GLOVER: The NBN has put out its new financial plan. It does seem as if the taxpayers going to have to chip in a bit more money than we thought.
WONG: Theres been an increase in the amount of Government equity, but theres also going to be an increase in what we call the rate of return. Thats the amount of money the taxpayer gets back at the end of this project. And of course, what the plan does show today is that were on track to deliver broadband across the country. Thats a good thing for the economy and a good thing for the community.
GLOVER: OK, well go to the positives in a moment, but if I can stay with the negatives for just a minute, why is it suddenly costing us $3 billion more?
WONG: A range of reasons. One of them is the nature of the arrangements with Telstra and with Optus. That obviously means a bit more upfront expenditure. But in the long-term it means more customers on NBN, and thats why you see a better return to taxpayers
GLOVER: I mean, essentially were giving $800 million to the Government of Singapore.
WONG: We are entering into arrangements which ensure that people migrate to the NBN and that we get a proper broadband network across the country thats open access and available to retail companies across the board. So thats a good thing for competition
GLOVER: OK, but why didnt we know it would cost this much when we first did the sums?
WONG: Those agreements were only finalised after the last Corporate Plan. But lets remember, since the last Corporate Plan that we put out weve had the agreements finalised with Telstra, the agreements finalised with Optus. Weve also had the ACCC tick-off on those agreements. So theres a lot of work thats being done, and this plan obviously is based on those agreements. And also the costs of the actual contracts, in terms of construction.
GLOVER: They also seem to be going a little slowly, Minister. Theyre six months longer than forecast to build the thing. Why is that?
WONG: We had about a nine month delay on finalising the agreement with Telstra, which obviously was critical, because if we didnt have that then we didnt get the structural separation of Telstra. That was needed, not just for the NBN, but for the benefit of the whole telecommunications sector. So in fact I think a six month delay, given we had a nine month delay on that agreement, is probably not a bad result.
GLOVER: They are forecasting that revenues will be up and that theyll perhaps come in a little earlier. To some extent that seems to be based on the fact that some of the early people who are buying into the NBN who are subscribing, are subscribing to higher-value services than we expected. And I wonder if thats simply because by definition theyre early adopters, and whether that percentage will be maintained once its rolled out more generally to the community.
WONG: Richard I hope theres also a glass half full way of looking at it, which is this: if you look at the trend over time for Australians in terms of our need for data and our take-up of products which enable us to transmit and receive more data then youll see that in fact NBNs plan is probably pretty conservative. The reality is were pretty thirsty for bandwidth, as a community and as an economy. And thats why this is the infrastructure of the 21^st century.
GLOVER: I dont think theres anybody saying that we shouldnt have some sort of system, what the Opposition
WONG: I suspect
GLOVER: What the Opposition is sorry, go on.
WONG: I suspect there are some people saying that. But I always look at it this way, we took many decades to build the copper network, and its served us well, but I dont think anybody could reasonably say that its an infrastructure that will serve us well this century. And we know the private sector wouldnt build this sort of network, because it didnt. It would demand a far greater rate of return. And if we think we need broadband across the country then weve got to have the project that the Government is building.
GLOVER: I guess Malcolm Turnbulls point is that, why do we need a Rolls-Royce when a sturdy Commodore might be able to do the job at a lot cheaper price?
WONG: I await the Opposition actually releasing anything on this and telling people how theyd fund it, and how theyd build it, and how they say it would be made cheaper.
I think it absolutely stacks up if you look at the plan. It demonstrates theres a good rate of return for taxpayers. And I think the reality is we know that from past experience what happened in the years before the Labor Government that we didnt have the sort of telecommunications infrastructure the country needs.
GLOVER: OK, but in a tight budgetary situation every time you throw $2.3 billion into anybodys hat youve got to find that somewhere. This is a big sting to public finances, isnt it?
WONG: This is an equity investment on behalf of the taxpayer over many years. And it is a big project, and its a project that we have to be very careful about. But it is a project that spans many years because its a project across the nation.
So, this is also one of the most scrutinised projects around. I mean, if you consider what weve just released today, this Corporate Plan, we dont generally release the corporate plans of Government Business Enterprises. But given the public interest in this, we have released it, and its a report that Im sure will be scrutinised by many, as have the many other reports that have been undertaken into the NBN.
GLOVER: And for the people who are listening in, mostly urban Sydney, when can they expect to have the chance to subscribe to this and to see whether all the promises arewhether its worth the money, basically?
WONG: Thats a good question. We anticipate to have commenced or completed connections for about 750,000 premises by the end of this year, about 3.5 million by the end of 2015. Obviously its a project across the country, it does take some years to build, but were on track, as the Corporate Plan today shows.
GLOVER: OK Penny Wong, thank you for your time this afternoon.
WONG: Good to speak with you.
ENDS