Mr TANNER (3:34 PM) —The Howard government's long, slow crawl back to the rotting corpse of its Telstra policy is finally coming to a conclusion. According to the Australian yesterday, after months of hiding behind the low Telstra share price, after months of National Party cowardice, after months of fudging a potential response to the Estens inquiry into regional telecommunications services, after having deferred the sale yet again in the recent budget and after having cooked the national accounts in order to glorify the value that Telstra has retained in the books, finally the government is about to come clean about its plans for Telstra and finally it is proposing to introduce the Telstra sale legislation to the parliament.

It looks like the plasma TVs have done the trick. They have been hiding for months with the Telstra sale legislation, but it looks like those great TVs—with Senator Alston watching the football and the Prime Minister watching the cricket—have done the trick, after the government was wavering a bit about what it might do. The Australian people are entitled to ask: what are the implications for them and what are the implications for telecommunications services in Australia of the proposed sale of Telstra? If they want to find the answer to that question, all they need to do is look at the recent record of Telstra and look at what has been happening already.

If the Australian people, particularly in regional Australia, want to see the future for telecommunications services with a privatised Telstra, they can get a pretty good indication of what that future will look like simply by examining what has been occurring in Australia in recent years. What Australians will see, if they examine the recent record of Telstra under the Howard government, is a catalogue of disasters—all of them connected with the government's obsession with privatising Telstra.

If we take a close look at where the privatisation strategy is already heading, we can see a very clear picture and get a very good foretaste of what telecommunications services will be like in Australia if the Howard government's plan to sell Telstra succeeds. First, we see a network that is now held together with bandaids and bits of string—a network that is suffering enormously as a result of serious declines in capital investment and employment by Telstra. We have gas bottles being used all around the country as temporary fixes to maintain air pressure in the cables. We have cables being run over haystacks and across people's front lawns, disturbing the kangaroos in parts of regional Australia. All sorts of stories of that nature come to my office. We have huge costs mounting up because of Telstra's own bungles with encapsulant gel—the Seal the CAN strategy. We have a list of over 100,000 supposed routine maintenance tasks that are in fact faults and defects in the network which are not being addressed. Why is all of this occurring? Because capital expenditure has dropped from $4.7 billion in 1999-2000 to $3.2 billion in the current financial year—that is a $1.5 billion drop in capital expenditure.

Similarly, over the same three years, the number of staff in Telstra has dropped from over 50,000 to little more than 37,000 people. The bulk of those staff reductions have occurred in regional Australia; the bulk of them being attributable to people who fix the network, maintain the services and deliver the services to people in the field. Now Telstra proposes to gut its information technology capacity, predominantly in Melbourne, and outsource the vast bulk of its IT activities to Indian companies conducting the work in India. That is the recent story of service delivery and jobs from Telstra.

What Australians would also see, if they examined the record to see where things are heading, is $2.5 billion lost in dodgy investments in Asia. They would also see massive increases in line rental fees. In the second half of last year, Telstra reaped 10 per cent more revenue—a further $124 million—from an increase in line rental fees. For the first five months of the financial year just about to be completed, Telstra made a net gain of about $80 million as a result of the line rental increases. They got $124 million extra and they gave back only about $40 million in call reductions. That money comes straight out of consumers' pockets and it is in effect a regressive tax, because everybody—the poorest people and the richest people—pays the same or roughly the same line rental fees. It means that the tax implicit in these line rental increases falls hardest on low-income earners. Line rental fees for telephones in this country three years ago were $11.65 a month. They are now up to around $25 to $26 a month and they are heading towards $32 a month. That is a regressive tax on low-income Australians—another effective levy by the Howard government.

If Australians examine another part of the record for rapidly heading towards privatisation of Telstra, they will also see Australia trailing the field internationally in the rollout of broadband. We have gone from being 13th in the OECD—not a particularly spectacular performance—to now being 19th in the OECD. Only roughly two per cent of Australian households are connected to broadband or high-speed Internet services, compared with seven per cent in the United States, 8.5 per cent in Belgium and 11.7 per cent in Canada, a country that is fairly comparable with Australia. Why? Because Telstra is dragging the chain, it is subject to inadequate competition and it prefers to milk the benefits of existing products like ISDN rather than really push broadband services hard. People will also see inadequate competition throughout telecommunications generally. Telstra is still totally dominant, it still has an effective monopoly in many parts of the sector and it is still being pursued relentlessly by the ACCC to try and ensure that it does not leverage that monopoly to benefit itself at the expense of consumers. With inadequate regulation and inadequate controls on the part of the government, Telstra still exercises far too much dominance in the market.

These are the issues in telecommunications in Australia. The government has one policy to deal with all of them—one policy response for all of those issues—and that is to sell Telstra. Will selling Telstra lead to more investment in Telstra's network? I do not think so. Will it lead to more jobs and more workers in the field to service the needs of regional Australians? No. Will it lead to less speculative losses as a result of dubious investments in Asia by Telstra, using up the cash flow from its monopoly in Australia? No. Will it lead to lower line rental fees for Australian consumers? No. Will it lead to a faster rollout of broadband services accessible to all Australians? No. Will it lead to stronger competition? Definitely not. We are already seeing what privatisation means for Telstra and telecommunications in Australia. We are getting a foretaste now, but we will get it in spades if the government succeeds. Just to top it off, you have the additional miasma of dodgy corporate behaviour starting to sink in. You have plasma TVs for the Prime Minister and the communications minister and a $1 million payout contract for the CEO if he fails—so, if he gets sacked for poor performance, he will get a $1 million bonus—a great reward for failure.

The Howard government have been hiding for months. They have been running away from the issue. They are frightened because they face the overwhelming opposition of community opinion on this. They have been trying to avoid saying anything. They are trying to hide behind inquiries and ensure that the National Party is not too upset by the fact that the vast bulk of its constituents hate this policy. They held an inquiry, led by a mate of the Deputy Prime Minister, which was a total whitewash. It has taken them seven months even to get around to responding to that inquiry. So they have gone to ground. But, behind the scenes, just like Dr Frankenstein experimenting in his laboratory, they have been working away and putting together the pieces to privatise Telstra. They have nicked a few body parts from the graves of the odd dead ideology around the place, they have thrown in a few ingredients from investment bankers and lawyers and they have sent the servants away so they do not know what is going on—that is the National Party, of course. They even cooked the books—the national accounts—to make the value of Telstra look better as part of their overall strategy. Shortly, they are going to whack on the electricity and breathe life into the monster. It will be unleashed on unsuspecting Australian consumers, the people in regional Australia, workers and all of those people who have the most to lose as a result of Telstra's privatisation.

We still have a chance to stop this dangerous and ill-founded experiment. We still have an opportunity to tackle the problems in Australian telecommunications. We still have a chance to tackle the issues in regional telecommunications, to accelerate the broadband rollout, to redress the problems that many lower income consumers are facing as a result of having to pay higher fees for line rentals and to protect consumers who, in many cases, suffer sharp business practices and unfair attacks on their rights in the telecommunications sector generally. That means primarily rejecting privatisation as the solution to the problems in telecommunications, because it is not the solution. The move towards privatisation is at the heart of the problems that I have identified. The vast bulk of the Australian community understand that and therefore reject the privatisation approach.

We need a different approach. We need the approach that Labor is committed to—the approach that I announced last week, the approach the Labor Party will introduce in government—and that rests on four key things. First, under Labor, Telstra will be returned to its core responsibilities. It will be required to get back to its primary role of delivering telecommunications services that are accessible and available to all Australians. It will be required to scale back on its foreign involvements and its media ambitions. Under Labor, Telstra will be a carrier, not a broadcaster; it will be a builder, not a speculator. Second, under Labor, Telstra will intensify its focus on broadband rollout to ensure that we have the platform for the future of our economy and for the future of the information society in Australia that it should be providing. Third, we will have a stronger, stricter competition regulatory regime which will be designed to ensure that there is a strict separation within Telstra of its wholesale and retail activities so that access can be provided to access seekers on effectively equivalent terms, the terms with which it has provided Telstra already. And the ACCC will be given stronger powers to ensure that it can enforce genuine competition so that consumers have some real choice, some genuine choice in the marketplace. Fourth and finally, under a Labor government, there will be stronger consumer protection. We will not allow line rental fees to be increased without effectively giving back money in the way of lower call costs. The government promised that the line rental fees would effectively be cancelled out by call costs being reduced. What was the outcome? Within the first five months of that new price control regime being in place, there was $80 million extra for Telstra. We will not allow that to occur.

Labor does not support Telstra's media ambitions. We find Telstra's involvement in Foxtel difficult to defend, both on competition grounds and on the appropriateness of public ownership of pay television. Labor does not support big, risky investments in Asia by a publicly owned telecommunications carrier—in this case, Telstra. Labor does not support the gutting of Telstra's IT operations and, therefore, the decimation of the engine room of the Australian IT sector, which Telstra is currently pursuing. Most importantly of all, Labor does not support privatising Telstra.

A Labor government will bring Telstra back to its primary responsibilities. Telstra will be required to operate in a more open, transparent and accountable way in order to maximise genuine competition in the sector. It will be required to focus its energies on maintaining a high standard network and on accelerating the rollout of broadband services which will be accessible to all Australians. It will be prevented from increasing line rentals without returning any increases in the form of lower call costs and, along with other telecommunications carriers, it will be subject to stricter regulation to protect consumers.

Labor believes in public ownership of Telstra, because telecommunications services are essential services. A privatised Telstra would be a giant private monopoly, too powerful for any government to regulate effectively. Just like the banks, Telstra would focus on the most lucrative markets in the bigger cities at the expense of people in regional Australia and lower income earners. People in regional Australia understand that a privatised Telstra will be just like the banks: out of town as quick as you can blink. Under Labor, Telstra will deliver high quality telecommunications services to all Australians, not just to those who happen to have the money to pay for it.