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Tuesday, 7 April 1998
Page: 2691


Mr MARTYN EVANS (9:24 PM) —The telecommunications industry is very much a battle ground. A war is being fought by the telcos of the world for the high ground in the information economy—something which will be enormously to their profit and which has the potential to provide communication services to the citizens of Australia and, indeed, to the citizens of the world on a scale which we have not seen in our lives so far.

That is a very dramatic period of change which the telecommunications industry is going through at the moment, and the pace of that change will quicken even more over the next decade. Media conglomerates, information technology companies and telecommunications companies themselves will struggle for the control of the optical fibres, the copper wires, the satellite dishes, the wireless wide area networks and technologies which are still on the drawing boards of the `Baby Bells' in the United States and hopefully on the drawing boards of Telstra in their laboratories in Melbourne—provided they keep them open.

But those technologies will only be available through the generosity of the telecommunications companies who will come to dominate those markets. I suspect that the number of those companies will decline significantly in the next 10 to 15 years. We have already seen in the United States, in Britain and in Europe a trend towards the amalgamation of those companies, towards the increasing consolidation of market power in fewer and fewer telecommunications companies throughout the world.

Telstra must be one of those companies still left standing when the dust settles in the telecommunications war. Telstra is a vital part of Australia's national interest. It has always been the case that Telstra has been a dominant player in the Australian market. Until recently, until the reforms of my colleague the honourable member for Dobell (Mr Lee), the then Minister for Communications, we have seen a substantial change in the competitive arena of telecommunications. We have seen areas opened up to competition which have previously been the sole province of one company.

But the reality is that the telecommunications industry in Australia is still very much in a state of flux. Telecommunications companies like Optus and Vodafone, who have sprung up in recent years as a result of those competitive initiatives of the former government, are still consolidating their place in the field. There are new companies arising all the time that are putting their toe in the telecommunications market just to test the temperature of the water. Some of them are finding it a bit too hot at the moment and are even withdrawing some of their services. Others are offering to skim the cream off the top of the inter-capital-city markets and possibly the international markets. But the reality is that the local loop, the last kilometre, is still very much 100 per cent in the hands of Telstra. That one company still owns the last kilometre. In telecommunications the last kilometre is a very vital piece of copper or fibre—as companies like Optus and Vodafone are now discovering. The reality of the market power which that last kilometre gives you is very significant.

That is the context in which we have to look at this bill—and the way in which it has been presented to the parliament—and ask ourselves: why was this bill drafted when it was? Why was it presented to the parliament when it was? It certainly was not drafted to advance any matter of high policy. It certainly was not drafted to ensure the better growth of the telecommunications industry in Australia. It was not drafted in the interests of Telstra. And it certainly was not drafted in the interests of the people of my constituency in Bonython in the northern suburbs of Adelaide in South Australia.

This bill was drafted and presented to parliament at this time for one very simple reason: one of the ministers of the Prime Minister (Mr Howard) had been discovered with a very substantial share of the market which he himself was administering and regulating. Senator Parer, the coal minister, was found to own far too much of his own industry. That was a problem which the Prime Minister needed to address during the course of his recent conference in Brisbane. That is why we have this bill before the House at this time. That is why we have this high policy debate put before the House now in a way in which the Prime Minister promised the people of this country would not occur during this parliament.

This bill is very much a response to the immediacy of the political environment which surrounds us at the moment. The Prime Minister brought it forward in order to ensure that there would be a substantive distraction from the day-to-day matters of political heat which he was already feeling. So this bill was not brought forward, I would suggest, to advance the telecommunications industry in Australia—quite the reverse.

This bill should not have come until after the next election when the matter could have been placed before the people of Australia, as the Prime Minister indicated at the time of the last election it would be in the event that he wanted to sell further tranches of Telstra. Yes, we had the commitment to sell one-third of Telstra, but we then had the equally strong commitment that no further share in Telstra would be sold until the matter had been put before the Australian people and adequately debated in an election context. Then, in the unfortunate event that the coalition were to be re-elected, the Prime Minister would place a bill for the sale of further shares in Telstra before the next parliament.

But instead we have seen yet another promise transferred into the non-core pile. This one is perhaps a little technical, which is only suitable, given the nature of the bill. But this is a technical non-core promise because the Prime Minister tells us that, if this bill gets through the House and the Senate, he will not present it to the Governor-General for proclamation until after the election in the event that he is re-elected.

But that deflects from the Australian people their proper role in fully debating this issue in an election context. What we will have is a debate now and a debate in the Senate shortly over this bill in the budget sittings, but we will not have the opportunity to present this matter to the Australian people in quite the same way as would have occurred had the Prime Minister kept his promise. So yet another promise goes to the non-core heap, yet another matter of dishonour for this government.

I have always seen the issue of telecommunications very much as one of industrial development in this country. Industry policy is very relevant telecommunications policy. If we look back at the history of the development of the telecommunications network in Australia, it has always been founded on the very strong driving force of, in the first instance, the Postmaster General's Department, and then subsequently Telecom and then Telstra. Those wholly government owned instrumentalities—either departments or corporatised instrumentalities—were responsible for driving forward the establishment of the network in Australia, they were responsible for driving forward Australian telecommunications industry policy and they were responsible for ensuring the development of a substantial export oriented telecommunications industry in Australia.

What will we have if we move to a fully privatised Telstra? We will have an option for 35 per cent foreign ownership. Some seven telcos around the world—from the United States, for example, and perhaps some from Europe—might end up buying those five per cent lots. They will control 35 per cent of Telstra's shares and, in concert with some Australian institutions who might well pick up some substantial part of the balance, they will be in a position to dominate Telstra's board, to dominate its industry policy and to dominate its purchasing policy.

Just how much credence do you think will be given to the needs of the Australian do mestic telecommunications industry, with all its export potential, in the years to come when there are American telecommunications companies who have substantial purchasing contracts and who are able to add Telstra's requirements onto the end of those contracts and, at marginal cost, which will be substantially less to Telstra in the first instance but a substantially greater cost to Australian industry in the long run? They will be able to ensure that Telstra purchases almost all of its requirements from overseas as add-ons to existing international contracts. That is hardly in the interests of Australia's telecommunications industry. It is hardly in the interests of ensuring that the already substantial gap in our trade deficit on telecommunications and information technology products does not widen further in the next century. I very much fear that, if this bill becomes law, it certainly will widen.

What will happen to the average consumer of telecommunications services under this scenario put forward by the government? We have already heard the concerns of the member for North Sydney (Mr Hockey) that this bill simply does not go far enough. I thought at first: how can you sell more than 100 per cent? But no, he wants to extend the requirements for foreign ownership, to remove those restrictions and to allow it to go well beyond 35 per cent. He wants to remove the requirements for the directors to be Australian citizens and he wants to remove the requirement for the chairman to be an Australian citizen. We see in his speech the direction of potential future government policy, and that is to wind back the one or two safeguards which exist in this bill.

Much has been made by the Minister for Finance and Administration (Mr Fahey) of the $10 million fines which will be imposed on Telstra in the event that they do not meet their community service obligations. What are those community service obligations? They are absolutely minimal. They really are a fall-back to the POT system, the plain old telephone system—a simple copper wire to the average rural or regional property and nothing much more than that. They certainly do not guarantee what the Prime Minister himself and his minister for communications at the last election sought to guarantee to their regional and rural constituents—that is, a high-speed data access network for all of those people. No, they do not deliver anything like that. They guarantee, under this huge threat of fines, the plain old ordinary telephone system which these people already have and which does not deliver the information economy and the information society of the next century and which rural and regional Australia has every right to demand and every right to participate in.

When we look at this bill, we must challenge the very basis on which it is presented to this House. It is not here for purposes of high industry policy. It is not here to further Australian national interest. It is here to deflect from the Prime Minister's political failings, it is here to distract attention from ministers who own too much of their own industry and it is here to ensure that those Australians and those foreigners who are able to afford the substantial amount of shares which will come onto the market if this bill becomes law will benefit from this privatisation exercise, not the ordinary citizens of my electorate and not the ordinary citizens of electorates in any part of this country and certainly not in rural and regional Australia. It will profit those foreign telecommunication companies, those Australian domestic institutions, those Australians wealthy enough to own substantial blocks of shares and those who hope to see this price rise in the near future, as it did on the previous occasion.

Those who will miss out under this scenario are those Australian citizens who already own a share of Telstra, those Australian citizens—everyone of them—who already own a decent chunk of our national telecommunications company and those citizens who will be deprived because of their lack of finance and their lack of inclination to want to buy back what they already own. They will be deprived of a stake in our national telecommunications company, a stake which we will never be able to buy back, a stake which will be lost to foreign interests forever and a stake which will ensure that our national telecommunications company will only become an outpost of foreign telcos. Our players in the national information economy will simply be bit players following the leads that others will set and not a strong, publicly owned institution of Australia which it would have been had the bill never been brought before this House and had the original decision not been taken.

Telstra should now be a strong Australian publicly owned company. Instead it will be one which will be dominated by foreign interests, one which does not have Australian industry development policy at heart and one which those ordinary Australian citizens who now own their fair share of that great Australian company will be denied access to continue to own. They will be denied the profits and the interest in this industry and they will be the ultimate losers of this Prime Minister's wish to take Senator Parer off the political agenda.