Deal on NBN to Cost More?

The Prime Minister promised to roll out the $43 billion NBN to regional areas first as part of a deal to secure the support of two independents needed to form a minority government.

But opposition finance spokesman Andrew Robb warned yesterday that rolling out the NBN to the bush before lucrative metropolitan markets could jeopardise the project’s economic case.

“The NBN business plan was to minimise the cost of the rollout and keep the maximum public exposure to $26bn by first attaining a critical mass in the cities that would allow them to generate revenues to assist the regional rollout, but now that whole thinking has been turned on its head,” Mr Robb told The Australian.

Mr Robb’s concerns about the cost of bringing the NBN to rural Australia were echoed in the northern NSW seat of New England, held by Tony Windsor.

Tamworth dairy farmer Karrie Whitten said she couldn’t make sense of the $43bn spend, saying that there were other more pressing priorities, including improving the patchy mobile phone coverage, fixing the potholes in the roads and getting better access to doctors and hospitals.

But she was most puzzled by the fact that her family home, like most of the households in the area, already had access to high-speed wireless internet, for $40 a month.

“I just don’t understand why the government would be spending such a massive amount when there are so many other things the money could be used for,” Ms Whitten said yesterday.

Read the full story in “The Australian”  This is a very good article and well worth the read.

Revenue and Costs. So the way Labor had planned, get the NBN rolled out in the cities, get people hooked up, the people start paying,(?) and then when enough money was generated, start to roll out again, this they figured would take 8 years. I would love to see the paper work on this. Cost of the NBN Labor said would be around $43 Billion that means it’s about $2,000 for every man, women and child, before operational costs. I’m not sure if that actually goes to your front door, or past the houses. A lot of houses on farms are anything from 1km + from the actual road. Joyce has said, that in Tasmania, the NBN has so far cost around $37Million, for 70 households, which is approx $500,000 per household. If this is true it’s going to cost a lot more than Labor is letting on.
Because this NBN is not actually costed, we really don’t know what the money figure will be.
There are a lot of people that can’t get broadband at the moment, not just rural but also in some new suburbs, there needs to be some new towers put in I feel, so at least these people can get access now not in 8 years time, but I really don’t think this NBN is going to happen, I can see huge blow outs with this that Australia just can’t afford.

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12 Responses to Deal on NBN to Cost More?

  1. bingbing says:

    If it really does go ahead, there’s no way it’ll cost only $43 billion. The BER has proved this to be the case. And anyway, Intel and Samsung are working on a wireless device that would far better suit the bush (or pretty much anywhere for that matter) and would be far cheaper. It’d work using existing mobile phone towers, thus, it’s those towers which really need the attention.

    • magsx2 says:

      Hi bingbing,
      (Thank You very much for your comment.)
      I also think it will cost a lot more than the $43Billion. I saw the BER again in the paper today, that also is a never ending money pit.
      That’s good news about Intel and Samsung, and I believe it should be left up to Company’s like this, as they know exactly what they are doing.
      I believe Tony Abbott’s plan was to put in more towers for this to be achieved, and I think it is the best way to go.

      • bingbing says:

        Agreed, although you’d think if Samsung and Intel wanted to make a buck, they’d invest in more and better towers themselves. I’m pretty sure it’s private enterprise that has put them all up in the past.

        Just why does government on either side need to be involved in this?

      • bingbing says:

        PS You’re welcome. It’s a good blog. Sorry about leaving the italics on.

  2. bingbing says:

    Cost of the NBN Labor said would be around $43 Billion that means it’s about $2,000 for every man, women and child, before operational costs.

    But only about half of the population (if that) actually pays any tax, so we can up that $2000 to around $4000.

    • magsx2 says:

      Hi bingbing,
      Yes that is a very good question. Why hasn’t private enterprise put in more towers. You know that there are some National Park areas in all parts of Australia, (more in NSW) that have towers. You can go camping in the middle of nowhere and still use the Internet, I don’t know who originally paid for these towers but they must be a godsend to a lot of the people that live around these areas, and especially to Park Rangers for communication.
      It just makes you wonder why the same can’t be done in some other rural areas.

      Of course you are right about the cost, it would be a lot more when you only include the workers. But like everything Labor does, I believe this project also will blow out, and I wouldn’t at all be surprised if it ended up costing double the amount.

      Very nice of you say you like the blog, Thank You.

  3. Gregoryno6 says:

    That this plan was originally costed at a mere $7 billion three years ago. I’m tempted to extrapolate from there but the number would be larger than I could comprehend.
    MSM were quick to blare about the hole Treasury discovered in Liberal numbers, but this impending trainwreck was apparently not even on the whoring threesome’s list for examination.

    • magsx2 says:

      Hi Gregoryno6,
      You are so right there, the media jumped very hard, yet the uncosted NBN was hardly mentioned at all. Yes I remember the $7Billion in the 2007 election, did you notice that the Labor policies were not much different than the original in 2007.

      • gregoryno6 says:

        Indeed, more of the same. We even had Jooolya saying “I’m not Kevin Rudd” to echo Kevin Rudd saying “I’m not John Howard.” And now the man who led the government that lost its way is the new Foreign Minister. Perhaps Joolya’s praying for a plane crash somewhere in Africa, conveniently near a tribe of ferocious cannibals.
        More ferocious than the ALP might be a tough ask.

  4. magsx2 says:

    Hi gregoryno6,
    I read about Rudd getting the Foreign Ministers job. Just ridiculous. Rudd made a mess of a lot of Australia’s relationships with some overseas Country’s. One minute the Labor Party sack him from his PM position for being incompetent, then they give him a job in a high position, the mind boggles.

  5. bingbing says:

    No worries. Wong’s in Finance.

    For the Canberra reaction, be sure to check out MarkL’s comments at Blairs blog, namely – for now- the Kevni’s World thread a bit down the page.

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