Prime Minister Malcolm Turnbull has admitted the National Broadband Network (NBN) project was a “mistake”, blaming Labor’s initial plan for the flawed rollout model.
It is the Prime Minister’s first dig at the use of NBN Co itself, a government-owned company, to oversee the rollout.
Instead of defending the nature of the rollout, Mr Turnbull slammed the Rudd Labor government’s foundations which the Coalition was forced to work with after the change in government.
Mr Turnbull claimed Labor had left the NBN rollout in a “bad place”.
“It was a mistake to go about [the NBN] the way [Labor] did,” he told reporters in Canberra on Monday morning.
“Setting up a new government company to do [the NBN rollout] was a big mistake.
“As the network expands, you will always get more complaints … but one complaint is one complaint too many, so I am determined to ensure that we address those issues and that people get the speeds they have paid for.”
Mr Turnbull expressed his endorsement for New Zealand’s equivalent broadband model, spruiking it as a success story in the international sphere.
“If you want to look at a country that did this exercise much better, it’s New Zealand,” he said.
“What they did was they basically ensured the incumbent telco – the Telstra equivalent – split its network operations from its retail operations and then that network company, called Chorus, became in effect the NBN.”
Mr Turnbull appeared to suggest NBN Co lacked the experience to ensure the rollout was efficient while minimising the costs.
This comes as NBN Co chief Bill Morrow admitted the company would struggle to turn a profit.
“The government has two options: to regulate to protect this model, or to realise that NBN won’t have the finances it thought and might require some off-budget monies to go in to make it happen,” Mr Morrow told Fairfax.
“We collect about $43 per month from retail service providers for each home they sell into.
“In order to recover costs we need $52.”
When questioned over this, Mr Turnbull said there was a “reasonable question mark” over NBN Co’s ability to make a return on investment.
“It is challenging. At the moment it is estimated to deliver a return of around three per cent,” he said.
“It is enough to keep it on the gov’s balance sheet.”
However, Mr Turnbull said there is “no way” it would reach six per cent, the initial expectation.
Shadow Communications Minister Michelle Rowland told The New Daily that the Coalition’s NBN would create an “unforgivable digital divide”.
“Last week [Communications Minister] Mitch Fifield declared the NBN would be the ‘envy of the world’. Today, the government is in a hysterical mess,” she said.
“What has changed in the space of one week?”
Ms Rowland said Mr Turnbull’s “stunning admission”, placing NBN Co’s return on investment in doubt, contradicted his previous statements declaring the NBN as the “greatest turnaround in Australian corporate history”.