Senator ALLISON(11.32 a.m.) —by leave—I move:

(16)   Clause 145, volume 1, page 130 (lines 8 to 12), omit subclause (2).

(17)   Clause 145, volume 1, page 130 (line 13), omit "or (2)".

(18)   Clause 145, volume 1, page 130 (lines 18 to 20), omit paragraph (4)(b).

(19)   Clause 145, volume 1, page 130 (line 27), omit "subsections (7), (8) and (9)", substitute "subsection (7)".

(20)   Clause 145, volume 1, page 131 (lines 14 to 26), omit subclause (8).

(21)   Clause 145, volume 1, page 131 (lines 27 to 32), omit subclause (9).

(22)   Clause 146, volume 1, page 132 (lines 7 to 11), omit subclause (1), substitute:

   (1)   The national universal service provider is the universal service provider for Australia.

(23)   Clause 146, volume 1, page 132 (lines 12 to 20), omit subclause (2).

(24)   Clause 146, volume 1, page 132 (line 22), omit "or (2)".

(26)   Clause 149, volume 1, page 134 (line 27), omit "or 148(1)".

(27)   Clause 149, volume 1, page 134 (line 29), omit "or 148(1)".

We also indicate that we will be opposing clauses 148, 150 and 151. The purpose of these amendments is to ensure that Telstra as the national carrier, which is still largely owned by the Australian public, remains the national universal service provider. It is our view that such arrangements should prevail whilst Telstra is in public ownership. If Telstra is one day fully privatised, then this policy should be reconsidered, but it is our view that that should not happen until then.

The proposal for tendering out of the USO stems from the assumption that other carriers may be able to provide the USO services, either nationally or regionally, more efficiently than Telstra. But the only way this is likely is through selecting a company which relies on cheaper labour rates. While the government may see this as appropriate, the Democrats do not believe it is wise policy to undermine the position of a substantially publicly owned company which operates nationally through promoting companies relying on cheap labour rates. This is a point I would like to emphasise to the Labor Party. If they vote against this Democrat proposal, then they should be clearly aware of the long-term implications.

Aside from the objective of encouraging reduced wage rates, which I do not put past the government or indeed the opposition, this proposal does not seem to have merit or indeed application in Australia. We already have a national network in place with a penetration rate of over 96 per cent. Duplication of communications infrastructure has been pursued in areas where it has been commercially feasible. It has been recognised as a major policy failure by numerous commentators. Sadly, the government and the opposition have chosen to keep their heads in the sand on this issue and persevere with more of the same.

Hoping to introduce competing infrastructure in areas where it is not commercially viable is simply a further invitation to extend the inefficiencies which the community and consumers have been burdened with to date. Indeed, as the CEPU has pointed out in its submission, the practical implications of the proposal do not seem to have been thought through. Telstra already supplies services to unprofitable areas. If an alternative universal service provider is selected for a particular region, then what is to occur to the Telstra existing facilities? Are they going to be sold off? What happens to them?

Is Telstra to continue operating a service at the same time? That is unlikely because if it is unprofitable for a single carrier to provide services, surely it is less profitable for two carriers to do so. By the same token, it is irrational to expect Telstra to act as some sort of reserve national universal service provider, ready to pick up the pieces if a regional or alternative national provider defaults.

As the CEPU points out, unless the industry is willing to fund the maintenance of its facilities while they lie idle, Telstra can be expected to withdraw selectively from those areas it is no longer required to service, making the necessary divestments with consequent risks and costs for consumers.

The CHAIRMAN —The question before the chair will be dealt with in two parts: firstly, that amendments 16 to 24, 26 and 27 be agreed to and then, subsequently, that clause 150 as amended and clauses 148 and 151 be agreed to.