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Wednesday, 13 November 2002
Page: 8896


Mr RIPOLL (1:16 PM) —It is a great pleasure to speak on the Telecommunications Competition Bill 2002. The opportunity to speak about telecommunications, about Telstra and about competition brings out the worst and sometimes the best in members, but it also allows us and the people listening to the debate to understand the issues and the critical thinking that leads this government to walk down this path.

I am not completely critical of the Telecommunications Competition Bill 2002, because it is intended to bring some level of competition into play, to improve the investment climate and the telecommunications sector and to rein in Telstra. In that sense there is broad support from Labor for this bill, because it attempts to do these things. The bill recognises the flaws that currently exist in the telecommunications competition regime. Those flaws are evidenced by the need to have this bill in the first place. But this government's handling of the bill is completely appalling in the way the government treats the community, the way it treats the processes of this parliament and, in particular, the way it treats agencies such as the Productivity Commission.

The Productivity Commission's competition regulation report was released in April this year, seven months before this government released its report. The government sat on that report for quite some time. When the government announced in April the accounting separation requirements under this bill, there was a bit of controversy over the vagueness of the statement. We now see a watered down version of the original statement about the accounting separation. This shows that, while the government has moved to bring into play some fairness in the process through the accountancy separation provisions, Telstra has, in effect, nobbled the minister. Telstra is a corporation that is 51 per cent owned by the government and by the people of Australia, and it nobbles the minister: `We're not happy with it; change it.' I ask other members to think about this. If Telstra is 51 per cent, or majority, government controlled and it nobbles the minister, what is it going to do when it is fully controlled by private ownership? That is a serious question that government members have to consider. If your minister can be nobbled over what is contained in this bill, if the bill can be watered down because Telstra is not happy with it, what will be the government's powers to legislate, to regulate and to bring pressure to bear on Telstra in other areas? I think it will be very small.

This bill, as has been said by a number of members, attempts to do four significant things. Firstly, it speeds up access to core telecommunications services. It needs to do that because they are not fast enough. Telstra has failed in its duties and responsibilities. Its major stakeholder, the government, is responsible for ensuring that. Secondly, the bill facilitates investment in new telecommunications infrastructure, something that is very welcome, particularly in light of the fact that Telstra commands some 90 per cent of all revenues generated by telecommunications in this country and has a virtual monopoly of some 75 per cent of the market.

Thirdly, the bill attempts to provide a more transparent regulatory market, particularly in relation to Telstra's wholesale and retail operations. That is a critical part of this bill and vindicates Labor's position about making Telstra more accountable and transparent and looking at separate parts of Telstra's corporate structure. Labor wishes to ensure that the government and the parliament can do the sums on where Telstra's revenues are going, what it subsidises and what it does not subsidise, its fairness in play in terms of what it charges itself as compared to what it charges its competitors for line rental and a whole range of issues. So, again, we welcome the amendment in terms of the things that need to be done to bring Telstra into line.

Lastly, the bill attempts to enhance accountability and transparency in tackling anticompetitive conduct. This last point is significant because Telstra's conduct is extremely anticompetitive. It is predatory. It is always brought into play by the government or by the ACCC. It is not a willing participant in fair competition. This is not an organisation that wants to play a fair game, as it probably should not be if it were 100 per cent owned by shareholders. It wants to maximise its profits, maximise its return to shareholders, maximise its revenues. These are normal, understandable things in the private sector, something you do not particularly criticise. That is what companies do— they make profits. Those profits are then redistributed to the shareholders.

Telstra is one of the largest companies in the country. We have heard great things said about Telstra by government members, and I endorse many of those comments in terms of the great institution that is Telstra around this country. If you look at it historically, it is probably an institution that could not be repeated in terms of the infrastructure. It would not be possible today for a company to decide to use its own capital—not the capital of taxpayers—to set about putting up copper in every street and every house, putting in place infrastructure. I do not know whether anyone has put a price on what that copper, that infrastructure, would be worth today. I would say it would be many hundreds of millions of dollars, if not billions or maybe tens of billions—maybe even more. When we look at the real value of this institution, even beyond the simple value of the cost to replace it, we see why it is important that taxpayers remain at least part owners, even if it is only 51 per cent ownership—why all taxpayers should remain part owners rather than just the few that can afford to buy shares.

I understand and sympathise with the ordinary mums and dads out there, the ordinary investors who have gone in. I have no real issue with them. It was offered up and they took up the offer. What I am sad about though is that many of them lost money. This government promoted and marketed Telstra and really pushed people. I would say it quite heavily pushed ordinary mums and dads into going out and buying shares, not only in Telstra but in other companies and institutions.

The member for Flinders made it quite plain in here when he stated that he has shares. The first thing that popped into my mind was to wonder how proud he is of the share price today compared to when he more than likely bought them; he has probably made a substantial loss. That is his bad luck. But the bad luck that is placed upon all those ordinary mums and dads is a little bit more tragic. Many of those people may have invested the only money they had or may have invested their retirement savings. It was claimed that there are nearly two million investors; if you really look at it, they have all lost money. Those people have lost money. The institutional investors may or may not have lost money. They may have played the market in different ways. But there is no doubt that ordinary people would have lost money. They are probably looking at the government and saying, `Well, what have you done wrong? You're actually in control and yet we are still losing money. But now you claim that if you sold it we'd probably make more money.' Maybe they would and maybe they would not, but how much control would they get over Telstra?

This government does a range of interesting things. One is to hold a number of inquiries into Telstra. They are welcome. There need to be a lot of inquiries just to keep that institution in line. It is interesting that we are debating this bill here today before the Senate inquiry has completed its work. In a sense the government is pre-empting that, is ignoring it or is just not interested. Either way, we are debating this bill before the Senate inquiry has finished its deliberations.

As I said before, the full sale of Telstra is integral to what this bill is about. The government is getting in while it can to make some very much needed changes. It will not be able to do these after the full sale of Telstra. If it applies it to Telstra, a private company out in the public arena, it will have to apply the same rules to other companies. Maybe it should, but in the case of Telstra there is some concern that the government will not be able to control this monolith that we have in our society.

I am quite disappointed about the Estens inquiry—I suppose like many people in this place and, I am sure, other people who are interested in this matter. Estens, to put it in simple terms, is an absolute sham. It is a sham because it is a couple of mates appointing a couple of mates to have a look into something. `Look, mate, John Anderson, Deputy Prime Minister, he has a good mate by the name of Estens. He happens to be a farmer. He says, “Well, mate, why don't you have a look into this thing for me so we can get this whole issue of sale put to bed; let's have one big last inquiry.” We all know what the result is going to be; we know what the outcome is going to be before it is written.' It is predetermined. Before Estens made the first inquiry you could have written down what the end result would be. There have been no surprises, of course; it has been as expected.

It is a sham; it is just one of those shameful acts. There is absolutely no shame in this. You just appoint a mate to look into a mate's problem, talk about what you might find and find only the things you want to. The reality is that some 600 submissions were made to the Estens inquiry. Most of those, I believe, were ignored. There were no public hearings. It was an extremely fast inquiry, which sped around the country, had a look at something here and something there, got all the submissions in and then came out with a report that was prewritten. I have no doubt that is the case. The public are not silly. The public know it was prewritten, because they know how it actually works.

In the past, we have had ministers in this place like Peter Reith who would just come in here and say, `Well, you can't trust politicians; they all lie.' He might have been talking about himself. In relation to this I am sure they will believe them.

All of this comes down to the core principle about why this government is even doing these things, and that is to sell Telstra off. I am certain that Telstra will be sold at some point while this government is in power. The people of Australia do not want that; they do not agree with that. This government will use every means it has. It will keep working on the PR, including allowing Telstra to spend taxpayers' money—its own money but money that comes through the profits that it makes rather than passing those through to consolidated revenue—on its own PR campaign to go out there and privatise itself. If the government is not going to do it, Telstra will just decide to do it itself. These are the sorts of tactics that we are seeing.

The government has even talked about the threat of double dissolution: `If we can't get our way, we'll just dissolve the parliament, even though 75 per cent of Australians don't agree with the sale of Telstra.' Australians understand the damage that will be done to them. They understand that this anticompetitive entity will become even more anticompetitive and in the end it will result in them suffering more and paying higher charges.

What is astonishing about the Estens inquiry is not so much what it did but what it did not do. It did not take a serious look at the future of the 3G mobile telephony system in regional Australia; it just ignored it. These are people who supposedly represent the bush. There is plenty of talk about the bush; we just do not see too much delivered.

The inquiry did not look at all at the problems of complex and confusing mobile phone contracts, which are a major issue for everybody, not just people in the bush; the real download limits that affect the cost of Telstra Internet packages; regular line drop-outs; the effect of the cost of dial-up Internet access through regional Australia—the enormous Telstra price hikes in schools, for example—the impact of price control regimes on line rentals; or mobile phone competition itself. In fact, it looked into very little, which is why I say it is a sham, a scam.

At a real grassroots level, at the real level where it counts, what we see in the homes of ordinary people is the lack of services. My electorate of Oxley is an urban fringe electorate. It has Ipswich and it takes in the western suburbs of Brisbane, so it is not exactly a rural, regional outpost or remote area. As my seat covers the western suburbs of Brisbane and Ipswich, you would think we might get some decent services. But think again—no, we do not. We have these huge black holes, not out in the bush where you might expect that might be the case but in places like Forest Lake, a highly developed, modern, new urban community. We have this huge black hole where this whole community cannot get access to ADSL broadband services. It is as simple as that. When I ask Telstra about it, the answer is, `Well, we just can't do it.' They do not have too many explanations. Maybe they know why they cannot do it; maybe they do not. Maybe they should look into why they cannot provide these services and provide them affordably.

These are the real issues—the voters, the people you are supposed to be providing services to. I get regular calls to my office and letters from people saying, `Why can't I get broadband?' Every night on TV they see Telstra spending its money advertising that they can get broadband. So they ring up and go: `Hey, that's not a bad idea; I'd like that service. My kids are at school. They make good use of the Internet. Why don't we get a faster dial-up?'

I am sure that some members on the government side sitting in the chamber today have broadband Internet services themselves, depending on where they live. Some of them might shake their heads and say, `Well, I haven't got it.' So Telstra does not service your area either? Surprise, surprise!

It is not just the cost of services or the black holes; it is things like pair gain. Pair gain is a simple thing. It is when you pay for a new phone line—a separate, additional phone line—and you get robbed. They do not actually install them; they just say they do. What they do is split your line in half and give you a second phone number, and you pay for that service. A million customers throughout Australia have been robbed, they have been cheated. They honestly thought they were getting a second line because that is what they paid for but, of course, they did not get a second line. Then comes the crunch where those people who have access to ADSL broadband ring up Telstra and say, `Well, we'd like to have that service put on.' Telstra goes, `Hang on, we can't do that, because you've got pair gain.' They go, `What's pair gain?' Pair gain means that Telstra has installed a service to your house that you paid for and that prevents you from getting those services.

These are serious issues. I have talked to Country Wide, the new PR marketing tool of Telstra to sell itself to the bush—that is all it is. Country Wide is not a new idea, either: in one format or another it has been around before. I have met with officials from Country Wide and I have asked them: `What is it you actually do? Tell me about the things you fix.' They say, `Well, what we do is make sure that Telstra fixes the problems.' I say: `No, no, hang on. What is it that you do? What is it that Country Wide does?' If you really examine it, it does nothing except refer complaints. It is like a referral service, but really it is a marketing tool for the government to ensure support in the bush for the sale of Telstra. The government reckons that, if they can hoodwink the bush a little bit longer, they might just get enough compliance out there to actually go through with the sale.

These cynical things that the government does are the real tragedy here—and this is while there is still some control. When there is no control, you will not be able to control what happens to Telstra and you will not be able to control the levels of service in the bush. Estens may believe that it is fine out in the bush. I see that the member for Paterson is in the chamber, waiting for his turn to speak. I am sure that the people in the bush that he represents rush into his office to thank him for the great service provision in the bush! He nods his head that they are. His electorate must be the only place in Australia where that is happening. Maybe he has a special relationship with Telstra. Whatever the reason might be, it is happening nowhere else in Australia—maybe it is just in the electorate of the member for Paterson!

There is another issue I want to raise, not about pair gain and black holes but about what some people might call a conspiracy on line rentals and timed local calls. You could be excused for thinking that there is a bit of a plot out there. Telstra is very quickly progressing the cost of line rental—the bit that we all pay for that is in essence static: whether you make a call or not, you pay that amount of money. It has gone from being very cheap—it was just a couple of bucks really, just a few dollars—to $6, then to $11.65 last year, to nearly $23 now and it will be $32 very soon. Thirty-two dollars is a fair bit of money just to rent the line. It does not really cost Telstra anything to rent the line in real terms, but it is a nice little money-spinner.

But my point is not about how good a money-spinner Telstra is; my point is that legislation does not actually prevent it from introducing timed local calls. That would be pretty unpalatable, and Telstra would not do it while this government is trying to sell it because that would be counterproductive to its masters. So it is going to keep jacking up the line rental, making it unattractive to even rent a line. But we will have no choice, so we will have to rent them. It will then introduce a separate product with timed local calls that may be attractive to some in the community, given the high cost of line rental. After it has done that, it will have opened up the market. The window will be open, it will be the thin end of the wedge, and timed local calls will be as good as in, because, once they are in one product, it will be: `Look, this actually works; let's just get it out wider.' These are my concerns. This is why I support in principle the government trying to rein in Telstra through the competition bill here. The bill does not go anywhere near far enough. It is a failure on the part of this government and it is an indictment of this government's failure to understand what the community wants: it does not want Telstra sold; it wants Telstra to provide better services. (Time expired)