The NBN is running out of money, with its final $8.8 billion of public funding set to be delivered by the end of the 2016/17 financial year, the 2016 federal budget reveals.
“The Australian Government has committed $29.5 billion in equity to NBN Co Limited (NBN), which is expected to be fully utilised by the end of the 2016-17 financial year,” the budget papers says.
The Coalition government, with Malcolm Turnbull as communications minister, promised at the 2013 election to deliver a mixed technology broadband network faster and cheaper than Labor’s NBN. The Coalition pledged $29.5 billion for the project, with the caveat that any additional funding would need to be raised from the private sector.
The budget warns that the NBN needs to raise between $16.5 billion and $26.5 billion to complete the rollout, and that it might not be as simple as first expected.
“In the event that NBN is initially unable to raise the necessary debt on acceptable terms, interim funding support may be required,” the budget papers say.
“Were it required, additional Government financial support for NBN would have implications for the fiscal position, for example by increasing assets and liabilities on the balance sheet and, depending on the nature of support, could have positive or negative impacts on the underlying cash balance.”
The government will be tasking the Department of Finance to help with consult the Department of Communications and the Arts to seek independent advice to help the NBN Co’s funding predicament.
Noticeably missing for the NBN in the Budget is the change to FTTdp technology, replacing the heavily criticised FTTN. This was expected after the superior technology was found to be almost the same price to deploy as the Coalition’s preferred copper-based FTTN.