The Federal Government has claimed that its $26 billion investment in the $43 billion National Broadband Network will yield a profit of 6 to 7 percent.The figures were released today in the NBN Implementation Study, written by McKinsey-KPMG after a $25 million commission from the Government.The study said that - assuming no deal is struck with Telstra - NBN Co could nonetheless be earnings positive within six years.
Speaking at the launch of the implementation study, Finance Minister Lindsay Tanner told the press today that the report "confirms clearly that the proposal is entirely financially viable" within the $43 billion plan first announced.Minister Tanner said the Government's $26 billion contribution to the NBN "is an investment, not a grant" because "it will be earning a return." The NBN Implementation Study assumed that half of Australia's population would take up NBN-supplied services "at prices comparable to today at faster speeds."
Prime Minister Kevin Rudd told a separate news conference that the report "confirms that the company will be profitable, so that Government investment peaks at $26 billion by the end of year 7, and taxpayers will be paid back with a modest return by year 15."
NBN Co CEO Mike Quigley released a statement saying that "it is pleasing to see that the Implementation Study has confirmed NBN Co's conclusion that this project is financially viable."
Issue: 324 | February 2014
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