And Abbott couldn’t possibly admit that the ALP had a better plan.
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Abbott’s mistake was not taking the contract exit hit and just ending the boondoggle. It would have been the cheapest thing to do.
It will never get a positive return and should be accounted for as expenditure n the Budget. This balance sheet malarkey only makes sense to a politician who doesn’t plan on being around when it is time to pay the piper. But then if it was treated as an expense it would make the deficit look much worse.
Abbott’s mistake was being a useless leader with no forward thinking, who never moved out of the role of ‘opposition leader’ despite being PM for nearly 3 years.
The NBN should have been built as originally envisaged.
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Well we will have to disagree about that. The NBN is a classic example of poorly thought through policy in my view.
But we will never know what would have happened in the absence of the NBN now.
It certainly meant carriers could drop their own broadband plans and shift investment risk to the taxpayer. Heck Trujillo must have thought he had won the next fifty lottos as the government actually paid a dozen big ones for the depreciated copper network. For him, red underpants Conroy was such easy meat he made Alston look like a good comms minister. Which is saying something.
Well we do given we’ve been given a half arsed version that has ended up costing more than the original version.
We would probably be even further behind what we have now, given Australia’s geography.
What motivation would carriers have had for significantly improving our Internet services? Telstra would still have a monopoly of crap service which would probably have gotten better at glacial speeds.
Howard stuffed that one up by privatising Telstra with its monopoly intact instead of splitting the network off. The network itself shouldn’t have been sold to begin with, but thats typical LNP privatisation to pay off vote buying tax cuts instead of forward planning. The NBN was supposed to fix that.
A lack of decent internet infrastructure also costs the economy, and costs taxpayers. There are also social impacts that the budget doesn’t measure.
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Selling Telstra eliminated our debt. It was the right thing to do. It is clear you think telecoms should be nationalised, and I don’t. We will just have to disagree.
The Telstra sale worked at the time because it helped government finances right itself, and also in fact generated a lot of investment in the industry. The dead hand of the government NBN and its jobs for mates no doubt slowed change in the industry. And yes, the NBN allowed Optus and Telstra to sit on their hands and shelve their broadband investment plans.
How does a non nationalised service guarantee acceptable service to areas where it will never be finically viable for private companies to cover?
There are services that Australia requires that private companies will not provide as they need to be subsidised. It is a fact of our geographical landscape.
Privitisation has screwed us over time and time and time again. The selling of Telstra INCLUDING the network infrastructure is what allowed the said network infrastructure to languish for so long. Telstra had a monopoly on the infrastructure and thus zero motivation to improve it.
And no Telstra didn’t need to be sold to eliminate debt. Howard’s government squandered an entire mining boom, that could have been used far better, in order to buy votes with tax cuts (when lying couldn’t win an election). This is why two of Howard’s periods in office were classified by the IMF as the most wasteful periods of government spending in modern times. Yet little of this spending was on anything meaningful like long term infrastructure projects.
Optus abandoned building its network due to the anti competitiveness of Telstra, due to how Telstra was sold.
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You mean like the old (and current) regulatory environment that had a CSO? Do you actually believe the NBN is (LNP)was(ALP) any different. Because it was never ever the case that FTTH was going to happen to every resident. Ever. Regional areas got satellite, or some variation of FTTN even in the Red Underpants Conroy’s model.
The rest of you post does not reflect political reality. There is no way our past or current debt could ever be paid off by running large budget surpluses. It would not be politically acceptable, as there is always a worthy cause that could be identified for political gain by those on the make.
The only way to reduce government debt in any meaningful sense is to eliminate most of it in a king hit. The remainder can be reduced over time with small surpluses as you suggest.
As to whether Howard or Rudd were bigger spenders (actually the biggest spenders as a % GDP are the current government), I don’t give a rats. They were both politicians, and I regard politicians as the enemy.
Never said it was the case. I believe the original over 90 percent fibre to the home. What is the current mix forecast - 25 percent?
You can’t have it both ways. The only way that a private company will agree to cover regional areas is if they get some benefit for that. Telstra’s benefit was having a virtual monopoly, which stifled any competition and allowed them to get away with whatever crap service they wanted, as it was too difficult to complete. Nobody is going to loose money to serve regional Australia, without some sort of bonus. Which is why the infrastructure should not have been privatised. The Government is by far the best placed to have built the network (under the original plan).
Selling Telstra was unnecessary. Australia’s net debt has always been relatively low and were certainly low in the early 2000s. Howard’s profligate spending for vote buying and lack of use of the mining boom for anything other than funding tax cuts is embarrassing. I would rather have seen Telstra sold for less and the debt slightly higher/ proper economic management used to source income from elsewhere to reduce the debt. That would have meant the network infrastructure was retained and the copper network phased out in a reasonable time period, instead of having to buy it back and then under the LNP plan for it to be maintained.
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I am a competition policy researcher.
Here is my ranking of my worst decisions made my politicians in relation to the Australian telecommunications industry.
Worst. Hawke government decision to introduce competition to a natural monopoly. This will take too long to explain but if competition had not been introduced, something like the NBN (and future projects) could have been supported by an organisation that was earning 100% of the Australian telecommunication’s revenue.
Next worst. Howard government sale of Telstra. When in 2006, the government holding of Telstra went from 51% to 18% the 2007 Rudd government was left with no control of an organisation with:
* Telecommunications management expertise.
* A highly skilled telecommunication's workforce.
* Access to pits, manholes, conduits, exchanges etc. We now pay Telstra billions of dollars to access infrastructure we used to own.
Next worst. Rudd government’s decision to establish a telecommunication’s organisation from scratch. What they should have done is increased the government’s ownership of Telstra back to 51%. All three of the above starred problems would have disappeared.
Next worst. It appears that the Turnbull government’s version of the NBN is probably next but I have not looked at this in detail.
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Thank you for adding your perspective.
I’m a little ignorant here - is this the move that opened up the telecommunications industry to competitors beyond PMG/Telecom? I recall reading somewhere that what eventually became Optus was introduced by the government order to provide competition to Telecom.
I have a great appreciation for Hawke, but I think his government made some missteps (The Button Plan comes to mind).
I’m not exactly educated on the matter, but I don’t see competition as a bad thing… though given that Telstra owned all the infrastructure, and any competitors would have to use that system or build an entirely new one… I always thought it was a bit redundant - except for the fact that Optus was cheaper.
Cosmichobo. This is a complex subject and there is a lot more to it than meets the eye. After two years, I am nearing completion of a paper on this subject. I have about a page and a half of advantages of competition and privatisation in the Australian telecommunications industry and about eight pages of disadvantages.
Competition is beneficial in some industries and harmful in others.
Oldmacs. Yes, the Hawke government introduced legislation for competition in telecommunications in 1991. Optus arrived in 1992. This led to a debacle from 1993 to 1997 (approx.) where our biggest cities got two lots of HFC cable and many other areas received none.
Issues I would consider in the telecommunications industry:
- What telecommunications infrastructure is duplicated as a consequence of competition and privatisation and to what degree?
- What other costs are duplicated and to what degree? Management, accounts payable, accounts receivable, call centres, H.R., administration.
- How much have the marketing costs of the entire industry increased?
- What costs are newly created? Remediation plans like the mobile phone blackspot program and other similar programs seem helpful to society until we realise that this sort of program exists because some urban centres have 3 lots of mobile phone infrastructure and some regional centres have none. This is caused by ‘creamskimming’.
- What other problems only exist because of competition and privatisation? e.g. closure of the Telecom training schools and research laboratories. Also, the movement of the call centres overseas.
Ultimately, the costs are passed on to the consumer.
If you think we have problems, spare a thought for South Africa. I have read that their politicians have adopted a totally free market approach to optical fibre. How many sets of optical fibre go down the street is driven by ‘the market’.
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I don’t think it’s accurate to say that only our 2 biggest cities got cable and the rest of the country got none.
Geelong and Ballarat both got cable and so did Canberra (and that’s just the ones I’m personally aware of).
Geoff. You may have misread my post a little bit. I did not mention two cities.
That said, you may have a point. A better way of saying it may have been:
- Our biggest cites received two lots of HFC cable. Many other areas received none. I will try to modify in my earlier post.
In Ballarat, was that Telstra or Optus HFC cable?
It was neither, it was an independent company that was later bought out by the company that ran the cable in ACT which was called Trans ACT I think.
They was later bought by Westnet? That was bought out by iiNet which was then bought out by TPG.
I can’t remember the name of the actual Ballarat company sorry… they had a site (which also had 2 way sat dishes in the yard) in the industrial park near Ballarat Airport.
I used to drive past on the way to the hanger where my plane was and each time I’d think… I wish I could get cable instead of ADSL in Castlemaine.
Sorry if I misread your post.
Interesting. I may have to look into this further for my research. Thank you.
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They were tied up at some point with the cable provider in Mildura as well but I can’t remember if that was before TransACT bought them or after… sorry.
Ah thanks - I will read up on it.
I personally agree with your assessment.
Australia is just too large for competition for our wired telecommunications infrastructure to work well.