A Cool Ninety-Four Billion

The Federal Opposition is now claiming that Labor's NBN will cost $94 billion, a number with almost no basis in fact. In an election year, one shouldn't be surprised.

First, some background. The Opposition officially released their alternative National Broadband Network policy on Tuesday, having unofficially released it the day before to the Daily Telegraph and The Australian newspapers. It was in these publications that the '$90 billion' figure first emerged.

The media conference, held in the Fox Sports studios, was about what one would expect, assuming one expected it to start half an hour late, to descend into a rancorous shouting match between the Shadow Minister and members of the press, and to end farcically with Tony Abbot fielding questions about sport. 

The full Q&A from the media conference can be found here.

Truthfully, we were fortunate to hear much about the Coalition's ICT policies at all, or at least the policy specifically concerned with delivering broadband nationally (no other area of ICT was even mentioned). Luckily Malcolm Turnbull is a seasoned pro, and talk of fibre, nodes and foreign precedent was never permitted to overshadow the true purpose of the exercise, which was to lay into Labor’s NBN. As expected, most of the allotted time was given over to precisely that. That portion the presser devoted to actual ICT matters – as opposed to sports and arcane Irish pub anecdotes – began and ended with sustained broadsides at the current NBN. It was reiterated that this will cost 'over $90 billion'.

Now that the Coalition’s policy has actually been released, we can see how this astronomical figure was really derived: it reflects the potential cost should absolutely everything go wrong with the NBN’s construction, the population’s trend toward mobile wireless accelerate wildly, and the movements of the market in the coming years. 

David Braue at ZDNet has a good breakdown of just how fantastical it is, and the reasons for it. The crux of the matter is that the cost of the Coalition’s NBN ($29.5 billion) was not sufficiently dissimilar from Labor’s ($37.4 billion), and so the $94 billion figure was invented in order to supply a key differentiator. It has little basis in reality, but that's not important if you repeat it often enough.

Turnbull yesterday defended the figure in a blog post, in which he otherwise rightly lambasts the wild inaccuracies in the Sydney Morning Herald’s reporting. He insists that the assumptions underlying the $90 billion figure are not only appropriate but conservative. I personally think they’re wrong, but even if they were correct, they reflect a situation in which everything has to go wrong - a perfect storm of cock-ups.

Nonetheless, $94 billion is now the figure we’re stuck with - it’s very sound-bite friendly – and featured prominently in Turnbull’s combative appearance on Jon Faine's ABC 774 program yesterday morning. However, while Faine did press Turnbull on some issues, the fabled 'ninety billion' wasn't brought up. Nor did Leigh Sales mention it on 7.30 the night before.

Expect to hear the phrase 'ninety billion dollars' rather a lot in the coming months - it's the Coalition's new version of 'white elephant'. And expect it to go unexamined by the broader media.

There are many aspects of Labor's NBN, and NBNCo's performance that do require scrutiny and debate, and there are certainly key ways that things can be done differently. But making up stupendously large numbers does the Australian voters a grave disservice.