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Permalink Reply by Dr Caroline Wright on May 12, 2013 at 4:55pm

You and I know that Phillip BUT the average person does not. However, some of the experiences getting the NBN connected in St Helens have not been good and this leaves a bad taste in the mouth of the people who know that their taxes are paying for it.

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Permalink Reply by Phillip Watson on May 12, 2013 at 8:09pm

Dr Caroline Wright said:

You and I know that Phillip BUT the average person does not. However, some of the experiences getting the NBN connected in St Helens have not been good and this leaves a bad taste in the mouth of the people who know that their taxes are paying for it.

I think you can expect that every major project will have some unhappy customers, especially in the early stages as all the teething problems are ironed out and techniques are developed. I wouldn't expect the NBN to be any different.

I would also like to say that the NBN is not being paid for from people's taxes. The Government are only guaranteeing the money for the NBN, it is the monthly user fees that ultimately pay for the rollout. Little or no tax revenue is contributed to the NBN. This is true of both the Labor and Coalition versions.

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Permalink Reply by Dr Caroline Wright on May 12, 2013 at 8:50pm

So Phillip what $age of the monthly fee the customer pays (say $100) goes to the NBN guarantee fund? The money had to come from somewhere ... so was it borrowed? If so did the Government borrow it which would have to be paid back or did the Government borrow the money on behalf of the NBN Service providers? The question is a bit convoluted but I hope the message gets through.

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Permalink Reply by Stephen Cox on May 13, 2013 at 6:55am

Phillip Government has no money,All that Government spends is taken from the people in the form of Taxes and Levies.

What is at issue with the NBN like many other Government thought bubbles is that ultimately we the people always pay regardless of whether it is for a straight out Private commercial enterprise exchange like walking into a shop and purchasing what you need or desire.

Or as is the case with Government anything Government gets involved in always costs far more than any straight out Commercial Transaction in the Private Sector,A good example of that was John Howards push for Government Subsidised Vehicle LPG Conversions,Not enough suppliers and a massive tempory increase in custoimers resulted in the cost of each conversion escalating to an ammount that met or exceeded the Government using Taxpayers money to subsidise those who could already afford such a conversion.

The poor still could not afford the conversion and soon after that policy was rolled out Government increased the excise charges on LPG,Nice little scam and by Government.

The BER,Pink Batts etc yet again those who vie for and win Government contracts invariably treat the Taxpayer as mugs and ramp up the cost far above commercial reallity to say otherwise occurrs with the NBN really does your intelligence no justice.

Now real effective user pays would and should have been Government still owning and by rote the people Telstra and such an improvement rolled out on a steady basis with wholly Australian Sourced funding models.

That would have been a real user pays user gets scenario,Instead we have Overseas Financiers making off like thieves in the night with Interest charges alone on the ammount involved.

And I wonder if like Bob Carr after his State Political life when he was rewarded with a good paying position at Macquarie Bank on of the main befefactors from his term in office,Just what benefit will Stephen Conroy gain after he is swept from Political Office.

Will it be a Job with some company that has benefited greatly from NBN Subcontracts Time will tell when we likely revisit that aspect within the year.

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Permalink Reply by Phillip Watson on May 13, 2013 at 10:44am

Caroline/Stephen,

The NBN is funded from the issue of Australian Long Term Infrastructure bonds, which have an interest rate of about 3.75%pa last I looked. Anyone can buy them, be it Australians or overseas investors.

The amount you pay each month for the NBN is a combination of the wholesale price charged by NBN Co to the ISP, plus the ISP's own costs and margin. For example, a base 12Mbps NBN connection sends about $27 per user per month back to NBN Co as revenue. The current top 100Mbps plan earns about $45 for NBN Co, and the upcoming 1Gbps plan will earn about $200 (all depending on the data volume consumed). This revenue is used to help run NBN co and build the rollout, in addition to the money coming in from bond issues. As the build grows, NBN 's revenue starts to exceed their expenses (predicted for 2019-2021) and they start repaying the Govt for the bonds issued.

Yes, I agree that Telstra should not have been privatised. Then it would be Telstra building the NBN now, instead of a new startup Govt business in the form of NBN Co. At the very least, the Govt should have split Telstra into a wholesale network owner and a retail ISP, then only sold off the retail side.

On the LPG, the reason the cost went up is because the technology changed. The old tech LPG conversions didn't go up in price at all. I had a Nissan Patrol converted pre-scheme and it cost me $2800. Since the LPG scheme started, I have had two vehicles converted. An old XB Falcon which cost me $2500 total ($500 out of pocket & $2000 rebate), and more recently a new Falcon which cost me $4500 ($3000 out of pocket & $1500 rebate). The difference was that the Patrol and XB used a standard vacuum LPG system while the new falcon used computer controlled liquid injection. Hence the price being much more expensive. The old LPG systems can't be fitted to new vehicles because they don't meet the emissions regulations.

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Permalink Reply by Stephen Cox on Wednesday

Phillip yes the technology changed but the cost ramp up occurred exactly within weeks of Taxpayer funding being tipped in,Something all to familiar to many as so many private companies and Individuals see or once did see Government contracts as a reason for massive price hikes.

That has resulted in situations these days where Government departments have become so budget strung they have become the worst of payers and those companies who can still afford to cover the increasingly long time it seems to take for Government departments to actually pay the Bill.

I guess that alone could be justification for loading up prices on Government contracts,having to virtually finance the Government department for anything up to nine months in one case I know of (NSW Health).

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