Mr CIOBO (6:18 PM) —I come into this chamber to talk about the Telstra (Transition to Full Private Ownership) Bill 2003 [No. 2]. I have been most intrigued to hear the contributions made by the member for Bass and, before her, the member for Melbourne. I am particularly intrigued by the fact that the member for Bass claims that the half-pregnant model that Telstra currently has—the model which sees approximately 50 per cent of Telstra in private ownership and approximately 50 per cent of Telstra in public ownership—in some way delivers benefits to the Australian community. That position is fundamentally wrong. The arguments that I just heard coming from the member for Bass highlight the clear total lack of understanding that those on the opposition side of the chamber have not only to basic economics but to the needs of the community.

I pick up on one of the final points that the member for Bass raised: that the Labor Party is committed to ensuring that Telstra remains a carrier, not a broadcaster. Right there, in that statement, is a highlight of the fact that the Labor Party is not only welded to the past but completely unable to recognise one of the key words that I hear bandied throughout the ICT industry at the moment: convergence. The word `convergence' is the new trend that is not just taking place this year but has been taking place for the last five or 10 years. The word itself explains the way in which Telstra needs to react and respond to new market conditions. It highlights the way that Telstra needs to become very aware of the fact that this new media marketplace is a convergence of not only the carriers of old but the new companies of the future.

A link is increasingly going to be made between the convergence of the mobile phone, for example, and what was traditionally the domain of the home PC. It is the convergence between mobile phones, which today incorporate not only picture to picture transmissions but access to the World Wide Web and news services, and the ability to push information from the web through to your telephone. These are the kinds of things that are happening in telecommunications today. It is the convergence between PDAs—the fact that you can have personal digital assistants as part of your mobile phones as well—and phones that connect to your laptop. In the future, I have no doubt, we will see telephones that not only will provide an opportunity for access to the World Wide Web but will be the equivalent of what we have in many of our lounge rooms today: televisions. The reality is that convergence is what ICT is all about. It is all about the future of ICT. And yet we have an opposition that comes into this chamber completely ignorant of this fact and talks about Telstra only being a carrier. If that does not highlight an opposition that is looking into the future with the back of its head, not with its eyes, then what does? I notice the shadow minister scratching the back of his head, and I know that that is the direction the opposition is going in.

The opposition are completely shackled to a view of Telstra that is totally out of step with not only those in the industry but all Australians. To suggest otherwise is some pathetic attempt by the opposition to try to portray themselves as being in touch with middle Australia. They are not in touch with middle Australia. If they were, they would not make comments along the lines that Telstra should only ever remain a carrier and never be a broadcaster. What rot. It is rot because it flies in the face of the convergence we have seen occurring in this sector for many, many years.

When I spoke on this bill before, I raised the fact that the ALP seems incapable of differentiating between the ownership structure of Telstra and service delivery. I would like to address in this particular vein a number of the key arguments I have heard from the opposition. I have heard opposition as well as Independent members come into this chamber and talk about how they cannot get mobile phone reception. I have heard them speak of how phones are not repaired within 24 or 72 hours but rather it takes a week or two for them to be repaired. I have heard opposition and Independent members come into this chamber and try to portray the fact that certain suburbs are unable to access broadband as being in some way tied to Telstra's ownership structure. It is wrong, and it is wrong because service delivery is not dependent upon the ownership structure; rather it is dependent upon what this government legislates and mandates should be the USOs that apply to Telstra.

The reality is that each and every position that the Labor Party puts forward—whether it be minimum service times, whether it be access to minimum broadband levels or indeed actual dial-up levels when it comes to Internet access—is able to be mandated and applied through legislation to a fully privatised Telstra. That is the reality. I would love to see the shadow minister disagree with that, because the shadow minister knows that community service levels can be legislated and applied to a fully privatised Telstra. Indeed, any government of the day can decide what it believes the USO should be and apply it to a fully privatised Telstra. To suggest that in some way a half-privatised, half-publicly owned Telstra is the only vehicle that allows the government to dictate what minimum service levels should be is false.

The Labor Party's position on Telstra is completely unsustainable. We see indications on a daily basis of why a half privatised, half publicly owned Telstra is unsustainable. I would like to deal firstly with the issue of conflict. The government owes it to all Australians to dictate minimum service levels. That is what Australians want of government. That is what Australians are calling for with respect to our regional and rural communities. They want us to dictate terms that we believe are a reasonable balance between commercial considerations and the reasonable expectations of people not only in metropolitan areas but also, and perhaps more importantly, in regional areas. Those minimum service levels might pertain to service response times, to mobile phone coverage or to Internet access speeds but, at the end of the day, it is the government's job to ensure that we legislate and provide guidance to our telecommunications carriers about what our expectations are of minimum service levels.

These minimum service levels that should apply in both metropolitan and regional and rural Australia can be enforced through the government not only mandating it but also applying to have those mandates enforced through, for example, the ACA or the ACCC. Part of what I was turning to is the conflict that currently exists under this model where the main consideration of the government, as the primary shareholder in Telstra, should be obtaining the maximum dividend possible. If you hold that assumption to be true for a moment and Telstra are seeking to obtain the greatest dividend possible, then the best commercial decisions are those that are made by the board and management of Telstra. But the conflict arises as a consequence of the fact that a Telstra management board—with the government being the primary shareholder they are accountable to—are unable to always make the commercial decisions because there is conflict between a government that is seeking the maximum possible dividend and a government that is seeking to ensure enforcement of USOs. They are totally inconsistent.

Mr Tanner —Is it the same for Australia Post?

Mr CIOBO —Yes, in my view it is exactly the same for Australia Post. It is impossible for the government to be a majority shareholder seeking the maximum possible dividend and for the government to also be the rule maker that is seeking to apply minimum service levels. I know the shadow minister knows that. In fact, that is why up until 6 February last year the Labor Party's position when it came to Telstra was that it believed in a virtual separation where the wholesale network of Telstra was somehow virtually separated from the retail network of Telstra. So the shadow minister would come into the chamber and argue, `No, we need to have the separation between the wholesale networks of Telstra and the retail networks of Telstra so we can ensure that we all enjoy the benefits that flow from the retail side but that we enforce USOs when it comes to the wholesale side.'

Mr Organ —A good idea.

Mr CIOBO —I hear that interjection from the Greens member. What happened to that policy? The policy was dumped and I have got the transcript right here of what the shadow minister said on 6 February 2003. He said that the notion of virtual separation was dumped as Labor Party policy.

Mr Tanner —No.

Mr CIOBO —Now the shadow minister says it is not. Well, apparently it is back. So I have just had confirmed by the shadow minister that the policy that was dumped on 6 February 2003—

Mr Tanner —It was actual separation that was—

Mr CIOBO —Now the shadow minister is clarifying that it is actually about actual separation. I see. So the Labor Party's position as of today would seem to be that they are going to sell off the wholesale network but keep the retail outlet of Telstra. Is that actual separation? There seems to be a bit of confusion coming from the opposition.

The Labor Party do not have a formula when it comes to responding to Telstra. The Labor Party are trying to make politically opportunistic points out of running around in the community and being scaremongers. That is what the Labor Party are about. The Labor Party are about talking down Telstra, talking down our mobile phone network and talking down Internet access because they think there are a couple of lousy votes in it. That is what the Labor Party are all about, and if you happen to be one of the 1.8 million Australians who have shares in Telstra—

Mr Tanner —They're doing well, aren't they? They're doing brilliantly.

Mr CIOBO —tough luck to you according to the Labor Party, because that is their only concern. I hear the shadow minister interject: `They're doing well, aren't they?' Well, shadow minister, why aren't they doing well? They are not doing well because your position is unsustainable. The fact is that shareholders in Telstra today are burdened by the fact that we have this half-pregnant Telstra and the market punishes Telstra accordingly—and that is the position that the Greens and the Labor Party would like to keep. The Greens and the Labor Party would love to keep a situation where those 1.8 million shareholders in Telstra can get stuffed, because that is the Labor Party position. They do not care for them; they are not interested in the response or in making sure that there are opportunities available to those shareholders. They are happy to see their money flushed down the toilet.

Make no mistake about it, the Labor Party position is perhaps not as clear as I thought it was. Is it actual separation? Is it virtual separation? Is it support for a half-publicly, half-privately owned Telstra? Or is it in fact support for a fully publicly owned Telstra? I am not sure which of those four positions it is and I would contend that the shadow minister himself is not sure which of those four positions it is. With respect to minimum service levels, the other point I would like to make is that you can certainly have a situation where minimum service levels are enforced by the ACCC. The reality is that minimum service levels would be totally enforceable by the ACCC under a fully privatised Telstra.

The final point I would like to raise is whether or not Telstra in its current format—in its current public ownership, private ownership structure—is able to respond to market demands and act as any good corporate citizen should. The reality is that it is completely hamstrung, because Telstra is unable to issue additional capital and is therefore unable to respond to market conditions. If Telstra wants to roll out a new technology, for example, that requires additional capital investment beyond the capital reserves that it has, it cannot do it under the current model. Why? It cannot do it because the government ownership of Telstra must remain at 50.1 per cent. That is the requirement. If Telstra does want to issue additional capital or to provide equity in Telstra to a company that it is seeking to absorb as part of its corporate structure, it is prevented from doing so because to do so would require of Australian taxpayers the expenditure of additional taxpayers' money into Telstra to ensure that we maintain the ratio of public to private ownership. That is just another example of the way in which this policy that the Greens and the Labor Party support is bad for business, bad for Telstra, bad for Australian shareholders in Telstra and bad for the Australian community. All of these negatives that flow from Telstra are absolutely the consequences of this half-pregnant Telstra that we currently have.

I would also like to highlight another point. Quite frankly, when it comes to Telstra going forward, I only ever hear arguments from the Greens and the Labor Party about the failure of Telstra to meet service levels with respect to service response times, phone repairs, phone connections and mobile phone coverage. They are the only arguments I ever hear from opposition members and from the Greens with respect to Telstra. Let me pose this question: when Telstra was fully in public hands, did these problems not exist? Were there no service connection problems when Telstra was fully publicly owned? Were there no problems with respect to mobile phone coverage when Telstra was fully publicly owned? Were there no problems with respect to connection times when Telstra was fully publicly owned? No, all of those problems existed under the full public ownership model as they exist today and, in reality, as they will exist into the future.

All of these problems will occur irrespective of the public or private ownership of Telstra. The Labor Party know it and the Greens know it, and for them to come into this chamber and attempt to argue otherwise is a complete misrepresentation of the position. Australians can see straight through that. They know that when Telstra was fully publicly owned they were not paying 3½c, for example, for a phone call to the UK; they were paying $1 a minute. I hear opposition members saying, `We can't privatise Telstra because it will act as a monopoly in the marketplace.' The fact is that when Telstra was publicly owned it acted more like a monopoly than I have ever seen it act in the last five years. In addition to that, by having a well-equipped, well-funded ACCC, we can ensure that any potential misuse of market power by Telstra is hit head-on by an ACCC whose sole purpose is to serve the consumer in this regard.

The reality is that the transition of Telstra to full private ownership is a must. The full privatisation of Telstra will not have any impact on service levels. What is more, if the opposition and the Greens are serious when they say that we need to ensure that there are minimum service levels and that the USOs that apply to Telstra incorporate all of the benchmarks that we want to have, it can happen under a fully privatised Telstra. No arguments about the inability to service customers appropriately can be made with respect to the current ownership structure of Telstra. No sustainable argument can be made that a half-publicly owned and half-privately owned Telstra is better than a fully privatised Telstra.

This current model of Telstra, half-publicly owned and half-privately owned, is resulting in negatives all round—negatives for the Australian government as a consequence of the conflict of being the primary shareholder, with the Australian people's expectation that the government will seek to ensure that appropriate safeguards are in place to guarantee the minimum mandated levels of service. There is also the conflict that arises from Telstra's inability to respond appropriately to normal market conditions because it cannot raise additional capital.

There are also consequences for those 1.8 million Australians who invested in Telstra—everyday Australians, mums and dads out there, who are being penalised through the share price of Telstra by the recalcitrance of the Australian Labor Party and the Greens in not supporting the transition to full public ownership. Let it be on the record very clearly for all Australians to see that no argument has been made by either the Greens or the Labor Party at this point that explains why half-public, half-private ownership is superior to fully privatised ownership.

I would reinforce one final time that each and every one of the minimum service levels that people like to apply to Telstra—be it service connection, access to broadband, access to dial-up services or mobile phone coverage—can apply to a fully privatised Telstra. This bill is worthy of full support, and I am very pleased that this government has the political honesty to go to the Australian people and explain to them why a transition to full private ownership is in the best interests of our nation.