Malcolm Turnbull NBN 2013

Malcolm Turnbull has been in Newcastle to deliver the annual Barton Lecture at the University of Newcastle. 1233's Carol Duncan spoke with him at length about the National Broadband Network, Tony Abbott, same-sex marriage and leadership.

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Malcolm Turnbull and Carol Duncan in the 1233 studios. If you want to know why Malcolm is holding a pomegranate, you will have to listen to the interview. (ABC Local:)

On the eve of Malcolm Turnbull's visit to Newcastle, the New Zealand parliament voted to redefine marriage as a union between two people, becoming the first country in the Asia-Pacific region to do so.

CAROL DUNCAN: Why do we still not have this right for Australians?

MALCOLM TURNBULL: We can (do this here) but as you know the parliament considered the matter last year and voted against it. But it's open to coming back again.

There is certainly much more rapid change in this area than many of us, including myself, had anticipated. In addition to New Zealand legislating, the UK is in the process of doing so, France has done so, there are now I believe 10 US states where gay marriage is legal so the trend is only going one way. I think the changes in New Zealand and the UK are going to have a very big impact (on same sex marriage legislation in Australia).

If you go back to the 1850s when there was a case in England called Hyde v Hyde in which a judge gave what became the classic definition of marriage for a long time which is a permanent union between a man and a woman. He did so on the basis that this was what was accepted in what he described as 'all of Christendom'. We wouldn't use that term any more but if you were sitting in a court in London or anywhere else today and you had to ask yourself 'what is the accepted definition of a marriage in the western world, or in countries of a dominant Christian tradition, however you wanted to define it, you certainly couldn't say it is a permanent union betwewen a man and a woman because there are so many of those countries, very substantial and important countries, which recognise gay marriage, so there has been a big change.

I would have said this was going to take a long time but I think it will happen sooner rather than later. It will become increasingly difficult for Australia to maintain opposition to arrangements which are accepted in countries with which we are so close, which we have so many people going to and from, so many people coming here from New Zealand. I think there has been a big seachange in this and it's happened incredibly rapidly, within the space of a couple of years."

CAROL DUNCAN: It is often suggested that you don't actually believe in the policy on broadband that you are having to present for the coalition, or that you don't really believe it is the best option for Australians.

MALCOLM TURNBULL: It is, I have absolutely no doubt about it. If I wasn't a politician, if I was back in my old job in the business world and the government, any government, asked me to advise on what the best course of action would be, I would describe exactly what our policy is because you get the right balance between the level of investment, affordability - being able to price the internet access at a price that people can afford, and speed, giving people the services that they need. So I think we've got the balance right."

The problem with Labor's scheme, let's be quite frank about this, Labor has said they're going to run fibre optic cable into 93% of Australian households. We criticised it as being too expensive. We actually think this project will cost $94bn, taking a very long time, it's running way behind schedule. After four years they've got less than 20,000 people connected to the fibre and they'll be lucky by June 30 to meet 15% of their targets.

CAROL DUNCAN: In 2003, Telstra executives told a Senate inquiry that the copper network had to be replaced, that it was 'five minutes to midnight' for the copper network. Should we be relying on the copper network at all for such a massive piece of infrastructure?

MALCOLM TURNBULL: You've got to remember that under our scheme we are replacing almost all of the copper. The only copper that would remain in the customer access network is the last four or five hundred metres to the premise, and the reason for not replacing that is that as long as it is in good condition, as long as the length is short, you can deliver very high speed broadband - up to 100 Mbps - so you can deliver very high speed broadband, certainly more than fast enough for what people want and what people value, but you save a gigantic amount.

The depressing thing about these networks is that it's really the last mile, it's actually less than a mile, that costs all the money because it's so labour intensive.

CAROL DUNCAN: What about those areas where the existing copper network, in some cases up to 100 years old, will not be good enough for the job?

MALCOLM TURNBULL: If that's the case, your area would be a candidate for either having that copper remediated at the time of the build, and we've taken account of that in our policy, or if you've got areas that have got endemic problems in terms of maintenance and water penetration then you may replace them with fibre and do so now.

So you just have to be pragmatic and practical about it but the changes are literally, you're talking about saving $60bn."

CAROL DUNCAN: In January 2013, Bloomberg's list of international internet speeds indicated that large parts of the world are already accessing speeds faster than 25Mbps, so is cutting the fibre at the node to save money now simply a false economy if over the longer term we have to continue to make very large investments in the very near future to upgrade the coalition's alternative NBN?

MALCOLM TURNBULL: No, I don't believe you'll need upgrades in the very near future.

Most people will get by 2016 on the fixed line upgraded network 50Mbps or better. We've said 25 Mbps is the minimum, that is the direction that we will give NBNCo as the minimum, so they have to do it on the basis that nobody gets less than that.

Our goal, and our direction to NBNCo will be that by 2019 to ensure that at least 90% of the people on that network have not less than 50Mbps.

CAROL DUNCAN: Singapore offers a download speed of about 50Mbps on average, Japan is rolling out a 1Gigabit (1000Mbps) network ...

MALCOLM TURNBULL: Which is useless by the way, for a residential customer, it's a marketing gimmick.

CAROL DUNCAN: Should we be building two networks, one for industry and research, the other for domestic users or simply investing one big network to cater for all needs?

MALCOLM TURNBULL: If your question is 'should you be providing higher rates of bandwidth to industry and research and businesses than you do to residential consumers' the answer is obviously yes, because they've got market for it.

You can spend a gigantic amount of money, $94bn, and connect every cottage, every flat and every townhouse in Australia to a fibre optic cable that's capable of running at 100 Mbps or ultimately at 1Gb, the vast majority of those customers have no use for, no value for and will not pay you for those very high speed services. So you're making a gigantic investment upon which you can get no return and as a consequence you end up having to charge people a lot more.

You've got to remember that under Labor's plan, this is not my figure, this is what they have said in their own documents given to the ACCC and their own corporate plan 'wholesale prices will treble over the next 10 years for broadband access'. Now they've (prices) been coming down for the last 10 years and it's no wonder they'll go up because if you're investing so much money in the network then you've got to get a return on it.

"I think a very important thing to bear in mind is that we've got to be practical and hard-headed about this. This is serious money. We're talking about all the other infrastructure investments we need to make in Australia. The great virtue of telecoms networks is that, unlike a bridge, you can expand them incrementally, bit by bit."

CAORL DUNCAN: Could it be expected that to delay the full roll out of fibre will increase future cost of completing the equivalent work as designed into the government's NBN? We often see major cost blow-outs with delays in major infrastructure construction across the country.

MALCOLM TURNBULL: Let's assume that we can spend $900 on average to get a premise up to the most part 50Mbps but no-one less than 25Mbps, and we can do that now. And let's assume it's going to take us the best part of another $3,000 to get them up to 100Mbps and up to 1Gb with FTTP, but let's assume that there's not going to be any demand for that very high speed in those residential areas for, say, 10 years, I'm saying you would be better off postponing that investment, keeping that extra $3,000 in your pocket, earning a return on it somewhere else or not having to borrow it, and then when the demand is there making the investment then. It's just labour costs, labour costs will rise with the price of inflation but so will everything else.

But the big difference is if you build a bridge you cannot build a bridge with demand just 10 years ahead because you can't just keep adding lanes every 10 years. You've got to think ahead 30, 40, 50 years.

With a telecoms network, you've got the ability to build it for now and the foreseeable future, and you've got the ability to upgrade it progressively over time as demands change, and you don't really know what the demand's going to be, and above all as technologies develop. And so while postponing investment until it's needed may seem a bit hard-headed and sounding too much like a canny accountant than a visionary politician, it actually makes great sense because if you postpone that investment until it's needed the opportunity cost on the money that you haven't invested and that would have earned no return in that time, so you've got your investment in your pocket or doing something else, but also when you do come to invest you're using the latest technology and that's a powerful argument to take a more steady and businesslike approach to it."

All politicians are susceptible to grand gestures, but this is a case where you can actually be heard-headed, pragmatic, make the network affordable for both the taxpayer and the consumer and have the advantage of the best technology when you need it.

CAROL DUNCAN: Why do you think that a lot of social media commentators suggest that you don't actually believe in the broadband policy that you are having to sell as Shadow Communications Minister?

MALCOLM TURNBULL: I have no idea. I think they're transferring their own views to me.

I can assure you that I do (believe in the coalition broadband policy).

I've been involved in the internet in Australia since it really got going, I was one of the co-founders of Ozemail. I'm digitally connected, I'm online a lot, I'm not a luddite, but I'm just saying to you that you can achieve everything you want to do, get everybody online quickly and affordably, I mean remember this - people in the bottom 20% of incomes are nine times less likely to be online than people in the top 20%."

CAROL DUNCAN: Can those in the bottom 20%, however, afford the $5,000 being suggested to connect to the coalition's alternative NBN?

MALCOLM TURNBULL: No, you don't need a fibre optic cable. This is the great fallacy you are labouring under is the notion that to have access to the digital economy you need to have a fibre optic cable into your house. It doesn't matter what the technology is as long as you have the speed that enables you to do all the things you want to do."

Now, you talk about 25Mbps, and I say that as a minimum, with 25 Mbps you can stream, download simultaneously four high-definition video streams. That is a lot. You can do all of your e-commerce, all of your tele-conferencing ...

CAROL DUNCAN: But there's been a television released this week that requires greater speeds than that.

MALCOLM TURNBULL: The real issue is, are people prepared to pay for it. Are they prepared to pay for that investment.

The answer is that you will never get a return, at least I don't believe, I cannot foresee a time when you can get a return from residential consumers for those very very high speeds. If I'm wrong, and it doesn't matter whether I'm right or wrong, because the flexibility is in the network.

We will build it so it is capable of being upgraded to FTTP as and when demand requires it."

CAROL DUNCAN: Do you believe there is a perception that women don't like Tony Abbott very much, that women aren't comfortable with him.

MALCOLM TURNBULL: I'm not sure that's right. I think that's something that's asserted and I know one woman who doesn't like him very much - that's his opponent the Prime Minister - but you look at Tony, I mean there he is, he's got two lovely daughters and he's got his wife and he works with plenty of women in his office.

The proposition that Tony Abbott is a misogynist I think is just wrong. You can make a lot of other points about him but the idea that he is a woman-hater is just nonsense.

CAROL DUNCAN: I often see comments about the September federal election along these lines, "I wouldn't vote for the Liberal Party under Tony Abbott, but I would vote for it under Malcolm Turnbull."

MALCOLM TURNBULL: That's very flattering and I'll always accept a compliment, you don't get a lot in politics. All I can say is that I am part of the Coalition collective leadership team. We are not electing a President. Tony Abbott is the leader, he will be Prime Minister if we win.

CAROL DUNCAN: For better or worse a lot of Australians do actually vote on personality.

MALCOLM TURNBULL: Yes but there is more than one personality in a government and there is more than one personality in an opposition, too, and so we are a team.

So you might prefer Malcolm Turnbull to Tony Abbott or you might prefer Tony Abbott to Joe Hockey or Julie Bishop to all of us, but the fact is that we're all part of that group. We're a package deal.

So all I can say to those people who say 'I'd rather have Malcolm Turnbull than Tony Abbott' is thank you, very much for that generous sentiment but I'd still urge you to vote Liberal because I will be there. I am part of the leadership team and it is a collective leadership team."

CAROL DUNCAN: So for those people who aren't comfortable with Tony (Abbott) you'll be there to rein him and make him behave in the ways that perhaps they wish?

MALCOLM TURNBULL: Well I'm not sure what they want me to rein him in on? When you ask people about that they keep on talking about his swimming attire. I don't know that that's my responsibility.

CAROL DUNCAN: Are people perhaps concerned that his obviously strong faith will interfere with his policy-making decisions?

MALCOLM TURNBULL: Well, I don't think there's any evidence for that. He's a very practical person. He recognises the Liberal party and indeed Australia is a very broad, diverse community.

We use the expression 'a broad church' not to express that we're all religious but that there's a wide range of views, and as the leader you've got to accommodate all of those views and I sought to do that when I was leader.

CAROL DUNCAN: There are lots of points that you two differ on, how hard is that?

MALCOLM TURNBULL: Well we differ famously on the question of the republic but that is, in effect, a free vote issue in the Liberal party so there are plenty of Liberals who think we should be a republic, Peter Costello comes to mind, but there are plenty that don't - John Howard and Tony Abbott are staunch monarchists so the Liberal party survives notwithstanding differences of opinion.

We have a common purpose in restoring capable, competent government that seeks to enable people to do their best rather than telling them what is best. So we've got a philosophy of government but we don't agree on every issue.