NBN Co chief executive Mike Quigley has won a lot of respect from business commentators for his handling of a flawed project amid an unstable government. But the fact still remains – the national broadband network is still delayed and the Coalition has big plans to make it smaller if it wins the upcoming election.
Fairfax’s Malcolm Maiden addresses the obvious question of whether Quigley was pushed or whether he jumped.
“For the departing National Broadband Co chief executive Mike Quigley it would have been both. His two key patrons were gone. NBN chairman Harrison Young was replaced by Siobhan McKenna in March, and Kevin Rudd's coup last month sent former communications minister Stephen Conroy to the back benches.”
The Australian Financial Review’s Michael Smith points out that Quigley’s departure was so well anticipated that “Sportsbet were offering odds on his replacement”.
Say what you want about Quigley, that’s funny!
The Australian Financial Review’s Jennifer Hewett agrees with Maiden that Conroy’s departure was the defining factor here.
“The Egon Zehnder search for a new chief executive was always going to take time. And directors are well aware that it would be inappropriate to make an appointment so close to an election. But the real significance of Stephen Conroy’s exit as minister was that NBN Co – under its new chairman Siobhan McKenna – was finally able to announce that the change would happen. The ever-passionate Conroy simply wouldn’t countenance the exit of the man he had so championed over the past four years.”
The Australian’s John Durie notes the confession from Quigley that when he got the gig, he wasn’t sure whether the project would be viable in terms of generating a return for the government.
“The crucial factor was the Telstra deal, which was only formally completed 12 months ago. This means Quigley was working away on a project for three years not convinced it was actually feasible. That in itself is revealing, even if he had the safety net of a government shareholder. He appears to have chosen his own departure date and going as he should with his dignity intact, leaving the government with some real world issues amid the Rudd revival. Even with myriad snafus, this was no small feat on Quigley's part. He is to be commended for sticking with the mission impossible for as long as he did, allowing him to walk rightly claiming that he had put the building blocks in place.”
Business Spectator’s Stephen Bartholomeusz notes, like many do, that the national broadband network has been highly politicised ever since its controversial birth.
“It was controversial, not only because it was conceived and committed to without any meaningful analysis, nor just because of its cost – at least $44 billion to build and probably a lot more – but also because of the bovver boy tactics Conroy used to bludgeon and threaten Telstra into co-operating. While Quigley, intelligent and personable and generally described as a ‘decent’ man, has been an understandably passionate defender of the NBN – he was NBN Co’s first employee and the architect of the organisation and the network’s design – the rollout has been plagued by problems, delays and targets for premises passed by the all-fibre network that have been continuously and badly missed and heavily revised down.”
Elsewhere, The Australian Financial Review’s economics editor Alan Mitchell has a terrific introduction to his piece on China.
“When economists start talking about a soft landing, adopt the brace position.”
The Fairfax veteran says if China’s transition becomes bumpy Australia, along with the other countries in China’s supply chain, will feel it hard.
The Australian’s economics editor David Uren notes China’s second quarter growth is out today in his discussion about how much Beijing will allow the economy to slow down.
Staying international, while everyone focuses on the US Federal Reserve, The Australian Financial Review’s Karen Maley looks at the growing difficulties in Italy and Portugal. She’s one of the only journalists who have consistently reminded readers that Europe's situation still sucks and the continent could give more trouble.
In domestic economic matters, Fairfax’s Ross Gittins tries his best to deflate the obsession with lifting productivity, especially as a way of combatting the end of the resources boom.
“The biggest risk in the potential hiatus between the waning of the boom and the return to healthy growth in the non-mining economy is an unacceptable rise in unemployment, and higher productivity won't fix that.”
Meanwhile, The Australian’s Judith Sloan notes that the word ‘austerity’ is likely to be in high rotation in this election cycle and brings back the criticisms of research by Carmen Reinhart and Kenneth Rogoff of Harvard University about the ‘tipping point’ for debt-to-GDP.
The Australian Financial Review’s Andrew Cornell investigates the significance that the superannuation industry will have in Australia’s evolving society. It amounts to a “hugely experimental delegated savings system”, writes Cornell.
He’s right. We don’t know what this thing is gonna do or look like in a few decades.
Elsewhere in the financial sector, The Australian’s Richard Gluyas takes stock of the rising levels of global banking regulation, brought forth ostensibly to make the system shockproof.
In company news, The Australian Financial Review’s Chanticleer columnist Tony Boyd is impressed that despite all the problems in the mining industry, Gina Rinehart’s Hancock Prospecting appears destined to secure necessary financing for the Roy Hill iron ore mine by year’s end.
And finally, Fairfax’s Elizabeth Knight has a fascinating insight into the world of corporate lie detectors, specifically a service by US consulting group Business Intelligence Advisors and the “hidden meaning in corporate disclosure”.
What are we really talking about here? Newcrest, of course.