Business Au

Government won’t write down cost of NBN to save consumers

Experts believe the government could reduce the cost of the beleaguered National Broadband Network by writing down the value of its investment.

The government has invested $30 billion in the NBN and questions have been raised over whether it’s getting its bang for its buck, in terms of profit and service.

A recent audit found some NBN users will pay more for their internet or receive a lower quality service, contrary to what the service promised.

The cost and slow speeds associated with the NBN could see customers choose other services like wireless and 5G. (9News)

“Right now the NBN is essentially required to make money… and get the money back the government lent it to create the NBN,” tech expert Trevor Long said.

“If that burden is gone, the NBN can charge less for wholesale, and therefore retailers can charge consumers less.”

Pegasus Economics director Stephen Bartos told 9News, “a write down could be a good be a good thing for NBN customers”. But the Coalition has written-off the idea of a write-down.

“The government is not considering a write-down of its investment into NBN,” finance minister Mathias Cormann said.

190611 Government income tax cuts crossbenchers power prices Federal Politics news Australia
The Minister for Finance Mathias Cormann. (AAP)

Trevor Long said the NBN is a “political football” no one wants to touch. “It would see it as embarrassing, and it would see it threatening its surplus targets,” he said.

The finance minister insists that’s not the case.

“It would have an impact on our balance sheet,” he said. “It would not have an impact on the underlying cash balance. “Every Australian should be concerned about the proposition that a government should make political decisions about the valuation of its assets.”

With the rollout of the network due to be finished in June next year – analysts say it still has time to prove its worth. But it will be tough with existing issues to iron out and a fear not enough customers will want slow, expensive NBN services with the growth of wireless and 5G.

© Nine Digital Pty Ltd 2019




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