Labor NBN policy and the economy

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James Riley

Labor has released its NBN policy for the 2016 election with the title Labor’s Plan to Build the National Broadband Network Australia Needs for the Jobs of the Future. It is an apposite reminder that NBN policy isn’t about building a “giant video entertainment system” (as Tony Abbott once famously called it).

The original ALP policy in 2007 (yes that long ago) started:

Australia’s small businesses are battling against competitors in countries where superfast broadband is cheap, reliable and widespread.

Our kids are growing up in a world where schoolchildren in other nations enjoy lightning fast broadband in every classroom.

Around the world, a new generation of service industries is multiplying, clustered around the instantaneous transfer of information across global communication networks – but Australia risks being left behind.

Australia’s future productivity, competitiveness and wealth creation relies on world class infrastructure. In the global economy of the 21st century, no aspect of infrastructure is more crucial than advanced communications networks.

It has always been about the economy.

The initial policy of building an FTTN network in conjunction with the private sector was abandoned due to the threefold factors of Telstra’s intransigence on structural separation, tight capital markets impeding competitive bids and the advice of the expert panel that FTTN was not a cost effective path to FTTP.

While the fact that Stephen Conroy took the request to the Prime Minister to propose an alternative policy on a plane trip, the context is important. In that period of January 2009 the PM was criss-crossing the country to express the Government’s commitment to keeping the economy strong. (James Button’s Speechless recounts the week in question in some detail).

The PM having accepted the proposition the revised NBN policy was considered for announcement as part of the February announcement of the second stimulus package. As Wayne Swan wrote in The Good Fight (page 112):

The composition of the stimulus package continued to change. At one stage it actually came close to including the announcement of the National Broadband Network, but it was decided – wisely, in my view – to defer a project of that magnitude until a later date.

As is well known the actual proposal was considered by the Strategic Priorities and Budget Committee (the SPBC a.k.a. the Gang of Four) a number of times before adoption by the full Cabinet in April 2009.

In constructing its policy Labor has balanced the need to reprioritise real fast broadband while also not falling for the mistake of opening up any renegotiation with Telstra nor causing excessive disruption at NBN Co.

The consequence is a policy that sees the number of premises expected to get FTTP almost double. But it does mean remaining committed to the contracts for the HFC network and current FTTN deployment.

However, Labor’s commitment to a full FTTP deployment and desire to ensure this is a principled rather than political decision is captured in the policy, which states:

Commission Infrastructure Australia, with input from relevant experts, to manage the development of a plan that outlines how and when the parts of Australia left with Mr Turnbull’s second-rate NBN should be transitioned to fibre-to-the-premises. This plan will be commissioned in the first term of a Shorten Labor Government.

The ‘how and when’ may be informed by underlying economic growth which remains sluggish across the globe. An accelerated upgrade of the remainders of Malcolm Turnbull’s Mess may well be the kind of project that meets to goal of government infrastructure investment that generates direct and indirect financial returns.

So Labor’s policy is well-calibrated, thoughtful and has upside for our economy. The policy document itself contains a quite devastating critique of the NBN roll-out under the Coalition. This is a critique built on the actual performance, not the fanciful exercise the Coalition released in 2013 which hinged on four extreme assumptions.

This is dealt with in the quite stunning Appendix included in the policy document. This clinically assesses the three “counterfactuals” relied on by the Coalition when seeking to contrast their policy to Labor’s. Each is revealed as being a chimera, “an imaginary monster made up of grotesquely disparate parts.

Unfortunately, Labor’s NBN policy announcement may get swallowed by the Orlando massacre, just as its NBN policy in 2013 got overshadowed by Syria. Even more unfortunately the voting public probably doesn’t get the connection.

The lateness of the policy launch enables the policy to be grounded in the facts as they are. But with three weeks to go Labor needs to talk about health and education. No matter that the NBN provides the single greatest opportunity to improve productivity in both; it shouldn’t feature.

Labor hasn’t forgotten about the NBN, but don’t expect to hear much more about it between now and 2 July.

Do you know more? Contact James Riley via Email.

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