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Thursday, 14 August 2003
Page: 18562


Mr MOSSFIELD (12:42 PM) —I rise, during this debate on the Telstra (Transition to Full Private Ownership) Bill 2003, to oppose the full sale of Telstra. We are elected in this place to represent the views and concerns of our own communities, and I can say this without a shadow of doubt: my community does not want Telstra being sold off. So far the government has not been able to convince too many other people that it would be a good idea to sell it, if opinion polls, surveys and the views expressed by the government's own members are any indication to go by.

The member for Moncrieff has just given us some reasons, I believe, why people in this country would not want Telstra being sold off. He is giving us some guarantees, I believe, that a Howard government would regulate a fully privatised Telstra. I ask him: would they regulate a fully privatised Telstra in the same way that they have regulated the Commonwealth Bank to stop the banks from pulling out of electorates like Greenway and others? I do not think so. I also ask him: is he talking about core or non-core commitments? I think these are possibly some of the reasons why the people of Australia are not accepting the government's arguments relating to the full sale of Telstra.

The arguments put forward by the government in favour of privatisation simply do not hold any water. `We have competition,' they say. There are some 89 telecommunications companies in Australia, so there is no need for the government to own one of those 89. The trouble is that when you scratch below the surface you will find that one company makes up about two-thirds of the entire industry and about 95 per cent of the profits. There may be 89 companies, but there is no true competition—certainly not on any level playing field. If you put a first grade national rugby league team, with all its resources, into a local C grade competition, you will get the idea of what sort of `competition' we are talking about in this industry. We have such an overwhelming and dominating single company that it virtually amounts to a monopoly anyway. Such a dominant monopoly should not be placed in private hands. It would be against the national interest to do so.

The government also like to trot out the line that owning Telstra is a conflict of interest because they cannot own and regulate at the same time. This, of course, is nonsense, but it does show the darker side of the government. Under such a theory, the government would be privatising Australia Post, selling off every public hospital, flogging every school and university, taking offers on a good sale price for the ABC and SBS, and outsourcing the Defence Force with a quick call to the mercenary company Sandline. Maybe they would like to do these things if they could get away with them but they will not, and they will not get away with trying to sell the remaining part of Telstra.

Of course there is no conflict of interest in the government owning Telstra. There never has been, there is not now and there will not be in the future. In fact, it has been argued to me by one of my constituents that the opposite is actually the case: that section 51 of the Constitution demands that the federal government provides telecommunications to the nation and that by telling Telstra off it is abrogating its constitutional responsibilities. That argument, quite frankly, has been around for some time. Maybe some constitutional lawyers would argue differently, but I believe that is the view of a number of people in this country who have legal qualifications.

Labor believes that a privately owned Telstra would be a giant private monopoly that would be too powerful for any government to effectively regulate, as the banks are. It would focus on the more lucrative markets in the bigger cities and neglect the interests of low-income and regional Australians, just like the banks have done. There would be an inevitable decline in regional service levels—again, just as has happened in the financial industry. A fully privatised Telstra would use its muscle to squash effective competition and spread its monopoly power into other sectors like the media and information. Telstra would exert enormous monopoly influence over Australia's economic, social and political landscape. It would be one of Australia's largest private companies and would potentially become an Australian version of Microsoft in the US.

Telstra remains essentially a public utility, with pervasive monopoly characteristics. On simple economic grounds there is no justification for privatisation. A majority publicly owned Telstra is the only effective means of guaranteeing universal telecommunications services for all Australians. Another argument by the government is that minority private shareholders are threatened by the government meddling in their company. This is, of course, fatuous, because the government is also saying that, if Telstra is completely sold off, it can still regulate how it operates—in other words, it can still meddle by other means. It is a classic case of the government trying to have its cake and eat it too.

The government tells us that, because Telstra is exposed to the vagaries of the share market, the government by its ownership is also subject to these same vagaries. The Treasurer has pointed out that under his stewardship Telstra has lost $30 billion in value. This is not an argument for selling Telstra; this is an argument for sacking the Treasurer. All of these arguments put up by the government seem to focus solely on the interests of the minority—private Telstra shareholders. As I walked into this chamber just prior to commencing my contribution, I heard the member for Moncrieff solely focusing again on the minority private Telstra shareholders. This is fair enough, but it does ignore the much larger group, which is the customers who are in themselves the majority shareholders, through the Australian government.

The government went to the last election with the following policy under the heading `Telstra: further sale'. It said:

The government will not proceed with any further sale of Telstra until it is fully satisfied that arrangements are in place to deliver adequate services to all Australians.

At present, the government is not satisfied that this is the case.

You will notice the word `adequate'—not `decent', not `good', not `world class'. It does not aim to achieve that; it merely aims for `adequate': `Let's just get by.' You will also notice the words `to all Australians'. That is a bit surprising, given the blinkered and complete focus by this government on services in the bush, which of course do need good telecommunications services. We do not argue with that, but it has been the case that every time the sale is mentioned the service levels talked about are only those in rural and regional Australia.

My constituents do not live in rural Australia, and Western Sydney is only classified as a region when it suits some government bureaucrats to do so. I have been speaking about service levels and telecommunications infrastructure in my electorate on the outer edges of the metropolitan area for quite a few years now. I am glad to see that the Prime Minister's own parliamentary secretary, the member for Lindsay, has also come out in public agreement with me about the low state of affairs with regard to infrastructure in our community. The member was on the front page of the Western Weekender on 11 July under the banner headline `Kelly talks Telstra'. There was a big photo of her with a clenched fist raised above her head, and she was decrying:

We don't get the benefits of the rural areas and we certainly don't get the benefits of the city. A lot of our area is new housing and we don't have the infrastructure that should come with these new communities.

I say to that quote: hear, hear! I fully support it. It is exactly the point I have been making in speech after speech in this place.

The huge expansion in residential development that has taken place in electorates like Greenway and Lindsay over the past five to 10 years—and, indeed, it is continuing today—has meant that Telstra has not kept up with the infrastructure that is needed to service these new suburbs. The problem of pair gains is huge. There are too many houses and not enough phone lines, so the phone lines are split, which halves the dial-up Internet speed and rules out any chance of broadband completely. In the new suburbs no cable is being laid. Pay TV is by satellite, which means that the satellite is also the only way to get broadband. As I have said in the past, satellite is the most expensive form of broadband services, cable is the cheapest and ADSL is only slightly more costly.

Telstra is currently advertising do-it-yourself broadband for $129 installation and $60 per month for an 18-month contract—that is, ADSL, if you are lucky to be able to get ADSL. As the member for Lindsay and I know, it is not available to everybody in our electorates. So the only option that is left is satellite at $699 for the hardware, $399 for the installation and $120 per month for the service. So you can see the disparity between the options available to our constituents in outer metropolitan areas. Over the 18-month contract that you are forced to sign with BigPond, a do-it-yourself ADSL customer will pay a touch over $1,200 while a satellite customer over the same period will pay a little over $3,250—over 2½ times as much. If that same satellite customer was living in remote Australia, there are enough discounts, subsidies and special programs available that the cost factor is reduced considerably. It is only people in the new developing suburbs on the fringes of our major cities who miss out.

I had a meeting with representatives from Telstra in my electorate office last week regarding this very issue. I was pleased that they were aware of the problem and I was pleased that I had the opportunity to talk to them and to give them some indication of the concerns our constituents have. I am also pleased that they are taking some steps towards fixing the problems associated with broadband access in these areas. You have to remember that, in our electorates, you have ordinary mums and dads who will use the Internet for their various activities and you have a large group of young people who will use it for education. But you have also got a large number of small business people who operate from home. At the moment they are finding that the Internet connections are simply not satisfactory.

We find that new copper wiring is being run into the remote integrated multiplexers in order to provide ADSL services to a greater area. It is happening slowly and only after years of lobbying. Think how much harder it would be with a private company concerned only with the bottom line. The two representatives also made some very interesting comments about the future. They said that in 50 or 100 years time, copper networks will not exist. There will be some other form of technology. Whatever that technology may be—probably fibre optics—it will require an enormous capital investment in order to upgrade the entire network. Will a private company invest that heavily in what is essentially a public, nation-building exercise? I do not think so. What happens even further down the track when something comes along to replace fibre optics? Who will put the network in place then, if not the government? Capital investment—not in research and development but in network infrastructure—is a huge ticket item that is in the national interest. But a private company, interested only in shareholder dividends and share market prices, will not invest the kind of money that will be needed.

Over the past three years, Telstra has reduced its capital expenditure by $1.3 billion. It spends $1.3 billion less investing in telecommunications networks and infrastructure than it did three years ago. So you can see what a fully privatised company would do. The Telstra work force has been reduced by 13,000 people, from 50,700 to just 37,000 over roughly the same period. How are the infrastructure problems that we are facing in our communities ever going to be fixed with such reductions taking place? A private company even more focused on the profit margin will only further reduce the investment that is needed to take our country to the cutting edge of new technologies. A privately owned Telstra will be concerned only with its bottom line, as any private company usually is, but it will ignore the infrastructure needs of the community and of the nation in order to do so.

One only has to look at line rentals to see where the trend is. Three years ago line rental was $11.65 per month. Today it is $26.50 and will rise to $30 within the next two years. For many in our community the line rental accounts for the vast majority of the monthly telephone bill. I have a letter from a constituent—a pensioner—who has written to me complaining about the costs of his telephone service. In part, it says:

I have a phone mainly for ringing doctors or for an ambulance. If I did not need it for these things, I would not have a phone as the charges are approximately 90% of my account. I'm a pensioner and I look at my accounts: $15.20 for 3 months for calls and the rest is charges. I think Telstra is robbing us.

A telephone is necessary, as this pensioner indicated. It is not a luxury and yet for many it is being priced out of reach. A privatised Telstra, concerned only with profit, will result in higher call costs and higher line rentals, turning this necessity of life into a luxury item. Telstra has over 100,000 faults waiting for maintenance, waiting to be fixed. Of course, it covers the figures by saying that they are not faults but merely `routine maintenance'. It is a fiction that most people see through.

Service levels are simply not up to scratch and there has simply not been enough improvement since the last election for the government to justify this sale. If the government were not satisfied that service levels were adequate at the last election and Telstra has since spent less on maintenance and infrastructure, there is absolutely no way that the policy the government took to the election has been fulfilled. This is not the time to get into philosophical discussions about core and non-core promises, but it is pretty obvious which basket the Telstra policy falls into. In 2001-02, Telstra made a net profit after minorities of $3.66 billion. The government's dividend from that at 22c a share was approximately $1.4 billion. In the half year to December 2002, the net profit was almost $1.2 billion and the dividend to the government at 15c a share was $967 million.

So in the past 18 months a publicly owned Telstra has paid the government $2½ billion—and that is not including tax; that is just the dividend. This revenue stream will be lost to future governments by a one-off fire sale. You might get a pretty penny for the company but you will only get it once. That will mean less money to spend on hospitals and schools and other government services. And once it is gone you will never get it back. The government have come up with some pretty bad ideas over the past few years and I believe this decision is right up there with the best of them. It is just plainly and simply a bad idea. It is the product of the rampant ideology that infests the conservatives in this country. They are working on a misinterpretation of 18th century economic theory that since its invention some 230 years ago has never worked in reality anyway. The theory demands that individual self-interest be placed before the social good; before the good of the community. It is a theory that simply has not worked when put in practice.

The Prime Minister keeps talking about taking Australia back to some distant memory of a golden age. I might remind him that the golden age he wants was a time when Telstra was 100 per cent owned by the Australian people and the government regularly intervened to correct constant market failure. The middle-class democracy of peace and prosperity is only available with the intervention of government. A completely laissez faire economy results in a society where the losers outnumber the winners by a vast amount. If the Prime Minister truly wishes to have everybody enjoy the wealth of a prosperous nation then he should not be trying to flog off Telstra to the highest bidder. The government is selling out our future.

It is worthwhile concluding with a few points that I believe the Leader of the Opposition made very effectively in his speech earlier today. He said that Telstra services would be leaving areas—just like the banks—and that there would be a need for an increase in taxes to fund future infrastructure expansion. He was also very critical of the golden handshake that has been made available to the chief executive of Telstra. He also made the very valid point—and I will conclude on this—that small business see telecommunications as being the third highest cost in running their businesses. Tax comes first, tax completion comes second and telecommunications comes third. We believe that if there was full privatisation of Telstra the prices would go up. (Time expired)