Senate committee slams NBN, says cost-benefit analysis required

A group of senators investigating the Government’s National Broadband Network have concluded a two-year long study by saying the program should be completely abandoned, or at least given a cost-benefit analysis.

The motion comes just one month before the first customers in Tasmania are set to join the network, with a number of retailers already offering fibre-based plans.

The committee also said details of the operating arrangements, network design and a number of regulatory issues should have been decided before the project began.

“It is not possible to make an assessment on whether the government’s NBN project will be a policy success because too much of the most important detail of the network’s design and future operating arrangements remains outstanding,” the report states.

“There is no detail and no demonstrated proof of value for money.” However, despite the committee’s objections, it is reported a motion to recommend scrapping the project altogether was not unanimous.

The KPMG implementation study released by communications minister Stephen Conroy last month did not include a study of the network’s financial viability, because the Government already viewed the project as a key election promise.

Communications department deputy secretary Daryl Quinlivan told the committee last month that a financial analyst is used to determine whether a project should be started, but argued the Government had already made that decision.

Now, the committee says the Government should now take up the offer of professor Henry Ergas to conduct a cost-benefit analysis free of charge. Such a review, Ergas told the committee, could be completed in just three days.

“Notwithstanding that the committee, for reasons detailed in its Fourth Interim Report, recommended that the Government abandon its NBN proposal in its current form, the committee acknowledges that the Government is proceeding with its NBN proposal,” the committee says in the report.

“The committee recommends the Government provide the public with “the calculations and underlying workings that were used by the Lead Advisor to generate its total cost estimates, and… a comprehensive statement of what are or will be the alleged and predicted benefits”.

It also said it believes many of the issues identified in the report will have a “serious impact” on the Government’s ability to implement the NBN project on budget. However, the Government has already rejected the committee’s findings, saying the network is well underway.