[AusNOG] News: Minister Conroy contemplating Government-Fundedundersea cable?

David Hughes David at Hughes.com.au
Mon Oct 1 11:08:48 EST 2012


On 30/09/2012, at 4:30 PM, Mark Newton wrote:
> Regardless of what anyone thinks of the NBN, it is inarguable that the Government's
> current plan is to finance it by means of an investment, not debt;  

Ok, so based on this, if I go to the bank and borrow $1M to buy a couple of "investment" properties then I don't have any "debt" because they are investments.  And as I'm not indebted I wouldn't be charged any interest on the debt facility I don't have because I spent the money on an investment.

Debt is debt is debt until such time as it isn't debt anymore (i.e. you sell the investment and give the money back).  The NBN is not being funded out of budget surplus so we are using someone else's money to build it - i.e. debt.  Based on a WAG of the NBN spend rate and government bond yields I'd put my finger in the air and suggest that the debt will be costing us between $1B and $3B in interest each year.  That will also be going onto the national visa card to be paid off once we get a budget surplus again.

IMHO the NBN is a good thing.  If we can realise the dream of a ubiquitous level of data service to the vast majority of residents of the country then that's a good thing (and I did day "if" ).  But there's no denying it's costing a fair chunk of change (plus interest) to build it.


David
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