JOINT MEDIA RELEASE
SENATOR HON MATHIAS CORMANN
MINISTER FOR FINANCE
24 November 2016
Bill Shorten’s attempt today to distort well-known facts about nbn’s rollout progress and financing arrangements simply flies in the face of reality.
Under the Coalition, the NBN is on schedule, ahead of its revenue forecasts and has met or exceeded its key rollout targets across two financial years.
The nbn half-way point is approaching. To date there are 3.46 million premises able to access an nbn service, and more than 1.5 million paying customers. By mid-2017 the rollout is forecast to reach 5.4 million, or around 50 per cent of all homes and businesses.
As first announced in December 2013, the Australian Government’s equity available to nbn remains capped at $29.5 billion. It was always clear that the nbn would be financed by a combination of equity and debt.
In successive Corporate Plans nbn has indicated that debt would be required to fund the rollout from 2018 and nbn provisioned for this debt and the interest.
As announced last week, the additional $19.5 billion will be in the form of a short-term Government loan facility on commercial terms.
The peak funding estimate for the project continues to be estimated at between $46 billion and $54 billion with a base case of $49 billion.
A government loan on commercial terms represents the most cost effective way to raise the debt and secure funding to complete the rollout of this important national infrastructure project.
nbn could raise the debt privately based on its indicative credit rating. However the Government has decided to provide nbn with a loan facility on commercial terms as the Government can borrow at a lower rate, which will save taxpayers substantial amounts in interest payments to banks and other lenders
This loan will be re-financed by nbn on external markets in 2020-21.
Labor is clueless about even the most basic financing details for this project, including the difference between equity and debt.
Unlike Labor, who took a ‘blank cheque’ approach to their gold-plated broadband policy, the Government and nbn remain focussed on keeping the rollout as efficient and affordable for consumers as possible.