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Paul Fletcher MP speaks to Ross Greenwood about the Scales Audit of the National Broadband Network
Ross Greenwood: Let’s go to the important input into the National Broadband Network, this is a key report that’s been put out, commissioned by the Communications Minister that tries to look at the performance of the National Broadband Network. Now everybody is well aware of course of the original cost of the National Broadband Network according to the Labor Party was going to be $43 billion, it was to be off the Government’s balance sheet, in other words it would not appear in the budget. The idea from the Labor Party, that time in Government, was that the National Broadband Network would provide a fibre right into your home.
The Government, the current Government simply said at the time that is unaffordable and as time went on it was proven that it was not only uneconomical for Australia, as many people argued right the way along, but that it had been ill-conceived and not well thought out and was going to massively blow out the budget. Well this particular report was effectively an audit into the performance of the NBN again comes out with the suggestions that not only was it ill-conceived to begin with, but the National Broadband Network was established as a start-up company even though its function was as a fully mature operational business set up in only 11 weeks. The whole point about this is the report by Bill Scales said the public policy process for developing the National Broadband Network mark two was rushed, chaotic and inadequate with only perfunctory consideration by cabinet- think about that. Remember also the Pink Batts program that was costed by the former Labor Government in just 2 days and I think that really says plenty about the NBN Co. Let’s now go to the Parliamentary Secretary to the Communications Minister Paul Fletcher, who’s on the line right now, thanks for your time Paul.
Paul Fletcher MP:
Good Afternoon Ross.
Ross Greenwood:
Look it’s all very well to sit back and point the finger back at the previous Government that was clearly developing a policy, the question is whether this Government and future Governments will learn from those mistakes, do you believe that is part of a parcel of what Bill Scales is recommending?
Paul Fletcher MP:
Well look, that’s exactly why the Abbott Government asked Bill Scales to conduct an audit of the policy process with the NBN. Bill Scales is one of Australia’s foremost authorities on public policy and we asked him to have a look at the way, that in just 11 weeks as you said Labor tore up the policy they took to the 2007 election, which was to spend$ 4.7 billion and replaced it with a policy to spend $ 43 billion and what this audit finds, is that it was a chaotic process, that it relied on flawed advice, there was no independent cost benefit analysis, there was an abandonment of normal cabinet processes, and he also says that the public service were not given the opportunity to provide advice as to why this was all a bad idea.
Ross Greenwood:
So in other words, this was the big picture that the former Government wanted, that Kevin Rudd wanted, that the former Communications Minister, Minister Conroy, Stephen Conroy was only too prepared to go with and right the way along despite everyone telling him that this would not work and the costs would blow out, continued to stick with the idea that fibre to the home was the only technological solution that would deliver, if you like, this high speed broadband to the rest of Australia?
Paul Fletcher MP:
Well it was all of that and it was even worse because when they announced this policy in April 2009 to spend $43 billion on a fibre to the premises network, had they done the thorough policy work to underpin it that Australians would normally expect their Government would do before announcing what we were told was the largest infrastructure project in Australian history. What Bill Scales’ review, this audit of public policy says is that they did not do the work you would normally expect, the whole thing was done in an incredible rush and as a consequence it has created all of the problems that have fallen to the Abbott Government and Communications Minister Malcolm Turnbull to fix because this was such a poor process, and indeed one of the things that was behind our thinking in commissioning this review is what can we learn from this poor process. Amongst other things Tony Abbott as Prime Minister has been very strong on cabinet process and yet if you compare that to what Labor did here, the full cabinet hardly even saw this proposal, they only got the chance too look at it a few hours before it was announced and it was a pure rubber stamp exercise.
Ross Greenwood:
So there is the situation, Bill Scales in his report says NBN Co. was not fit for purpose, it was start-up company given the job that only a well-functioning, large, and established Telecommunications company would have been able to undertake in the allotted timeframe. Then it goes to recommendation one, when political parties include in their election commitments a promise to implement large infrastructure projects or infrastructure related funding they should also commit to having the project or projects fully and independently costed by the Productivity Commission or Infrastructure Australia before the project proceeds. All of that was missing in this case and as result the public was denied any opportunity to recognise whether it was feasible or not.
Paul Fletcher MP:
Look that’s exactly right, it was a terrible set of processes. We obviously have a cost benefit review underway now, it’s somewhat after the fact but we said that we were going to do it and we are doing it but it should have happened before this decision to go ahead occurred and what they also should have done was rather than creating a brand new company from scratch and populating it with people with no experience in Telecommunications, we should have taken the approach which we have now belatedly moved to since we have come to Government of appointing in a very experience chair in Ziggy Switkowski , former Telstra and Optus CEO, very experienced CEO, and very experienced Telecommunications executives in the company because you previously had people in senior positions in this company and on the board who just did not have the experience and that’s why the minister said in that grab you just quoted that the project was running well behind time and well over budget by the time we got to the 2013 election.
Ross Greenwood:
Let’s go to recommendation six: the Government should take special care in determining and deciding appropriate, realistic timeframes are put in place for the design and implementation of large and complex infrastructure projects and reforms. Notwithstanding that the current Government has scaled down the scope of the National Broadband Network so it will be now fibre to the node, in other words to the end of the street and in some cases to the premises, where it already exists, that infrastructure; in most cases it will not be as extensive. Notwithstanding that, it is still a significant project in Australian terms so therefore do you believe that this Government has taken special care in determining and deciding appropriate and realistic time frames?
Paul Fletcher MP:
Well we’ve been very careful on this and other points. Amongst other things Malcolm Turnbull as Communications Minister has been determined to ensure there’s transparency and disclosure, the company is reporting regularly on its website as to the number of premises that are passed, it reports regularly as if it were a public company in terms of its financial performance, and in terms of the targets that the company is setting it met the roll out target of 30 June 2014, one of the first times that it has met such a target in its history and a critical principle here is that the rollout plan is one that the company commits to, the management and board commit to, they believe can be delivered. Whereas previously you had target, indeed you had the whole plan, imposed in many ways at the political level and then dumped on the company and told go and do this and guess what? In many ways it couldn’t be done and that’s why we’ve had all of the difficulties we’ve had again, all of which emerged from the chaotic policy making process that’s been so accurately and clearly identified in this audit conducted by Bill Scales, an eminent public policy expert that’s been released today.
Ross Greenwood:
Paul Fletcher, we appreciate your time on the program.
Paul Fletcher MP:
Thanks indeed, Ross.
