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Thursday, 25 November 2010
Page: 2262


Senator LUDLAM (4:51 PM) —I will be reasonably brief; I just thought I should address directly the coalition amendments that we are considering. I suppose I cannot help myself, but I want to provide a brief response to Senator Cash after that unusual little outburst. I have no difficulty whatsoever with the coalition providing scrutiny.


Senator Cash —Then why did you criticise us?


Senator LUDLAM —Perhaps the issue here is what we might define as ‘scrutiny’. Reading big slabs of Odgers Australian Senate Practice at us is not scrutiny. Tying us up with two or three hours of procedural blocking tactics is not scrutiny.

Opposition senators interjecting—


Senator LUDLAM —You did vote for that.

Honourable senators interjecting—


The TEMPORARY CHAIRMAN (Senator Fisher)—Order!


Senator LUDLAM —I will address my remarks to the coalition’s amendments. So far the coalition has failed to do that, but I am happy to address them and acknowledge that they have been put up in good faith in an attempt to improve the bill. I think Senator Macdonald used the phrase ‘gun to the head’, or it might have been Senator Cash. To a large extent these arguments, if they were ever genuine or relevant, probably are now moot and really have been set to rest. Telstra has made an agreement since the first iteration of this bill was drafted and debated briefly late last year and early this year. We now have a heads of agreement with Telstra and we have some quite substantive amendments to this part of the bill that make the gun to the head argument somewhat redundant.

Telstra have been working the building during the past couple of weeks urging people to pass the bill—and pass it as quickly as possible. It should also be acknowledged that the gun, if ever there was one, is holstered, shall we say, in the present version of the bill. It can only be placed at the company’s head by a legislative instrument, which this parliament may disallow. I hope that coalition senators are willing to acknowledge that if the minister was seen to be abusing this power of forced divestiture of some of Telstra’s assets it could be brought back to this parliament. That is a disallowable instrument and it is probably appropriate that it should be. That is an amendment to the second draft of the bill that we would support.

The incentive remains important though. The notion that Telstra would simply voluntarily structurally separate and that that was something they might be planning on doing anyway—giving up the market power that arose from its vertically integrated monopoly status—is quite clearly mistaken. I will quote Telstra’s own remarks on this point, from a couple of years ago now, from Mr Quilty at the Senate select committee that has been mentioned once or twice in this debate so far. On 11 November 2008 he said:

There is no doubt in the mind of Telstra management, and all of the analyst reports concur, that further separation of Telstra is not in our shareholders’ interests. We simply cannot contemplate it.

That was the situation that this government faced. The previous government—for the 12½ or 13 years under the coalition government—did nothing about this apart from privatise this entity and then watch it run amok and exercise its dominant market power as a vertically integrated monopoly. It is quite clearly its directors’ legal obligation to do so for the benefit of its shareholders. What an extraordinary change in the past two years from Telstra.

The current version of the bill, from my reading of it, also provides that Telstra may not need to divest itself of its HFC and Foxtel assets in order to retain access to 4G wireless spectrum. That now becomes discretionary; that is no longer automatic and again that is an amendment that we support, particularly in the context of the heads of agreement that was signed some months ago.

If the minister is satisfied that the structural separation undertakings sufficiently addresses the extent of Telstra’s market power, then that divestiture is no longer mandatory, it becomes discretionary. Hopefully this gives the coalition some comfort that the intention is not to protect NBN from fixed line competition, but it is rather to address Telstra’s horizontal integration. And in any case, if the government is not able to reassure parliament on this point, we can disallow the legislative instrument that permits the government to move what has been seen as quite a substantial intervention in the operations of a private company.

So we will not be supporting the coalition’s amendments. I would be delighted if any of the coalition senators want to actually address the subject of their amendments because perhaps there are merits there that would be worth pointing out to the chamber, and might even change somebody’s mind. But if they are simply going to be reading big slabs of Odgers at us until late into the evening, I will continue to call them on it because such a thing can in no way be considered scrutiny of a bill. It is quite simply wasting people’s time.