NBN is good for Gillard, not taxpayers
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Posted : Tuesday, September 07, 2010
Michael Stutchbury's article on the issue was also published in The Australian
Labor's $43 billion National Broadband Network may be the most politically rewarding pork barrel of all if it gets Julia Gillard over the line with the country independents.
But, like most politically driven investment, it is unlikely to provide the best return for taxpayers and even telco users.
Broadband Minister Stephen Conroy doesn't really contest this point in continuing to dodge the simple question of why Labor refuses to put the infrastructure project through a cost-benefit analysis.
Instead, Conroy points to the study he commissioned from McKinsey and KPMG that found the NBN could be built with the $43bn price tag and be "affordable for all Australians".
"We've got on with the job as we promised at the last election of building the national broadband network," he argued on the Sky News program Australian Agenda.
Except that the McKinsey "implementation study" was required to take the NBN as a given, not consider any less expensive alternatives and not conduct a cost-benefit study as urged by the Productivity Commission and the Organisation for Economic Co-operation and Development. And except that the advertised bill has blown out from $4.7bn at the last election to $43bn.
Shortly after the election, country independent Tony Windsor suggested the $43bn figure was "fictitious" and he wanted to see the "real trail" of numbers. But
after being briefed, Windsor backed Labor's NBN on the weekend, describing the Coalition's $6bn alternative as "retrograde".
http://www.ceda.com.au/research/current-topics/ace/2010/09/07/nbn_stutchbury.aspx