NBN write down ‘more likely’ says Labor
LABOR has signalled it could seek to writedown the value of the National Broadband Network in a move that would hit the bottom line of the federal budget and pave the way for cheaper home internet prices.
There have been growing calls in recent years for the value of the NBN to be revised lower, reducing the financial burden on NBN Co to recoup the costs of the $49 billion project.
In an interview with the Financial Review, Opposition communications spokeswoman Michelle Rowland said honesty about broadband's future was necessary, as the party finalises its policy for the nationwide network.
Ms Rowland said there was "really tough choices on the technology and economics of the NBN" that needed to be addressed.
"A writedown needs a trigger and it is not a decision for governments to make, but the possibility of that happening looks more likely," she told the Financial Review.
The move would be welcomed by broadband retailers like Telstra, Optus and TPG because it would reduce inflated wholesale broadband prices. That would likely flow on to service providers allowing them to offer better priced plans to end users.
Ms Rowland reiterated Labor's intention to provide access to more reliable fibre in the network and blamed the current mix of technologies for not providing enough value to Australian consumers.
"The starting point of this is the value of the NBN has been severely eroded by the multi technology mix," she said in a studio interview with Sky News this morning.
"It makes it more susceptible to new technologies like 5G."
That was the message delivered in a report by credit rating agency S&P Global Ratings in July last year which warned that a writedown was "inevitable" because the high access costs for the NBN were driving customers towards mobile internet as a cheaper and increasingly viable alternative.
Under the current set-up, the federal government's $29.5 billion equity in NBN Co is held off the nation's official balance sheet so it doesn't impact on the deficit. The government has also lent NBN Co a further $20 billion at favourable rates.
Ms Rowland stressed there would need to be a trigger for any potential writedown.
"We need to be very clear, the government doesn't have some magic writedown wand," she said. Instead a move would need to be triggered by a change in accounting rules or the pricing structure of the NBN wholesaler.
"Let's face it, ultimately this is about ensuring we have an asset that is fit for purpose," the shadow minister told Sky News. "Certainly the issue is the value of the NBN and its long term economics."
Her comments come just days after Finance Minister Mathias Cormann rejected calls for an NBN writedown, denying it was necessary and saying it was not up to the government.
Analysts estimate the NBN's valuation could be slashed by as much as $20 billion, which would hit the budget bottom line of the federal government.
But those who have long been arguing for a write down, including Telecom expert Paul Budde who once advised the Labor government on the rollout, say the profitability mandate of the NBN corporation overlooks the social value of the project.
"This is not just about internet access. This is also national infrastructure that can be used for education, healthcare, smart cities, smart buildings, you name it," he told news.com.au in August 2017.
"So there is also a national interest value, a social value to the whole thing that doesn't show up on the balance sheets of the NBN or the ISPs. This is a benefit that goes directly to the country … And the government should actually calculate that into the business model."
NBN Co has been contacted for comment.
NBN USERS LEFT WAITING FOR TECHS
New data from NBN Co shows almost 160,000 people were left waiting in vain for an NBN technician to show up for a scheduled appointment in the year from July 2017 to June 2018.
What's perhaps stranger, NBN Co reported in March the number of missed appointments since July was just 80,000 - meaning it doubled in the final three months of the financial year.
"Australians are reasonable and do not expect perfection - but they expect better than this," Ms Rowland said this morning.
NBN Co also told a Senate committee customer satisfaction with its services dropped over the past two years, from a rating of 7.2 out of 10 in 2016 to 6.5 last year.
"If (Communications Minister) Mitch Fifield had been more focused on NBN consumers and less focused on installing Peter Dutton as prime minister, we would not have this situation," Ms Rowland said.
"Less downtime, greater accountability and fewer missed appointments - that is what consumers deserve and what Labor wants to achieve."
- With AAP