13 June 2016
E&EO
LAURA JAYES:
Mitch Fifield, Labor’s plan says they will rollout 2 million more premises to fibre in your timetable and a billion dollars extra?
MITCH FIFIELD:
Labor’s policy today is based on two great deceits Laura. The first is, they will finish the NBN on the same timetable as the Coalition. But they won’t. Our timetable is to complete the NBN by 2020. Labor’s timetable is to complete it two years later at 2022. So they want two million Australians to wait at least two years longer to get the NBN, compared to the Coalition. The second great deceit at the heart of Labor’s announcement today is that their approach will cost only a billion more than that of the Coalition. Now Labor say that their approach will cost $57 billion, and that’s a billion more than the Coalition. Only problem with that is, that’s not correct. NBN’s Corporate Plan has a peak funding requirement and target of $49 billion. So Labor’s proposition is $8 billion more than what would be the case under the Coalition. So apart from the fact that they’re lying in terms of the rollout, they’ll take two years longer than us. And apart from the fact they’re fibbing in relation to the cost, it’ll be $8 billion extra, at least, rather one billion. You do have to wonder about a Party, the alternative Government, who can’t even talk straight to the Australian people when it comes to the time frame and the cost of their NBN plan.
LAURA JAYES:
But Labor say there are operating savings of $60 million dollars a year through not have to power the nodes of Fibre-To-The-Node?
MITCH FIFIELD:
Well, let’s take at face value, I’m feeling generous today, what Labor says $60 million a year less cost, in terms of power for Fibre-To-The-Node versus Fibre-To-The-Premises. Even if that’s correct, it’s a long way to go from $60 million a year in saving in one aspect to cover the costs of $8 billion extra in expenditure. The other thing that Labor say is “oh look, if we provide faster speeds, there’ll be masses of more people who’ll come onto NBN; and that NBN will therefore have higher revenues. Well the experience to date is 83 per cent of the people who are currently connected to the NBN, are opting for speeds of 25 megabits-per-second or less. So there are some very heroic assumptions based in Labor’s policy. But look, the straightforward truth-of-the-matter is, even if we take Labor’s costings at face value, what they’re talking about is a roll out that will cost $8 billion a year more.
LAURA JAYES:
Explain the $57 billion and why that’s not a billion more than you would spend?
MITCH FIFIELD:
Labor say that they will deliver the NBN for a billion dollars more than the Coalition. They say that the Coalition will deliver the NBN at $56 billion. And they say they can do it for $57 billion; so that’s only a billion dollars more. But NBN’s Corporate Plan, while it has a range within which NBN will look to deliver, in NBN’s Corporate Plan the target is to deliver the NBN for $49 billion. So Labor are doing a sort-of ‘pea-and-thimble’ trick and hoping that no one notices the difference between the one billion that they’re saying that will cost extra under their plan, it’s actually $8 billion.
LAURA JAYES:
So the NBN is hoping that it can deliver at a cheaper cost but Mitch Fifield the goal posts have constantly moved on the cost and rollout of the NBN plan, I know it’s a huge project, but how can you expect voters to believe that it will come in at the cheaper end?
Isn’t it true that the Coalition in 2013 pledged that it was going to be 25 megabits per second and a total cost of $29.5 billion, and to be completed by the end of this year? That’s a four year delay and a doubling of cost even under you.
MITCH FIFIELD:
Well in Opposition in 2013, we were operating on the best available information that was available to the Opposition. When we came into government we discovered a few things. One was that NBN, as an organisation, and the Labor Government didn’t know what the delivery of the NBN was actually costing. It turned out that Fibre-To-The-Premises to deliver that, house-by-house, business-by-business, was actually costing twice what the previous Government thought. They didn’t even have a clue what the rollout of the NBN was costing. Also NBN under Labor, missed their 2013 rollout target by 83 per cent that’s a million premises. They’d only connected 51,000 paying customers. And just by way of contrast, in the last month alone, we signed up 61,000 paying customers. So it was a state of absolute disarray, and we’ve put it back on track.
LAURA JAYES:
Well the Coalition has been in government for three years, you’ve been a Minister for a fraction of that time, overseeing this project. So you’re saying now, under the Government’s assumptions there will be no more changes. So this will be a running cost, you’re saying $48 billion and will be completed by 2020. Should we expect that not to change from here on in?
MITCH FIFIELD:
There’s reason to have confidence that $49 billion is the peak funding, and that 2020 is achievable and on track for the completion of the NBN nationwide. Look when Malcolm Turnbull became the Minister for Communications, he brought order to bear where there was chaos. In four states, NBN’s contractors had downed tools. So since we’ve come into office, we’ve gone from 51,000 paying NBN customers to a million paying customers. We’re now at a situation where we’ve got 2.6 million premises nationwide, who can access the NBN very close to a quarter. By about this time next year, we’ll have half the nation will be able to access the NBN.
LAURA JAYES:
Ok Minister, I understand that, and I understand the scale of this project. But now, you’re confident of the assumptions that NBN Co has in place, I mean we’re talking to a cynical electorate here, who’ve seen the goal posts move constantly. So can you guarantee the running costs rolling this out won’t go above $48 billion and will be completed in 2020?
MITCH FIFIELD:
Laura, one of the best predictors of future behavior is past behavior. NBN have hit every milestone over the last eight quarters. They’re on track this financial year for their Corporate Plan target for revenue and also expenditure. So NBN has been hitting its milestones. And that really is in contrast to the situation under our predecessors.
LAURA JAYES:
Ok, one thing that does seem curious as well as a Government driving this strong innovation agenda but many experts argue that you’re running this agenda with last century technology. Those two things seem a bit at odds with each other.
MITCH FIFIELD:
Well we’re not pursuing a last century approach. What we’re doing is taking a ‘multi-technology mix’ approach. The mandate to NBN is: use the technology that will see the NBN rolled out fastest and at lowest cost. So we’re using fibre-to- the-premises, we’re using fibre-to-the-node, we’re using fixed wireless, we’re using satellite, we’re using the HFC/Pay TV cable. By using new technologies, but also existing technologies in part, we see the NBN rolled out sooner, and at less cost than our opponents want to do. And they’ve confirmed that today, by saying that their approach will take two years longer, at least, and cost $8 billion more. Now one of the benefits of the NBN is getting it to the whole nation sooner. You start to get the macro-economic networking benefits of the NBN, if the whole nation has it sooner. That’s our objective and we’re on track to do it by 2020.
LAURA JAYES:
But Minister, do you still think though copper really is the way of the future here?
MITCH FIFIELD:
Well look, we’re only using copper for the last link to some premises and also between the pillar and the node – to get technical. So you’ve only got a fairly limited use of copper when it comes to each premises…
LAURA JAYES:
But it affects the running of the overall speed of the network doesn’t it?
MITCH FIFIELD:
Well with Fibre-To-The-Node you can get speeds of up to 100 megabits-per-second, which is super-fast. On average, the download speeds on Fibre-To-The-Node are about 70 megabits-per-second. And our undertaking is that 90 per cent of people on the fixed line footprint will have speeds of 50 megabits-per-second. These are good speeds. And what we’ve found as I think I said before is 83 per cent of people who are NBN customers are opting for speeds of 25 megabits-per-second or less. So we’re delivering for Australian consumers what it is they want. And we’re doing it sooner and at less cost than Labor.
LAURA JAYES:
Are other countries still rolling out part-copper networks? Or is Australia alone in this sense?
MITCH FIFIELD:
Look, we’re using, we’re not rolling out the copper network. What we’re doing is availing ourselves of the copper that’s there. And we’re putting a little bit extra, to link up the node to the pillar. But look throughout the world, the approach is a multi-technology mix. Stephen Conroy took a theological approach to the NBN. It was all fibre, regardless of the cost, regardless of how long it took. We’re taking a technology-agnostic approach. Using what is there. Using new technology to provide super-fast broadband to Australians, faster and at less cost than what Labor are proposing. And I think that’s a good story.
LAURA JAYES:
Alright, Communications Minister Mitch Fifield thank you for your time.
MITCH FIFIELD:
Good to be with you Laura.
[ends]