NBN loan will improve budget bottom line

The federal government has been accused of using a $19.5 billion loan to the company rolling out the national broadband network as a way of making its budget bottom line look better.

"That's a very clever accounting trick," Labor senator Sam Dastyari told Communications Minister Mitch Fifield during an estimates hearing in Canberra on Friday.

The minister had said the commercial rate loan would have a positive impact on the budget because NBN Co would be paying higher interest than the government could borrow funds itself.

The government loan means the NBN does not have to raise funds to complete the $49 billion project on the open market.

The already committed $29.5 billion in government funding for NBN Co. is expected to run out at the end of the financial year.

The government argues a loan on commercial terms represents the most cost effective way to raise the debt and secure funding to complete the rollout.

The loan is expected to be refinanced on external markets in 2020-21, ahead of the privatisation of the business.