Mr SOMLYAY (8:30 PM) —When members of the Labor Party stand up to speak in this debate, I hope they declare whether they took the opportunity to buy Telstra shares when the float was made. It would be very interesting to check the register of members' interests. I have not done so but I am sorely tempted. There are a few matters which in recent times have ignited emotions in regional and rural Australia more than the question of privatisation of Telstra. Let me make the position very clear from this side of the House: the proposed sale was not and is not motivated by ideology. No-one on this side of the House wants to sell Telstra for mere ideological reasons.

The Prime Minister announced before the 1996 election, not after the election, that a coalition government would sell one-third of Telstra. We were open and honest about Telstra before the election. We did not make the announcement without a mandate, as Labor did with their plan to sell the Commonwealth Bank. Labor sold the Commonwealth Bank without a mandate. Not a word was said before the 1993 election about Labor's intention to sell the Commonwealth Bank. Labor sold the Commonwealth Bank by stealth. We sought a mandate from the Australian people before we sold one-third of Telstra, a mandate which the people gave us by the strongest acclamation—a resounding victory at the 1996 election.

This mandate was supported by the people of regional Australia. In the last parliament, the coalition held 61 seats which were wholly or partially rural or regional, as against the ALP's 11 seats. We had the one-third privatisation of Telstra firmly on the agenda. Although we had a mandate, Labor opposed the sale of Telstra and frustrated the passage of the legislation in the Senate.

I said that the coalition, in opposition and in government, were not driven by ideology in proposing to the Australian people that we partially privatise Telstra. Why would anybody sell an income producing asset? Why would an individual want to sell his or her income producing asset? Why would business people propose to sell their assets, especially income producing assets? Why would a government propose to sell an income producing asset? One obvious reason to sell an income producing asset is that you have to—not `want to' but `have to'.

What is being lost in this debate is that the government had little choice but to propose to sell Telstra if it were to be judged fiscally responsible. We had to pay off government debt. Remember that that debt was Labor's debt. Successive Hawke and Keating governments accumulated $95 billion of government debt in six or seven years during the 1990s. The stark reality is that Labor's debt had to be paid off. Some of it has been paid off but more remains to be paid off. Therefore, one reason to propose to sell an income producing asset is to retire debt. That point is reached when the cost of servicing that debt becomes unmanageable.

When we came to office, public debt interest was running at $9.1 billion. The member for Perth pointed out to the House that the income the government received through the dividend stream from Telstra was $1.4 billion. Debt servicing costs were $9.1 billion. In other words, our capacity to implement our programs—provide hospitals, health and other services—was limited by interest payments of over $9 billion on Labor's debt every year. Before we could spend one cent on social services—welfare, defence, roads—we had to spend $9.1 billion on interest payments on Labor's debt.

Another reason to propose to sell an income producing asset is to give yourself the financial capacity to invest in other income producing assets. The government has done a combination of these two things. We proposed before the 1996 election to sell one-third of Telstra because we were forced to address Labor's legacy of debt. We used part of the proceeds to retire a significant amount of that debt. The amount we did not use to pay off Labor's debt we have used for investment in national and regional development through the Federation Fund and the Natural Heritage Fund. Most of that $2 billion investment went into infrastructure and rebuilding rural and regional Australia.

After the sale of one-third of Telstra is Australia better off or worse off? Many Australians invested in the share float. Are they better off or worse off? Members on both sides of this House hold Telstra shares, and so they should. Everyone who invested in Telstra shares is better off today, including the employees of Telstra who had the opportunity to invest in the future performance of their employer. Are the people and the hundreds of regional communities that benefited from the excellent works funded from the Natural Heritage Fund and the Federation Fund worse off? I know they are not worse off. I know that local councils and communities are far better off from the investments made from the proceeds of the sale of the initial one-third of Telstra.

In the last budget in my previous capacity I tabled a statement on government expenditure in regional Australia which showed an annual expenditure of $3.2 billion on programs which were non-existent under the previous government—that is, $3.2 billion of expenditure in rural and regional Australia that was non-existent under the previous government. That was new expenditure, new programs and new investment creating new employment in the bush. This could not have been possible without the sale of one-third of Telstra. Would Australia have been better off without that quality infrastructure? Of course not. The reality is that without the sale of Telstra the government could not have funded the quality infrastructure so essential to the competitiveness of regional businesses and the quality of life for people living in rural and regional Australia.

I have already mentioned the $1 billion Federation Fund, the bulk of which contributes to national infrastructure. There is also a further $250 million through the Regional Telecommunications Infrastructure Fund and the Roads of National Importance program. The $1.25 billion Natural Heritage Trust is the most integrated and far-reaching package of investment in conservation and natural resource management ever introduced in Australia. We sold part of an income producing asset to retire Labor's debt and to invest in a whole range of other income and job producing assets, particularly in regional Australia.

Who then are the losers from the privatisation of Telstra? Who is worse off? Through scaremongering and misinformation, Labor has created a sea of unrest about the privatisation of Telstra. The implication of this and the doubt created by those such as One Nation is that people in regional Australia have been scared into believing that a full sale of Telstra would result in a fall in standards of service in the bush. When you look at the investment in the bush from the one-third sale of Telstra, people are far better off, not worse off. You can see where the money went and where the money is going. Interest on debt is down. Communication services in the bush have been boosted as never before.

I contrast this with Labor's record. They have opposed the sale of Telstra all the way with ideological passion. But Labor sold Qantas and Labor sold the Commonwealth Bank. What has Australia to show for the sale of these assets? Did Labor sell those income producing assets to pay off debt? The answer is an emphatic no. Debt went up during and after those sales, not down. Did Labor use the proceeds to invest in other income producing assets? The answer is again an emphatic no. In fact, not only did government debt accumulate further but Finance Minister Beazley left this government with a $10.3 billion budget deficit on top.

Labor sold Qantas and the Commonwealth Bank, but where did the money go? When we came to office we could not find it. There was no evidence that anyone benefited from Labor's privatisation program because Labor used the money not for investment, not for debt redemption; the proceeds propped up your budget bottom line. You blew the money and Australia has nothing to show for it. Proper economic management by the Howard government, the sale of one-third of Telstra and the responsible use of those proceeds see Australia far better off than in 1996.

I do not want to see further potential benefits disappear. The government will sell another 16 per cent of Telstra to keep faith with those in the community who fear full privatisation will mean a lower standard of services. No more will be sold until we are assured beyond doubt by an independent inquiry that standards will not fall. No-one on this side of the House would contemplate sale further than 49 per cent unless we have ironclad guarantees on standards.

I urge the people of regional Australia to consider the further benefits which will flow from the passage of these bills. The Prime Minister uses the term `social bonus' to describe benefits that will accrue. But I point out to honourable members that the social bonus is, in reality, an investment in infrastructure, our great regions and the people of those regions.

Direct benefits will be an increase in the Natural Heritage Trust by $250 million; rural transaction centres, $70 million over five years; extended access to untimed local calls, $150 million over three years; meeting the telecommunications needs of people in remote and isolated island communities or the Australian Antarctic Territory, $20 million over three years; Internet access for people in rural and regional areas, $36 million over three years; mobile phone coverage along highways, $25 million over three years; and, finally but not least, a television fund to enable improved television reception, extend coverage of SBS television and to support a new media unit to be established within the SBS, $120 million over five years.

In summary, as a member who comes from regional Australia—I have a regional electorate—this package of bills provides an enormous opportunity for this parliament to move towards full private ownership of Telstra and to enable the government to enter the next century without a debt problem while at the same time investing in our people and our regions. The bills also give the people of regional Australia—in fact, all Australians—ironclad guarantees on consumer service standards, customer service standards, transparency and many other safeguards. I therefore commend these bills to the House.