NBN review finds policy formation was 'rushed, chaotic and inadequate'

Updated

An independent audit of Labor's National Broadband Network has found the policy's formation was rushed, chaotic and inadequate.

The Abbott Government appointed former Telstra director Bill Scales to investigate the advice and processes that led to Labor's NBN policy between 2008 and 2010.

Mr Scales's report questions whether a full range of options was considered while developing the NBN policy and found no evidence a business case, independent study or cost-benefit analysis was undertaken.

The audit found the company responsible for the project, now known as NBN Co, was established with 11 weeks' consideration, was not fit for purpose, and did not have clear operating instructions.

The report says the problems in the initial setup of the NBN had "a long-lasting and detrimental effect on its operations" and roll out.

Communications Minister Malcolm Turnbull says the idea was "little better than a thought bubble conceived at the end of January 2009".

"It was an extraordinary leap into the unknown - the most reckless commitment of Commonwealth funds in our history," he said.

The Labor communications minister responsible for setting up the NBN, Stephen Conroy, says Mr Scales did not have the full picture.

"Mr Scales is not aware of all of the evidence and all of the deliberations," Senator Conroy told AM.

"There was an alternate position discussed but Mr Scales was not aware of that because it was discussed in Cabinet committees, but there was a massive amount of work and I would like to pay tribute to the public servants and the people involved in that period."

Also under scrutiny was the advice given to Labor by the Australian Competition and Consumer Commission (ACCC).

Mr Scales found the ACCC "overstepped its authority" when it advised Labor that connecting the broadband fibre through street terminals, or nodes, was not a stepping-stone policy towards linking fibre directly to homes.

"What is extraordinary is that the ACCC, which is not an engineering consulting firm or expert in this regard at all, gave that advice and what is even more remarkable, frankly, is the Government took it," Mr Turnbull said.

The rollout of another Labor project, the National Disability Insurance Scheme (NDIS), has also been under scrutiny.

A review in March warned of delays and likened the National Disability Insurance Agency (NDIA) to "a plane that took off before it had been fully built and is being completed while it is in the air".

Opposition Leader Bill Shorten says the latest NBN report is politically motivated and that the Coalition needs to look at its own time in office.

"I just wish Tony Abbott's Government would stop being knockers," he told reporters in Tasmania.

"They are in government now. Perhaps they should get on and look after people rather than trying to play politics with all these important things like the NBN and the NDIS."

Mr Shorten says the NBN is a massive undertaking and Labor remains committed to building it.

"There is no doubt Labor got the project started, and what sort of short-sightedness did Tony Abbott and the Liberals have? They have no vision for the NBN. They have no vision for the internet age. They are uncomfortable with change."

Billion-dollar projects should undergo public analysis

The Scales report makes seven recommendations, including a call to have all infrastructure projects worth more than $1 billion subject to a public cost-benefit analysis.

Another recommendation is to have all large infrastructure election commitments independently costed by Infrastructure Australia or the Productivity Commission.

Mr Turnbull says tens of millions of dollars have been wasted because of the NBN and he says he does not want to waste any more.

As a general rule, bad projects get worse. It is much harder to turn around a failing project than it is to start one from scratch and get it right. Malcolm Turnbull

"It is very important to learn from the mistakes of the past," he told reporters in Canberra.

"The purpose for doing this audit is so that you have an independent, sober assessment of what happened and the mistakes that were made so that we learn from those mistakes and, let's hope, so that we don't make them again."

He says the Government had to make big changes to the NBN when it come to power.

"As a general rule, bad projects get worse. It is much harder to turn around a failing project than it is to start one from scratch and get it right.

"We inherited the NBN in a terrible mess. It was running way over budget as we know. It was also running way behind time. All of the targets they set had been missed.

"They were putting out figures which were misleading and, frankly, intending to mislead people."

Senator Conroy concedes the NBN as an infrastructure project has not been perfect.

"I have acknowledged that the construction companies that were hired and signed contracts failed to deliver on promises they made in their construction contracts and that we optimistically believed that construction companies would deliver," he said.

"But why is Malcolm Turnbull spending $10 million of taxpayers’ money to attack the NBN because his policy is a dog?"

Earlier, Mr Turnbull became defensive when repeatedly asked if other contentious, multi-billion-dollar policies, like his Government's paid parental leave scheme, should also be subject to similar, public cost-benefit scrutiny.

"Well, it's already been the subject of consideration by a number of people including the Productivity Commission, that it is the Government's policy," Mr Turnbull said.

"I'm puzzled given this report on the National Broadband Network and Labor's failure to properly analyse a major infrastructure project, and obviously, unhappy with that, you no doubt find that boring, you want to turn this into a discussion about paid parental leave Don't you think you're a little bit off topic?"

Public service risks being written out of decisions: Bartos

The Scales report also raises some questions for the public service more generally.

Former senior public servant and Acil Allen Consulting executive director Stephen Bartos says there are some useful lessons and challenges to be found in the report.

"Of course there are elements of politics in the commissioning of the report by Malcolm Turnbull," he told The World Today.

"It was always fairly obvious there had been problems with the NBN roll out so it is not surprising Bill Scales has found some."

The final Scales recommendation says the public service leadership should look at whether its inability to have its views seriously considered on the NBN was circumstantial or a signal of a more serious malaise.

"Now I think that it an incredibly tough recommendation for the Australian public service but one that they will have to take on board," Mr Bartos said.

"It comes about really because of the loss of policy expertise and increasingly ministers are not turning to the public service for policy advice and they are getting it from elsewhere."

The difficulties the public service had with the Rudd government in particular have been well documented in the past, but Mr Bartos says the move away from public service advice is continuing under the current government.

"It is something that the public service has to take seriously, because it does not want to be written out of policy making all together," he said.

"The public service needs to be involved if the policy has any chance of working."

Topics: federal-government, information-and-communication, wireless-communication, internet-technology, computers-and-technology, telecommunications, australia

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