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Excuses for agile PM quickly evaporating
Volume 32 #17
October 4, 2017
$50b scrambled NBN egg If you are to believe a parliamentary inquiry into the NBN rollout released September 29, it appears a complete disaster. The 210 page National Broadband Network (NBN) report by the Joint Standing Committee contains 23 recommendations, and essentially validates what experts have long argued. Since the Liberals took control of the project from Labor in 2013, technologies to deliver the project diverged to accommodate their desire to reign in cost. As communications minister, Malcolm Turnbull argued at the time that speeds would be adequate with a mix of antennas, satellites and fibre to the node, which is basically a junction point on a street. Labor’s original project was to deliver fibre to the home. The report says, ‘The decision to deliver the NBN through a multi-technology mix was a policy shift that occurred with the election of the coalition government in 2013. Prior to that, NBN was rolling out a fixed-line network using fibre-to-thepremises technology.’ The recommendations are to complete as much as possible of the remaining fixed-line network using fibre to the curb/ kerb (FTTC) at a minimum, or fibre to the premises (FTTP). Additionally NBN should be required ‘to produce a costed plan and timetable under which that would be achieved.’ An independent audit and assessment of the long-term assumptions underpinning NBN’s financial projections and business case is also recommended. In reply, the peak body representing the interests of internet users said they ‘applauded the work of the Joint Standing Committee on the NBN.’ Internet Australia’s executive director Laurie Patton said, ‘The way we’re heading now, whoever is in office in 2020 will have to deal with our biggest ever national infrastructure debacle. NBN Co will owe the government circa $19 billion, which it is having to borrow to complete the rollout, and within five to ten years will have to fund an expensive replacement of FTTN. No-one seems to know how many billions this will cost. It’s not provided for in the NBN Co business plan.’ ‘The Joint Standing Committee is correct. We need to abandon the FTTN rollout immediately.’ The NBN project – one of Australia’s most ambitious and biggest infrastructure rollouts – illustrates that the Liberal/Nationals are no better economic managers than Labor. In this case, it appears a lot worse. Unfortunately Labor have not committed to reversing the terrible mistakes that thencommunications minister Malcolm Turnbull made, claiming it would be too costly. The egg has well and truly been scrambled on this one. Hans Lovejoy, editor News tips are welcome: editor@echo.net.au
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ell it was not exactly watertight – or perhaps gastight. The deal which Malcolm Turnbull announced last week after yet another talkfest with the major gas suppliers ended with a lot of reassurances (from our prime minister, at least) but nothing that could be described as a binding commitment. The three big exporters – Shell, Origin and Santos – agreed that they would reserve some supplies for domestic users over the next two Australian summers to offset what may or may not become serious shortfalls for a couple of years. The idea, apparently, is that they will hold some of the gas they had hoped to sell on the spot market – their existing contracts for gas exports are apparently already locked in. This will be then made available for the gas retailers to purchase at, presumably, whatever price the market will bear. Which is one of the many catches in what Turnbull now claims as a breakthrough, although it sounded suspiciously like a similar meeting with the same players some months ago. The idea then, and now, was that unless the gas moguls could be persuaded to play ball, the government would take out the big stick: it would legislate for compliance, so the moguls would do better to cop it sweet. And obviously, after considerable arm twisting, and after getting the best advice possible from their well resourced lawyers and accountants, they agreed – well, up to a point. So they will swear, hand on wallet, that if there are to be blackouts in the coming months, they will not be their fault. Which leads to the ques-
tion: If the worst happens and there are blackouts, whose fault will it be? Turnbull, of course, has the answer – or, rather, the answers: it’s Bill Shorten and the Labor Party – they may have left office four years ago, and the coalition government has done bugger all to fix the problems since, but blame Blackout Bill. Or blame the states, or renewables, or the rapacious power companies, but don’t blame us.
But in one sense, that is the easy bit. Most consumers do not lay awake at nights worrying that the lights will go out or the stove will run out. They assume that the supply will be more or less reliable and if there are occasional outages, they will be repaired quickly and efficiently. They will whinge if they are not – let’s face it, they will whinge in any case, and they will whinge more if they feel
Newspolls will roll on towards the final third of their journey towards Turnbull’s fateful 30th failure by Mungo MacCallum But this formula was looking pretty threadbare even before last week, and now it has been blown away entirely, because Turnbull has given an assurance, a guarantee, a solemn promise: he has solved the impasse. So now he owns the solution he has brokered, and if anything goes wrong he will be held responsible. And this will apply even if it is the kind of unforseen and unforeseeable weather events that paralysed South Australia’s grid all those months ago. Turnbull still likes to claim the blackout was caused by the negligence of the state government and the reckless reliance on renewables – which was in fact a very minor part of the reason for the blackout, but so what. The point is that he has no excuses left, which was always going to be the case anyway. Having declared it an emergency, a crisis, he has run out of options: having claimed to have resolved it, he now has to deliver.
that Turnbull has, yet again, let them down. But the blackouts our prime minister has been harping on about are an aberration. What is inevitable, the bit they really resent, is the regular accounts, which rise constantly, apparently regardless of anything governments, federal or state, are able to do. Turnbull proclaims the three pillars of reliability, sustainability and affordability, but while the first has been on hold more or less indefinitely while the coalition party rooms sort out their differences and he has declared victory on the second, the third – the elephant that arrives in the letterbox every month or so – remains intractable. Turnbull has admitted this, which is why he has now abandoned his free-enterprise mantra extolling the need for government intervention on almost every level. So he snarls at AGL and its CEO Andy Vesey for their perfectly rational decision to wind down the ancient
and unreliable Liddell plant and relace it with something more modern and efficient – and, of course, profitable. But it is not just AGL: it is the whole industry. So when Shell, Origin and Santos sit down to work out how to pay for the ultimatum Turnbull has demanded, they are not likely to make their first priority finding ways to lose money. And there is no reason why they should: if they are simply going to switch their gas reserves from export to domestic sales, it should not cost them anything. In fact, they may make a small margin on the deal, in spite of the ballyhoo about transparency that Turnbull hopes will bring in a brave new world of competition. What is almost certain is that retail prices will not go down, and this means that the consumers’ hip-pocket nerves will not be assuaged, and that means that the politics of the situation are unlikely to improve in spite of last week’s announcement, and that means that the disastrous Newspolls will roll on towards the final third of their journey towards Turnbull’s fateful 30th failure. Once again Turnbull has found an answer – at least a sort of one, assuming everything goes according to plan – but it is not the answer to the question the voters are asking: When are we going to get some relief from soaring prices and stagnant wages? And when are you, the leader we endorsed so enthusiastically more than two years ago, going to stop complaining that it is all everyone else’s fault and face up to the fact that the buck – our buck as well as yours – stops here? Making deals is all very well, but if they aren’t the right deals, you have to ask what’s the point.
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12 October 4, 2017 The Byron Shire Echo
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