Senator ALLISON(12.15 p.m.) —The Democrats have amendments which are almost identical to the opposition's proposal, except for one significant difference. Where the opposition amendments refer to `eligible customers', the Democrats's amendments simply refer to `customers'. The Democrats believe all Australians should be entitled to untimed local calls, not only those who are eligible. We will be moving amendments to make this possible.

I would like to deal with the issue of price discrimination. It is our view that prohibiting price discrimination between local call zones is essential if the benefits of competition are to be equitably shared by all Australians. Allowing for price discrimination will invariably mean, as Senator Schacht has indicated, that residents in high density urban areas, such as Melbourne and Sydney, will benefit at the expense of those who live in rural, regional and remote areas. I do not think anyone is in any doubt about that. Clearly, for residents in such places as Tasmania, where Telstra is the sole carrier, there will be no competitive push for price reductions. The Democrats believe that the way around this is to legislate to ensure that all Australians share the same rights. I expect that the National Party members will want to support these amendments and I will be interested to see if they actually do.

The majority report of the telecommunications bills inquiry, which reflects the views of government senators, was critical of maintaining price discrimination restrictions because it thought it would result in weakened competition, and thereby lessen consumer welfare. Two points need to be raised in response. Firstly, competition between carriers will still be possible. The only difference is that carriers will not be able to price discriminate across local call zones. Secondly, the alternative, as we all know, is that urban and business consumers will benefit substantially while many others will be left behind, potentially even cross-subsidising the former. To overcome the problem of making Telstra the sole carrier forced to avoid price discrimination, our amendments impose this measure on all carriers. This will ensure that Telstra is not unfairly constrained relative to its competitors.

Finally, I think it is important to point out that the amendments I am proposing do not lock this position in. We have provided for the minister to review the operation of this within four years.