Senior banking and business executives have called for a cost-benefit analysis and business case for the Government’s National Broadband Network.
The comments were made during a business leader’s forum in Sydney featuring the board chairmen of Telstra, National Australia Bank (NAB), ANZ, Boral and Woodside Petroleum.
“You’d be crazy if you didn’t think we could increase productivity through faster access to the Internet,” ANZ Banking Group Chairman, John Morschel, said. “However I think the lack of a business case and the publicity over that is sowing a lot of doubt in the public’s mind over the level of expenditure.
“We need to see a business case.”
NAB and Woodside Petroleum chairman, Michael Chaney, cast doubt on the Government’s $25 million implementation study and called for more information to be released.
“I feel for any investment of that size you do need to do a thorough cost benefit analysis,” he said. “There was a statement done by McKinsey but some of the assumptions in there that they may well have been told to make are unrealistic.”
But Chaney added that unforeseen benefits could yet come out of the NBN to benefit Australians.
“When Faraday discovered electricity we couldn’t imagine it would give rise to high-rise CBDs,” he said. “It’s a bit like building a road. It’s hard to do a BC [business case] analysis on it as some have found.”
While she agreed the NBN could provide a boost to productivity, Telstra chairman, Catherine Livingstone, said a lot of work would needed to be done before it happened.
“Small businesses can be the big beneficiaries because large businesses already have private networks,” she said. “We need to get on with the work of establishing how we’re going to use the capability.”
The banker’s calls come as Communications Minister, Senator Stephen Conroy, stands by his claim private investors will stump up to $17 billion for the project.
According to the McKinsey study, the Government will pump $26bn of taxpayer dollars into the project with the institutional investors such as banks funding the rest for a rate of return between 6-7 per cent.