Terry McCrann: Selling the NBN would be ‘astonishingly stupid’

Any suggestion the NBN should be privatised is simply madness. It must stay in public hands, and to do otherwise would be vandalism on a national scale, writes Terry McCrann.

Any sale of the National Broadband Network to the private sector anytime soon would be an act of unconscionable national vandalism. It would also be just quite astonishingly stupid.

Now that the NBN is — and despite the whinings of the idiotic “gigabyte geeks”, it is — all but completed across the most sparsely populated land area in the world outside Antarctica and Greenland, and generating serious revenues as a consequence, there’s much chatter that it should be sold.

Apart from the basic fact — do they think everybody in Canberra is really so stupid? — that the chatter is mostly just the greed talking of assorted main-chancers desperate to make a billion or ten from the transaction and the “afterwards” — it made no sense to sell it before the plague.

The NBN, both as it now is in its less-than-pure (fibre) form — but which enabled it to be so functionally effective and so quickly generating pervasive revenues — and even more what it will grow into being, is the single most important foundational infrastructure for the Australia of the 21st century.

It must remain publicly owned.

Apart from anything else, otherwise we would get into exactly the same sort of mess — but worse — that we had by selling Telstra into the private sector with its monopoly core (20th century) telco infrastructure.

The NBN must not be privatised, writes Terry McCrann

What Telstra’s CEO, Andy Penn, unveiled yesterday was a composite of three things.

First was just how effective the NBN had been in its core objective — breaking the old Telstra monopoly. I’ll give that to Kevin Rudd and Steve Conroy, although they don’t seem to want to take it.

Secondly, what the new Penn Telstra would do — has been forced to do — is to make itself a far more effective player in the world of the NBN.

And finally, the putting in place of a corporate structure which could grab the NBN — or be in the “grabbing” — if we were silly enough to sell it.

That’s “pre-plague”; it made no sense to sell the NBN.

Now it makes even less sense and indeed it tips all the way over into national vandalism, because of two things: The reality of near zero interest rates and massive and all but permanent budget deficits.

Whether the government lends money to the NBN or “invests” equity capital into it, the actual reality is that all such money will be borrowed, be part of the budget deficit, and add to the government debt which as we know is headed to $1 trillion, then $1.5 trillion and still going.

Talk about being penny wise and pound foolish: let’s see it for — $20bn? $50bn? — so that when the debt was going to hit $1 trillion it’ll only be the (more likely, on a $20bn sale) figure of $980bn.

Telstra CEO Andy Penn. Picture: David Geraghty / The Australian.

And instead of $1.5 trillion, only $1.48 trillion. Whoopee!

Apart from the fact, as I’ve written about on and off over the past 30 or so years, those figures are figments of fiscal fantasies anyway.

Enter interest rates. The government can borrow the, say, $50bn to fund the NBN at 1 to 2 per cent, depending on term and maturity and timing.

So the cost to the taxpayer of hanging on to our most important national asset is $500m to $1bn a year.

As I said, it would be vandalism and utter, utter stupidity to sell it and “pay off” an utterly insignificant amount of debt.

This is the time to be borrowing money and buying assets — for governments just as much as it for private investors.

Indeed, the government — we — get a much better return on $50bn borrowed for the NBN than $100bn borrowed for JobKeeper.

So what about 5G? Will that make the NBN obsolete?

Only after they repeal physics.

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Originally published as Terry McCrann: Selling the NBN would be ‘astonishingly stupid’