Monday, March 26, 2007

Labor's $4.7 billion broadband bonanza

Doesn't Labor have higher priorities?

Ross Gittins weighs in this morning.

It is a cynical bribe to the powerful media proprietors and to country voters, and a come-on to punters who want to download their porn faster, disguised as a far-sighted, imaginative initiative to make us internationally competitive in the productivity-oozing new world of e-everything.

Here's a tip: when you hear a pollie talk about Nationbuilding projects it's a sure sign he wants to waste money. The last Nationbuilding project was the now patently uneconomic Adelaide to Darwin railway.

As does Alan Mitchell in the Financial Review (no link):

The biggest problem is not that Labor is proposing to take part of the money from the Future Fund, but that it is proposing to invest the money at all.

It is all very well for Rudd to conjure up images of 19th century nation-building, and for the internet cheer squad - including the media companies that would benefit directly from the investment - to wax lyrical about the economy-transforming benefits of broadband. Rudd is proposing to spend public money on a project that the telcos are quite capable of doing without additional taxpayer assistance.

More from Mitchell...

As is too often the case with grand public investments, Rudd's political commitment to the high-speed broadband network has been made without any serious evaluation of the likely costs and benefits.

Rudd complains about the back of the envelope preparation of the government's water initiative. So where is his detailed analysis?

His broadband proposal is... a populist initiative, dressed up as nation-building, that is designed to win votes while doing Labor's media mates a very generous favour.

And Joshua Gans recaps.