NBN committee pushes for cost-benefit analysis

The NBN Senate Select Committee has produced its final report, recommending the Government be more transparent about the costs and benefits of its $43 billion scheme.

Tabled today, the report called for the public release of the "calculations and underlying workings" used in the Government's cost estimates, as well as a statement of the "alleged and predicted" benefits of the project.

The committee further recommended that the Government commission a "rigorous" cost-benefit analysis of the project, echoing a sentiment put forth by the Opposition and some in the industry.

Citing Section 52 of the Nation-Building Funds Act 2008, the committee noted that the lack of an "accurate and justifiable" cost-benefit analysis breached the government guidelines for assessing whether national infrastructure projects should proceed.

When Committee Member Senator Mary Jo Fisher asked the Department of Broadband, Communications and the Digital Economy (DBCDE) why no such analysis was included in the Implementation Study, DBCDE deputy secretary Daryl Quinlivan responded:

"Because the government had made a policy decision already. The purpose of the cost-benefit analysis is to determine whether there is a case for doing something or not ... But the government had made that decision. It was an election commitment."

The Committee acknowledged that the Government would not accept its May 2010 recommendation to abandon the NBN proposal.

Government Senators on the Committee, Kate Lundy and Glenn Sterle, wrote that they "reject any notion that there has been a lack of transparency," arguing that its Implementation Study was published in full in May.

Lundy and Sterle noted the Committee's recommendation that the Government accept economist Henry Ergas' offer to conduct a cost-benefit analysis free of charge, using data from the Implementation Study.

However, the Government Senators argued that Ergas had "well-known opinions on the NBN and has undertaken consultancy work for both Telstra and the Liberal Party".

This afternoon, the DBCDE dodged iTnews' questions about any plans to conduct a cost-benefit analysis, stating instead:

"The Opposition has made clear it would shut down the NBN, no matter what the Implementation Study, or any other report, recommends.

"The Government is focused on delivering better, more affordable broadband for all Australians.

"The Opposition has had three shadow communications ministers and still no alternative broadband plan for Australia's future."