Monday, February 14, 2011

Want to fund flood reconstruction? Raid the NBN

The government should raid the pool of funds set aside for the National Broadband Network to fund flood reconstruction and abandon plans for a levy according to the Business Council in a pre-budget submission released this morning.

The Council says low value programs and infrastructure projects that have escaped cost-benefit analysis should be raided before considering an extra tax and singles out the NBN as the biggest example of a project "not demonstrated to provide a net benefit to the Australian economy".

With funds and labour tight as a result of the mining boom and stretched tighter by the floods and cyclone the Council says there is no longer any need to spend on infrastructure merely to stimulate the economy.

It wants Infrastructure Australia to run the ruler over all projects including the NBN to determine whether they are value for money...

The Council's submission echoes a report from the UK-based Economist Intelligence Unit that last week found Australia's proposed NBN to be the world's most expensive, offering relatively poor value for taxpayers' funds.

The submission calls for a permanent Natural Disaster Fund costing around $1 billion per year instead of the $80 million per year presently set aside for disasters.

It says the budget has become hostage to commodity prices and notes that if they slide 17 per cent from their present record highs government revenue will be hit $35 billion.

It submission calls on the government to set up a permanent Independent Commission of Budget Integrity to second-guess the work of Treasury, and offers up $10 million of business tax concessions per year to fund it.

The idea builds on the NSW Parliamentary Budget Office being set up to cost state election promises and the scheme costing proposed in Canberra by rural independents.

Releasing a study prepared for the Business Council by former senior Finance Department official Steven Bartos, BCA President Graham Bradley said external scrutiny would place greater pressure on Treasury and the government to get "value for money" and ensure programs were "sustainable over the long term".

The Independent Commission would take over the Intergenerational Report from Treasury and examine spending and benefits at present "off limits" such as those applying to owner occupied housing and private health insurance.

Published in today's SMH

Related Posts

. Reserve to earth - First a cost-benefit analysis, then an NBN

. The Economist broadband survey is a disgrace

. A parliamentary budget office?