The Distillery: Fibre glass houses

Communications Minister Malcolm Turnbull is trying to avoid a run-in with the NBN Co board as he awaits word from Ziggy Switkowski on the company’s precise situation. Then there’s a very distracting confrontation with Telstra that he’d similarly prefer to dodge. Australia’s business commentators dissect our country’s largest infrastructure project with fresh eyes as the Coalition looks to shape the fibre in its own image.

Fairfax’s Malcolm Maiden says it makes sense to slow the NBN down while the Coalition gathers all evidence required to determine just how it would change it.

“It is the talks that come after Switkowski has reported back and the new designs are drawn up that will be crucial. Tony Abbott's pre-election commitment that Telstra and its shareholders would be ‘kept whole’ in a rewrite of its $11 billion deal to co-operate with an NBN rollout is the fulcrum, but there are many moving parts. Telstra has leverage because in its original deal it retained ownership of the copper wire that will have to be used where the government opts for fibre to the neighbourhood node instead of fibre all the way to premises. Telstra will need to be paid for its copper, but will get less for allowing access to its ducts and pipes, because the new fibre network will be less extensive.”

The Australian Financial Review’s Jennifer Hewett writes that Turnbull himself isn’t issuing any personal criticism of individuals on the NBN Co board.

“Indeed, he says, the country should be grateful for the board’s work on a complex and difficult project. NBN Co’s chair, Siobhan McKenna, and other directors will be excused for smiling grimly at such belated protestations of goodwill. Most of these individuals have already been effectively sacked due to the new minister’s long-planned changes — politely described by him as a means of ensuring the government’s ‘complete flexibility’. Unofficially, it’s all part of Turnbull’s determination to have a total change of direction, culture and construction and telecommunications experience.”

Business Spectator’s Stephen Bartholomeusz points out that while Turnbull wasn’t having a go at any one individual on the board, he had to emphasise that NBN Co was likely to meet only half its target of premises passed this financial year.

“The target of 729,000 premises passed by June 30 next year compares with NBN Co’s original target for June 30 this year of 1.7 million premises passed. It is worth noting that a new corporate plan was supposed to have been handed to the former Labor Government back in May, but has never emerged. Turnbull's predecessor, Anthony Albanese, has claimed it was in draft form and therefore wasn’t able to be released publicly. It was always obvious why that plan remained an unreleased draft in the lead up to the election. While Turnbull was almost complimentary about the NBN Co board, pointing the finger at the underlying policy/thought bubble the board was originally handed by Kevin Rudd and Stephen Conroy rather than at the board members themselves, the continuing inability of NBN Co to meet targets that have been continuously lowered made it inevitable there would need to be sweeping changes to the board.”

The Herald Sun’s Terry McCrann says acting Labor leader Chris Bowen and would be leader Anthony Albanese “should both have the decency” to keep quiet about the NBN for a while.

“So far as the NBN is concerned, they and their former ministerial colleagues in the Rudd-Gillard-Rudd governments have much to be humble about. They also owe the Australian people a huge apology for embarking on the waste of billions of dollars in the way they went about building their NBN. To borrow from Winston Churchill, arguably never before has more money been splashed around on a piece of public infrastructure, to get so little usage by so few people.”

It should be said that the NBN consistently gets high approval ratings from voters and the Coalition’s broadband policy has swung from almost nothing to being within striking distance of Labor’s.

Speaking of which budgeting issues though, The Australian Financial Review’s economics editor Alan Mitchell would like the new prime minister to give voters a sense of how there’s more to the budget than just the bottom line.

The Australian’s John Durie takes a look at some decisions from Australia Post boss Ahmed Fahour in the context of the Coalition government’s window to privatise the business. It should be said that Fahour doesn’t buy into that speculation; at least he doesn’t publicly.

And finally, The Australian Financial Review’s Chanticleer columnist Tony Boyd looks at the long-awaited move out of cash for Australian savers in riskier asset classes.