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Thursday, 21 August 2003
Page: 19182


Ms CORCORAN (11:36 AM) —The purpose of the Telstra (Transition to Full Private Ownership) Bill 2003 is to allow the government to sell its remaining shareholding in Telstra. When I say `its shareholding' I mean, of course, our shareholding, the community's shareholding. This bill will remove the restriction in the Telstra Corporation Act 1991 that requires the Commonwealth to retain 50.1 per cent equity in Telstra, and I oppose this bill. There is no sound justification for selling Telstra, and there are very good reasons for holding on to majority public ownership, not the least being the profits that Telstra generates, which enable the Commonwealth to fund other government services.

Let me put a little history on the record. Telstra was formed in 1992 with the passage of the Australian and Overseas Telecommunications Corporation Act 1991, now the Telstra Corporation Act 1991. Telstra is a public company limited by shares and formed from the merger of Telecom Australia, the then domestic telecommunications carrier, and the Overseas Telecommunication Commission, the then international telecommunications carrier. In 1995 Telecom changed its name domestically to Telstra. It had already made that change overseas in 1993.

The Telecommunications Act 1991 allowed the commencement of competition in telecommunications by establishing a duopoly network between Optus and Telstra and a mobile-only operator, Vodafone. The publicly owned Aussat domestic satellite system was sold to Optus in the early 1990s. The introduction of major changes made 1997 a big year for telecommunications in Australia. Comprehensive competition in telecommunications was introduced on 1 July 1997. Up until then, regulation of telecommunications was the province of Austel, an industry specific regulator. Now regulation of telecommunications competition falls under the Trade Practices Act 1974, which is administered by the Australian Competition and Consumer Commission.

The first sale of Telstra shares, one-third of the Commonwealth's equity, was in 1997, with 65 per cent of those shares reserved for Australian investors. The second tranche was sold in 1999 and took privately owned shares up to 49 per cent of Telstra, with the government's shareholding of 51 per cent still the majority. If passed, the Telstra (Transition to Full Private Ownership) Bill 2003 will allow the government to sell the remaining 51 per cent of the original shares we all hold in Telstra. I repeat: I oppose this bill. There is no good reason to privatise Telstra and there are plenty of reasons for keeping what is left in public ownership. Most Australians do not want the rest of Telstra sold. There are many surveys to support this. My constituents are saying that they want Telstra kept in government hands.

Telstra generates substantial returns for the Commonwealth on its shareholding—valuable income that is available to fund priority services in health and education, for example. Once sold, this income is lost forever, and the once-off cash return is no compensation for this. But the main argument for keeping Telstra in public hands is that telecommunications, like health and education, is an essential service. It is not in the best interests of our society that essential services be operated, run, managed or controlled by private enterprise. We all need telecommunications to function in today's society. We need good telecommunications in order to survive, let alone live in a reasonable fashion, in today's world.

A good and reliable telecommunications system is essential to stay in touch with our families; to communicate with work colleagues, customers and clients; and to find information on almost everything we touch in our lives. Most organisations, including government departments, refer us to their phone number or web site for information. Many students, particularly those in tertiary education, now do most of their interaction with their school or university—commun-icating with their tutors, submitting their assignments, getting their exam timetables and then their results—through the Internet. All of this is reliant on students having access to good and reliable telecommunications.

This country's telecommunications are largely delivered by Telstra, with 95 per cent of the profits made in Australia's telecommunications industry made by Telstra. There are 89 licensed telecommunications carriers in Australia, but just one of these carriers, Telstra, makes 95 per cent of the profits and makes up over two-thirds of the industry. This means that customers are voting with their feet. Whilst people outside the major cities do not get the range of choice city folk do, the large share Telstra has of the market shows that the majority of people in the cities—that is, those people who do have the choice—are choosing Telstra. As I said, most customers outside the major cities do not have access to these 89 different carriers. For many people, especially in rural and regional areas, the only choice is Telstra. This in itself is a clear argument for not privatising Telstra. If the other carriers do not see sufficient profits in business outside our major cities, a privatised Telstra is unlikely to be willing to stay there either.

The first responsibility of private enterprise is to its owners or shareholders, who require profits to be made. That responsibility is not always compatible with the need of all Australians for a good and reliable telecommunications service. A privatised Telstra would inevitably focus on the lucrative markets in the major cities. A privatised Telstra would have to place its first priority on getting the best return possible for its shareholders and therefore would focus on cities at the expense of our country and regional areas. A privatised Telstra would deny people in these areas access to the same quality of services enjoyed in the cities because they do not offer the same level of profits. The gap between the haves and the have-nots would widen even further.

Already we are seeing increasing costs for our phones. Line rental increases have more than doubled, from $11.65 a month just a few years ago to as much as $23.50 to $26.50 a month for a home phone today. Business lines are even more expensive. Mobile phones, text messages and Internet fees have all gone up. Some schools have seen their Internet charges increase by 1,000 per cent. Small business has identified the cost of telecommunications as its third highest concern, behind only tax and tax compliance costs.

In the past four years, capital investment by Telstra has dropped from $4.5 billion to $3.2 billion and is going to drop further. Staffing in Telstra has plummeted. Since 1999-2000, jobs in Telstra have dropped from over 50,000 to just over 37,000, with more job cuts planned. These jobs are predominantly those of people working out in the field, maintaining and fixing the network, upgrading the network and installing the lines. In other words, the number of people doing the hands-on work to deliver telecommunications services is shrinking. That is why it takes a week to get your phone fixed or several months to get a new line installed. If this is what Telstra does when it is partly privatised, just imagine what it will do once it is wholly privatised.

Broadband access is already an issue for many people, and there is no reason to believe that access will be any better under a privatised Telstra. People in many areas in our cities simply cannot access the latest in broadband Internet technology. This is because Telstra-installed pair gain systems mean that ADSL is unavailable. Australia has fallen from 13th to 19th in the OECD table of broadband access. Broadband access is increasingly vital, especially for small businesses. They are more and more reliant on the Internet for a range of services and will quickly fall behind without broadband access.

A privatised Telstra would be a giant private monopoly, too powerful for any government to effectively regulate. It would be able to dictate policy on regulatory issues and it would seek to exploit its monopoly power both in telecommunications and in other sectors. Already we see Telstra ignoring the needs of its customers, whilst pretending otherwise. I have spoken on a number of occasions of the need of my constituents in Cranbourne to be recognised as Melbourne residents for telephone billing purposes. Telstra declares Cranbourne as outside the Melbourne call zone for reasons which are historical and partly technological. However, time has moved on. Melbourne has grown, and Cranbourne is recognised as part of the metropolitan area by most government services. But Telstra refuses to recognise this and inappropriately continues to treat the suburb as a country area.

Telstra has introduced a series of different call plans in an attempt to offset this disadvantage. The call plans are complicated and most residents have given up trying to understand them. There is no clear way for a Telstra customer to test the plans on existing phone bills. Almost 12 months ago, represen-tatives of Telstra met with me and one of my constituents over this issue. After about two hours of discussion one of the Telstra representatives commented that, if Cranbourne were moved into the Melbourne call zone, the residents would end up paying more for their phone calls. This claim seemed to be based on the assertion that most calls are local and that the variety of call plans referred to earlier give residents an advantage. My constituent and I were some-what taken aback at this assertion and asked that Telstra provide some proof of this claim. We made the point that, if the claim was indeed so, then the campaign to have Cranbourne moved into the Melbourne call zone would go away as Cranbourne residents are interested in lower phone bills.

Nearly 12 months later, Telstra are still to come back to my constituent. It is clear that this claim is not sustainable. This means that it must cost my Cranbourne constituents more for their phone bills than it would if they were in the Melbourne call zone. Telstra have launched a campaign to deflect this issue through their new Country Wide shop, which was set up in nearby Frankston to service the Mornington Peninsula. As a side issue, it might have been better to put the shop actually on the peninsula but that is another matter. The Country Wide staff are working hard to convince Cranbourne people that they are not disadvantaged. But there is a simple way of doing this and that is, of course, to remove the disadvantage altogether by including the suburb in the Melbourne call zone. So once again I ask Telstra and the government to do the right thing by the people of Cranbourne. I ask them to recognise the march of time, recognise that Cranbourne is part of Melbourne and move the border so that Cranbourne is in the Melbourne call zone. Stop putting up smokescreens of confused and confusing call plans and just do the right thing.

I now return to the matter of the full privatisation of Telstra. Privatisation has happened in a number of other industries and it just does not work. Look at public transport in Victoria, where the private train service provider recently just pulled up stumps and left because it was all too hard. Look at the power supply system in the United States where recent blackouts were caused by a lack of infrastructure development, and similarly in Auckland, New Zealand, where the power was off for months. I oppose this bill in the strongest possible terms. Our telecommunications should be in public ownership. We must not sell off what is left.