Senator STEPHENS (2:00 PM) —My question is to the Minister for Communications, Information Technology and the Arts, Senator Alston. Can the minister confirm that, in March 2000, Telstra's phone rental fee for most customers was $11.65 per month? Isn't it also true that, under the Howard government's new Telstra pricing arrangements, line rentals have now increased to $21.90 per month and will eventually rise to around $32 per month? Why is the government letting Telstra squeeze more money from struggling families already under financial pressure in order to fatten up Telstra for full privatisation, using precisely the same presale tactic as it used for the sale of the airports—that is, jack up the charges to sweeten the sale?

Senator ALSTON (Minister for Communications, Information Technology and the Arts) —It does not take long for the new recruits to get the hang of the ideology, does it? I suppose when you run for preselection you are probably sworn to secrecy about the Commonwealth Bank and Qantas and how Labor ratted on the public on a regular basis about their true love of privatisation. Their hatred of competition is very well known. We believe in maximising competition wherever possible, trying to ensure that the competitors get a fair crack of the whip. The classic balanced playing field never appeals to the Labor Party. They would rather be pulling the strings, putting in high taxes and giving them back to their mates; that is basically their fundamental political strategy.

We recognise, and so does the ACCC, that the current pricing arrangements are not conducive to maximum competition. What you have are very low line rentals, which means there is a very significant access deficit—I think it is about $1.2 billion—and that means that interconnect charges have to be higher than they would otherwise be, I think by about 30 per cent. That means that it is much more difficult for competitors to get a fair go.

I know you do not believe in competition. You would like to, before you strangle Telstra completely—I presume you have not ruled out buying it back yet, have you? That is about all you have not ruled out. You have certainly ruled in breaking it up into little pieces; two million shareholders will be very rapt in that proposition! But even if you do not break it up into little pieces or if you do not just hold on to the network and flog the rest, which seems to be Mr Tanner's latest approach, the fact is that there do need to be price controls until you get competition working effectively, to the optimum level.

With respect to the price control regime that we announced, Labor has now foreshadowed it will be opposed—in other words, it will be all or nothing. You would actually be relaxing a number of the price controls on Telstra, because you will revert to the status quo. What you will also do is make it much more difficult for those second- and third-tier carriers to be able to compete on local call services, which I presume is what you would claim to be of importance. The fact is that prices for local calls have come down from about 25c to something like 15c to 18c. That is very good news.

ACOSS is supporting the latest package of price measures. But, of course, this opportunistic lot on the other side think that they can somehow ignore the rest of the equation, focus on one little aspect and say, `We're against price increases.' We know full well that their economic illiteracy is well understood by the electorate. But what they do not understand is that they will actually force up prices. They will make it much more difficult. If you really think you want to constrain Telstra the best way to do it is to have serious competition.

Senator ALSTON —I do not know how you are going in your war with Mr Tanner. I wish you well because at least you have the sense to oppose the break-up—for all the wrong reasons of course. I do not mean you, Mr President; I know you are very much in favour of the government's position on these issues. I am talking about the likes of Senator Mackay, who happens to be on our side on this issue because it suits her union purposes—after all, that is why you are here, and if you do not deliver they will whip it away from you next time around. So you have to toe the line; I understand that. But we just happen to be on the same path this time around.

Senator ALSTON —I am entitled to talk about `we'. (Time expired)

Senator STEPHENS —Mr President, I ask a supplementary question. Can the minister also confirm that ordinary families are not being compensated for these new increases by lower local call costs as the minister promised, and that Telstra's total increased line rental revenue will outweigh any reductions from lower call costs by up to $100 million?

Senator ALSTON (Minister for Communications, Information Technology and the Arts) —Again, there is simply no willingness to understand the concept of rebalancing. So why don't you get the ACCC in for a briefing and you will understand that it is actually in the best interests of consumers. That is what it is about. The way in which other carriers can offer lower call rates, which is pretty much the main game— if you do not make too many calls and you think that line rentals are too high you do not have a phone, do you. No-one is forcing you to be on the line.

Opposition senators interjecting—

The PRESIDENT —Order!

Senator ALSTON —In fact, about 11 million people actually choose to have mobile phones, to pay for timed local calls and to bear much higher telephone charges as a result. That is their choice, and good luck to them; it is very convenient. But we are interested in looking after the lower end as well, so when we came up with this rebalancing we were very careful to ensure that Telstra consulted with ACOSS and others. (Time expired)