Monday 5 August 2013

So the economy will be the issue well lets look at the NBN

We have a situation where if Abbott gets in he will reward his mates at News Limited. He will do this by ensuring that the NBN is watered down so as to ensure that Foxtel doesn't lose any market share or can truly get an advantage over any potential entrants into the market by slowing down the speeds and distribution.

The NBN will in either form help the economy but let's consider the economy on two other factors first and then take that into consideration with the NBN

Abbott says he will honor all deals with the states on Gonski. That should have been a no-brainer from the start. We would not have the drastic skills shortage if the Howard government had started increasing money for education and training back when it first got into government 19 years ago. We would have a range of graduates in a lot of areas that would have jobs rather than having a youth unemployment rate of 25%.

What I find interesting is the LNP saying they will increase jobs by 1 million. What I want to know is how? And the retort will be by reducing regulation and the burdens of taxation on business. This is not the reason why people are not employed. The reason is that the people who are in the market don't have the right skills or there is no incentive for them to become engaged in being in the work place. We import a huge number of workers under 457 visas. Why haven't we trained our people in these skills?

The coalitions policy in Healthcare is one of privatisation and fragmentation to give the people on the ground more say on what occurs in the delivery of services. Sounds great in practise but expensive in delivery and who pays? "The Patient"?

This election is going to be about the economy. It is my belief that the ALP needs to be selling a message that includes the combination of the following as they relate to the economy:

NBN is a big infrastructure project that will be a game changer for Australia in the new economy. We have led the world in the provision of service-based businesses and if we don't continue in this area we will be left behind by our trading partners. We have an opportunity to truly export great internet businesses across the world from anywhere in the country. The NBN will also change the way we live and where we live enabling us to reduce the impact on cities and allowing us to decentralise over time.

There will be the creation of new jobs in a greener and more connected economy. This means we can have people working in a manner that suits their life style as well as provide employers with a flexibility that suits their needs. This is through the NBN.

Healthcare needs to focus on the benefits that can be achieved by having a single e-health system, and by getting the states to recognise the savings that can be achieved through a centralized and well managed single management system. A system that is able to provide services where they are needed regardless of where the service provider is located (A Radiologist in Melbourne providing consultation to a Doctor in Marble Bar in remote WA). Nearly all major enterprises in the world are moving to single ERP (Enterprise Resource Program) systems that enable them to have a transparency to increase efficiency and reduce wastage. Surely this has to make sense in what is one huge enterprise that is health care.

The LNP, even though they profess to be the productivity experts, have in each of the states in their control cancelled or suspended work on eHealth. Hate to be cynical and start to sound like a conspiracy theorist but could this be because they have outsourced a majority of the services to the private sector on a per service basis and any efficiency gain would reduce the private sectors income stream? Below is an article regarding the cancellation of HealthSMART which yes had its issues but with appropriate leadership and drive could have delivered outstanding benefits.

http://delimiter.com.au/2012/05/21/victoria-dumps-healthsmart-e-health-project/

Education being able to be provided regardless of where you are and in a manner that is engaging and able to take into account your special needs. This will then enable people to undertake studies of their choice in areas of interest that suit them rather than the current model of providing study at local institutions that is only relating to the local economy eg in Barossa they offer wine making courses but not much in the way of mine supervision or being a Nurse.

The LNP solution for the NBN is to provide us with an inferior and what will become an unreliable system. This is from the people who call themselves good economic managers.

So let's look at the difference in cost for benefit

LNP

So lets look at the numbers 29.5 Billion gives us FTTN. We, the home owner, have to pay if we want the last mile as they call it in fiber at a cost of lets say $2000 (Estimates say $6000) so lets say we have 5 million homes who chose to get connected to fiber (that is only 13% of the total connections under the ALP) that is an additional 10 Billion in cost. so we have a total cost of 39.5 Billion we will then have cost of maintenance of two systems. Fiber network at say 1 Billion and the copper at $700 million so total cost of ownership over ten years is 56.5 Billion that is connected to 5 million premises at high speed and another 32 million to be connected in the future so an additional 64 Billion impost on the economy or we have a two tiered system with all the disparity and issues that we get with that. Total cost to get equal network to the economy 110 Billion odd dollars


ALP

37.3 Billion this is the cost estimates by NBN so lets say they are out by 25% it is 46.8 Billion gives us FTTH with all the copper replaced we have all 37,632,000 premises connected we are only up for the maintenance on the fiber network of 1.2 billion give us a total cost of ownership over 10 years of 56.5 billion.  So we have 36 million more premises connected at a higher speed and with the ability to be able to achieve higher speeds sooner.

Here is the article about BIS Shrapnels assessment of the maintenance cost
http://www.zdnet.com/au/nbn-to-save-up-to-au700m-in-copper-maintenance-costs-7000002846/ 

As I said before the LNP are trying to say they are the economic managers

So what is our return on investment then? Well we first of all save 700 Million per annum on not having to maintain the copper network.

We spend 121.4 Billion on Health, 76 Billion on education so lets say we get a 2% productivity gain in each of these sectors. That is a saving of 3.94 Billion a year but lets not be that generous.

If we look at the total GDP and say we have a productivity increase of .05% we are looking at 6.5 Billion per annum so taking just the economy as a whole with a .05% improvement the Return on investment is just over 8 years on a piece of infrastructure that if it lasts as long as the copper will be here for 100 years.

We want to give the economy over to these dolts. I did this based on simple maths garnered from government published numbers so even on the back of a postage stamp the numbers are pretty easy to see.



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