Government savages Liberal plans to scrap the NBN

The Federal Government has rounded on Liberal opposition leader Tony Abbott (pictured) after he announced plans to abandon the building of the National Broadband Network should the Coalition return to power in the Federal election.

Abbott's office has confirmed that he told the The Daily Telegraph the first thing to go in the Coalition's plans to slash public spending by $10 billion would be the $43 billion National Broadband Network (NBN).

While refusing to specify what will go, Abbott was quoted as saying that "if you want to cut spending, look at the NBN".

"Not proceeding with it could save billions of dollars," he told the Telegraph.

It provoked a swift response from Communications Minister Senator Stephen Conroy, who said that Abbott's plans to stop building the NBN would place the country's economic future in jeopardy.

"The NBN is crucial economic infrastructure," Senator Conroy said. "Without it, Australian companies will not be able to compete with the likes of Japan, Korea or Singapore."

He added that scrapping the NBN would also threaten the estimated 25,000 jobs that will be supported every year of the NBN rollout.

Labor Senator Kate Lundy said Abbott's announcement was "quite shocking to everyone associated with IT and telecommunications".

"Up until now [the Coalition has] obfuscated in the Senate, but now they've made the statement that they would not proceed with the construction of the NBN," Lundy said.

She countered the Coalition's argument that the NBN should be funded by private enterprise rather than the taxpayer.

"First of all, it was clear that private enterprise was not funding it," she said. "The private sector was unable to realise the raft of additional benefits to the economy and society that a public investment in the network can make," she said, adding that the conditions attached to private investment would "depress competition at the retail end of the market".

Lundy also quoted Telstra executives as saying that the country's copper network existed at a "five minutes to midnight" stage in terms of becoming obsolete.

"I think it's fair to say that there was consensus that the capacity to optimise the existing copper network had reached an end point and that fibre was the most future-proof technology that we could invest in," she added.

Senator Conroy said the NBN was in full swing, with about 500 kilometres of a proposed 6000 kilometres of optical fibre for regional Australia laid.

A spokesmaon for Abbott's office confirmed the comments were made by the Opposition Leader, but that he would not be commenting further on the issue.