National Broadband Network funding, implementation and regulation


Budget Review 2011-12 Index

Budget 2011–12: National Broadband Network—funding, implementation and regulation

Brian Dalzell

NBN funding allocation

The major item in the 2011–12 Budget with respect to the Broadband and Communications Infrastructure Program (BCIP) is the identification of $18.2 billion of equity funding for the NBN (via NBN Corporation (NBN Co)) over the budget and forward years.[1] At least some of the $18.2 billion was in the contingency reserve as provided in the 2010–11 Mid-year Economic and Fiscal Outlook (MYEFO), although the MYEFO did not state a dollar amount.[2] The total NBN allocation from initiation in 2008–09, through 2014–15, is shown in the Table.

Table: NBN allocations, 2008–09 through 2014–15 ($ millions)

2008–09 to 2010–11

2011–12

2012–13

2013–14

2014–15

Total

Actual

B.E.

F.E.

F.E.

F.E.

 

1 712

3 088

4 400

6 600

4 100

19 900

Source: Australian Government, ‘Part 3: capital measures’, Budget measures: budget paper no. 2: 2011–12, Commonwealth of Australia, Canberra, 2011, p. 342, viewed 17 May 2010, http://cache.treasury.gov.au/budget/2011-12/content/download/bp2.pdf; Note: B.E. is budget estimate. F.E. is forward estimate.

Table 1 shows that total funding from 2011–12 through 2014–15 is $18.188 billion, and that the total allocation since the initiation of equity injections into the NBN (2008–09 through 2014–15) is $19.9 billion.[3]

NBN funding sources and timing

During the NBN rollout, the Government will retain full ownership of NBN Co and funding will initially come from government equity. NBN Co will be funded via this equity until it has sufficient cash flows to support private sector debt. Government equity will be partly financed through the issuance of Aussie Infrastructure Bonds (AIBs). The 2011–12 Budget Strategy and Outlook states that AIBs will not be required until 2011–12, as Government equity will be met until then from the Building Australia Fund. Consequently, in 2011–12, the Government expects that $2.7 billion of the Government’s investment will be financed by AIBs.[4]

NBN implementation

The Department of Broadband Communications and the Digital Economy (DBCDE) will receive $23.4 million over four years to support the Government during the rollout of the NBN. Key deliverables include the establishment and support of a new agency to manage the delivery of the Universal Service Obligations.

NBN regulation and oversight

The Budget allocates funds for the regulation and oversight of the NBN. The Australian Competition and Consumer Commission (ACCC) has been allocated $5.6 million over four years to monitor competition outcomes arising from the structural change delivered by the NBN. The Australian Communications and Media Authority (ACMA) has been allocated $7.2 million over four years to develop and monitor implementation of appropriate network standards and codes to facilitate the rollout.[5] The Department of Finance and Deregulation has been allocated $1.2 million for ongoing shareholder governance and policy advice to the Government and NBN Co.[6]

The Government will provide $3.1 million over two years (2010–11 and 2011–12) to conduct a review of communications regulation. Funding will be from amounts set aside in the contingency reserve for the transition from analog to digital television. The review is expected to be finalised in 2012.

The Government will provide $2.1 million over four years to the Department of the House of Representatives to support the Joint Committee on the NBN.



[1].       The budget figures in this brief have been taken from the following document unless otherwise sourced: Australian Government, Budget measures: budget paper no. 2: 2011–12, Commonwealth of Australia, Canberra, 2011, pp. 116, 342, viewed 17 May 2010, http://cache.treasury.gov.au/budget/2011-12/content/download/bp2.pdf

[2].       Australian Government, ‘Part 3: Fiscal strategy and outlook’, Mid-year economic and fiscal outlook: 2010–11, Commonwealth of Australia, Canberra, 2010, p. 60, viewed 17 May 2011, http://cache.treasury.gov.au/budget/2010-11/content/myefo/download/MYEFO_2010-11.pdf

[3].       Australian Government, Portfolio budget statements 2011–12: budget related paper no. 1.3: Broadband, Communications and the Digital Economy Portfolio, Commonwealth of Australia, Canberra, 2010, p. 14, viewed 17 May 2010, http://www.dbcde.gov.au/__data/assets/pdf_file/0018/134208/2011-12_BCDE_PBS_Complete.pdf

[4].       Australian Government, ‘Statement 7: asset and liability management’, Budget strategy and outlook: budget paper no. 1: 2011–12, Commonwealth of Australia, Canberra, 2011, p. 7-15, viewed 17 May 2010, http://cache.treasury.gov.au/budget/2011-12/content/download/bp1.pdf

[5].       Portfolio budget statements 2011–12: budget related paper no. 1.3: Broadband, Communications and the Digital Economy Portfolio, op. cit., p. 14.

[6].       Portfolio budget statements 2011–12: budget related paper no. 1.3: Broadband, Communications and the Digital Economy Portfolio, op. cit., p. 14.


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