So how should I cover Budget 2012?

I’ve commented on the Budget for Crikey every May since Labor took power in 2007. This year will be no exception. But what will I say?

In 2008 I criticised Rudd’s slow digital revolution.

Dig into Budget Paper No. 2 and there’s a frustrating lack of detail and commitment.

Of $4.7b promised for the National Broadband Network [this was the original 12Mbps fibre to the node policy], only 0.16% has been committed: $2.1m this financial year and $5.2m next for “establishment and implementation”. The remaining 99.84% — you know, actually building the thing — is all “nfp”. Not for publication. We’ll get back to you…

The rest? All. Too. Slow. And. Vague.

In 2009 I complained that the machinery of Australian government is as outdated as the steam locomotive and the electric telegraph in The Budget? How quaint! They’re just made-up, you know.

Here we imagine that once a year we can produce a Big List of Numbers that’ll cover everything our “modern” nation-state will need to deal with for the next 365 days.

We proclaim it Good or Bad for this or that self-interested sector of the community on the basis of a quick glance, a gut reaction, and the need to create a narrative that’ll attract an audience or justify a pre-existing political zealotry.

We pretend to believe numbers like “$20 million over four years” when only a tiny part of that might be committed in the coming financial year and the rest, still to be confirmed in the next Budget, is therefore nothing but wishful thinking.

The reality, of course, is that the world moves faster than this. We experience a sudden global financial crisis, and must immediately tighten our belts by … um … giving away $900 cash to everyone.

In 2010 I complained of More NBN vagueness, border control and cyber-safety re-allocation. It’s not a bad read, but I’ll leave you to click through to that one.

And by 2011 I was clearly over the whole thing, writing Ritual shenanigans, but hey, this is government.

Riddle me this. What is the actual point of the federal budget process and all the lock-up shenanigans that go with it when the biggest bucket of money related to the technology sector by far, that National Broadband Network thing, isn’t even on the books?

What is the point when the way that NBN money is being spent – and is it $26 billion or $36 billion or $43 billion or that $50 billion scare-number that Malcolm Turnbull pulled out of some random orifice and keeps repeating unchallenged? – it is all SEKRIT thanks to those magic words “commercial confidentiality”…

What is the point of this annual ritual – built on the assumption that we can publish a set of numbers in May that will, in this complex and rapidly changing world, still be meaningful six months down the track – when the government has to respond to changing circumstances? Such as urgently building a fibre-to-the-premises network? Or responding to a global financial crisis? Or starting a land war in Asia? Or handing to every taxpayer $900 because, um, oh, shut up stop asking questions and buy a new TV.

I went on about “$20 million in suck-up-to-Tasmania funding” and “Labor’s half-arsed internet ‘filtering’ policy” and “loud-mouthed entrepreneur Ruslan Kogan” and noted:

Just be aware that all of this could be changed in an instant, budget process or not, if a minister gets on a plane with the Ranga-in-Chief with a few numbers scribbled on the back of an envelope.

So, what the fuck will I end up writing once the budget papers drop onto government websites tonight? Especially given that my shoulder is “out” and I won’t be able to get it fixed until tomorrow afternoon — my birthday! — and I’m scoffing codeine? Suggestions please!

The 9pm Edict #19

Years ago, a bloke got frustrated at the end of a long day, and swore a bit. And suddenly the entire fucking media in this country is buzzing around this one pissy little story like blowflies to the corpse of a dead horse.

Yes, less than two days since I posted episode 18, today’s bullshit reportage on a video in which former prime minister Kevin Rudd swears a few times — shock horror! — and a bunch of unsubstantiated rumours from Canberra have triggered this episode.

Just look at this crap, from ninemsn. Even the ABC, which is supposed to be a credible, non-sensationalist news outlet, covers the swearing but then has two “related stories” about the speculation about a leadership challenge, that the cabinet is supposed repeatedly testing support for Julia Gillard and that attorney-general Nicola Roxon had declared her support for her.

The Australian has at least six stories linked from its home page, including some irrelevant commentary from opposition leader Tony Abbott and even Rudd saying he’d do it differently now.

Seven is reporting that independent MP Andrew Wilkie reckons Rudd will launch a challenge, describing the video as “explosive”.

This entire episode is an embarrassment. It’s this sort of Canberra pseudo-insider bullshit that’s precisely the reason I don’t read newspapers or their websites and don’t watch TV news. It’s all a sideshow, the so-called journalists who perpetuate this bullshit know it, and yet they continue to do it.


Well I think I know why this fucktardery happens, and I have a modest proposal for fixing it.

You can listen to the podcast below. But if you want all of the episodes, now and in the future, subscribe to the podcast feed, or even subscribe automatically in iTunes.

Um, except… no… oh fuck no, not this!

News has just come through — well, Dennis Shanahan says — that Rudd’s leadership challenge is on. Really. May God have mercy upon our souls.

If you’d like to comment on this episode, please add your comment below, or Skype to stilgherrian or phone Sydney +61 2 8011 3733. Not that anyone ever does.

[Credits: Audio grabs from ABC News24 and, of course, the video in question. The 9pm Edict theme by mansardian, Edict fanfare by neonaeon, all from The Freesound Project. Photograph of Stilgherrian taken 29 March 2009 by misswired, used by permission.]

Adam Schwab’s NBN reply

Yesterday I posted a fairly blunt attack on Adam Schwab‘s analysis of the national Broadband Network (NBN). Today he sent this response, which I publish in full.

Stilgherrian is, on most occasions, one of the leading technology writers in Australia — his coverage of the planned internet filter was first class, as was his recent reporting of the planned $400 million under-sea cable between Sydney and Los Angeles. However, Stilgherrian let his lofty standards drop and seriously damaged his journalistic credibility with his blinding support for the National Broadband Network (NBN). Sadly, it appears that Stilgherrian’s ostensible desire that other people to pay for a shiny piece of broadband infrastructure has gotten in the way of him actually considering whether the multi-billion dollar public investment is a good idea for Australian taxpayers.

Stilgherrian launched a blistering attack on an article I wrote in Crikey, alleging that it was “full of misunderstandings and straight-up mistakes”. A somewhat ironic comment given most of his criticisms were themselves quite obviously incorrect. Specifically, Stilgherrian stated that:

[Schwab] thinks the NBN is an internet service provider (ISP). He wants it to deliver short-term commercial return on investment. And he doesn’t differentiate between needs now and a decade or two or three in the future.

Perhaps Stilgherrian should have either read the original article properly or spent thirty seconds contacting me before jumping to incorrect conclusions as to my ‘thoughts’. Nowhere in the original article was it stated that the NBN would be a retail network. The NBN has always been a wholesale network. The original article referred to the speculated final retail prices which may result from the NBN, but did not specify that the NBN would be the retailer. Nor was that point even remotely relevant to the main intent of the article.

Second, the original article also never referred to a ‘short-term commercial return on investment’. Rather, the it noted that no proper cost/benefit analysis had been undertaken. It is correct that ‘return on investment’ to taxpayers is not a purely financial determination (for example, returns from a public investment will partly be in the form of higher living standards which flows from the investment). But the article was making the specific point that no analysis of the returns had been undertaken (instead, proponents of the NBN had pointed to rather unconvincing benefits, like eHealth or the ability to hold videoconferencing as justifications for the project).

It is certainly possible that if such an analysis were ever carried out the study may deem that the NBN is in the best interests of taxpayers (although critics claim that such is unlikely given the inevitable ‘waste’ and inefficiencies which would result from a public project of such a size). The point remains — no such determination was ever undertaken.

Like many proponents of the NBN, Stilgherrian falls into the trap of simply assuming “faster internet is better”, regardless of the costs. Of course, prima facie, faster internet is superior to slower internet. I, like most people, would prefer faster broadband. I, like most people, would also like the Government to buy me a Porsche. However, it is preferable that the Government does not make spending decisions based on the desires of certain individuals rather than the economy as a whole, as that would result in misallocation of capital and a terrible waste of taxpayer money. (Admittedly, there are many other terrible Government policies from both sides of the political spectrum, so the NBN is certainly not the worst Government promise, just the most expensive).

A decision on the scale of the NBN should be properly considered — the costs (which are obviously financial, and look like bring are in the range of $30-$35 billion — depending on the final result of the Telstra deal) should be weighed against all the benefits of the faster broadband infrastructure which too may be substantial but are in the most part, still unidentified.

Stilgherrian then submitted a range of reasons why the public benefit resulting from faster broadband outweighs the cost, including inserting a nice-looking graph prepared by none other than the National Broadband Network itself.

Stilgherrian also made a couple of valid, yet obvious points — wireless in itself is not a sole solution and certainly isn’t able to carry the amount of data of fibre. But that is to ignore other existing infrastructure and the fact that private companies (like iiNet, TPG, Foxtel and Telstra) are also able to roll out high speed broadband to compliment existing infrastructure. (Most CBD businesses already have high speed broadband).

There is also the option of having a broadband network which covers predominantly higher density areas at a marginally lower speed, substantially mitigating the cost but retaining many of the benefits Stilgherrian referred to.

The NBN was drastically altered at the time of the global financial crisis by a Government which was looking to stimulate the economy without proper economic analysis. The plan went from a $6 billion to a $4 billion to a $43 billion scheme at what appeared to be the whim of a now deposed Prime Minister. The original article questioned whether that remains the correct decision for Australian taxpayers. It may be, but to the decision has become so politically clouded that taxpayers can’t be confident that they are receiving a return (be it financial or otherwise) from their investment.

I haven’t properly digested this response yet, but I do think it’s nice to be able to continue the conversation. I’ll probably write something on the weekend.

Adam Schwab’s NBN “analysis” arsehattery

[Update 30 July 2010: The conversation continues. Adam Schwab has written a response to this article.]

Crikey logo

Two weeks ago in Crikey, Adam Schwab dismissed the National Broadband Network (NBN) as “a poll-driven economic disaster”. His “analysis” is so full of misunderstandings and straight-up mistakes that it’s hard to know whether he’s pushing a pre-election agenda, deliberately trolling or is just an ignorant arsehat.

In a recent piece for ABC Unleased I proposed three tests for the credibility of NBN analysis. Schwab fails all three. He thinks the NBN is an internet service provider (ISP). He wants it to deliver short-term commercial return on investment. And he doesn’t differentiate between needs now and a decade or two or three in the future.

The NBN replaces an ageing copper network with a new one based on optical fibre. Internet access is an obvious application, but it’s also about services from pay TV to security monitoring to health — and, indeed, to good old voice telephone if that’s all you want. An analysis that only considers internet access is missing a lot of potential revenue.

The whole point of public infrastructure is that it generates benefits for all, not just short-term commercial return for investors. Think interstate highways, schools, armies, hospitals, police. It’s what governments do. As Crikey reported last year, OECD modelling shows that savings of 0.5% to 1.5% in just four sectors —  electricity, health, transport and education – would indirectly pay for a fibre-to-the-premises network in ten years.

Arguing that current internet speeds are fine for what people currently do is a tautology. If speeds weren’t OK for current activities, they wouldn’t be activities at all.

This graph shows the exponential growth in our typical demand for fixed-line internet speed since we first got dial-up modems in the 1980s. By 2015 the NBN’s initial 100Mb per second speed won’t be that stupid phrase “super-fast” any more, but merely average. Just twelve years from now we’ll want ten times that much, 1Gb per second.

Schwab is proposing that suddenly, today, this growth in demand will take the orange path and stop. Forever. Why would that happen?

All this is enough to dismiss Schwab’s nay-saying as irrelevant. But wait. There’s more…

Continue reading “Adam Schwab’s NBN “analysis” arsehattery”

Anzac Day 2010: Recycled

It’s Anzac Day, Australia’s national memorial for those who’ve made the ultimate sacrifice for our country, and that other country.

I’ve written two quite lengthy pieces for the last two years, Anzac Day Rememberings and then Anzac Day 2009: Sacrifice. I have nothing more to add today.

They shall grow not old,
As we that are left grow old,
Age shall not weary them,
Nor the years condemn.
At the going down of the sun,
And in the morning
We will remember them.
Lest we Forget

As I wrote last year, we trust that our politicians, who decide where and when these men and women serve, make worthy decisions about their most valuable contributions. Sometimes they never return, or return… changed.

Prime Minister Rudd, Sir, are you making worthy decisions? Tony Abbott, are your policy proposals also worthy? Please look me straight in the eye when you answer that.

[Photo credit: The rosemary sprig was taken from Matthew Hall‘s Twitter page from 2008. If I owe someone for that usage, I’ll make good.]