As I noted last night, besides some small related investments, there was no additional funding allocated to the NBN in the 09/10 budget, leaving a $38.3b short fall.
The Government has previously said that the NBN would raise money via infrastructure bonds, but wouldn’t these bonds count as debt?
The on the books catch is that they may not need to appear in the budget, because the bonds will be raised by the NBN corporation; not dissimilar to Telstra debt when it was still majority Government owned (NBN will be min 51% Government owned.)
But here’s the part that’s got me stumped: the form of the bonds.
From a previous Government statement:
?¢‚Ǩ?ìThe network will be funded from Aussie Infrastructure Bonds while private sector investment in the new company will be capped at 49%”
The implication here is that those bonds are Government backed. If they are issued by the company, with the Australian Government backing them, the Government in effect acts as a guarantor for the bonds. The last time I looked a guarantee of debt is counted as a liability until such time the debt is cleared.
If they’re not guaranteed by the Government, the use of the Aussie Infrastructure Bonds name is erroneous, but more importantly the cost of raising the money will increase relative to the security offered being less, which will further drive up the cost of the NBN.
As far as I could see, $54 million was budgeted for the NBN “implementation study” and other preparatory work in 2009-2010, and nothing beyond that. Since that study includes how the thing's going to be funded and the legislative framework, I assume that big blank space will be filled in at the next budget, costs, interest, the whole shebang?
Stilgherrian, I think I saw the same allocated budget. And it seems that not all the funds are yet considered.
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