Millions of homes and businesses will gain access to ultra-fast internet under a $4.5 billion upgrade to the national broadband network.
At least eight million premises should have speeds of up to one gigabit per second by 2023.
The upgrade will be financed through NBN Co borrowing from private debt markets.
Communications Minister Paul Fletcher said with 99 per cent of premises now able to connect to the NBN, the time was right to upgrade the network.
Mr Fletcher said the coronavirus pandemic had also changed the way people used the internet and highlighted the need for speed.
He appears to be laying the groundwork to sell the government-owned NBN Co during the next term of parliament, should the coalition retain office.
The upgrade signals a significant change in the coalition’s approach to the NBN rollout.
Labor originally planned to connect most Australian homes to the NBN through fibre to the premises.
The coalition scrapped this approach after coming to power in 2013 in favour of mixed technologies.
Fibre was instead rolled out to “nodes” near houses or apartment blocks, which people would connect to via copper wires, often leaving them with much slower connections.
Labor has panned the policy reversal, arguing the coalition should not have changed the plan in the first place.
“This has to be the most extraordinary wasteful public policy backflip in a generation. This government has built a network that costs more and does less,” Labor communications spokeswoman Michelle Rowland said.
“This government has been opposed to having world-class fibre-based broadband and all of a sudden this is visionary, it is going to be a driver for jobs.”
Mr Fletcher argues Labor’s plan would have built fibre everywhere before people were willing to pay for it.
He claimed the coalition’s approach was better because it waited for pent-up demand, whereas Labor was going to install fibre to the home before the demand was there.
The upgrades will generate returns on investment and add significant value to the company.
Mr Fletcher seems to be laying the groundwork to privatise NBN Co after the next election.
“As responsible stewards of taxpayers’ capital we are always alive to the question of what will a particular investment plan by a government business enterprise do to the value of that enterprise,” he told reporters.
“NBN was required to demonstrate to the government that there was a positive return on investment.”
The independent Parliamentary Budget Office estimates NBN Co is worth $8.7 billion, whereas it’s on the government’s books at $29.5 billion.
From an economic perspective, the NBN is estimated to increase Australia’s gross domestic product by $6.4 billion a year by 2024, including $1.5 billion in regional areas.