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Thursday, 21 August 2003
Page: 19168


Ms GEORGE (10:03 AM) —I rise to speak in this debate on the Telstra (Transition to Full Private Ownership) Bill 2003. Telecommunications services are essential services, and it is through Telstra that this service has been delivered to all Australians, regardless of where they live or their level of income. Today, telecommunications is more than just the historical standard phone connection; it is about ensuring the capacity of all of our citizens to be connected to the information economy.

More affordable access to the latest telecommunications services is one of the next major challenges facing the Australian nation. Telstra has played an important role in helping to achieve a more equitable society but, increasingly, it is also vital to our future national economic success. I believe in the principle that all Australian citizens should have the opportunity to continue to enjoy access to essential telecommunications and broadband services.

Labor believes that a majority publicly owned Telstra is the best means to deliver the latest in accessible and affordable telecommunications services to all Australians, regardless of where they live. Majority public ownership would protect our citizens from market failure in the provision of services at the same time as it would continue to promote social inclusion. I do not accept the argument put by government mem-bers that somehow, through regulation, you could ensure the same outcomes under a privatised Telstra. You cannot future-proof Telstra services. You cannot guarantee an ongoing presence in all parts of Australia, even if it is written into a licence condition.

As we know, a privatised Telstra would be a giant private monopoly—too powerful for any government to effectively regulate. It constitutes about two-thirds of the entire industry and accounts for roughly 95 per cent of profits in the sector. We know that it exerts enormous power and its reach is universal. I believe this monopoly power needs to be constrained in the interests of all and that this can only be done by retaining Telstra in majority public ownership. As is often said, a privatised Telstra would be a giant private monopoly that would leave town faster than the banks, and we know from experience what that would mean to our citizens: the loss of access to and affordability of an essential service. People outside the major cities, and not just those in isolated rural areas, would inevitably be the losers. A privatised Telstra would have as its core objective the making of profit. Its accountability would be to its private shareholders and not to the national interest. Under part privatisation, we have already had a taste of what the outcomes would be; and, in my view, the outcomes would be even worse when the making of profit becomes the primary motivator.

Despite the spin and the inquiries, the average Australian knows exactly what the outcomes of part privatisation have been. We have seen enormous staff cuts, with the loss of over 13,000 jobs in the past four years—predominantly workers out in the field who service and maintain the network. We have seen a drop of over $1 billion already in capital investment. We have seen less maintenance, which has led to severe problems in the network. People know—not just in rural areas in electorates such as mine—that services have been reduced and people are having obstacles placed in the way of accessing the new technologies and broadband. And, of course, at a time when Telstra has continued to make enormous profits, costs have increased. I will give you a small example. Line rental costs were about $11.65 per month a few years ago; they have almost doubled now, to about $26.50 and, in the next year or two, they are expected to be about $30 a month. So, in that period, costs have risen for standard services but also for mobile phones, text messages and Internet fees.

As I said earlier, much of the nation's economic development in the future will be dependent on being plugged into the information economy, and that relies very much on accessible broadband services. Telstra is currently failing to deliver broadband at the level all Australians are entitled to receive. The inadequate roll-out of broadband has now positioned Australia in the 19th spot on the OECD table in terms of the number of broadband connections into households. In general terms, those are the results of part privatisation of Telstra, and no amount of spin or doctoring can alter the realities.

The government tells us that it is not going to flog off Telstra until it is `fully satisfied that arrangements are in place to deliver adequate services to all Australians, including maintaining the improvements to existing services'. If that is the test, it certainly has not been met. If the government wants to argue that the improvements have been such a great success, I think the member for Corio rightly pointed out in his contribution yesterday that that is a compelling argument to retain majority public ownership. You cannot have it both ways.

You just need to look at the submissions made to the Estens inquiry—a whitewash if ever there was one—to get an honest appraisal of the problems that Australians are facing. Hundreds of Australians wrote to that inquiry, complaining of poor telecommunications services, primarily in regional and rural Australia. They talked about poor mobile phone coverage, inadequate dial-up Internet data speeds and constant line dropouts.

Despite what the average Australian is telling the government, we know that they are intent on privatising Telstra and trying to provide the arguments in support of that position. You need only look at the response of the electorate—not just in my area; the member for Hume found this recently from polling his constituency—to see that the Australian people do not want Telstra privatised. We know that the National Party has already sold out their constituencies in the bush on this matter. They have agreed to the sale and privatisation of Telstra despite the fact that, in the bush, the Telstra failures are so clearly evident.

The rosy picture of regional services painted by the Estens inquiry was a complete sham and in complete contradiction to the hundreds of submissions made to the inquiry. Let me assure you, Mr Deputy Speaker, that the problems of regional Australia are exactly the same as those faced by my constituents. I represent an electorate that is less than 100 kilometres from Sydney—an outer metropolitan area just over an hour's drive from Sydney and 15 minutes south of a major regional city, the city of Wollongong, with a population of around 250,000 people.

The problems that we are experiencing locally are exactly the same as those that have been talked about and written about in submissions to the Estens inquiry from people from regional and rural areas. I want to recount some of these experiences just to make the point that regulation of a privatised monopoly is never going to work. We have got regulations in place now, but they are so easily avoided, as my experiences will show.

When I first took up the position as the elected representative for Throsby, we went through a major outage in one of the suburbs in my electorate. Telephone services were out for nine days in early 2002—a very long time to be without access to a phone, especially for the sick and elderly who had no access to the 000 emergency contact. The tragic death of a child in rural Victoria highlighted this problem. I must say that there have been some positive measures put in place as a result of that. It was amazing that, in the nine days the phone services were out, there was no communication to my constituents and, in fact, quite insulting messages when people rang to report the faults. In one case which involved a woman whose mother had just come out of hospital, the Telstra people told her: `Surely most people these days have a mobile phone.' In writing to me, the constituent, Mrs Swire, pointed out the foolishness of this assumption: she did not have a mobile phone, nor did any of her elderly neighbours.

With 400 of my constituents having gone through this inconvenience for a period of nine days, a week later there as another major outage—13 businesses in Albion Park had their phones cut for over a week. During the disruption local businesses lost contact with customers, EFTPOS facilities, faxes, networked computers and the protection of property with the loss of phone back-to-base alarm systems. In speaking to just two of these local small businesses, they estimated that they had missed on about 1,700 calls between them in that period.

What was Telstra's response? We supposedly have, by way of regulation, customer service obligations. When my office pursued these matters with Telstra, they attempted to shift the blame, firstly to vandals, then to line wear and tear and, finally, they said it was all the fault of the rain. What they did was to override their customer service obligations by a neat little trick of declaring a mass service disruption. I did not realise that once Telstra declares a mass service disruption that overrides any obligations or recompense to constituents. So those who argue that we can privatise Telstra and ensure equitable outcomes through a process of regulations better have a real hard look at the inadequacy of current regulations and the customer service obligation.

I argued that the outage was well within Telstra's control, that it was a lack of maintenance that resulted in the conditions that led to the interruption of services. This argument went on between me and Telstra, and finally I had to pursue the matter with the Ombudsman. We checked the so-called extreme weather conditions with the Bureau of Meteorology statistics and found in looking back over the last 107 years that on 43 separate occasions, over 43 periods, there had already been recorded at least one month of rainfall similar to the rainfall that occurred in January 2002. Telstra's excuses for the declaration of a mass service disruption had one objective, and that was to avoid its liability to pay compensation to those people and businesses that were affected by its negligent maintenance procedures and reduction in staff numbers.

Let me repeat that the government pretends that it can regulate customer service obligations when Telstra is privatised. You can see that it cannot enforce those obligations now, even when we have majority government ownership. It was the cutbacks in staff numbers and the resulting lack of maintenance that were primarily responsible for the outages and the unreliable services that continued to plague the Illawarra. Between Helensburgh in the north and Albion Park in the south the number of staff to service our network has been reduced from 150 in 1996 to just 48 today.

The lack of maintenance staff is particularly important for the phone cable system, which is pressurised to prevent water entering and destroying the paper insulation. Telstra recommends a continuous cable pressure of 70 kPas to prevent moisture ingress. Its own guidelines consider 40 kPas to be an alarm trigger and 20 kPas to be a serious threat to a functioning network system. Yet data collected by the union in March 2003 in my region indicated air pressures as low as 20 kPas were evident in at least 56 of the 144 cables in the Illawarra, 40 cables were pressurised at less than 20 kPas and 19 were ridiculously low, at less than five kPas.

Fortunately for the people who I represent in the Illawarra, many of these major cable problems have been rectified. I have to put that on the public record. But they have only been rectified after extreme public pressure applied by the union, by my office and by the local media. What obligations would there be to rectify a fault of this magnitude under a privatised Telstra? None at all, I would argue.

On the down side, despite the fact that we have had additional staff to rectify this major cable crisis, Telstra has sacked a further eight staff, citing improved services as one of the reasons why they were no longer needed. This is but one example which challenges the assumption that somehow under a privatised scenario you could regulate to ensure effective outcomes and maintain access and affordability. It is a ludicrous position. We know it cannot happen and it will not happen.

In conclusion, Telstra is now owned by all Australians; we all have a share in Telstra. It belongs to all of us while ever we have majority public ownership. Telstra is there to serve an important national purpose. It should be retained in majority public ownership to continue to serve the national interest and not the interest of private shareholders.