Friday, 6 April 2012

The Forgotten Elephant

Percy Allan, president of the Australian Institute of Public Administration and former head of the NSW Treasury, had some choice words to say about the NBN yesterday.  The project seems to have avoided the headlines in recent times, slipping somewhat under the radar.

That is regrettable.  Such a huge investment of taxpayers' money - the biggest single government expenditure in Australian history - should be subject to the most intense of scrutiny.  Mr. Allan would seem to agree:

"That choice might be to spend $36 billion ripping out copper wire and disconnecting Foxtel cables and starting afresh, which is the proposition we are facing.  But had they examined the need, examined options and consulted they might have discovered cheaper ways to fill the need."
"If a lower than expected proportion of people end up subscribing to it because they don't want to pay Rolls-Royce prices for a Rolls-Royce service, this thing is going to be a financial disaster - watch public opinion then."

Mr. Allan suggests that the Labor Party's image is at stake, not just now, but for many years to come.  The party already suffers from the impression that it is profligate - a stigma that has lasted since the Whitlam government of the 1970s.

Mr. Whitlam may be remembered fondly by many people, but his legacy has contributed significantly to the lingering public impression that conservatives are by default better economic managers.  His government continues to haunt the Labor Party even now, four decades after it left office.

Memories fade, and that impression of profligacy will weaken, with time - provided that Labor consistently bucks the stereotype.  The Rudd and Gillard governments have thus far failed in this regard - and if the NBN goes pear shaped, then Labor will struggle for fiscal credibility for decades to come yet.

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