The NBN is still years away from completion, and so too is the funding the NBN requires to get the job done far from being sorted.

In this ‘Statement 8: Statement of Risks (continued)’ document on ‘Fiscal Risks’, Australians are told that: “The Australian Government has committed $29.5 billion in equity to NBN Co Limited (nbn), which is expected to be fully utilised by the end of the 2016‑17 financial year.

“Consistent with nbn's 2016 Corporate Plan, nbn is expected to raise debt from external markets of between $16.5 billion and $26.5 billion (with a base case of $19.5 billion) to complete the rollout of the network. nbn is currently undertaking the necessary preparatory work on the proposed debt raising.

“In the event that nbn is initially unable to raise the necessary debt on acceptable terms, interim funding support may be required. Were it required, additional Government financial support for nbn would have implications for the fiscal position, for example by increasing assets and liabilities on the balance sheet and, depending on the nature of support, could have positive or negative impacts on the underlying cash balance.”

In this document entitled: ‘Statement 8: Statement of Risks (continued) - Significant but remote contingencies for ‘Communications and the Arts’, Australians are told:

“NBN Co Limited — Equity Agreement”

“The Australian Government has entered into an Equity Funding Agreement with NBN Co Limited (nbn). The Agreement formalises the Australian Government's intention to provide equity to fund the roll‑out of the National Broadband Network, with such funding being conditional on the annual appropriation processes.

“In addition, it commits the Australian Government, in the event of a termination of the National Broadband Network roll‑out, to provide sufficient funds to nbn to meet its costs arising from that termination. Although the nbn Equity Funding Agreement will end in 2019, the Commonwealth would retain obligations to meet nbn's costs arising from a termination of the roll‑out. As at 29 February 2016, nbn's termination liabilities were estimated at $9.4 billion.”

“Optus financial guarantee”

“The Australian Government has provided a guarantee in respect of the NBN Co Limited's financial obligations to Optus Networks Pty Ltd, Optus Internet Pty Limited, Optus Vision Media Pty Limited and SingTel Optus Pty Ltd (collectively, Optus) under the Optus HFC Subscriber Agreement (Guarantee).

“An amended version of that Agreement came into effect on 19 September 2015 and the Guarantee continues to apply to that Agreement. The Agreement extends for the period of the National Broadband Network roll‑out in Optus Hybrid Fibre Coaxial areas. As at 29 February 2016 it is estimated that the Australian Government's liability under the Guarantee will not exceed $50 million.

“There is a low risk that a claim would be made under the Guarantee. The Guarantee will terminate in 2021.”

“Telstra Financial Guarantee”

“The Australian Government has provided a guarantee to Telstra Corporation Limited (Telstra) in respect of NBN Co Limited's (nbn) financial obligations to Telstra under the Definitive Agreements. The Agreements were amended on 14 December 2014. The Guarantee was not amended at that time and it continues in force in accordance with its terms in respect of the amended Definitive Agreements.

“The liabilities under the agreements between Telstra and nbn arise progressively during the roll‑out of the National Broadband Network as Telstra's infrastructure is accessed and Telstra's customers are disconnected from its copper and Hybrid Fibre Coaxial cable networks. The Australian Government is only liable in the event nbn does not pay an amount when due under the Definitive Agreements.

“As at 29 February 2016, nbn had generated liabilities covered by the guarantee estimated at $4.3 billion. The guarantee will terminate when nbn achieves specified credit ratings for a period of two continuous years and either:

• the company is capitalised by the Commonwealth to the agreed amount; or
• the Communications Minister declares, under the National Broadband Network Companies Act 2011, that, in his or her opinion, the National Broadband Network should be treated as built and fully operational.

“Termination of the funding agreement with OPEL Network Pty Ltd”

“As at 31 March 2016, the Australian Government is a party to legal action brought by OPEL Networks Pty Ltd (in Liquidation) (OPEL) and Optus Networks Pty Ltd (Optus) in relation to an agreement under the Broadband Connect Infrastructure Programme. OPEL is a joint venture between Optus and Elders Telecommunications Infrastructure Pty Ltd. The outcome of that litigation is unknown as the proceedings are ongoing.”

More below, please read on!

In the section entitled: ‘Statement 8: Statement of Risks (continued) Contingent liabilities — unquantifiable’ in the ‘Communications and the Arts’ section, Australins are told about ‘NBN Co Limited - Board Members’ Insolvency Indemnity.”

This section says: “The Australian Government has provided each Director of NBN Co Limited (nbn) with an indemnity against liability as a result of the Government failing to meet its funding obligations to nbn.

“The liabilities covered by this indemnity would be no greater than those covered by the nbn Equity Agreement, with the exception of any legal expenses incurred by individual Directors arising from this indemnity.”

In ‘Statement 6: Debt Statement, Assets and Liabilities (continued) - The Australian Government's major assets and liabilities’, the section entitled ‘National Broadband Network’ states:

“The National Broadband Network (NBN) will deliver fast, affordable broadband to all Australians. The Government has instructed NBN Co Limited (nbn) to complete the NBN using a multi‑technology mix (including fibre to the premises, fibre to the node, hybrid fibre coaxial cable, and wireless and satellite technologies), to ensure the NBN is delivered as soon as possible and at least cost to taxpayers.

“The Government will provide $8.8 billion in equity to nbn in 2016‑17, including $0.4 billion moved from 2015‑16. The Government's equity contributions are capped at $29.5 billion.”

You can read more NBN entries in the 2016 Budget here.

You can watch Australian Federal Treasurer Scott Morrison’s 2016 Budget speech here, read a transcript here, see the official Budget 2016 site here, and see the Liberal Party’s Budget 2016 site here.