Budget 2011: Turnbull slams off-book NBN

Shadow Communications Minister Malcolm Turnbull has labelled the Federal Government's continued approach of keeping the cost of building its flagship National Broadband Network project off the annual budget books a "charade", in the wake of early take-up figures of the network's services which the Coalition views as being less than expected.

In the budget papers released on Tuesday night, the government provided further detail about how it would inject equity funding into the NBN project, allocating $18.2 billion to NBN Co over the proceeding years up until the 2014/15 financial year. The payments are instalments towards the government's total equity contribution to the NBN, which is expected to be $27.5 billion.

However, in a statement released last night as part of the Coalition's budget response, Turnbull said the government had continued its "charade" in the budget papers of "keeping the entire cost of this needlessly expensive, excessively risky, anti-competitive project off the books".

The government, Turnbull said, assumed the NBN could be kept off-budget because it would generate a commercial return, making the NBN worth not less than the cost of its initial investment.

"But eight months after the first sites were turned on in Tasmania, expectations of strong early revenues are looking overly optimistic," the member for Wentworth said, claiming that only 11 per cent of households in Tasmania who had access to the NBN had signed up for services so far; less than the predictions that 58 per cent of households would sign up by 2014/15.

"The lacklustre performance metrics for the NBN so far bode ill for taxpayers," Turnbull added. "The claim that the government's equity costs are limited to $27.5 billion (excluding $16 billion to be paid to Telstra) with the balance funded in debt is a very spurious one. There is no prospect of NBN being able to borrow on a no-recourse to the government basis and so the NBN's indebtedness will be just another category of government debt. All of the NBN risk is with the government."

Other budget measures

Also in the budget was the revelation that the Federal Government would not proceed with a funding program that has seen Australian internet service providers provided with grants to offer internet filtering options to customers; driven by a lack of interest in the project. The project proved less than popular in its first year — with just $200,000 of available funds of $9.8 million being used in the past 12 months.

Turnbull said the funding cut sent a signal that Communications Minister Stephen Conroy had realised that relying on the internet industry and parents taking responsibility was a more effective way to make online activities safe than wholesale censorship of Australia's internet, as Labor's controversial mandatory internet filter policy proposes.

The MP also somewhat reinforced coalition criticism of the $308.8 million allocated in the budget to fund digital set-top boxes for pensioners and the disabled as part of the government's ongoing efforts to switch Australia over to digital television.

Prime Minister Julia Gillard staunchly defended the program yesterday, claiming that for some, the pending switch-off of analog television had the potential to remove "perhaps the only companion in their lives".

"The Coalition understands the cost of living pressures on all Australian households, and so supports any cost-effective assistance measures provided to Australians to switch to digital-only television," Turnbull said. "However, there are serious concerns over Labor's ability to roll out this program and accredit installation specialists, given the government's woeful previous record of administration with pink batts, green loans and school halls."