NBN Analogies

by

There is a current game going around of comparing the NBN to successful past public projects. The other week I used the Columbus Voyages although that was supposed to be on the issue of cost-benefit analyses that were hard to do rather than some direct comparison. That is, I’m not saying that because the Columbus Voyage turned out to be a success (at least for Europeans) that the NBN will too but that those voyages would have likely failed a cost-benefit analysis because such analyses have problems. Consequently, begging for more narrow cost-benefit analyses on the NBN does not seem the way to go.

The Government has used the Snowy Mountains Scheme and yesterday, there was some challenge on that front. According to Angus Taylor, who has personal familial knowledge of the scheme, proper cost-benefit analyses were carried out prior to its commencement. He makes three points.

  1. The Snowy scheme delivered benefits people could see — namely, getting rid of electricity blackouts in Sydney.
  2. It involved a substantial and diverse immigrant workforce that was unifying in the wake of WW2.
  3. It involved public ownership but with private outsourcing of various elements — apparently, innovative for the time.

Now all of those things are interesting. To those who argue that we don’t need big Government solutions to infrastructure problems, it is surely the relevant counter-example. And in the end it says that the NBN, because of its scale, will need to be innovative to succeed. That is all fine and maybe the Government today doesn’t have the mettle to pull it off. But the claim at the beginning of the piece is that the Snowy-NBN analogy was false:

“The Snowy was exceptional in many ways and has had a lasting effect on our nation. Like the Snowy hydro scheme, the NBN requires a big chequebook, but that may be where the similarities end.”

Put simply, the article argued that the Government could learn alot of relevance for the NBN from the Snowy experience on implementation. How can that possibly be a ‘false analogy’?

8 Responses to "NBN Analogies"
  1. Well, there is one stark difference. Can you imagine a manager today being allowed to immediately sack a group of shirking roadworkers?

  2. Is this counterargument by false (or perhaps over-extended) analogy?
     
    Argument: some projects are so large and important that they must be built by government.  The Snowy Scheme is an example.
     
    Counterargument: but the Snowy Scheme was built by immigrants from lots of nations.
     
    Conclusion[?]: the NBN should not be built, unless it is built by immigrants from lots of countries.
     
    Huh?
     

  3. If cost-benefit analysis is not the right way to assess such a project, what approaches can be used?
    There are clearly many large public infrastructure investments which are not worthwhile (I can’t think of any good federal examples off the top of my head, but on a smaller scale, some obvious examples like the Sydney Monorail spring to mind.)
    And even if you do accept that an NBN is worthwhile, how was it decided that fibre-to-the-home is the best choice.  Would fibre-to-the-node have delivered 80% of the benefit at 20% of the cost?

  4. @StephenM,

    Interesting article. So from that input are we to conclude that the Federal Government is engaging in wistful thinking, regarding benefits (direct and indirect), and underplaying the likely costs?

  5. Did the Snowy Mountain scheme earn a good rate of return? I thought it turned out to be a lousy investment.

%d bloggers like this:
PageLines