What Costs Taxpayers More: The NBN Or The Australian Olympic Team?

One of the perpetual arguments against the National Broadband Network (NBN) is that it's too expensive, and that the money could be better spent on roads. Following a less than stellar performance at the 2012 London Olympic Games, similar claims of waste are now being thrown at the Australian Institute of Sport (AIS). We thought we'd compare the two projects and see what costs more: Australia's elite athlete training programs or the National Broadband Network?

We recognise that comparing spending between programs is never as clear-cut as it sounds, as we've discussed previously, but for argument's sake and for a bit of fun, we thought we'd give it a bash. For this comparison we'll be looking at the operating expenditure of the National Broadband Network Company (NBN Co) and Australia's government-funded elite athlete training programs, which is what we pay to operate them on an ongoing basis (not one-off capital expenses, which are almost impossible to measure for sport and which are handled quite differently in accounting terms for the NBN).

Olympic Spending

Calculating precisely much each gold medal costs taxpayers is almost impossible, considering the various grants, investment programs and funding drives from various government and non-government stakeholders involved. We decided that the best way to compare the cost of the National Broadband Network against the cost of the Australian Olympic effort would be to examine the operating expenditure of the Australian Sports Commission.

The Australian Sports Commission (ASC) is a government agency that provides monetary support to organisations like the Australian Institute of Sport — responsible for training elite athletes — and funding programs that will get more Australians interested in sport.

ASC's budgetary projections for budget 2011-12 see those goals broken down into two programs: a program for building sport in Australia (Program 1.1) and a program geared towards training elite athletes for international success (Program 2.1).

Here's the breakdown from the Federal Government's budget estimates on how much the ASC spends on training elite athletes to send to the Olympics.

As we can see, the program for training elite athletes has the same budget allocated to it each year for the next five years at a total cost of $781 million per annum. We have to remember that this number is just for the training of athletes. The costs are higher when we factor in things like actually sending them to the Olympic games, for example. This is the figure we're working off for this comparison; the actual total would be higher.

Let's now take a look at the NBN.

NBN Spending

NBN Co breaks down its operating expenditure forecast into two categories: direct operating expenditure and other expenditure.

Direct expenditure accounts for the money NBN Co spends on network deployment, including the use of Telstra exchanges, migration payments to Optus for its HFC network and the cost of increased usage of Telstra's dark fibre network.

Other, or indirect expenses include the cost of staff, administration, the cost of providing payphone connectivity around Australia, the cost of implementing backhaul links and IT systems administration.

Here is what NBN Co's operating expenditure looks like through to 2040:

As we can see, the cost of the NBN is set to ramp up over the next decade or so as the network roll-out activity increases.

So, Which Costs More: The NBN Or The Olympics?

Based on our maths, it's easy to see that the National Broadband Network costs far more than it does to train elite athletes to run fast, jump high or swim far in the long term.

The operating expenditure of NBN Co will this year be $260 million cheaper than training the nation's elite athletes, but as time progresses, the NBN will gradually become more and more expensive.

Next year the NBN will become $312 million more expensive than the elite athlete training programs, $396 million in FY2014 and a whopping $2.122 billion more expensive in FY2015.

Both projects have copped a fair bit of flak for not giving us the return we expected, whether that's the take-up rate and roll-out speed for the National Broadband Network or the medal tally for Australia's Olympic team compared to the Beijing games. In both cases, the flak misses the point is that these projects — the training of elite athletes and the deployment of an elite network — are a government investment in the future of this country.

As much as I dislike sport, I can see the merits of having high-flying Olympians competing on the world stage, both for Australia's identity globally and for kids locally who want to get into sport. In the same vein, the NBN is about putting us on the world map for super-fast broadband, and it's about giving kids and adults alike the tools to get into information intensive futures, like science, research or engineering. Perhaps we should stop bitching about both of them. That's a capital idea.


Comments

    Are the numbers quoted dollars or outcomes in terms of counted numbers? For instance, it looks like it is 700 athletes being supported each year, rather than $700m?

    You've proven that both need a complete review to ensure value for money when it comes to taxpayer funding.

      Damn right...we could end homelessness in a year with that budget.

    As someone who has been loving the Olympics so far, as well as someone who loves tech and games, I'm really not a fan of the whole Us vs Them attitude that seems to come from the IT crowd and the sporting crowd.
    I grew up as the stereotypical nerd, also hating sports etc, and it's not until I actually found the activity I enjoyed that I realised just what some of these people need to go through in order to achieve. The Australian public's reaction to not being showered in gold is pathetic. Our athletes over there are still among st the best in the world.

    It's a shame that the NBN isn't made out of silver. Could've killed two birds with one stone...

    When there are no more starving people on the streets, then let's send someone to the Olympics. Until then, the Olympics doesn't matter.

      Oh the Olympics matters it gets people from around the world interested in our country. they may invest in our economy in the shape of tourism or business which in turn boosts our economy, which helps feed starving kids. there is a place for everything. don't be so naive

        Show me a starving kid that has benefited from the Olympics.
        Can you point to a specific program that channels funds to the needy from the Olympics?
        I think you could be the one that is naive.

        When everyone in need of help with food, housing, hospital care, education, spousal/child abuse is taken care of then is the time to spend money on frivolous crap like sport - let those that want a sports presence on a world or local stage, pay for it themselves.

          wallygaw - disconnect from the Internet and turn your computer off: you're wasting resources that could be better used elsewhere. While your at it, turn your telly off so the Olympics doesn't offend you.

          Ok, so lets stop doing anything that is enjoyable or challenging to the human race until no one is starving, without a house etc. ... scrap NASA, shutter the LHC, stop wasting time on genetic research, forget tech development, don't bother with clean energy research - its all a waste of time.

          What about all Brits that were happily employed before, during the games? What about the tourism interest the UK has generated after? What about the people like Aucix who found something new that is enjoyable and healthier than trolling on blogs?

          For the love of god, stop wasting pixels on my dual 30" LCD's wallygaw :)

            Go back and read what you just wrote, slowly. Did you really just equate the payoff from the Olympics with the world-changing tech that's come out of the world's R&D budgets?

            It's as simple as this: while there are people in Australia who are living below the poverty line, why are we spending almost a cool billion a year to teach people who can run really fast to run ever so slightly faster?

            We're not talking about scrapping clean energy research. We're talking about not paying people to do laps in a pool, or to jump over hurdles, or to throw a fscking shotput.

    If religious organisations payed their fair share of tax it would easily cover both costs. <- built up anger

      If google and Apple pay their fair share of tax to Australia, maybe everyone doesn't have to pay tax.

    I think your $781 Million per annum figure in the article is wrong. The table shows the NUMBER of athletes being supported each year as 700, not allocating $700 Million as you claim.

    Re-read the document you sourced it from (http://www.dpmc.gov.au/accountability/budget/2011-12/docs/PBS_2011-12_asc.pdf).

    There's an error on both sides. Yes, the AIS information is talking in discrete individuals/programmes and not numbers, but the NBN information also only looks at gross expenditure - not revenue. It should be based on the forecasts for net expenditure.

    Comparing one unrelated boondoggle with another is just a simple fallacy. Why don't you compare alternative options to the NBN to see whether it represents value for money?

      ha ha. There are alternatives? Are you really coming onto a Tech website and telling us ther are alternatives to the NBN. Any reasonable nerd will tell you that yes it's expensive, and we all expect the cost to blow out thanks to normal government shenanigans however it's a needed investment.

      Actually there's an old guy at my work who was around in the old Telecom days - apparently they had a warchest in place to do Fibre back then but the government took it, spent it then sold the company. Damn I wish the cable had been laid back then - that way we'd only be debating on the cost of network upgrades and separation of the infrastructure instead of these useless fibre vs wireless and government infrastructure vs private.

      We've all argued through this a million times and Fibre rolled out and controlled by the government is the only way to ensure ubiquitous high speed internet for all australians at an affordable price.
      /rant

        Awnshegh, Sorry - for a second there I thought you said that there were no alternative approaches ? And that Government is the only way to deliver "affordable" high speed internet. Wait...

    Operating expenses for the NBN will be offset by Revenue from sales..eventually the NBN will provide a return on investment at 7.1 % and the NBN will be paid for in full , returning all monies back to the Taxpayer..It then becomes a huge Capital asset owned by the Govt.. How many Gold Medals is that???
    Win, win win..

      Isn't that what Tesltra was doing? Remember, projected figures are not reliable. Just look at the difference between the projected MRRT recipts at the Budget and now.

    I'm sure the uptake will go up when the NBN hit some dense area that already have a high level of ADSL2 uptake. Can you do a comparison of NBN current roll out uptake V what was there before. Eg if people are used to dial up or Satellite, they probably wouldn't think they need super fast net. Unlike us speed freaks

    Where the NBN is up and running it will create revenue (a return on investment). When an athlete gets a couple of gold medals, they often score some very lucrative sponsorship and then move to a place like Monaco to avoid paying any tax.

      +1 - should be a HECS style thing where they repay all the money we put into making them famous. Not sure how to fix the Monaco problem though...extraordinary rendition by the ATO?

        That was proposed by the same guy who developed HECS - and then promptly ignored by the government. To make it more palatable it was even proposed that the income cut off be set much higher than HECS is, and the money be pumped back into the AIS rather than general revenue. Unfortunately I don't see either side being willing to hit "our athletes" with HECS style debts.

    Sorry, but that is an epic fail - that 700 is the number of athletes - the ASC financials are later in the document., which shows revenue from government at $270 million. So the NBN is already far higher on opex alone, and it going to get even higher.

    Typical consumerict perspective. What is the RETURN on this investment? Factor that into the spend and look at the waste of time and moeny the Olympics represents.

    If i want to upgrade my car, then I will definitely look at my budget. I will not buy a BMW if my budget is not in the range so what works out for me means that I don't strangle myself if my budget is not high. The most expensive NBN roll out in the World, and we are only 22 million in population means that some one out there really doesn't know how to manage the project. Well if it's the TAX payers money then Labor Government really doesn't care do they??????

    So Gizmodo Australia is becoming like every other part of the Australian media scene and getting riddled with party politics. Can you stick to a balanced view, a bit like your peers in the US, please!

    Wow, talk about journalistic incompetence. Go back to your source documents and learn to read. I'll start you off - page 159, section 3.2.3 Budgeted financial statements tables.

    Oh, and nice job with the NBN costs, you should run this article right next to "Six Myths About The NBN You Should Stop Believing Right Now"

    Roads are boring.
    Problem with roads is they can absorb an infinite amount of money and people still say they are the worst.
    Spend it on rail.

    Maybe if the Aussie team concentrated more on medals than tweeting then we would have more gold.

      +1. Stephanie Rice and those two idiots in the gun shop spring to mind.

    the NBN may be more expensive... the difference is... the NBN is more useful to all of Australia... the olympics is useful to about 400 athletes and officials...

    In the grand scheme of things, does getting Gold Medals and sending Athletes around world actually achieve anything real world or practical? Putting aside the fact that people are getting fit , which lets be honest, people can from gyms.

    What a stupid argument. The NBN is for use for and by all Australians, the Olympic budget is for a handful of people who think because they can run, jump or swim that the Australian population has to support them. I would rather put that money into Hospitals and Education and do something useful with it, rather than pissing it up against a wall. If a person wants to be a Doctor, Lawyer etc, the pay their own way, so why do Sports people think that we have to support them. The're paid too much and once the taste the good life, forget winning any more medals, because it just becomes partytime. (Eg. Stephanie Rice, paid too much by sponsors, partied around for 4 years, we get to pay for her to go to London and watch watch her lose) What a waste of money. Enough is enough get your logic right NBN = Everyone Olympic Funding = Partytime for losers.

Join the discussion!

Trending Stories Right Now