Why should there be a cost-benefit analysis of the NBN?
The truth is that every major piece of infrastructure investment should be the subject of a rigorous cost benefit analysis. As Ken Henry famously said “government spending that does not pass an appropriately designed cost-benefit analysis necessarily detracts from Australia’s well being.”
Of course the larger the investment the more appropriate is that analysis and this is especially so when the investment is to create a business asset.
The failure to conduct the cost-benefit analysis is particularly egregious because it is this Labor Government which set up Infrastructure Australia for precisely the purpose of identifying and assessing infrastructure investments of national significance. It is difficult to think of any piece of infrastructure that would better qualify for the attention of Infrastructure Australia, but the Government has refused to allow it to consider the NBN.
So what would a cost-benefit analysis do? It would first make sure we were asking the right question. What is the problem we are trying to address? Put another way, if fibre to the home (FTTH) is the solution, what is the problem? Read more.