Small business needs the NBN…now!

Australia’s two million-plus small businesses are often called the “engine room of the economy” – but too many are running on empty, waiting for a National Broadband Network that has been promised since it was established by the Rudd Labour government in 2009.

Fast internet is key to successful and innovative businesses, but the Government’s NBN strategy is failing our SMEs – and setting them up for failure. In a recent survey commissioned by Reckon, 83 per cent of respondents indicated that they don’t have confidence in the ability of the government to deliver the NBN within the next two years as promised.

Small business needs a white knight, not a white elephant.

A government that heralded itself as pro-innovation cut itself off at the knees by turning to inferior technology to complete the roll out. You don’t win a race by stopping before the finish line. You don’t deliver a true high-speed broadband network by stopping before the end connection point.

We’re too far down the NBN track for major changes, but it’s not too late to support small businesses growth and innovation by fast tracking the rollout through aggressive government funding. On the original timeline, it should already be finished and would have been all fibre to the premise (FTTP) – just like New Zealand.

What began as the largest public sector investment in broadband infrastructure in the world as a share of GDP with an initial allocation of $40.7 billion in 2009, has degenerated into a sad story of the unintended consequences of government meddling in technology. Instead of enabling our innovation leaders and getting out of the way to let them do the job, Australia has endured one of the most interventionist broadband rollouts in the world. And to what end result? Globally, Australia now ranks 64th in average peak connection speed, well behind neighbouring New Zealand (35th), who continues to improve their ranking every year.

According to the Technology Policy Institute’s ominously named The End of Australia’s National Broadband Network?, the proportion of users in Australia with access to high-speed broadband has not improved since 2007. Availability and adoption here compared to other countries suggests we have performed worse under the NBN than we did before. In 2010, Australia ranked 19th in fixed broadband penetration across OECD countries. By 2015 we ranked 24th. In speed, we ranked 27th out of 30 measured OECD countries in 2010. By 2015, we were second last, only ahead of Greece. It called the NBN “an example of an intrusive policy subject to political pressures that has resulted in inefficiencies that distort consumer patterns and investment decisions without changing the competitive landscape.”

The government still has an opportunity to change that competitive landscape by aggressively increasing its NBN investment to enable faster completion. A recent survey by ISP speed champion MyRepublic revealed that only one in three homes connected to the NBN (34 per cent) believe their speed is good enough for a home-based business.

Without the backbone of an effective, high speed, widely available NBN, many of those businesses won’t be in a position to take advantage of trade agreements or innovations.  Projects such as the NBN hurt our competitiveness in an increasingly winner-takesall global economy. Even incremental improvements deliver a better outcome than none. The goal should be to provide everyone with a decent Internet service with speeds that drive innovation, competition, productivity and jobs. Then make it even better.

The Government needs to get back on board with financial support to drive connection speeds and speed of rollout– then get out of the way.

Sam Allert, Managing Director – ANZ, Reckon

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