Senator TIERNEY —My question is directed to the Minister for Communications and the Arts. Is the minister aware of a report in the Hobart Mercury which says that Senator Lyn Allison claimed that, once Telstra was partly privatised, country people would have to pay much more for telephone services? Is the minister further aware of the opposition party's conclusion in the report of the Senate committee inquiring into the Telstra bill that the partial privatisation of Telstra would be responsible for extensive job losses in Telstra? How accurate are these concerns, and did the weight of evidence in the inquiry support these propositions?

Senator ALSTON —Yes, I did see the report in the Hobart Mercury where Senator Allison was quoted as saying:

Country areas will be completely abandoned after privatisation . . .

and that—

. . . the move to user-pays would be devastating to rural areas, with the cost of connecting a phone to rise dramatically.

We then got a series of figures in a table, which presumably were designed to frighten the pants off anyone who did not understand the issues.

The facts of the matter are this. Irrespective of privatisation, there is already legislation in place—which will not alter if and when the Telstra (Dilution of Public Ownership) Bill goes through—that imposes and maintains the universal service obligations. That ensures that, to the extent that services to rural and remote areas are uneconomic, the cost is borne by all of the carriers. In other words, they contribute to a universal service levy, and they will pay pro rata on their revenue—currently, it is on market share.

Let there be no misunderstanding. Those arrangements will continue to apply irrespective of privatisation—just as they do in America, which has always had privately owned carriers. Indeed, at the conference of APEC telecommunications ministers last week, one of the three major agenda items was how they could extend the concept of universal service obligations. In other words, every country—

Senator Bob Collins —We do it very well already.

Senator ALSTON —I explained to them how we are a world leader. They were very interested in getting a briefing from me. The only thing that disappointed them was that they were absolutely amazed that the Labor Party was opposed to privatisation. They said that, when they talked to people from the opposition, they were told, `Never mind, it is political. We understand the logic, but it is political,' and they were very disappointed. That is the first thing to be said.

The second part of the question related to the extent to which partial privatisation could be responsible for extensive job losses. I see that Martin Ferguson was saying the same sort of thing in a press release today. The important thing to remember is that between 1991 and 1995 Telstra underwent 25,000 job reductions. It did that without any industrial disputation and against the background of an acknowledgment by the union sector that these were technology driven changes. In giving evidence to the committee, Ian McLean, Branch Secretary of the CEPU, said:

I do not think there will be a difference in the number of jobs, but they will not—

Senator Carr —That's not true.

Senator ALSTON —Just a moment, sport. If Senator Carr will just listen, Mr McLean said:

I do not think there will be a difference in the number of jobs, but they will not be working for Telstra; they will be working for Skilled Engineering or some other contractor.

Colin Cooper, Divisional President of the CEPU, said:

. . . we have agreed in some areas that there can be staff reductions. We have been through all these processes with new technology.

Senator Tierney asked Mr McLean:

These job losses are primarily driven by technology?

Mr McLean said:

Yes. The major driver is technology . . . the union recognises that.

Senator Tierney said:

What you are telling us is that the basic driving force that has been reducing the work force over the last few years is technology driven.

Mr Cooper said yes. Mr Allan Horsley, the Managing Director of the Australian Telecommunications Users Group, said:

. . . the industry is desperately short of people.

. . . . . . . . .

. . .. if, as a result of any process, this or just management changes in Telstra result in fewer employees, those employees will pick up work, without a doubt, outside.

. . . . . . . . .

It is not overstating the case to say that demand is enormous.

The Chairman of the Service Providers Action Network said precisely the same thing—that there is an acute shortage of staff in the telecommunications industry today. He went on to say that all others in the industry were having trouble getting good people. In other words, there will not be a reduction in total employment in the industry; indeed, there will be a boom as a result of a more efficient Telstra, a more dynamic industry and a more competitive environment.

Senator Bob Collins —You don't believe that for a minute.

Senator ALSTON —I am sorry, but Ian McLean is your witness and he says it all. (Time expired)