Mr PEARCE (10:09 AM) —Relin-quishing the government's remaining equity in Telstra is clearly in our national interest. It is in the interests of the Australian public, of Telstra shareholders, of Telstra itself and of the wider telecommunications industry. The Telstra (Transition to Full Private Ownership) Bill 2003 amends the Telstra Corporation Act 1991 to repeal provisions requiring the Commonwealth to retain 50.1 per cent equity in Telstra. While the political debate over the merits of full private ownership of Telstra has continued unabated, the rationale and benefits from the potential sale of the government's shareholding still hold true. The proposed changes to the ownership of Telstra are not a stand-alone policy; they are, in fact, just one part of a comprehensive and ongoing reform process in telecommunications instituted by this government upon coming to office in 1996.

There are many reasons for the government's approach to Telstra; important, however, is the recognition by the government that they are reasons not for reasons' sake but for the significant benefits that will flow to all Australians. Australians both young and old, whether they live in the city or in outer city or country areas, will all benefit from the government's approach. As a result, I want to outline what I believe are just some of the major benefits from the government's decision to introduce this bill.

The first point I want to make is a fundamental point of principle. That principle is that governments do not and should not have a role in the day-to-day management and operation of a business, particularly a business that operates in a highly competitive and dynamic market. The fact is that governments have a series of core competencies, and history has demonstrated time and time again that running and operating a stand-alone corporation is not one of them. Governments are responsible for key challenges that only they can address. Governments must be focused and highly attuned to those challenges and not be distracted by matters that are not within their core capabilities. When looking at the telecommunications industry, experience reveals and the facts prove that our telecommunications system can now be financed and much more effectively run by private enterprise; we just have to look at the benefits that have flowed to consumers in recent years.

The next benefit to all Australians that I would like to touch on is the removal of the burden of debt. Sale of the government's remaining equity in Telstra would provide an excellent opportunity for us—that is, all Australians—to pay off the $32 billion that remains from the $96 billion debt that Labor left the country with. You have to ask: what are the practical benefits of this debt reduction? One benefit so far from this government's prudent economic management is an extra $5 billion each year in interest savings that can now be invested in essential services—essential services such as schools, hospitals, roads, defence and all of the other areas that are important to our country. But the Commonwealth still pays around $3.5 billion each year in interest on Labor's debt. If the remainder of Telstra were sold, it could reduce the Commonwealth's debt position to zero. This would provide at least an additional $3½ billion extra each year for additional resources in the areas of education, health, transport and defence. Our failure to miss the opportunity of retiring the vast majority of Labor's remaining debt will mean leaving that debt as our legacy to be repaid by future generations of Australians.

The proposed sale would bring an end to the current conflict of interest faced by the Commonwealth in its dual role as regulator of the telecommunications industry and majority shareholder of the largest participant in that industry. It seems to me quite obvious why you would want to remove from the regulator, who is responsible for providing competition and consumer safeguards, a direct financial interest in maximising the profits of a participant. The primary reason is that it means that the regulator can focus solely on delivering outcomes that are in the best interests of consumers. It would provide both the regulator and the participant with real independence of action and strategies in achieving their divergent best interests.

The next benefit of the full private ownership of Telstra is that it would bring about the much needed end to the constraints on Telstra from the hybrid ownership arrangements of being part public and part private. Currently, Telstra is unable to realise its full potential as one of Australia's most important and largest companies and is therefore unable to compete effectively in the global telecommunications market. This is largely because Telstra cannot raise equity due to the legislative restraints it faces as a result of the government's ownership. So the question has to be asked: how can Telstra compete in a market when it is treated differently to its competitors, whether they be domestic players or huge international players? Full private ownership would give Telstra the flexibility it needs to raise capital and invest in new areas of revenue and growth, not just for today but for the future and for the benefit of all Australians.

The next benefit would be to remove the current exposure to the volatility of the share market that the taxpayer faces through the government's continuing shareholding in Telstra. Risk over the profit and losses of businesses should be held by those who choose to take it on—that is, the risk should be held by risk-taking private investors who explicitly choose to buy shares in that company. The current situation forces all taxpayers to accept the risk as a result of the government's stake in Telstra. Another reason for selling Telstra is that Telstra's 1.8 million shareholders should not have to suffer the political interference of a majority shareholder with divergent interests. Currently, shareholders face having their shares devalued by the threat or the potential of some governments meddling and making politically motivated decisions.

In this debate it is important to consider the alternative offered by Labor. Given that Labor have themselves considered splitting up Telstra and selling off its best performing assets, what credibility do they have in their promise to keep Telstra in government ownership? You just need to look at their track record on the issue of public ownership to see this. When Labor were last in government they privatised everything that moved. They promised in a share prospectus that they would not sell any more of the Commonwealth Bank and then went ahead and did so. They drew up a detailed proposal to sell 100 per cent of Telstra without telling the Australian public and then tried to get BHP to buy Telstra on the sly. The one thing that Labor's privatisation program distinctly lacked was any requirements about maintaining services—something that is a key feature of this government's policy for Telstra.

What about Labor's track record in telecommunications? It is worth remembering that under Labor there was little competition in telecommunications and no consumer safeguards. As a result, Australians had little choice of phone company, had access to very few services and had their phone installed or fixed only when the telco was good and ready. A further example of the contrast between this government and Labor is on mobile phone services in regional Australia. It may surprise you to know, Mr Deputy Speaker, that in the early 1990s Labor signed a contract to close down the perfectly good analog mobile phone network, which would have left people in regional areas with no mobile coverage at all. Thankfully, the Howard government was able to rectify this problem by requiring the roll-out of the new CDMA network that now provides wider coverage and more functions than the analog network did.

As I said earlier, the coalition's record on telecommunications stands in stark contrast to that of Labor. When you look at Labor's `just say no' position on the ownership of Telstra you see that it adds to the long list of obstructionism. It is worth noting some of the many measures they have opposed. They opposed budget savings, tax reform, sustainable PBS and disability support pension systems, ending compulsory trade union fees, unfair dismissal laws, waterfront reform, construction industry reform, education reform, youth wages, cracking down on welfare cheats, national security measures and private health insurance incentives. Labor just oppose everything.

There are many strong reasons why the government should divest itself of its ownership of Telstra. However, in concluding my remarks, I want to outline the real reasons why Labor are opposed to this initiative. At the end of the day, the Labor Party do not care about the ownership structure of Telstra. What they care about are their own political fortunes, and that is very obvious in this debate. There are five key reasons why Labor do not support the Australian community and do not support the government on this bill. The first reason is political motivation. Labor very much understand the benefits that the full private ownership of Telstra will bring to Australia, and that is exactly why they oppose it. If Labor thought it was such a bad policy, they would support the bill. They would enable it to pass and would let the government receive its just desserts. It is for precisely that reason that Labor oppose this policy, because Labor know that the government will be rightly credited for helping to deliver the significant benefits that will flow from this policy.

The second reason is reflected in Labor's alternative policy. If Labor truly feel that having Telstra in public ownership is the best option, if they really feel that the government continuing to own Telstra is best for the Australian people, why have Labor not promised to buy back all of the existing shares if elected? If it is so important to have Telstra in government ownership, why have Labor not promised all of the existing shareholders of Telstra that if they are elected they will buy back all the shares?

Mr Slipper —And nationalise the company.

Mr PEARCE —Yes. Why have they not promised to do that? It is because they do not believe that at all. It is just one of their increasingly irresponsible acts in their game of political survival. The third reason is the traditional Labor motivation of wanting to appease their union mates. These union mates do not want to see any potential threat to their role in Telstra's work force, so no news is good news. The fourth reason that Labor oppose the proposed sale is that they do not want to see Australia's debt retired. You have to ask yourself why Labor would not want to see Australia's debt retired. The reason is that it is their debt—it is the debt that Labor ran up when they were last in office. Labor do not want people to see the benefit of the gov-ernment's prudent economic manage-ment and debt retirement program.

The fifth and final reason is one that I have already briefly noted in my remarks, and that is that Labor oppose everything. They have quite literally become the party of opposition for opposition's sake, not for the benefit of Australia. They make no constructive contribution whatsoever to the national political debate, and the ongoing debate on the future of Telstra's ownership is a prime example of that. The case for this bill is clear, as are the motivations for Labor's opposition—something that is increasingly recognised in the Australian community. I commend this bill to the House.