The Morrison Government has announced that it will implement a broadband tax for residential and business users of non-NBN services:
Under the bill, announced by Communications Minister Paul Fletcher, households and businesses not using the NBN will be hit with a $7.10 monthly fee. That’s $85 Over the course of the year.
The proceeds of that tax would be used to fund the future costs of commercially nonviable parts of the NBN network, and reduce reliance on the federal budget.
The bill, if passed, would see Australians taxed from July 2020. It was first introduced in 2018.
“The money collected from the base component of the charge would be used to fund the losses NBN Co incurs in constructing and operating its fixed wireless and satellite networks, replacing the company’s opaque internal cross-subsidy from its fixed line networks,” Fletcher said on Thursday.
Shadow minister Michelle Rowland responded by describing the bill as one supporting a levy with a primary purpose of reducing competition…
The Australian Taxpayers’ Alliance has also come out swinging, criticising the plan as one that penalises Australians for wanting to use an internet service that works.
This tax goes against the Productivity Commission’s 2017 Telecommunications Universal Service Obligation report, which recommended against funding universal service obligations (USO) via levies:
The Australian Government should fund targeted measures to meet telecommunications universal service objectives principally through general government revenue rather than an industry levy. This would imply the ultimate removal of the Telecommunications Industry Levy.
More broadly, broadband services should be treated as an essential service, just like electricity, water and gas. As such, wholesale access prices should be based on what is best for the economy, not seek to achieve a given financial return by forcing inflated monopoly pricing.
If this requires writing down the NBN to achieve competitive wholesale pricing, and taxpayers taking a budget hit, then so be it.
Because it makes no sense for Australians to be charged excessive user fees for sub-standard service, in turn stifling Australia’s productivity.