The Government Just Revealed How Much We're Paying For The NBN

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Yesterday the Parliamentary Budget Office released a report showing exactly how much money the Australian Government has already invested into NBN Co, and how much it is expected to cost over the next 10 years.

Including details on a recent $19.5 billion loan, which was given despite an existing government investment of $20.3 billion, and the existance of an investment cap of $29.5 billion, the report says rollout is due for competition in 2020, at a total cost of $49 billion.

By June this year the Government had given $20.3 billion to NBN Co, but the Government's equity in the company was only $13.1 billion.

The $7.2 billion deterioration is "principally due to NBN Co accumulating losses totalling $8.3 billion", the report reveals, stating the losses "reflect the early years" of the NBN rollout.

The details about the annual costs are particularly interesting.

The annual cost to the budget of the Government's investment in the NBN is estimated at around $580 million in 2016–17.

Following the final drawdown of the $29.5 billion in equity and assuming the loan is drawn down from 2017–18 and paid back in full in 2020–21, the annual cost is estimated to rise to over $730 million in 2019-20 and to $2.1 billion by 2026–27.

Public debt interest payments on the money put into NBN by the Government is identified as the "key driver" of the annual cost, although the loan provided to NBN Co has an interest rate higher than usual, giving a "partial offset" to the annual cost.

"The final cost of the Commonwealth's financing of NBN Co will not be known until NBN Co is privatised and the market places a value on the NBN," the report says. "Until then the Commonwealth will continue to bear an annual cost associated with its financing of NBN Co."

The report goes on to say that if the sale price of NBN Co is less than the cost of financing NBN Co, then the NBN would have "an enduring cost to the budget".

There is also a small risk (less than five per cent chance) that the Government could be forced to meet "contingent liabilities" in relation to the NBN rollout, totalling an amount of $15.5 billion as at 30 June 2016.

This story originally appeared on Gizmodo


Comments

    What a shambles...

    ... for a substandard network that will be obsolete in 10 years. Good job. /s

      - cue Meatloaf -
      You took the words right out of my mouth
      (Though, assumedly, not while you were kissing me)

      and at a higher price and longer time frame than the organically superior plan.

    So... how much cheaper is this compared to what the proper NBN would have cost?

      The extremely wild eyed Liberal party estimate for the ALP NBN plan was that it would cost $96b (I think KPMG maxed out at $86b for the build). The shit version we are getting now is predicted to cost $56b max. The issue for me is that the completion time has blown out and I believe this is down to cut labour and management budgets more than any straight up infrastructure or materials budget. There are definitely less people at NBN Co now than there were before the LNP took over the build. It's a fucking joke.

        I assume those numbers are just for the initial build, not including ongoing operating / maintenance costs?

          Yeah that's to get it up and running. I imagine maintaining all the shitty old copper will cost a bit later on.

    ... Should have asked Telstra for a better kickback, when they agreed to leave their infrastructure strangle-hold intact.

    I look forward to my ticket coming up in the NBN coverage lottery Dec 31 2020 then! :p

      Frankly, I could do without. Thanks to being super close to my exchange with good infrastructure, my ADSL2 is a very decent speed, and my plan is affordable. To get an equivalent speed on most NBN plans is likely to cost me double. The speed-based costs are insane.

      Last edited 15/12/16 11:17 am

        There are companies with cheap plans such as Dodo and Belong.
        I have Dodo for 60 a month unlimited but I think I will change to Belong when my 2 year NBN contract runs out in a year.

        I've got a $60 MyRepublic service with unlimited and it's fantastic so far. I live in an apartment so it's fibre to the basement, but I get around 11MBps downloading on Steam which is great.

        Actually, I have mates of mine who pay LESS on NBN (through Internode) than they did on ADSL2+. Now they get more bandwidth, a higher data cap (1Tb) and they're looking at getting upgrades to 250Mbs.

        So ..... no. ADSL2 is not cheaper.

          Yep same for me. Haven't got it yet but they've started in my suburb now and I'm paying more for ADSL2 than the NBN plans on offer.

    Mean while I am still waiting with no expected build for the next 3 years.

      (In Soup Nazi Voice)
      No eChange for you!

      heraldsun.com.au/news/opinion/the-echangers-australian-entrepreneurs-move-to-the-country-and-the-suburbs/news-story/4f45a6dbd979c2a0b470e511dcd3f0ce

      Same here, and I'm actually quite happy about that. I'm hoping that by the time they get to me they'll have changed back to FTTP instead of the half-arsed bullshit we'd probably get if they were doing it next year.

        Same - just without that glimmer of hope. Not even being listed in the 3-year plan is part and parcel of living in the No-Man's Land of anywhere in Noosa Shire that isn't Noosaville or the first 600 metres of Tewantin (any further inland, and 'go fuck yourself'). But it also means the Snowflake Cult of Noosa would scream bloody murder if us peasants out in the sticks got any service, much less better quality.

      Then once you have the joy of NBN you can pay another $5000 to get the same FTTP service others got for free in year one! AMAZING!

        It will most likely be satellite out here... yay for non stable internet that is highly affected by prevailing weather conditions!

        The whole NBN was a shitstorm of bad decisions and squandered money.

        I believe it's closer to the 12,000-20,000 range.

      Same situation. And to make matters worse for me, I can only currently get Telstra 4G and it's so horrible for home use in terms of data

      Last edited 15/12/16 6:19 pm

    The way they are rolling this out is beyond disgusting. There are areas around me where quite literally there is 2 or 3 houses with it and no where else. The fuck kind of rollout is that shit?

      They must have been undecided voters. Thus they rolled the NBN out there to butter them up for the upcoming election.

    Yet they fail to mention the NBN tax and how much that too will add

      Dude what the fuck, I hadn't even heard about this until you mentioned it.

        Indeed, they've pushed it in very much under the rug. They're going to be trying to build up revenue via it to help fund the NBN by taxes now. It's a clusterfuck of gigantic proportions.

        "No new taxes!..........except those we make!"

          "It's a surcharge levy, or something, not a tax"

            "If you can't stump them with the truth, baffle them with bullshit!"

              "Words mean what we say they mean."

              I'm surprised they aren't using their "we're not satisfied with the current state, so we're going to restrict funding until it improves" anti-logic to justify slashing the NBN budget. I guess that's just for health and education.

    I'm betting they'll have this thing privatised before it gets to my house!

    so the people of australia pay billions for a rollout

    then have to pay 60-100 a month for the service

    double dip gov

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