Why the NBN Should be Costed in Rupees

Posted on 01 June 2011 by Philip Brookes

ONE in eight Australians will be able to work from home by 2020 under an ambitious blueprint for the National Broadband Network that predicts it will save the typical family $148 a week. At least, that’s what yesterday’s Herald Sun declared.

For those not yet familiar with the currency exchange rate, that’s savings of about Rp. 7113. (The Indian national currency is Rupee, and there’s about Rp. 48 for every AUD $1.)

Yesterday’s launch of the National Digital Economy Strategy was, of course, the trigger for this most recent Herald Sun article.  A key plank of the ‘strategy’ is the supposed benefits to be derived from our improved ability to ‘telework’. The Gillard Labor Government jumped on “a recent survey of Australian businesses [that] revealed that 20 per cent believed the NBN would change their employment model by facilitating increased flexibility in the location of staff and expanding the supply of skilled labour”, and started throwing around figures of a few billion dollars extra value to our economy.

But as any economist or market researcher knows, you can’t make policy decisions and fiscal projections on the basis of a throw-away question in a popular opinion survey.

Any role that can be performed by a teleworker in Australia, can be done more cheaply by a teleworker in India or Philippines – which is of course the ultimate when it comes to “increased flexibility in the location of staff and expanding the supply of skilled labour”. Businesses in Australia don’t care who does the job, as long as it gets done – and preferably at the lowest possible price. They’re not going to give preference to a swag of individual home-based rural Australian workers when, for half the price, they can have a whole team of trained and supervised Indians working in a professional office environment in Bangalore.

Likewise, as the article points out, “by the end of the decade it will be common for people to visit the GP for a standard check-up without leaving their home”. Of course, this is not a capability that is the sole domain of the NBN, but its reach is extended into even the most remote rural areas, increasing the attractiveness and commercial viability of the Australian marketplace for Internet-based medical practices around the world.

And if we don’t feel confident going directly to an Indian online doctor and being quoted in Rupees, our entrepreneurial Australian medicos will be able to help us bridge the gap, providing a reassuring local face for a service which is Medicare compliant, but which they can then substantially outsource to India.

Meanwhile, Australia continues to strengthen our cultural and economic ties with India, as we welcome large numbers of students, migrant workers, and students who become migrant workers. In a bid to overcome our ‘skills shortage’, we’ve been able to import entire gangs of car wash attendants, shopping trolley collectors, McDonalds night crews, and of course 95% of our professional taxi drivers. This has been highly effective in releasing our unskilled Australian citizens from such mundane and mind-numbing employment to pursue more important roles such as trying to become a teleworker or perhaps develop some new skills in order to take on one of those burgeoning careers for which we currently have a skills shortage.

As our ties to India become more robust, Australian firms have the flexibility to improve efficacy through telework arrangements with India, and all Australians have NBN access to engage a GP, lawyer, accountant, business consultant, security monitoring firm, or even enrol for university studies in India at a fraction of the local cost, it begs the question – will the Government put pride above practicality and cling on to the Australian Dollar even after it’s passed it’s use by date, or will they be progressive enough to follow in the footsteps of the EU and consider adopting a common currency, most likely the Rupee because of it’s universal applicability?

The playing field is being leveled. Teleworkers will need to work for comparable rates to their Indian compatriots if they wish to have any real prospect of securing a job. Potentially, leveraging the benefits of the NBN, they could even secure contracts with Indian and other foreign employers. And as our income levels start to reach an equilibrium more in line with Indian remuneration, our spending power and economic activity will also adjust to a point where it will make more sense to collaborate with India using a single currency.

Given that the NBN is going to open up these amazing opportunities to a greater range of businesses and consumers to access cheap and efficient services from India, would it not have made more sense to cost and justify the NBN in the currency which is likely to dominate the transactions it facilitates?

No longer will your opportunities be restricted based upon your geographical location – thanks to the NBN, you will now be able to compete freely with anybody else, located anywhere in the world.

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