Labor is failing hard-man Conroy

Labor's message on infrastructure has broken down – and it's failing to point out major flaws in the 'one quarter of the NBN' price tag the Coalition likes to use for its broadband scheme.

If Labor is smashed at the 2013 federal election, it will be because it failed to hold the line on its own suite of nation-building reforms.

The latest weakening of that line comes today with news that Infrastructure Minister Anthony Albanese is expressing doubts about one of Labor's 2010 infrastructure promises – to back a $20 million feasibility study into high-speed rail.

The release of that study, which will take place in good time ahead of the election, will show, says Albo, that such trains are a bit noisy, and would need lots of tunnels to get from Melbourne to Brisbane. All too hard!

While Albanese says he's not against the project per se, even airing such doubts is a clear softening up of voters for the anti-climax that what seemed so heady a prospect in 2010, isn't likely to happen. Just like the four other major studies into high-speed rail that have been conducted since the early 1980s (for that history, see Is Albo off the rails? September 2010).

The fiscal reality that Labor is living with, but not necessarily accepting – tax revenues tumbling while it announces expensive education reform and the national disability insurance scheme – does make it a bad time to consider investing in yet another major infrastructure plan.

But that said, Labor's current failing is to back down from the clear choice it is offering voters – while team Abbott is committed to slashing public spending, and attempting to re-invigorate the private sector (particularly in the SME space), Labor has a suite of public investments designed to boost productivity.

Labor's vision is to upskill Australia as rapidly as possible, to avoid having to compete with our regional neighbours on labour costs. At the heart of that vision is the national broadband network, but there's also investment in higher education, trade training centres and an unwillingness to allow the resources sector to kill of the services and manufacturing sectors. Whatever one thinks of individual elements of that vision, is provides a coherent narrative to take to the electorate – if Labor has the guts to do so.

Albo should probably have a pep talk from the oft-beseiged communications minister Stephen Conroy.

Yesterday saw the inking of yet another deal in the rollout of the NBN, with Conroy signing a $300 million deal with French firm Arianespace to launch two satellites to provide regional Australia with NBN services at download speeds of up to 25 Mbps.

France's digital economy minister Fleur Pellerin was on hand to say what a trs bon ide it all was. And Conroy will derive much comfort from her comments – the French economy, more than most in Europe, is built on public 'state capitalist' projects that have paid large productivity dividends in recent decades. There's the TGV high-speed rail network, state funded nuclear power, and even the ground-breaking Minitel system that gave French citizens internet-like services between 1978 and 2012 (when it was decommissioned).

Labor has already taken that course with the NBN, substantial increases in other national infrastructure, and increases in education and training spending. Failing to match its actions with a strong, confident message that these investments will transform the nation is what will kill Labor – something their UK-import communications director, John McTiernan, should be all too aware of.

In recent weeks Malcolm Turnbull has had the government on the back foot over its biggest investment, the NBN. He has managed to get away with saying that, in approximate terms, the Coalition will deliver a good-enough broadband network for around a quarter of the cost, built in about a quarter of the time.

However, with news this week that Telstra isn't planning to budge an inch on the $11 billion (net present value) deal its shareholders voted to accept from the Gillard government for use of its pipes and pits, and to compensate it for the loss of its wholesale business, the real cost of a Coalition plan is much greater than 'one quarter' of Labor's spend.

To the $11 billion Telstra deal, there's another billion or two for Optus, a $2.1 billion equity injection in 2011/12, and a $4.67 billion equity injection in 2012/13.

That's about $20 billion of the '$50 billion' price tag the Coalition likes to use for the true cost of the NBN (Labor prefers the $37 billion figure without the Telstra and Optus deals).

What's clear, then, is that after the next election, even if the remainder of that budget was cut by 75 per cent, the total cost would be somewhere upwards of $27.5 billion. The political problem with that figure is that it's a hell of a lot to spend to only end up with a fibre-to-the-node system that Labor tried to arrange in 2008 for $4.7 billion.

Conroy knows this and, despite a turbulent couple of weeks after some unfortunate comments from NBN Co chief Mike Quigley, isn't resigning an inch from his line that this is a bloody good idea for the nation.

As the third most senior member of the Labor government, this will be causing hard-man Conroy extreme frustration. Labor's platform for 2013 is in stark contrast to the Coalition plan, but caucus infighting over the Rudd issue is causing weakness in the ranks and a general failure to sell that message.

It's that failing, rather than any inherent weakness in the policies, that is dragging Labor ever closer to the precipice.

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