Opposition responds to budget, slams NBN

Shadow communications minister, Malcolm Turnbull, has continued the Opposition's post budget reply attack on the National Broadband Network (NBN), claiming that billions of dollars will be pumped into the national infrastructure project.

“Labor is planning to pump $18.2 billion into the NBN by the end of 2014-15," Turnbull said in It also continues the charade of keeping the entire cost of this needlessly expensive, excessively risky, anti-competitive project off the books,” Turnbull said in a speech at the annual Wentworth post-budget lunch.

“The government assumes the cost of the NBN can be kept out of the budget’s reckoning of the government’s annual revenue and expenditure because it will generate a commercial return and the asset will be worth at least as much as the cost of the investment.”

See the complete coverage of ICT spending in Computerworld Australia's Federal Budget 2011 section

Turnbull called the project a gamble that may not receive the uptake the government is expecting to receive.

“Despite a delay of at least six months in signing key construction contracts, and huge doubts over the accuracy of the government’s cost estimates for public works, the NBN business case assumes that…58 per cent of households will be purchasing services over the NBN, compared to 11 per cent who have signed up in Tasmania so far.”

Turnbull went on to slam the decision making behind the NBN, saying that the building the fibre to the home (FTTH) network was an excessively expensive one.

“The gigantic cost of the NBN is a consequence of the decision to build an entirely new customer access fibre to the home network,” he said.

“Were the network being built in an economically rational way, the fibre would extend to the furthest economically viable and technically necessary point in the network and no further.”

Turnbull's comments follow similar remarks from Opposition Leader, Tony Abbott, who used his reply speech to the 2011-2012 federal budget to argue that speeds of up to 100 megabits were already “potentially available” to “almost every” major business and hospital, to most schools, and through high speed cable already running past nearly a third of Australian households.

“The smart way to improve broadband is not to junk the existing network but to make the most of it,” he said. “It’s to let a competitive market deliver the speeds that people need at an affordable price with government improving infrastructure in the areas where market competition won’t deliver it.”

The federal government also announced that it planned to axe plans to build a broadband network for vocational education and training institutions.

The news comes as iiNet last week praised the NBN.

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Copyright © 2011 IDG Communications, Inc.

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