ABC Newsradio drive with Steve Chase - 20/12/2010

20 December 2010

JOURNALIST: Senator Wong is with us now. Thanks for being with us.
WONG: Good to be with you.
JOURNALIST: Now there has been, as you know some criticism about the plan. But in your heart of hearts, do you think the Governments got it right?
WONG: Look this is such an important piece of nation building infrastructure. This is about providing broadband across the nation. Broadband that is financially viable and at an affordable price for Australians. It is the infrastructure for the 21st century. What weve seen today is a business plan which shows it is financially viable, that we can fund this. Government can make an investment in this and get its money back. It is financially viable but its also about providing broadband for Australians across this vast land.
JOURNALIST: Now you are the Finance Minister, do you concede, I was speaking to an IT group who conceded to me a few months ago that the problem is in selling this to people who are pretty happy with their broadband plan. And theres another criticism, another dimension to this criticism that youre spending $27 billion of taxpayers money on something for the future whereas that money they save could be better spent on education, health, transport?
WONG: The first point Id make is what the business plan demonstrates, which is the $27 billion is investment in an income earning asset. That is, the National Broadband Network will return to the taxpayer at a rate of in excess of 7 per cent over the period of the project. So this is investment in an asset which does generate a return. Thats before you factor in all the broader economic and social benefits of having broadband across the nation.
The second point Id make is in relation to what you said, that some people are satisfied with the broadband they are getting now. There are many Australians who would like far better broadband services than they get.
We also know historically over the last ten years, what we have seen is Australians wanting more services, more capacity. What we know with some of the services that we want to build, whether they are in health or education for example, require broadband with a far greater reach than we have now.
So this is an investment in what is very important infrastructure, weve been very careful about considering the financial case. And what we put out today is a very detailed outline of the way in which this project will work and the financials. There is far more disclosure about this project than probably any other major infrastructure project in recent times.
JOURNALIST: With respect, Senator Wong, I havent noticed people storming the barricades in Canberra to get faster broadband speeds, to download a movie faster. You have a selling problem. Youve got to go out and sell
WONG: Look, what we say is this, that broadband is the infrastructure of this century. And just as we think about the railways, we think about the Snowy Mountain Hydro Scheme, but perhaps more importantly, we think about the money that the nation invested in the post war period, to put in place the copper network. This is the next investment. I dont think anybody suggests that we can simply rely on the infrastructure, the telecommunications infrastructure we have now. We do need to shift up. And what weve released today is a business plan which shows that we can invest taxpayers money, we can generate a rate of return. And that is before we even look at the broader benefits to Australians of having fast, reliable broadband across the country.
JOURNALIST: Well, youve released today the business plan. You say the taxpayers are going to get their money back. But I still put it to you again, that youve got a big job to sell to the people, something, what youre planning is something that they actually need. In all the opinion polls that Ive seen, people dont actually rate faster broadband that highly. Its rated highly but not higher than say greater health care, greater education services, etc.
WONG: Obviously health and education are important, thats why this Government is investing in health and education. But were also investing in broadband because we think its the right thing to do. Its the right thing, not just for today, but in the years to come for Australia.
We know that a range of studies by Access Economics, by international organisations, have shown the productivity and economic benefits to a nation from increasing broadband penetration. We know that we lag many other countries when it comes to both access to services and the quality of those services. We know also that increasingly we want to be able to use broadband for health and education services. Its one of the ways in which we can increasingly modernise our health and education system. Its an important platform.
JOURNALIST: One of the other things predicted by the business plan today is that its going to take nine and a half years to build. And you estimate the standard internet package will cost between $50 to $60 a month. In fact, your colleague Senator Conroy says he can guarantee that the prices will be competitive. Youre the Finance Minister, youre not going to overrule him on that are you?
WONG: The business plan itself says that we anticipate wholesale prices, both in real and nominal terms - that is the actual numbers but also what proportion peoples pay packets go towards them - will fall over time. The company has put forward a business plan that says here is our basic offering, thats the one youve been quoting which is 12mbps would be around $24 per month at a wholesale price. Now that is a much better product, if you look at what the capacity is per month and the speeds than many, then most products on the market. Most importantly it will be a product available across the country, so thats a very significant difference to what we have today.
JOURNALIST: The Opposition is naturally not happy with the business plan. They say it is no cheaper, these prices were talking about than comparable broadband services today. So why bother?
WONG: I dont think theyre right if you think about this across the country. Remember, were talking about a National Broadband Network. So were talking about something which provides services across Australia, not just in one busy part of Sydney but being able to link regional Australia, and different parts of Australia with each other and with the world.
Second, I just would make the point that this is the basic offering, the 12mbps. Lets remember many of the speeds which are currently advertised out there, Im talking about maximum speeds not actual speeds or average speeds. And I think all of us at different times would know that regrettably there are services that operate less quickly sometimes than we think that they should.
JOURNALIST: Senator Wong, thanks for being with us this afternoon.
WONG: Good to speak with you.
ENDS