NBN Co Limited (NBN Co) is a Commonwealth company under the Public Governance, Performance and Accountability Act 2013 (PGPA Act), and is a Government Business Enterprise (GBE). A GBE is a commercially focused government owned business that is established to fulfil a Commonwealth Government purpose. The Commonwealth Government establishes GBEs to implement government policy, where intervention is appropriate such as where there are high barriers to entry, market failure or no market at all and/or infrastructure investments with lower rates of return.

The purpose of NBN Co is to provide fast, reliable and affordable connectivity to enable Australia to seize the economic opportunities before it and service the best interests of consumers. NBN Co is accountable to the Australian Government as its sole shareholder. The Commonwealth’s ownership interest is represented by two shareholder ministers, the Minister for Communications and the Minister for Finance. The Australian Government has made a commitment that it will keep NBN Co in public hands for the foreseeable future to provide the company with the certainty needed to continue delivering improvements to the network while keeping prices affordable.

In July 2020 the board commenced oversight of changes to NBN Co’s governance, strategies, initiatives, processes and reporting to facilitate the transition of the company to be ‘a customer-led, trusted critical national infrastructure provider’ by 2023–24. The nature of the NBN Co transition is one of a shift in the balance of its two core functions of ‘building’ and ‘operating’ the national broadband network. NBN Co will continue both types of activities after completion of the transition. The transition reflects the shift in focus to being primarily on the operation of the network while continuing to build and upgrade the infrastructure supporting the network.

This performance audit aims to provide assurance that NBN Co has strategies and arrangements in place to oversee its transition from building to operating the national broadband network.

The performance audit examined the changes in governance, processes and reporting from July 2020 to December 2023 to support the transition activities. The focus of the audit was to evaluate the oversight of the transition by the board as the accountable authority. The audit considered the board’s operation and reporting to shareholders based on information provided to the board by management.

Key findings:

• Strategies and arrangements to oversee and manage the transition from building to operating the national broadband network were largely effective. Communication with, and reporting to, shareholder ministers fell short of mandatory and other requirements.
• NBN Co had largely fit-for-purpose and risk-based transition plans and strategies except for failing to address all mandatory requirements. The approach to the transition made the achievement of timelines and key milestones less transparent to the board. There is no timeline for completion of the transition. It was not transparent that ministers’ statements of expectations were reflected in NBN Co’s transition plans and strategies.
• NBN Co’s monitoring and reporting demonstrates that it has been largely effective in transitioning its business to support a focus on operating and enhancing the national broadband network. NBN Co’s performance monitoring and reporting did not meet the content requirements of a GBE. NBN Co has demonstrated that its activities and performance expectations have adapted over time to reflect transition performance and outcomes.