NBN tax on new homes

The Abbott Government has quietly announced a surprise $900 tax for newly built homes connecting to the National Broadband Network.

Communications Minister Malcolm Turnbull has also given the green light for companies to compete with the NBN in new developments, unpicking one of the core principles of the program as laid out by the former Labor government.

In a policy update paper released yesterday, the Government announced NBN Co would levy a one-time connection charge of $300 on new homes, admitting resale service providers would pass that charge on to consumers.

NBN Co would also levy a "deployment charge" on developers of $600 for new homes that would also likely be passed on to the homebuyer.

But in perhaps the most significant step, the Government said it would allow developers to choose among competing telco infrastructure providers to roll out cable - effectively opening up wholesale competition against the NBN.

When the NBN was first unveiled by Labor, NBN Co was to be the sole provider of fibre optic cable to homes and suburbs, with internet providers such as iiNet using that network to sell fast broadband to homes.

In a further cost to developers, the Government said at new building sites where backhaul was not available, NBN Co would charge builders a co-contribution of up to 50 per cent of the first $1000 per capital cost incurred.

Labor communications spokesman Jason Clare said the tax would hit those who could afford it the least - young families building their first home.

In a separate paper, the Government said it would remove NBN Co's current system of uniform national wholesale prices and replace it with price caps.

Under the uniform wholesale prices scheme developed by Labor, NBN Co would sell broadband to internet service providers at the same cost.

But Labor claims replacing that model with price caps could end with internet users in the bush paying more than users in the city.

The Abbott Government has slowly been allowing competition to the NBN wholesale network in some urban areas.

"The fact is that nothing when it comes to the NBN is 'free', despite Labor's best attempts to convince the electorate it will be," a spokesman for Mr Turnbull said.