Samuel seeks distance from cost-benefit debate

 

Sits firmly back on the fence.

ACCC chairman Graeme Samuel today denied that he had ever rubbished the case for a cost-benefit analysis for the NBN, but was careful to stop short of suggesting the opposite was true.

Samuel told a Senate Estimates committee hearing today that reports of his alleged comments on the cost-benefit analysis were "frustrating and bewildering".

"I want to make it clear what I said.

"I did not say I thought a cost-benefit analysis was not needed," he said.

"I did not go on to say that one was needed."

Samuel then rebuffed attempts by senators to state his position on the issue.

"I don't want to enter a political debate after being dragged into it by giving an innocent interview [to Business Spectator]," Samuel said.

Samuel said his comments were aimed at the business community, not parliament - where they ended up as fuel for the political firestorm around the national broadband network.

He tabled a lengthy clarification statement that he asked to be read into Hansard.

Samuel said his remarks were aimed at addressing "confusion in the business community between the need for the establishment of a business case - which is a private cost-benefit analysis - and on the other hand a social cost-benefit analysis.

"There is a difference between the business case that [NBN Co chief Mike] Quigley is finalising and the social cost-benefit analysis, which is a separate issue," he said.

"All I observed was that a social cost-benefit analysis for a project such as [the NBN] is very complex indeed."

Samuel said there were "two additional elements amongst a range of others" that separated a social cost-benefit analysis from a business case.

He said that one was the factoring in of "social investment" that catered to the "enormous geographic spread" of Australia's population and the "significant contribution that rural and regional Australians make to the social fabric of our country."

Samuel said this social investment - common in large-scale infrastructure projects in Australia - "wouldn't satisfy a business case in the commercial sense of the word."

The other complicating factor was a number of assumptions that he felt had to be made in a social cost-benefit analysis around the "ultimate social benefits that will flow from a particular project."

Samuel said that the fast pace of broadband technology made the formulation of those assumptions difficult.

"I defy anyone to give a prognosis as to the benefits that will flow from high-speed broadband networks," he said.

"It is very difficult to go out five years let alone the 50-to-60 year [lifespan] of the project concerned."

Samuel also warned that "playing around" with assumptions in a cost-benefit analysis could lead to "high-level skepticism" over its conclusions.

The cost-benefit analysis issue was planted firmly back on the agenda by Opposition communications spokesman Malcolm Turnbull this week when he introduced a private members bill to parliament seeking to force the project to be analysed by the Productivity Commission.

If the Coalition was able to get backing for the proposal from other parties and independents, such a process could take from seven months (Coalition estimate) to several years (according to comments by Communications Minister Stephen Conroy in Senate Estimates).

The Government has, meanwhile, re-introduced draft legislation attempting to shore up competition and regulatory frameworks ahead of the full rollout of the NBN.

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