NBN’s completion will lengthen Australia’s dole queue

CEO Stephen Rue has confirmed that the initial rollout of the national broadband network (NBN) is due for completion by the end of June:

NBN Co’s announcement of its third quarter results – exceeding its rollout, revenue and activation targets – with the company reporting that it made 670,000 residential and business premises Ready to Connect to the nbn access network in the third quarter alone… with the build of the network “remaining on track” for completion of the initial rollout by 30 June 2020…

“With more than 11.38 million homes and businesses now able to access an NBN service, NBN Co is within striking distance of its Corporate Plan target of completing the large scale network rollout with 11.5 million premises able to connect”.

NBN capital expenditures (capex) were $2.5 billion over the second half of 2019. However, with the initial NBN rollout to end on 30 June, these capex expenditures will vanish from the Australian economy, in turn pulling down jobs and growth.

This is important because the NBN’s construction was a key reason why the Australian economy continued to grow despite the private sector falling into recession:

At its peak, the NBN accounted for around 0.5% of Australia’s GDP.

Arguably, the jobs impact will be even greater than its growth impact. This is because the NBN’s rollout is far more labour intensive than most other forms of capex, such as roads and public transport.

Thus, the NBN’s completion will arrive at precisely the wrong time for Australia’s labour market, which will already be suffering from mass unemployment and the potential unwinding of the JobKeeper wage subsidy.

Leith van Onselen

Comments

  1. Andy McPherson

    In Melbourne, I’ve had to dealings with 5 sets of NBN technicians over the last 3 years. They were all probably subcontractors here in Australia on temp visas. I’m not sure if they’ll go home when there’s no more work here?

  2. Sir, sir! Pick me!

    What if we redid this schemozzle, but with, wait for it, fibre!

    • That’s pure science fiction. The money’s been allocated to buying 12 subs that will be delivered in, wait for it, 30 years.

      • Andy McPherson

        The NBN has a lot in common with the subs:Just like we ripped fibre out of the NBN and replaced it with 1920-era copper phone lines, we are ripping the nuclear power out of the subs and replacing them with World War I era diesel engines and batteries.

    • Beat me to it. You could upgrade most HFC or FTTN premises at least to FTTP for about $1,500 a household.

      • FTTC – would be the best upgrade path for FTTN.

        The problem with FTTP is that the most painful and expensive bit is replacing the copper from the pit outside the property to the connection in the house. Dealing with the homeowners and digging up garden etc is very time consuming.

        Getting fibre to the pit from the node is not difficult and FTTC can deliver up to 1Gbps.

        If the home owner really wants fibre to replace the copper from the pit on the street to inside the house they can pay for that themselves.

    • AdrianHuntMEMBER

      Yes, we might as well get started building a modern nbn now that we’re finishing Malcom Turbull’s legacy boondoggle.

    • DominicMEMBER

      Excellent idea, Swampster. I like the cut of your jib!

      Just think of the GDP boost. Anything more you can think of that we can break and re-build?

  3. We have some VDSL system installed in Canberra by the private sector twenty years ago. The kids tell me it’s way better than NBN.