Mr McGAURAN (Minister for Science) (3:49 PM) —This is an issue of such importance and moment for the Labor Party that we have not had a single question on it during this week or several preceding weeks! Literally hundreds of questions have been available to the opposition, which they have taken up, but they have not dealt with Telstra. Anybody listening to the shadow minister just now would form the impression—superficially, at least—that this was a telecommunications company on the verge of collapse. He maintains that `bandaids and bits of string' are holding together its infrastructure. He said that they use gels and that cables are across haystacks and people's front gardens. It is of such concern to the opposition that they have not asked a single question about it. Why do they do it to the member for Melbourne? Why do they use this issue of privatisation as a filler and expose him to the obvious ridicule of the government? He does not ask questions about it and the tactics committee does not allow questions to be asked, and therefore his claims and exaggerations are seen for what they are: just meaningless criticism without substance and without solution.

Sadly, I fully intend to answer each and every one of the bogus charges raised by the shadow minister today. But, first, let us put it into context. The opposition are not interested in this issue because it does not occupy any of the parliament's time, except for the occasional quite infrequent matter of public importance when the opposition need a filler. And today is a filler. They have nothing else they wish to pursue, despite the proclaimed return to policy debate to put the government under pressure. Instead, we have the old chestnut of privatisation of Telstra brought out. Indeed, the shadow minister, the member for Melbourne, proposed his MPI off the back of a report in yesterday's Australian newspaper regarding Telstra privatisation plans being revived by the government. I am informed by the Minister for Communications, Information Technology and the Arts that the report is inaccurate. Yet there have been 20 questions asked by the opposition since this first appeared. Not a single one of them has been on Telstra. Surely question time is a more appropriate forum for the opposition, particularly the member for Melbourne, to express his concern, to explore the issue and to put the government under pressure. But, instead, either he avoids question time or the tactics committee—having regard to his rather low standing in that august body at the moment—does not allow him to pursue it.

I cannot take very seriously the member for Melbourne's claims, but I am deeply concerned on two fronts. The first is that his now seemingly personal battle against Telstra's current management and staff continues unabated. Again, it is an avalanche of abuse and criticism, and his challenges to their commitment to consumers and customers are a reflection on not just their competence but also their integrity. That disappoints me. Why is the member for Melbourne engaged in this campaign of slur and abuse? The second thing that worries me is the so-called policy plan of the member for Melbourne, which will have to be teased out. The Labor Party's approach to the future of Telstra is going to require more than—and I timed it—a three-minute explanation.

Mr Tanner —I did a speech on it last week!

Mr McGAURAN —He reminds me by way of interjection that he gave a speech on it last week, but that was overshadowed by other events occurring within the Labor Party last week and did not see the light of day. I must get a copy of it; I presume it is on the ALP's or the member's own web site. I will study it for its worth, but from the brief summary he gave of it today I think I might be wasting my time—because there is no worth in what he said.

I fear that those who recommend or make investment decisions will be pouring over every word the honourable member for Melbourne uttered last week in his speech and again in the MPI, because there is no doubt that to the extent the opposition has a policy it is to intervene in the day-to-day management of Telstra. There is no doubt that the objectives listed by the member for Melbourne as to Telstra's future purpose and operations involve ministerial intervention. We all know what that will mean for the value of Telstra and the holdings of hundreds of thousands of Australian shareholders. I am deeply concerned that the shadow minister, the member for Melbourne, has outlined today a policy of intervention and ministerial direction which will substitute government management of Telstra for the board of directors and the executive. The opposition is on very dangerous ground. Unless the mem-ber for Melbourne is prepared to spell out the exactness—in other words, the limits—of intervention and ministerial direction, everyone is going to be left guessing or, quite frankly, expecting that it will be a wholesale intervention. That is very worrying.

We are going to have the member for Melbourne and the cabinet running Telstra, not Ziggy Zwitkowski or the board. If he thinks the stock market and shareholders believe he and his colleagues in the cabinet can do a better job than an independent board with a responsible CEO and senior managers, he has another thought coming. I fear for the value of Telstra under those conditions. The sooner the member for Melbourne clarifies the situation, the better. The problem for the member for Melbourne is that he does not address the issue of ownership—

Mr Tanner —Yes, I did!

Mr McGAURAN —All right, the shareholding will remain as it presently is, in which case you cannot run Telstra as a business from the cabinet room. That is the worst possible thing you could do, and I do not believe that the shareholders of Telstra would want that. You are jeopardising the share price of Telstra with this ad hoc policy that does not solve the issue of ownership.

Let me now state the government's position on the future ownership of Telstra, which is crystal clear. We will not proceed with any further sale of Telstra until we are fully satisfied that arrangements have been put in place to deliver adequate telecommunications services to all Australians. That has been the bedrock of our position, and we have not shifted from it. The Prime Minister has made it clear that any future sale of Telstra depends upon, firstly, the government being convinced that services in the bush—in country and regional areas of Australia—are up to scratch; secondly, the passage of the legislation through parliament; and, thirdly, a share price that maximises the return to the taxpayer. We have set down quite clearly our position on the ownership of Telstra and put down the conditions.

Before we can satisfy the first condition—that services are satisfactory in country areas—we have to await the response of the government to the report of the Estens inquiry, which is an entirely creditable report. It provides a very comprehensive assessment of current services in regional Australia and detailed recommendations as to the adequacy of services and the arrangements that should be put in place to ensure that all Australians, wherever they live, share in the benefits of further developments in technology. I understand from the minister for telecommunications, Senator Alston, that our response to the Estens inquiry will be made in the very near future. Given these considerations, in the context of the 2003-04 budget statement, the Minister for Finance and Administration indicated that the future sale of Telstra is more likely to take place in the 2005-06 budget year than in the 2004-05 budget year.

Allow me very quickly to address the criticisms of a hysterical nature—leaving aside the inaccuracy of them—of the member for Melbourne. The first is with regard to the job cuts. He said emotively that Telstra's work force has declined from some 50,000 to about 37,000. It is no secret that Telstra has been pursuing a cost reduction strategy in recent years which has involved and resulted in a reduction in its work force, but to remain competitive Telstra—and it is highly competitive, thanks to this government's competitive regime—and other industry players have to focus on delivering quality services at lower prices to consumers. Telstra is not Robinson Crusoe in this regard in either the IT sector or any other sector of industry or commerce.

Telstra states that it does not have specific targets in relation to the job cuts but that redundancies can occur at any time. Telstra has also indicated that, due to depressed global conditions and efforts to further reduce costs, capital expenditure is likely to fall. In February this year, during the half-yearly results announcement, Telstra advised that capital expenditure for 2002-03 was expected to be approximately $3.3 billion and, for 2003-04, around $3 billion. Even the member for Melbourne, in accusing Telstra of not spending enough money, must recognise the commercial and business environment in which it must operate.

Looking now at the generalised criticism of the Telstra infrastructure, securing services by maintaining infrastructure is incredibly important. We recognise as a government that reducing fault rates is an important issue. That is why we implemented regulatory safeguards such as the customer service guarantee and the new network reliability framework, which are aimed at boosting Telstra's network reliability.

The Australian Communications Authority monitors Telstra's performance under the customer service guarantee and under the network reliability framework, and it reports on the performance quarterly. While faults will occur—it is a massive network, so of course they will—and will attract media coverage and be highlighted in the parliament, it is important to remember that Telstra operates over 10 million fixed services, and the vast majority of these operate efficiently and reliably. Telstra's most recent public report under the network reliability framework showed the national average availability of phone services in April this year was 99.92 per cent. The national percentage of services with no faults for the same period was 99.08 per cent. So 99 per cent of Telstra's fixed services operate without fault.

The honourable member mentioned in passing the gel sealant. In relation to the specifics of Telstra's weatherproofing sealant, Telstra has advised that, as part of the general maintenance regime of its cable network, a weatherproofing gel is used to seal cable joints against weather damage. The product has been in use since 1997, and Telstra believes the gel continues to be effective on the vast majority of the joints and that issues relating to the remaining joints are being addressed. Nevertheless Telstra believes the product is at the end of its life cycle, and has begun replacing the gel where required. So why abuse Telstra? Telstra is more committed to servicing customers, whatever their postcode, than the honourable member for Melbourne will give it credit for. You are always talking down Telstra. You are always reflecting on Telstra's professionalism, its commitment and its dedication to the people it serves. Spend some time with me at Telstra Countrywide in Gippsland or any of the other Countrywide facilities throughout Australia. Those people are locals. They cover local territory and they respond to local issues and local concerns raised by local people. It is terribly unfair that the member for Melbourne, in such a generalised and destructive way, abuses Telstra and the people of Telstra. Telstra is not some entity; it is made up of people who take their jobs very seriously and respond in a very dedicated way.

With regard to the gas pressure, Telstra has advised that cable pressurisation through the use of gas bottles is a method used to protect the copper network from water damage. Telstra is aware that the cable pressurisation system needs to be upgraded and is working to achieve this. With regard to the line rentals, the government imposes retail price controls on Telstra to drive efficiency and return the improvements and the savings to customers. We know that most Telstra customers will receive a $1.60 increase in monthly line rental charges, balanced by a drop in local call rates by one or two cents per call. So, on average, reductions in call charges for services covered by the price controls are likely to outweigh line rental increases. We have a safety net for low-income earners.

On all the points—all the criticisms he raised—the member for Melbourne has not put it in a balanced, measured way. He has a personal crusade against Telstra. As a result, it is distorting his judgment, and he has come up with this half-baked idea of the government running Telstra, which will destroy the value of Telstra in an instant. I urge the member for Melbourne to reconsider carefully and thoughtfully. Take advice and consult with the people of Telstra. If you have a mistrust or a dislike of certain people, so be it, but do not taint everybody in Telstra because of your personal obsessions and crusade. Work with Telstra, work with the government and develop a proper policy with regard to Telstra. (Time expired)