Concerns are mounting that Australia’s broadband network will leave an anchor on the country’s budget.
The government loaned $20 billion to NBN Co on November 18 to pay for the final phase of construction of the network, on top of $30 billion already pledged by taxpayers.
The newly released Deloitte Access Economics Budget Monitor warns of a “growing worry” that costs to the NBN are not counted in the budget, meaning the government’s fiscal situation might be even worse off than it appears.
“If the NBN turns out to be a dud, then the deficits of recent years have actually been rather larger than the public has understood them to be,” it states.
Costs associated with the NBN aren't included in the current budget because it is anticipated that those costs will be repaid to the Commonwealth when the network is eventually sold.
PricewaterhouseCoopers has estimated that the network will be worth just $27 billion in 2024-5, approximately half the price of its construction.
The new $20 billion loan is an unanticipated commitment from the government. Malcolm Turnbull had previously indicated that the organisation would be able to operate “without assistance from government” with only the initial funding.
It’s more money than the $14 billion the government hopes to save over the coming four years with planned policy changes.
Labor communications spokeswoman Michelle Rowland told SBS the biggest threat to the NBN is "its limitations which have been imposed as a result of technology", specifically the reliance on the existing copper network.
The Deloitte Access Economics report estimates the budget deficit has blown out by $3.4 billion in the current year.
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