NBN costs creating budget time bomb: Deloitte
'Fifty billion? Tell 'em they're dreaming, son'
Once a fan of Australia's National Broadband Network, Deloitte Access Economics is now warning it's a time bomb for the federal budget.
Last week, the federal government tipped in a loan of AU$19.5 billion so nbnTM could finish its NBN rollout. Deloitte is now warning that the network doesn't cover the government's total $49 billion budget exposure.
In its Budget Monitor publication, Deloitte warns if the NBN is “a dud”, a chunk of those billions will drop back into the federal budget. The government currently treats the network as an asset investment that doesn't count against the federal government's deficit.
That hole could be as much as $22 billion, if a PriceWaterhouseCoopers calculation from February this year is correct. PWC predicted that by 2024, the network would be worth $27 to potential buyers.
A low sale price would effectively turn last week's government loan into a grant.
The gloomy view of Deloitte is in sharp contrast to its sunny prediction back in 2012/13 that the network would give the country a GDP boost of more than $3 billion by 2020-21 and create tens of thousands of new jobs, merely by enabling more telework.
Something must have happened to dent its optimism ... ®