Main Committee - COMMITTEES - National Broadband Network Committee Report

Mr HUSIC (Chifley—Government Whip) (18:04): It gives me great pleasure to speak on the second report of the Joint Committee on the National Broadband Network. The report reviews the rollout of the National Broadband Network, the largest infrastructure project this country has seen, and details some of the milestones reached in the early days of this project. I also recommend that people read the contribution of the Minister for Broadband, Communications and the Digital Economy in his National Press Club speech in December, in which he outlined some of the things that have been occurring in a short space of time for a project as big as this and what has been achieved.

In 2011 there was great progress, which is also documented in the report—eight first release sites; 18,000 premises initially passed with 3,000 customers connected; the signing of big construction contracts and other associated contracts; the use of Fujitsu in new developments; a major contract signed with Silcar to assist with the construction; the use of Ericsson for wireless deployment; the involvement of Optus and IPSTAR in satellite and interim satellite services; and the outlining by the NBN Co. that over the next 12 months it will run past 485,000 premises.

With this work comes a flow-on effect. For example, $3.5 billion of NBN Co.'s procurement will be spent locally, with local firms benefiting from the investment being made through the NBN. But it is the jobs component, the employment impact, the massive shot in the arm for local skills and for Australians to be engaged on a project of this magnitude to build up skills in this massive nation-building project that we are committing ourselves to. In one major project we will upgrade the technological infrastructure of this nation, which will require a lot of people to be involved. In actual fact, given it is a significant national project, 18,000 jobs will be directly created as a result of the project—up to 23,000 if you include the indirect benefits. That is a major shot in the arm for local skills. We are going to need that number of people because when the project hits full speed it will be running past 6,000 homes a day.

Jobs, employment, training, skills—these are areas within this committee, which I am very honoured to be sitting on, that I have a deep interest in and that I have raised with the chair, the member for Lyne. We should look at maximising input from people on this project and should also recognise that this will fundamentally reshape the sector because we had a dominant vertically integrated player, which will be structurally separated. In my former role I represented employees within Telstra—and I am joined here by the member for Throsby, who also took as a badge of honour a role representing the needs of people employed by Telstra and in the sector. Maintaining jobs is certainly a big focus for us both, and I bring that focus and that commitment to my role as a member of this committee.

It does cause me a great deal of concern to know that under the deals with Telstra we have been able to establish a $100 million workforce retraining package. That is outlined on page 49 of the report, where we spell out that under the Telstra agreement the government will provide assistance to Telstra to help it retrain and redeploy staff who are affected by reforms to the structure of the telecommunications industry. The Retraining Funding Deed sets out those terms. It will conclude on 20 June 2019 and it will require Telstra to give priority to retraining staff who currently work on the copper and HUFF networks, including the wholesale copper work force and the direct field support workforce. I have been concerned because I have met with people who are looking at the prospect of jobs in Telstra being offshored. I have been concerned that jobs will be lost now, that people will not be given the opportunity to be retrained to ensure that their skills are kept and that in actual fact jobs will be offshored. There have been a number of articles in the press recently. I refer, for example, to an Australian Financial Review article of 7 December titled 'Telstra: 280 jobs to go overseas', which referred to the offshoring of 280 jobs from a key growth area in Telstra. Telstra is claiming that the move will help it achieve its growth targets and shift its focus to higher value areas. Yet they are being granted $100 million to retrain staff. I do not see evidence that they are applying that in a meaningful way. Further, a few days ago the Australian noted that Telstra had briefed staff that it planned to move an additional 73 jobs offshore and a further 26 jobs were to be made redundant. Again, this is of great concern to me because I think we should be working to bring people that are affected over. Telstra has a responsibility to ensure that those skills are maintained in the industry into the years ahead.

As I said, this is one of the areas that I am interested in pursuing. The chair of the committee has indicated that this will be an area of work we will be investigating—for example, the Telstra submission of its plan on how it will be retraining its employees. Telstra will be working with the department in basically submitting that plan, the budgets attached to that plan and, importantly, the training targets that will be committed to within it. It will need to provide six-monthly reports to the government on the progress against these plans and it has got to consult with stakeholders on how it intends to use the funds and deliver the training courses.

Within the sector itself—and again the report touches on this—there is a need for education and upskilling. ICT professionals will need to be able to undertake the development and implementation of applications within Australia that will flow as the NBN rolls out. If people turn to pages 100 through to 102 of the report they will see that while some universities had huge intakes of ICT students in Australia, Monash University has halved the size of its ICT department from three years ago. Only two Australian universities are now providing specific ICT e-health development programs. This is leading to concerns that there will be insufficient graduates to be able to meet the market's needs. ICT places have declined in South Australia by 50 per cent and in Western Australia by 38 per cent. There is a need for the industry to tackle this because we do face a situation where skill shortages may hold back the development of the sector.

I have previously spoken in the House of the value of the internet to Australia as documented by Google. It engaged Deloitte and Access Economics, which put a value of $50 billion in terms of GDP value on having access to high-speed broadband. If we provide the network and the platform through the NBN, clearly we need to have the skills around to be able to capitalise on it.

There is another group that I am concerned about as we transition to a broadband network that is faster and as people become adept at adopting technology in their daily lives. I have spoken on this in the House in reference to the House of Representatives Infrastructure and Communications Committee inquiry report, Broadening the debate on the NBN. It detailed, for example, that as countries improve their internet access and where people and businesses transition more of their functions online you may have a decline in postal services because people do not feel like they need to send letters anymore. We have seen a contraction in letter volumes. That has an impact, particularly in regional areas, in the employment of people within Australia Post. There will be more homes in Australia—more delivery points—but less mail. It is a formula that will have an impact on Australia Post. I have spoken previously about the need for the government to develop a long-term strategy to upskill people within Australia Post as letter volumes contract but at the same time parcel volumes increase because people are using the internet for retail purchasing and are needing home delivery. Australia Post needs to be filling the void there. There is a need to be able to change the skills mix within Australia Post. While Australia Post has embarked on a process of restructuring and has committed $20 million over three years to prepare its 40,000 employees for this change, structural assistance certainly is an area that needs to be examined. The member for Wentworth in his contribution yet again put out a number of myths, such as that we do not need the NBN. I have heard the member for Wentworth comment a number of times that we do not need the NBN. Apparently coalition policy is basically balanced on the member for Wentworth's iPad. He often refers to the fact that he uses his iPad and that he gets wireless access and that we do not need the download speeds that are demanded, as he would put it, by the NBN, even though, as documented in this report, the growth in data demand has been phenomenal. Between 25 and 35 per cent per annum growth in download speed has been required over the last two decades. No-one is calling for us to go back to dial-up. The demand is there just as much for upload, for example, to be able to do high-definition videoconferencing; we need to have a network that can do that. What those opposite are proposing is a patchwork approach where we do not have uniform speeds and where we do not have a uniform approach, where we rely on, for example, wireless, which in low-density areas works great but which in high-density urban areas fails to keep track with what people want.

We also have this claim that technology itself will make the NBN redundant. Those opposite point out that wireless or HFC is the way to go. As I said a few moments ago, there are major shortcomings with a reliance on HFC. In some cases it is completely overwhelmed by volume demands in certain areas. The committee report documents that there has been a huge growth in fixed line broadband and that there is a shift in demand for wireless. Mike Quigley, who gave evidence before the committee, said:

When looking at total worldwide broadband data downloads they expect the amount of traffic on mobile broadband to be one half of one per cent of fixed line network traffic by 2016 ...

That was from a conversation that he had had with people from Ericsson. Further:

We expect the number of devices to go up, but the heavy lifting of applications other than voice is going to be done on fibrebased networks.

So we are not ruling out the use of wireless; there will be a complementary mix of services, but this idea that we can just rely on wireless is simply selling short the notion of what is required of a network of this magnitude.

It has been repeated today that this is going to cost too much. The member for Wentworth, Mr Turnbull, claimed today that the cost of broadband will go up. Mr Turnbull has said that the NBN will increase retail prices. In fact, an economist used by Mr Turnbull, Henry Ergas, claimed a couple of years ago that the NBN would cost users more than $200 a month. The reality is completely different. The fact is that retail pricing over the NBN today is broadly in line with, and in many cases cheaper than, current ADSL. For example, NBN packages will start from $34.50 per month. For $37.50 per month you can get a 25-down five-up service, which is superior to anything available over copper. The independent consumer website, WhistleOut, has said that the entry level NBN prices were between 23 and 43 per cent lower than comparable ADSL2 plans. So this bogey campaign that says that the NBN will cost too much is, in actual fact, not supported by reality. The member for Wentworth said that he believed the report raises more questions than answers. The main question we need answered by the opposition is: are they able to put a credible alternative forward that demonstrates that they can do what the public wants?

And what the public wants is documented in those statistics I mentioned earlier: a 25 to 35 per cent increase per annum in demand for data that cannot be delivered under what had previously been supported by the coalition. There were 19 failed plans—they knew there must have been something that was required—so they have tried 19 times to bring in faster broadband service to Australians but have been unable to do so. The answers required are from them not from this report.

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Ed Husic MP
Federal Labor Member for Chifley


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