The Turnbull government's $29.5 billion cap on public funding for the national broadband network is set to run out by the end of the 2016-17 financial year, budget papers reveal.
The company rolling out the network has already begun tapping the private sector to make up the $16.5 billion and $26.5 billion shortfall, a year earlier than planned.
"NBN is currently undertaking the necessary preparatory work on the proposed debt raising," the budget's Statement of Risks says.
The final $8.8 billion tranche for fiscal 2016-17 includes $400 million initially allocated for the current financial year.
To cancel the project altogether would cost $9.4 billion, the budget documents show.
$29.5 billion was the initial estimate the Coalition made for peak funding of the NBN rollout prior to its election in 2013.
Since then the cost estimate for the infrastructure project has risen twice, to $41 billion following the government's post-election NBN Strategic Review, to a range of $46 billion to $56 billion in the NBN's current corporate plan.
While the government capped its financial commitment at $29.5 billion, Tuesday's budget opens the door to additional emergency public funding.
"In the event that NBN is initially unable to raise the necessary debt on acceptable terms, interim funding support may be required," the documents read.
However the budget papers also warn of the strain such a move would put on the government's coffers.
"Were it required, additional government financial support for NBN would have implications for the fiscal position, for example by increasing assets and liabilities on the balance sheet and, depending on the nature of support, could have positive or negative impacts on the underlying cash balance," the document reads.
