Mr WILTON(11.29 a.m.) —The opposition is firmly of the view that no part of Telstra should be sold. We are committed to a 100 per cent government owned carrier for this nation. We believe that selling all or part of Telstra represents an act of gross irresponsibility. The opposition will not be supporting the sale of Telstra on the basis that it will be a more competitive company once it has been sold, as the government claims. Nor will the opposition support the government's scurrilous suggestions on talkback radio that mums and dads will be able to own a greater share of Telstra, having participated in its privatisation.

Clearly, Australians have been able to purchase a share of Telstra over the years by virtue of the fact that they have paid their telephone bills. To link the passage of this bill, which will see the beginning of the total privatisation of one of the Australian public's most lucrative and strategically important assets, to foreign owners with the establishment of a capital trust to fund environmental programs is perhaps one of the lowest examples of political expediency that this House has ever seen. By comparison, Labor's approach to the environment came with no qualification. We believe that the environment should be funded in an ongoing manner simply in the same way that other key areas such as health and education are funded. Labor has had a long and abiding commitment to landcare, coast care and the restoration of the Murray-Darling Basin—long before the environment ever became a contemporary issue in the minds of the government. This has also been done without any reference whatsoever to blackmail of the kind perpetrated by this government on the Senate.

Telstra is a strong and vibrant company. It is vigorously and successfully seeking new markets in Asia and across the world. Its value has increased from $18 billion at the time when John Hewson attempted to sell it to around $24 billion today. These figures, and the fact that it has made a half-yearly 1995-96 profit of $1.853 billion, certainly put paid to any government claims that Telstra cannot be managed efficiently if it remains within the public sector. Let us not kid ourselves for a moment that the short-sighted and ideologically driven legislation that is before the chamber today, aimed at selling one-third of Telstra, will inevitably lead to the sale of the whole of Telstra, as Senator Alston's speech on 30 April of this year has made quite clear.

There is no doubt that the government will try to cloud the waters in this debate by making a spurious claim, as it has already this morning on several occasions, that the Labor government's approach to the sale of Telstra is no different to the sale of the Commonwealth Bank and Qantas. This attempt to muddy these waters is grossly misleading, and I wish to take some time to set out some of the reasons why.

Telstra provides nearly 90 per cent of this nation's telecommunications services. As such, it has inherent natural monopoly characteristics. It is Australia's largest government owned asset and part of Australia's social infrastructure. Neither Qantas nor the Commonwealth Bank could lay claim to such positions. Nor could they lay claim to the market dominance that Telstra currently enjoys. Qantas and the Commonwealth Bank do not impact upon genuine issues of national interest. The Commonwealth Bank serviced only about 20 per cent of the banking sector of Australia. Many of its functions, which at that time set the standards for conduct of banks in this nation, have long since been passed and allocated to the Reserve Bank.

Similarly, Qantas enjoys only about 50 per cent of the domestic air travel business and less than 40 per cent of the international travel market in and out of Australia. Obviously, only a small proportion of Australians fly on a regular basis. I should point out that both the Commonwealth Bank and Qantas regularly require capital injections of federal funds from time to time to expand their businesses. Telstra raises all its own investment funds without a drain on the federal Treasury for capital expenditure. Unlike Qantas and the Commonwealth Bank, Telstra provides an established world-class telecommunications network to all Australians at reasonable cost. Telstra has already been corporatised and is performing very well in international markets.

Telstra, that great Australian corporation, as I have alluded to, posted a post-tax profit of $1.753 billion in its 1994-95 financial year. This leads me to suggest that Telstra's total value added represents 2.2 per cent of GDP. Of course, Telstra pays substantial income tax. Last year $649 million was paid to the federal government. Telstra, as a public corporation, does not seek to minimise its tax payments, yet once privatised there is no doubt that Telstra will minimise its tax payments significantly. Not only will Telstra's community service obligations be diminished, but it will minimise its tax payments to the government, resulting in even further cuts to government services to all Australians who, through the payment of their phone bills over the years, now effectively own a share of Telstra in their own right.

Telstra paid a dividend of $944 million to the federal government last year. In the event that one-third of Telstra is privatised, one-third of this dividend will be lost. It goes without saying that, in the likely event that all of Telstra is privatised, all of this income would be lost as revenue. In its current form Telstra's returns to government will continue to grow and expand. That proportion of privatised Telstra's dividend which will go overseas will be added to our own current account deficit.

As I have emphasised, Telstra is 100 per cent Australian owned. The parliament, and through it the Minister for Communications and the Arts (Senator Alston), is responsible for all service deliveries and is responsible if service is not adequately delivered to the Australian communication consumer. Service is being delivered. As the member for Kalgoorlie (Mr Campbell) said in this place last night, Telstra is perhaps the greatest communications carrier in the world today. If one-third of this great communications carrier is floated, despite having two-thirds of the shares, the minister, and therefore the parliament, will not be able to intervene in the running of the corporation.

The bill before the parliament repeals the power of the minister to direct the board in the national interest. This means that a company which is 70 per cent owned by Austral ians will act according to the views of all directors, including foreign directors. This will undermine the undertakings in the bill to protect Australian consumers.

The minister can investigate or conduct inquiries into the performance of a privatised Telstra but can she or he act on information revealed? The answer is absolutely no. Furthermore, the minister cannot vary the Telstra corporate plan prepared by the board. What is more, there will be no separate shares for foreigners as promised during the election campaign.

The coalition wrote this promise to control levels of foreign ownership of Telstra by issuing A class shares to Australian nationals and B class shares to foreigners. Scrapping this commitment will no doubt make it easier for foreigners to acquire shares beyond the existing 11 per cent limit. I want to know, in particular, what has happened to that promise.

The role of Telstra's board of directors will be to maximise profits and, therefore, returns to shareholders. This will be done fundamentally by increasing the cost of installation and calls, by decreasing levels of employment and by decreasing community service obligations. The dramatic cost increases predicted from the sale of Telstra will hit the cost of the average telephone user squarely in the neck. The telecommunications industry and all those ancillary companies that depend so heavily on Telstra for their very existence will also be hit squarely in the neck.

Over 70 per cent of Telstra's equipment, materials and services purchases are from Australian firms, big and small. A privatised

Telstra would not be required to maintain the purchasing policies that the former government put in place when OTC was combined with Telecom—as it was then—several years ago to form Telstra. The size and economies of scale generated by Telstra provide a hub around which a multitude of ancillary industries that make up a diverse range of the communications network industry revolve.

Not only does the existing employment level of Telstra generate demand within the economy but so does the corporation itself. I repeat that a privatised Telstra with greatly depleted employment levels would not be required to sustain existing Australian oriented purchasing policies of the kind that exist with our national carrier of communications today.

There is no doubt, as the Leader of the Opposition (Mr Beazley) put so succinctly in his speech to this place a moment ago, that this would herald the end of the Australian electronics industry. Instead, under foreign direction, Telstra will look to more convenient ways of making profits.

This bill does not prevent a privatised Telstra from charging for directory assistance. This would increase revenue by $80 million per annum at the expense, in particular, of the sight and hearing impaired and, to a lesser degree, mobile phone users. Similarly, the impost of a charge for directory services would have an impact on the elderly.

Telstra remains a major exporter of telecommunications equipment and services. The increase in exports from approximately $50 million in 1983 to nearly $1 billion today has had significant positive benefits and impacts upon our foreign debt.

The Asian telecommunications market is the biggest potential market in the world. When foreign telecommunications companies take a share in Telstra they will not be enthusiastic about Telstra competing with their own companies overseas in those international markets.

I turn now to the crucial issue of community service obligations. Telstra is required to provide a universal service to all Australians and to ensure equity for all Australians. We do not want to develop a structure of information rich and information poor Australians. Universal service obligations are basically defined in the Telecommunications Act 1991 wherein they are outlined as being to ensure that the standard telephone service is reasonably accessible to all people in Australia on an equitable basis.

It is the responsibility of Telstra to meet these community service obligations. Under the previous government this was done admirably because the previous government had acknowledged that social policy consider ations, as well as questions of market power, lay behind the application of price controls over Telstra. These controls are necessary to ensure that prices remain affordable in the loss making universal service areas, particularly those areas in the bush.

Telstra's universal service obligations will be of no interest whatsoever to a profit-driven board of directors. The watering down of these universal service obligations will, as I have alluded to, be bad for rural and regional Australia because these USOs underpin subsidies to those areas. Will a foreign, profit-driven owner regard such subsidies as being economically feasible or viable? I think not.

All those opposite with electorates in rural and regional Australia ought to hang on to their Akubras because, on the basis of subsidy withdrawal, they might find themselves out of a job come the next election. It is of some bewilderment to me that the seat of Farrer, which is occupied by the Deputy Prime Minister (Mr Tim Fischer), received $5.8 million in subsidies last year and the seat of Gwydir, which is occupied by his colleague, the Deputy Leader of the National Party (Mr Anderson), received $13.5 million in subsidies last year. That these two gentlemen and others of their ilk would vote against this amendment is absurd in the extreme.

In my own electorate of Isaacs, we have the rapidly growing outlying suburb of Cranbourne on the south-eastern fringe of Melbourne. Cranbourne lies within the 059 STD area code, and on behalf of its people I will be doing all that I can to ensure that it is drawn within the 03 Melbourne area code as soon as possible. However, my task will no doubt be made much more difficult by the fact that directors of the new foreign owned Telstra will pay no heed to the needs of people on the outlying fringes of such metropolitan cities who wish to be incorporated within the 03 and other metropolitan area codes for obvious reasons of cost.

In conclusion, this bill constitutes nothing more than privatisation for privatisation's sake. In a January AGB McNair poll, 61 per cent of the people stated that they were opposed to the sale of Telstra in any form. We should not let outsiders profit from the sale of Telstra, one of the world's finest communication carriers, simply because the government maintains a dogged adherence to a failed political ideology.

We ought not to forget that Telstra does not need capital injections; it makes a profit and is viable in its own right. It drives the Australian electronics industry, which depends on Telstra's domestic purchases for its very existence. In 1983, as I have already stated, our electronics industry exported $50 million worth of goods per annum and that same domestic electronics industry now exports some $1 billion worth of goods per annum.

If privatised, there is one thing you will not be able to do with Telstra—that is, maintain a quality of subsidised service if you do not own it. That ought to be borne critically in the minds of those opposite, particularly in the minds of those who occupy the many rural and marginal seats which were gained by the government at the last election, which, as I say, they may not hold come the next election.

In commending the amendment to the House, I suggest that all members examine critically the experiences of those in New Zealand and Britain where profits have risen, the number of jobs has fallen and dividends paid to shareholders have gone through the roof. That is not the sort of Telstra we want to see in Australia. We do not want to see Telstra privatised simply for the sake of some outdated, incorrect political ideology. I commend the bill to the House.