87% take up the NBN

[Super Nova]

By the time it is done and dusted, my mortage will have taken me 30 years to pay off, yet every day it provides value to me even though I technically run a loss.

You get a good return on your investment.

1. You are not paying rent - dead money
2. Repayments is just above rent
3. You own the asset at the end.
4. It is worth more than you paid

Great ROI case. A good one.

Here the issue is transparency. they should say.... it will cost X and will not recover X in the term of the project 8 years. It provides indirect benefits to the ecconomy that is Y. Since the NBN business can not financially via accounting treatment realise these benefits on it's balance sheet the business case still stands. It will recover the financial investment by date Z. The total benefit to the ecconomy and the intanglible benefits are XYZ. Business case for Australia... stands up. Business case to NBN standalone is not so compelling.

My biggest concern when you set up a business that is structurally loss making, is at sometime in the future they will be forced to be profitable. If they can not change their cost base they will have to increase the cost of the services. if they do that it will erode the benefits case to consumers and australia. if that happens then the whole thing never stood up from the beginning.

Setting out how this will be addressed if a key issue for me.

[IQSRLOW]

Your immunization analogy= fail

This is the spending govts are supposed to do. Not get involved where business knows better

You pay a mortgage because historically, bricks and mortar provides a return. You should sell up and rent because you are too stupid to know better

[Leftwinger]

Great ROI case. A good one.

Not really, if you want to get technical. In any case 30 years is nearly 4 times 8 years - somehow you say it is ok to take 30 years to pay off something but if something else might not pay itself off in 8 years then it's no good?

Repayment on a mortgage today is quite a lot higher than rent in a majority of cases - often two to three times. And whether it's worth more at the end is quite questionable in light of the recent state of the housing market. But I digress.

But that's the thing isn't it? I didn't buy it for the sole purpose of buying an asset. It fulfilled a social purpose, and a very necessary one at that. But how could such a thing be considered in a business case? In short, it couldn't - those things are outside the parameters of the purely immediate monetary return values laid down in a business case. I might make a vauge reference to xyz but no matter what those benefits might be, they cannot be considered to be of any overarching importance.

I wonder how many years it took the Great Ocean Road - constructed as a "make work scheme" in the depression - to realise a monetary return on investment? Yet today, it is one of the nations great tourist drives for both Australians and international visitors. It has certainly paid for itself many times over. But if a pure business case had been required for it to go ahead, it would have failed the case and never been built. To our ultimate loss.

Really, applying such a requirement - a full return on money invested in less than a decade on a project expected to have a viable lifespan of 50-60 years - is pretty meaningless. My local nursery has been operating for the better part of 30 years -the owners expecting to pay it off on the date of completion of building would be pretty bloody silly. Yet it has been a profitable business all these years, employing people and providing a useful service to the community.

The construction of an NBN will open up business opportunities that do not currently exist and in doing so, can be reasonably expected to enhance economic activity and ultimately through that, the governments tax take, so that like the Great Ocean Road, it may end up more than paying for itself in real terms.

[IQSRLOW]

but if something else might not pay itself off in 8 years then it's no good?

Where do you pull this 8 years bullshit from?
http://www.theaustralian.com.au/busines ... 5962385026

NBN Co chief executive Mike Quigley is staring down claims that the high speed internet project will involve a "destruction of capital".

The business case for the government-owned NBN Co, released last week, shows the weighted average capital costs for the project are likely to exceed its internal rate of return.

NBN Co's capital costs are expected to average 10 per cent to 11 per cent over 30 years.

Although NBN Co has not released its forecast returns, it has indicated they are likely to be above the long-term bond rate of about 5.4 per cent.

[Leftwinger]

Where do you pull this 8 years bullshit from

It is the projected time to complete rolling out a modern NBN right around the country.

NBN Co's capital costs are expected to average 10 per cent to 11 per cent over 30 years.

Although NBN Co has not released its forecast returns, it has indicated they are likely to be above the long-term bond rate of about 5.4 per cent.

Did you have a point to make here?

[IQSRLOW]

Did you have a point to make here?

Yes. Even after 30 years, this piece of shit will never pay itself off, let alone 8