Senator MACKAY (2:11 PM) —My question is to the Minister for Communications, Information Technology and the Arts, Senator Alston. I ask the minister whether he stands by the claim, as part of his ritual abuse of the Labor Party, that he made on the Sunday program last weekend:

I ask the minister why he endorsed precisely that approach, when he said on ABC radio's the Media Report on 15 March this year:

Has the minister's blatant bipartisanship completely derailed all his consistency on the issue of telecommunications infrastructure development in this country?

Senator ALSTON (Minister for Communications, Information Technology and the Arts) —I congratulate Senator Mackay on being able to read Mr Beazley's letter to the Financial Review this morning. But, unfortunately, as so often happens, it is grotesquely out of context. One needs to understand that the essential difference between the two approaches on this critical issue is that telecommunications is a form of infrastructure and, of course, we want to see as much infrastructure out there as possible. We all like to see it available as cheaply as possible and as quickly as possible. But, of course, there are commercial constraints. These things have to be paid for. Infrastructure is not cheap. Roll-outs into regional and remote areas can be very, very expensive. That is why you have a universal service obligation—to require Telstra to provide that money, even though it is uneconomic, and they recover the cost through a levy on the rest of the industry. It is a mechanism that has been well and truly recognised.

In that interview I gave the example of the untimed local calls tender in extended zones. Telstra have always said, `We can't afford to do it,' and governments—including yours— have always said, `Well, that's too bad; too hard; can't do anything about it.' We actually found $150 million, so we made it possible for Telstra to do it. Now they will have the capacity to earn some revenue out of that service which otherwise would not have been available because no-one could afford it. In the same way, it did not make sense for mobile phone carriers to provide continuous coverage on major highways because there is not enough traffic there. So we said that where it is clearly uneconomic we will actually provide $25 million and put it out to competitive tender—and Vodafone won that contract. So that is one approach: where it is not economic to do it, you provide the funds—you have a transparent mechanism for ensuring that you do not force people to do something that is otherwise uneconomic.

We will go into this in a little more detail later, Senator Mackay, but there are plenty of examples of Mr Beazley being caught short. He is actually very much in favour of directing Telstra to do a whole range of things. Directing them—not subsidising them and not providing the funds so they can afford to do it, but making them do it irrespective of what effect it has on two million shareholders and irrespective of what effect it has on the commercial operations of the company. That is the crucial difference.

Labor use the term `nation building' as code for saying, `We do not care whether you want to do it and we do not care whether it makes commercial sense; we will require you to do it.' These are the weasel words backgrounded by an unnamed Labor spokesman in the FinancialReview yesterday: `We will not have to actually use the power of direction'—in other words, `We will just have a bit of a chat to you. We will just have an interview with you and explain how important things are.' We know exactly what that means because Mr Beazley is already on the record in a number of areas explaining precisely how he is going to direct. You only direct because Telstra cannot otherwise afford to do it and it does not make sense commercially.

That is the difference between nation building as defined by the Labor Party and nation building as defined by us. We provide the resources to enable it to occur so people's commercial enterprises are not jeopardised. Labor say, `We don't give a damn about that. We've got a political agenda. We're going to come in and run your business and drive it into the ground. And we will direct you to do it even if it does not make commercial sense.'

Senator MACKAY —Madam President, I ask a supplementary question. It is no wonder that you had a starring role in Shane Stone's memo after that answer.

Honourable senators interjecting—

The PRESIDENT —Order! There is a conversation across the chamber which should cease.

Senator MACKAY —Given that within a few months the minister has claimed both that telecommunications companies have a crucial role to play in nation building and that a nation building role for the country's largest telco would be a recipe for disaster, which statement on which program is in fact an accurate reflection of this government's current policy on Telstra?

Senator ALSTON (Minister for Communications, Information Technology and the Arts) —I wonder why you bother but I will. The fact is, there are two different approaches to nation building. One of them involves forcing the major carrier to do what is uncompetitive, forcing the share price to go south into free fall, not worrying about the commercial activities, pretending it is the PMG and pretending it is a political plaything. That is one approach—your approach. Our approach is to say, `If you need the funds to do it, we will provide them.' So we provide $150 million.

That is why they are opposed to that whole billion-dollar social bonus package. We are prepared to put very serious money on the table to build regional infrastructure. This lot think they can do it for nothing by forcing Telstra. They think they can just treat Telstra as somehow an extension of the Labor Party to meet their political objectives completely unrelated to the cost of providing services. This is mickey mouse land. No wonder you are in diabolical trouble with roll-back. You are going to be in bigger trouble on this one. (Time expired)