NBN pledge takes future vision back to Rudd past

Anthony Albanese’s vision for the future has led Labor back to Kevin Rudd’s 2007 vision for a National Broadband Network that is now valued at half of what taxpayers have spent on it. The federal government will spend another $3bn to increase the reach of the NBN and promises to keep it in government ownership. Part of the attraction for Labor is to wedge Peter Dutton, who did not support legislation to forbid a sale of the NBN and is running on a platform to cut government spending. But the question remains: Does the NBN represent good value for taxpayers and is it the best way to unleash the productivity-boosting benefits of the online world?

Meanwhile, Labor’s pledge for a new style of politics with integrity does not exclude personal disparagement of the Opposition Leader as “cold-hearted, mean-spirited, sometimes just plain nasty”. In a radio interview on the ABC on Monday, the Prime Minister said Mr Dutton had built a career on dividing people. “He’s built a career on targeting people, particularly people who are vulnerable,” Mr Albanese said. “He’s never sought to bring people together, which is why his own party rejected him and elected Scott Morrison as leader, even though Scott Morrison had a very small base of support, because they understood that he represented a shift to a hard-right version of the Liberal Party.”

And in opening remarks to cabinet to rally the troops for an election year, Mr Albanese said: “Today we get down to work building further on our agenda and putting forward a positive, optimistic vision for Australia. One that unites Australia, not one that seeks to divide. One that seeks to bring people together, not looks for a political opportunity at every single occasion.”

It was another display of political chutzpah to set the tone for what promises to be a long campaign. Mr Dutton dismissed the attack and said Mr Albanese had been the “weakest prime minister since Federation”. Voters can expect more personal attacks as the election draws closer.

But it is the substance that matters. On this front, Mr Albanese’s claims on the NBN are difficult to justify. The Albanese government will fund the upgrade of Australia’s remaining national fibre-to-the node network through an equity injection of up to $3bn, with NBN Co contributing more than $800m to the project. Mr Albanese says public ownership of NBN Co was the best means of ensuring prices for high-speed internet remained affordable for all Australians.

But as Judith Sloan writes on Tuesday, the NBN faces plenty of competition that makes its value uncertain. Potential competitors include the 5G network and Elon Musk’s Starlink. Sloan argues that the government-funded and owned NBN Co was never a good idea. In other countries, it was quickly realised that the private sector could provide affordable and adequate internet access to densely populated urbanised areas. And, she says, it is worth noting that the NBN has delivered neither fast internet speeds nor affordable bills. The NBN has been a commercial disaster and Sloan says it was a complete gimmick for the Labor government to legislate that the NBN should remain in public hands because no investors in their right mind would think of buying it in its current form.

The additional funding commitment takes the total equity injection from the government since the NBN’s launch in 2008 to more than $35bn even as analysis conducted by the Productivity Commission estimated the market value of the asset at $19.7bn in 2021-22. Unfortunately, the NBN announcement sets a bad example for what voters can expect as the election date draws near – big promises that are divorced from economic reality.