Australian election... why IT matters

Lobby groups debate what election result could mean for NZ's ultra fast braodband plan

On Saturday 21 August, the Australians go to the polls. What makes this election critical from an ICT point of view is that the fate of the country’s National Broadband Network hangs in the balance.

The NBN policy has been keenly watched on this side of the Tasman – both from an industry and a political point of view.

If Labor wins the election, the $43 billion fibre-to-the-home network NBN is likely to go ahead, unchanged. If the Coalition wins the election, the NBN will be scrapped and in its place a much less ambitious $6.25 billion in joint public-private investment and grant funding to optimise existing DSL networks, build open access fibre backhaul, a satellite network and the creation of two wireless networks designed for rural/regional areas as well as outer metropolitan areas.

So how will the Australian election result affect the fibre-centric contracts the New Zealand government is currently negotiating as part of its $1.5 billion Ultra Fast Broadband inititive.

Computerworld asked six leading industry groups – three on the demand side, three on the supply side, to comment on how the Australian election result will effect the New Zealand rollout.

Demand side

New Zealand Computer Society CEO Paul Matthews

Labor wins

The main political effect is a good one: it would continue to make it politically very difficult for either main party in New Zealand to withdraw support for Ultra Fast Broadband (UFB) over here, even if they were short-sighted enough to consider it. From a practical perspective it is likely, however, to drive up the cost of roll out in New Zealand, especially if this is done on an aggressive timeframe on both sides of the Tasman. The reason for this is the fact that increased competition for skilled workers to roll out the infrastructure will no doubt drive up wages and result in many heading across the ditch to work on the rollout over there, lured by higher wages.

Coalition wins

The announcement by the Coalition last week that they were going to fluff around the edges, taking a short-sighted and narrow view of the issue shows, however, that politics [and policies] (SN addition ok?)can change and often do (especially leading up to an election). However, given that polls out already show that any party without the vision to support the National Broadband Network over there are likely to get hammered in the election because of it, the backlash could, of course, have the effect of helping cement support over here.

InternetNZ policy director Jordan Carter

Labor wins

The NBN going ahead is a status quo option, so the impact remains the same - a trans-Tasman competition for the skilled labour needed to install the networks, and an ongoing real-world experiment in different ways for governments to build networks compared with the New Zealand case.

Coalition wins

A policy change across the Tasman may encourage the nay-sayers here in New Zealand to argue that we should follow suit and re-assess the UFB. They would be wrong - the arguments in favour of the UFB remain sound and New Zealand still needs it. It would on the up-side remove the large scale project with its draw for skilled staff mentioned in my last answer.

TUANZ chief executive Ernie Newman

Labor wins

The NBN is one of the few defining issues between the parties in Australia, so a win for Labor has to be seen as strong public endorsement of serious public spending in this field. National, rightly, would see this as a positive signal. It could encourage them to appropriate a larger sum to our broadband project, especially in the regions where the monetary commitment and rate of progress are seen to be lagging behind the urban project.

Coalition wins

The big difference between Australia's NBN and New Zealand's UFB is in the quantum of government money applied. After adjusting for the population and exchange rate, Labor in Australia has committed four or five times the amount per capita in public money. It is the weak point in the NBN scheme. I would see a win for the coalition not as a public denunciation of government spending on broadband, but reaction to a perceived profligacy in their NBN scheme, so I doubt it would deter our government from its plans. Further, the Australians have a significant issue in dealing with militant Telstra investors, which to some extent is a throwback to the belligerence of the Sol Trujillo regime. By contrast, in new Zealand there is greater public and cross-party awareness that Telecom's earlier behaviours had to be halted.

Supply side

NZICT CEO Brett O’Riley

Labor wins

Positive for New Zealand as there are many opportunities for us to capitalise on the lessons from their approach, including deployment and technology options. Future broadband demand will also drive investment in more international capacity between both countries and beyond.

Coalition wins

Difficult to determine, but we may not see as much innovation without scale.

Telecommunications Carriers Forum CEO David Stone

Labor wins

I don't think the re-election of the Labour government will have any effect on the New Zealand UFB initiative. The NBN is a much more ambitious undertaking involving A$43 billion of government investment and the creation of a new access monopoly owned by the state, while the New Zealand UFB is much more modest and has a larger private sector component. The Australians will continue with their model and we will continue with ours. We seem to have become quite comfortable with the differences in scale of our respective approaches.

Coalition wins

This is a more interesting possibility. The Coalition has just announced its alternative proposal, which reduces the amount of government money expended from A$2000 per citizen for the NBN to a more modest A$300 per head. This compares with A$360 per head for UFB and around A$200 for the Singapore network. The Coalition approach is much closer to the New Zealand approach and could be seen as an endorsement that our approach, which is more in line with what others see as achievable, now has the endorsement of our trans-Tasman cousins.

Telecommunications Industry Group CEO Rob Spray

Labor wins

The main impact of Australian NBN initiative on NZ UFB will be in two areas:

Negatively, on the resources required here to implement the UFB - the NBN will draw a huge number of employees to Australia. Mike Quigley, the CEO of NBN Co, has said between 20,000 to 25,000 people will be employed in the construction of the NBN. New Zealand today employs a total of 14,000 employees in our whole [telco] industry.

Positively, on the long-term outcomes of the UFB project, if UFB is to achieve anything for New Zealand then to my mind the critical area is in the fostering of innovation and new businesses or approaches delivering services and content over this infrastructure. The fact there are two very similar markets side by side who have the same infrastructure, should ensure that New Zealand-based companies can build their businesses based on a market of 30 million rather than four million.

Coalition wins

The two effects mentioned above will work in reverse if the Australians shelve the NBN, that is the build costs will be lower and resourcing easier, but the opportunities for our innovators will be lower – companies will largely just be building applications for our market. The other risk introduced by this scenario is in future years and election cycles in New Zealand. The UFB will take a bit of persistence and energy from the government to keep on track (which long-term build projects often do). Given the Australians shelve the NBN and seem to be successful regardless, this can dent the political will here in New Zealand causing it to waver over the years.

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