NBN Review: Labor's NBN Policy Was 'Rushed, Chaotic And Inadequate'

Another day, another review into the National Broadband Network. The Scales Review into the public policy surrounding the former Labor government's National Broadband Network roll-out policies, released this morning, has found that the plan to deploy fibre-to-the-premises to Australian homes and businesses was a "rushed, chaotic and inadequate" process.

The Scales Review, run by former head of the Productivity Commission, Andrew Scales, was designed to analyse how the National Broadband Network plan had been constructed from a public policy perspective.

Scales analyses the full scale of events leading up to the announcement of the very first Labor NBN policy during the 2007 Federal Election, and charts the evolution of said plan into what he calls NBN Mark II, which involved abandoning a fibre-to-the-node policy in favour of fibre-to-the-premises.

That transition period has been highlighted in the review, with Scales saying that a quick turnaround time in the policy revamp was detrimental to the National Broadband Network as a whole:

By contrast with NBN Mark I, the public policy process for developing NBN Mark II was rushed, chaotic and inadequate, with only perfunctory consideration by the Cabinet.
After just 11 weeks of consideration, the Government had decided to establish a completely new 'start-up' company (now called NBN Co) to roll out one of Australia's largest ever, single public infrastructure projects. The NBN was to be rolled out in eight years at a preliminary estimated cost of around $43 billion. There is no evidence that a full range of options was seriously considered. There was no business case or any cost benefit analysis or independent studies of the policy undertaken, with no clear operating instructions provided to theis completely new Government Business Enterprise, within a legislative and regulatory framework still undefined and without any consultation with the wider community.
Most of the important issues in relation to the NBN policy and the operating arrangements for the NBN Co remained unstated or unresolved well beyond the end of the period of this Audit, with the Government's first detailed Statement of Expectations not provided to NBN Co until December 2010.
NBN Co was no fit for purpose. It was a start-up company given a job that only a well-functioning, large and established telecommunications company would have been abel to undertake in the allotted timeframe. tThe governance arrangements that operated in the very early stages of NBN Co's life had a long lasting and detrimental effect on its operations and a profound effect on the roll-out of Australia's NBN.

In his review, Scales recommends a raft of measures that would ensure that large public infrastructure projects don't fall victim to the same mistakes he identified in NBN Mark I and II.

Recommendations include a mandatory cost-benefit analysis on all infrastructure projects over $1 billion, a requirement for all large-scale election commitments (such as the NBN policy) should be fully costed by the Productivity Commission or Infrastructure Australia before they're announced, and that government departments planning such policies ought to "take stock" and consider appropriate timelines for their completion to avoid delays, slow-downs or blow-outs.

You can read the full 186-page report here (PDF).

Speaking at a doorstop interview, Communications Minister Malcolm Turnbull echoed the findings of the audit.

"It's very important to learn from the mistakes of the past. The purpose of doing this audit is so that you have an independent sober assessment of what happened, the mistakes that were made, and we learn from those mistakes and let’s hope we don’t make them again. Because there’s tens of billions of dollars wasted because of this.

"Basically what happened was that by the end of January 2009 it was clear that Labor's election policy which was to essentially subsidise the private sector to build a national broadband network had failed; their tender process had failed.

"And then instead of going back to a proper policy consideration and carefully analysing what their options were, in about eleven weeks, from the end of January to the ninth of April, without any expert advice, without a cost benefit analysis, without a business plan, they then rushed off and announced they – the Government – were going to build its own telecom network, its own broadband network and they estimated it was going to cost $43 billion.

"And so it was always a reckless, crazy way to go about public policy – extraordinary that a project a commitment of that kind could be made with so little consideration. And that's because irrationality had trumped due process," Turnbull said.

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