Treasury claims $900m Coalition NBN shortfall

By Ry Crozier on Sep 2, 2010 2:07 PM
Filed under Telco/ISP

Difference of opinion.

The Coalition's promised savings from scrapping the National Broadband Network were $900 million out over four years, a Treasury analysis claimed.

Independent MP Rob Oakeshott posted on his website overnight the costing analyses of Labor and the Coalition's election promises that were prepared by Treasury.

They were handed to Oakeshott and the other independents by Treasury head Ken Henry in meetings that wrapped up last night.

Members of the Coalition put costing variances down to "differences in opinion with Treasury" in various interviews with the press today.

The Coalition had previously said that scrapping the NBN would save $2.44 billion over the next four years because the Government wouldn't be paying interest on borrowings to fund the network.

But the Treasury analysis claimed there needed to be a "reduction of $900 million over four years to public debt interest savings from reversing the ALP's policy to build the NBN" in the Coalition's costing projections.

The costing difference was reportedly due to the interest rate used in the respective calculations, Coalition finance spokesman Andrew Robb told a press conference in Canberra today.

The Coalition used a 5.5 percent rate; Treasury used 4.9 percent, Robb said.

That was supported by an official Coalition statement: "Several of the differences in the Coalition's and Departments' costings reflect different models and data," it said.

Coalition treasury spokesman Joe Hockey told ABC Radio's AM program today that the Coalition had a "difference of opinion with Treasury over nine or ten different policy" costings.

Hockey said the Coalition was "entitled to have a difference of opinion" but said it "emphatically" stood by its polices and numbers.

"Where there is a difference of opinion, the Treasury - as it states in its letter to us - had facts and figures that we did not have available and the public didn't have available so we had to use best endeavours to get our numbers," Hockey said.

"We stand by our numbers".

Hockey said the Coalition had attempted to explain the costing differences with Oakeshott and Queensland independent Bob Katter. Other independents had not been contactable, he said.

Treasury claims $900m Coalition NBN shortfall

6 comments in this discussion

"@RB Im sure we can squeeze in an investment which will actually return much greater benefits to the economy than the $650 billion which is allocated to Welfare payments in the budget..."

By ptconsult

Tags

treasury, analysis, independents, coalition, costings, nbn, 900, million, shortfall

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Comments: 6

rodzilla666 Sep 2, 2010 3:59 PM	Now the worm-wriggling starts! :)
RB Sep 2, 2010 4:43 PM	Surely this is not the real issue to be considered here! We have 2 policies, one costs $43 billion the other $6 billion. Forget about how much "interest" is saved by one over the other ... what about the debt? Surely the debt is the real issue. And, by Mr Quigley's admission, the NBN network will never recover that debt. If Australia had the money to afford the NBN then the debate would be quite different. But it doesn't. The money needs to be borrowed. AND, it is so much money that it will cost somewhere between $1.5 and $2.4 billion just over the next 4 years in interest. So for my family that's about $500 just for the interest! And there's a good chance I won't even get connected in that time. Wake up Australia. We all want the NBN but we can't afford it. PS. Wake up Treasury. Deposit rates are paying 6%. What makes you think you can borrow for 4.9%?
Ace Sep 2, 2010 5:26 PM	Um @RB, they're not borrowing from Westpac.
ITnovice Sep 2, 2010 9:26 PM	'And, by Mr Quigley's admission, the NBN network will never recover that debt.' - That is not what i read. '...What makes you think you can borrow for 4.9%?' - Um...They are a Government, they have access to finance ordinary people cannot access. 'Wake up Australia. We all want the NBN but we can't afford it.' - That is a matter of opinion, some would say we cannot afford not to build it (given the benefits and potential it has). Without the NBN IPTV and the cloud (just to name a few) will not be a viable option in many areas of Australia.
den Sep 2, 2010 9:42 PM	I am on ADSL1 plan because I am sitting on a RIM. I also have a VPN so I can connect to home from work, now my max upload speed is 256K so if I try and get a 1M document it will take a minimum of 40 seconds and typically takes over a minute. With NBN it will be as fast as if I am connected directly to my network. Also backups over the internet become usabel. I also have a '3' wireless connected to my notebook for work and in spite of 'connecting' at 7.2Mbps the average speed I achieve is more link 256Kbps and drops out a couple of times per day. This is the sort of things I want NBN for. Also my ADSL1 plan costs twice what a ADSL2 plan would cost and I don't see any improvement for a long time.
ptconsult Sep 2, 2010 10:00 PM	@RB Im sure we can squeeze in an investment which will actually return much greater benefits to the economy than the $650 billion which is allocated to Welfare payments in the budget...