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Thursday, 14 August 2003
Page: 18542


Ms O'BYRNE (11:22 AM) —I must start by commenting on the contribution earlier today by the member for Cook. The member for Cook, with his reds under the beds contribution, has failed to understand exactly what we are doing here and how important this debate is. This is one of the most important debates that the House is going to have. It goes to the future—to the government's ability to provide infrastructure to our nation to ensure that our regions have the same services that our cities have.

On a number of occasions we have heard ministers and members opposite in this House saying that somehow Telstra is okay because, back in the olden days, it was a lot worse. We had Minister Tuckey, in an MPI last session, saying, `It's okay that Telstra doesn't provide some services because, after all, once upon a time we didn't have any phones.' We then had the member for Cook talking about some childhood memory of when his parents—and I think this might have been a little while ago—had to wait a few months in order to get their phone on. We just had the previous speaker talking about the days of pedal radio. I am not quite sure what planet these people are on. The fact that once upon a time we did not have a service is not an excuse for not having an appropriate service when we can have it, when the technology exists and when other nations are providing it.

Since this bill was introduced into the House, the prospect of full privatisation of Telstra has created more than just a feeling of unease and trepidation for many people living in regional and rural Australia. Since the decision to sell off parts of Telstra was taken the concern has been to create a state that the government likes to label `half pregnant', but it is a half pregnancy the government refuse to take responsibility for. Many people living in my electorate of Bass are rightly frightened about what a privatised Telstra will mean for them in accessing telecommunications services. There are towns that are only a stone's throw from Launceston—one of Australia's larger regional cities—that do not have access to basic telecommunications services. I know the minister at the table, the Minister for Citizenship and Multicultural Affairs, has recently visited George Town in my electorate.


Mr Hardgrave —They have got phones in George Town.


Ms O'BYRNE —He may have noted that he did not get mobile coverage down to George Town, and that is the largest town.


Mr Hardgrave —Yes, I did. I was doing radio interviews.


Ms O'BYRNE —I am pretty sure that you would have had to stop to get clarity, Minister. I am happy to drive down there with you one day and see if you can get mobile coverage the entire way. We will sort it out then. Yesterday, the Prime Minister said:

Telecommunications services in the bush are mostly up to scratch.

The Prime Minister was in Tasmania just the other weekend and he obviously was not listening to the community there either. It is no wonder they do not hold any House of Representatives seats in Tasmania, as he was urging them to do. The reality is that, until they listen to the people of Tasmania, they are not going to hold any seats in Tasmania. A fully privatised, profit only focused Telstra will mean that this situation is only going to get much worse. When the government no longer have ministerial power of direction over Telstra, they will refuse to act in the national interest. They will lose that ministerial direction capacity as soon as our stake falls below 50.1 per cent. Without government control, Telstra will no longer be interested in its responsibility to provide services to all Australians. We know that a fully privatised Telstra will not continue to provide services to small towns where it is not making a profit—where there is no bang for its buck. By letting Telstra off the fully public hook through the so-called `half-pregnant' part privatisation—there are far too many p's in that sentence—the government have given Telstra a green light to abandon the regions. I ask the minister—I am sure he can—to help me identify where the Nimbin flashing red light is.

I will not stand by and see my constituents disadvantaged in this way. I will not stand by and allow shareholder profits to be put before the provision of access to basic services in our community. The market value of the Commonwealth's equity in Telstra is currently around $30 billion. That is a nice little earner for a government that is quaestuary and obsessed with selling off Australia's infrastructure. A government that is interested in profit over policy is not a government that is acting for the public good. The full privatisation of Telstra will ensure the delivery of the greatest profits to the shareholders, which will undoubtedly be beneficial to the telecommunications infrastructure in capital cities, but I can guarantee that it is going to do nothing about maintaining services or infrastructure in regional and rural Australia.

The government has proved once again it is two-faced and I remain unconvinced of any goodwill that will ensure all Australians are able to access appropriate telecommunications services. Despite this government's assurances that it will not sell Telstra `until it is fully satisfied that arrangements are in place to deliver adequate telecommunications services to all Australians, including maintaining the improvements to existing services', it is a government that has been hell-bent on putting in place all measures necessary to speed up the process of privatisation. Labor will not support this bill and believe that public ownership of Telstra is the only way to ensure that essential services are not eliminated in regional areas. We are already seeing Telstra abandon its responsibilities to the Australian public, and we are already getting a taste of how Telstra plans to exploit the Australian people if is allowed to become the most powerful Australian company—a company that will potentially become the Australian version of Microsoft; a company that has plans already to move into new markets, such as media and information.

If we allow this to happen there will be even less chance that Telstra will focus on its core responsibility, that being the provision of telecommunications services to Australians. In addition to this, there is the matter of inappropriate corporate behaviour, which has been well publicised. This behaviour saw our Minister for Communications, Information Technology and the Arts and our Prime Minister provided with free plasma TVs. Apparently they were given the free plasma TVs to enable them to look at the technology and what the barriers might be to having people sign up and buy plasma TVs. The barrier is $12,000; it is the cost, the one thing that the minister and the Prime Minister did not have to experience while they sat back and watched the sport. Then there are the assurances offered to CEO Ziggy Switkowski that he would receive a $1 million-plus golden handshake if he is sacked. What an inducement to do your job well! Stuff up Telstra and we will give you all your entitlements, and a nice little earner as well—a nice little bonus. I wonder if Minister Abbott is going to ensure that that offer is made to all workers, that the next piece of workplace relations legislation he brings up says that all workers are going to get those entitlements. I really doubt it.

The full privatisation of Telstra will destroy any opportunity for people living in rural and regional Australia to keep up with telecommunications developments both now and in the future. The future-proofing arrangements for regional telecommunications services that have been built into this bill offer no guarantee of any reasonable future levels of service. These provisions are at the discretion of the minister and Australian communications services. If there can be no guarantee of reasonable levels of service at the moment, what hope does regional Australia have of securing reasonable levels of service once Telstra has been sold off?

In the electorate of Bass, Telstra has already shown how it plans to conduct a fully privatised business. In recent times there has been an attitude throughout Telstra in Tasmania that money should not be spent fixing an infrastructure that soon may not be necessary. That attitude is supported by the reduction of the capital expenditure budget over the last three years. It has gone from $5 billion in 2001-02 to $3.5 billion last year and it has again fallen in this financial year to below $3 billion. From this, it is not hard to presume that Tasmania's share of the projected lowered funding allocations from this budget would have to be very much reduced and far from the amount needed to address the shortfalls of the infrastructure. These reductions have meant that Telstra has become very good at implementing bandaid solutions to hold together a copper network that is in serious decay. The network of cables is known to have many faulty pairs and cables, which give rise to noisy circuits and unreliable service. In fact, these faults jeopardise the reliability and security of the telephone network.

The use of the system of pair gains in Tasmania is now prolific. This system was basically meant to be an interim stopgap measure to provide additional telephone services by allowing the provision of more than one telephone service over a single or, in some cases, several pairs of wires. In some areas, up to six homes or businesses are running all of their telecommunications services off one phone line. This means that homes and businesses are running their phone, fax, Internet and other telecommunications services off the same lines as up to six other homes or businesses. There are severe limitations on access to services when the pair gain system is used. For example, there are problems with congestion—if the line is busy, there is no service for other users of the line and there is no dial tone.

Another example of how the network is in a state of decay is the endless list of exchange cables throughout Tasmania which connect a telephone exchange to a distribution point that are grossly overloaded and outdated. Telstra's means of addressing these exchange issues is to install new pair gain systems or some other stopgap means, because there is no scope to introduce new cable capacity. Despite the inferior level of service on this system, services are not discounted by Telstra or compensated for in any other way.

In another example of how Telstra has been providing services in regional Australia, I know of two cases in Tasmania where Telstra cables are running through properties and preventing the landowners from developing their land. You would think that such an important part of the network would actually be properly mapped so that there was knowledge about where the cables were, but that is not the case. In both of these cases, there was nothing to indicate that there were Telstra cables anywhere on the properties. These cables were only discovered after development work had started. In both of these cases, the landowner has been informed that they are financially responsible for any damage done to the cables.

In yet another example of why a privatised Telstra would not be beneficial for Australia, already there has been a plain case of misuse of resources. I am referring to a recent poll conducted by Telstra in which customers were phoned and asked an incredibly important question: which celebrity would they be most upset to miss a call from? They cannot provide services to the regions or spend money doing up the cable network, but they can waste time ringing people with ridiculous questions.

If this is the level of priority given to the provision of regional services now, I am not filled with great hope that the priority of services would get any better if Telstra were fully privatised. Through offering shabby service like this, Telstra is betraying not only its customers but also its majority shareholders, and it is abandoning its responsibilities to Australians. If Telstra is treating its customers and shareholders in this manner now, what would its level of betrayal be if it were to become the most powerful company in Australia?

The government may claim naively that it can continue to pass national laws on telecommunications matters that will control this most powerful company in Australia. But already we have seen that powerful national companies become international companies and begin to manage their business at a level that is above the law. You have only to look at the way business is conducted in most multinational companies to see how this would happen. The full sale of Telstra may not have an impact on the parliament's power to pass laws directed at regulating telecommunications matters, but that does not mean that these powers would have any impact on how a fully privatised Telstra would manage its business.

The government does not really believe that Telstra would have any interest in maintaining services in unprofitable regional areas when it can concentrate its services and increase profit by sustaining services to the cities, thereby keeping the shareholders happy. I am opposed to the further sale of Telstra because I believe that a fully privatised Telstra would have no interest in maintaining existing voice framework services or providing new data framework services to regional Australians. I also believe that it would have no interest in continuing to roll out new services, such as broadband, in regional areas. In many communities there is no access to broadband services. With a fully privatised Telstra, there is unlikely to ever be access to broadband services.

If Telstra is fully privatised, it has plans to branch out to new fields, including information technology and media. This will no doubt be to the detriment of the Telstra customers who are already dealing with a deteriorating network that is being run by a declining work force. I am aware of one instance where Telstra management in Perth, Western Australia—and I know that you will be interested in this, Mr Deputy Speaker Wilkie, as it is very close to your own home—sacked a group of workers one Friday. The employees came into work one day and were told, `You're all sacked—see you later.' At the same time, the management summonsed, by SMS, another group of employees based in a regional area near Perth to come in and cover the shift of those workers who were not actually needed anymore. What sort of management practice is this? How can this type of action be that of an organisation that is ready to be run as a large corporation?

Telstra has already put its toe in the water in the area of investment in foreign markets and it has failed. Its losses on investments in Asia have been to the tune of $2.5 billion, and it continues to lose billions of dollars overseas through cuts to network investments and core staffing levels. It has also failed in its roll-out and the level of take-up of broadband services. Australia's broadband take-up rate is pretty low in comparison with other countries. We are 19th in the OECD. This is because Telstra has shown indifference and has failed to educate the public on the benefits of broadband. Its neglect of advertising of the Launceston broadband project and its subsequent comments on the future of broadband only act as further proof of this. Also, the take-up rate is lagging behind much of the developed world because of the lack of competition that might motivate Telstra.

If we allow Telstra to become a fully privatised monopoly, any competition would find it even more difficult to compete on a level playing field. In terms of success in new markets, what guarantees are there that a fully privatised Telstra will be any more successful through branching out into different markets? What guarantees are there that a fully privatised Telstra, with its focus on different markets, will be able to provide any sort of up-to-date telecommunications network? Telstra needs to look at the improvements that are needed to its services before it thinks about moving on. Telstra needs to look at how it can become an effective partner with all Australians, including regional Australians, before it begins to think about how it can then provide services to those regions. The divide between city and country is getting bigger and regional Australia continues to fall behind the bigger cities. If Telstra sells out on the country, this divide will get bigger and there will be no possibility for regional Australia ever to catch up. Telstra must remain in majority government ownership to ensure that it acts in the national interest and not just in shareholders' interests. I have asked the government if they are aware of any private companies that currently put the interests of regional Australia before delivering profits to shareholders. As yet, I have had no response on that.

The only consumer protection in place is the customer service guarantee, which Telstra already exploits. There is a loophole in that guarantee that allows Telstra to self-declare an exemption from the regulatory regime. The loophole allows Telstra to not have to fix faulty phones or install new services within the prescribed time frames, without any compensation to customers. The loophole even has a name: the mass service disruption notice. The Australian Communications Authority, as the regulator, is supposed to oversee that loophole, but as it reports to the same minister as Telstra it becomes yet another toothless tiger in regulation.

A fully privatised Telstra would have its regional and rural services regulated through the proposed regional telecommunications independent review committee, which I understand is supposed to review the adequacy of telecommunications services in regional areas. The reports from that committee, which would be assisted in its function by the Australian Communications Authority, would then be tabled in parliament. From what I can see, that would probably be very time consuming and ineffective and, while it was happening, customers would still be waiting for their services to be connected and their phones to be fixed. If Telstra is privatised, they will simply have to wait longer.

The faults I have mentioned do not even begin to include technician identified faults, which are not recorded on these lists and sometimes go years without being resolved. The problems with the Telstra network are many and critical. These problems are the result of underinvestment by Telstra in network maintenance and repair, and of reprehensible job cuts that have been pursued in order to generate revenue growth and to increase the share price. These problems are significant and are the result of massive problems with the basic infrastructure. These problems are going to cost hundreds of millions of dollars to fix over many years. I do not see this type of spending high on the list of priorities for a privatised Telstra.

Telstra is currently engaged in undertaking massive job cuts in order to push up the share price. These job cuts mean that almost 3,000 communication technicians lost their jobs last financial year and another 3,000 jobs are planned to go this year. The member for Cook identified this and said that it is just modern corporate management. Perhaps I can help him to understand the implications of such modern corporate management by doing a bit of basic maths. One technician does about four fault repairs or new installations each working day. This means that across Australia there will be 12,000 fewer faults and installations being done each day and 60,000 fewer each week. That is three million fewer each year. How can Telstra manage these cuts when it is already well behind in its response to fixing faults and installing new services? How can Telstra deny that these cuts, the poor focus on service and its poor record in regional Australia are not all about fattening up Telstra for full privatisation?

Labor will not rest on this issue and remains committed to ensuring access to basic telecommunications services for all Australians, regardless of where they live. Labor remains committed to ensuring that Telstra remains in public ownership. Labor will not and cannot allow Telstra to neglect regional Australians and Australians on low incomes. It cannot allow Telstra to go the way of the banks and shut up shop if it is not making a profit. We cannot stand by and watch services diminish any further in regional Australia. If Telstra is fully privatised there is nothing the government can do to prevent that from happening.

It must also be pointed out that Labor is not alone in its opposition to this bill. The member for New England held a press conference and released the results of a survey he conducted in his electorate. The member found that 98 per cent of the respondents in his electorate are opposed to the government's full sale of Telstra. Despite Minister Alston's belief that the survey is bogus, the government cannot ignore those sorts of figures. They are figures that are no doubt representative of many other electorates around the country.


Mr Hardgrave —You can't believe what you just said.


Ms O'BYRNE —Minister, you can laugh as much as you like. The reality is that you continue to laugh and ignore the needs of rural Australia at your own peril. The member for New England is not the only one opposed to the bill. One of the government's own members has already spoken out against the full privatisation of Telstra and the impact it would be likely to have on his constituents. The member for Hume, who has always been a very vocal member, recently advised that he might abstain when the House finally votes on this bill, because he cannot desert the needs of his constituents in regional Australia. He said that he was dismayed at the standards of service that regional Australia receives from Telstra. In return for his honesty, the member for Hume says he has been subjected to intimidation and shunned by his colleagues for speaking out. I therefore urge the member for Hume to do the right thing by his constituents and not only abstain from voting but vote against this bill. I urge him to vote with his conscience and according to the needs of his electorate. This bill is bad for Australia. The privatisation of Telstra is bad for Australia. Labor will vote against it and will continue to oppose cuts to regional services.