers of digital innovation. High-speed broadband is the underlying infrastructure for the exchange and free flow of data that are collected remotely through, and used by, digital services.”

The only part of the “jobs and growth” strategy that Malcolm Turnbull would struggle to get through the new parliament will be tax cuts.

If he is lucky enough to still be Prime Minister he needs to go back to the promise of developing a National Digital Economy Strategy. Citizens in Regional Australia have much to gain from the digital world; under the Coalition all they have is fear.

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