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Wednesday, 9 February 2011
Page: 265


Mr HAWKE (6:47 PM) —I am grateful for the opportunity to rise to speak on the National Broadband Network Companies Bill 2010. Listening to the contribution of the member for Shortland highlights why we in the opposition have grave concerns about the idea of a massive, legislated government monopoly being able to do the job that the market could do, and probably should do, in this instance. If it were up to the member for Shortland, for instance, we would pass a motion that Lake Macquarie council send out a few council workers and all of our problems in life would be fixed!

The story of Australian progress, ingenuity, innovation and risk and return is that of the market and the operation of the market. In Australia today, most Australians access the broadband that they want and that they need at a reasonable price. The economy has developed to a point where most businesses access the broadband that they need and that they want at a speed that suits their business. Of course, what government is for is to deal with those situations that the market cannot, a concept that seems to be totally foreign to those opposite in this legislation before the House. This bill is not to deal with black spots in major cities. This is not a bill to deal with rural and regional areas that cannot be funded by market risk and return. This is a bill to create a massive government monopoly across the entire country, to 10 million homes.

The member for Shortland spoke about the ACCC. The provisions of this legislation effectively cripple any form of competitive tension or process in this market space until its eventual privatisation—and I will get to that in a minute. What this bill will do is mandate that you cannot compete. Prices will be regulated. Technology will be regulated. Let us go over that one more time: technology will be regulated by this bill. You would dare not invest your capital in a new form of emerging technology in broadband provision because there would be a massive government monopoly which says you must maintain a technical standard equivalent to the National Broadband Network. What the legislation is doing is effectively putting a lid on innovation, on advancement in technologies.

When we see articles from the United States, we see that President Obama—and this is something which those opposite should take careful note of—is talking about innovative, forward-looking wireless solutions. I am not simply talking about wireless solutions. But he is talking about new technologies and the advancement of a modern economy. I regard Australia as a modern economy that should be allowed to advance. Investment should be encouraged in broadband, internet and other technologies to allow new and emerging technology to flourish. Jeffrey A Eisenach wrote an article in the Australian last week highlighting three differences between Obama’s plan and the National Broadband Network. He says:

The most obvious difference is that the NBN is focused almost exclusively on fibre, while Obama spoke of deploying “high-speed wireless”.

…            …            …

A second … difference is that the Obama administration’s broadband plan depends almost entirely on private funding. While the NBN will cost Australian taxpayers about $36 billion …

He then points out that Obama’s whole stimulus plan was only about US$7.2 billion. Jeffrey Eisenach then points out, and this is what I want to highlight:

The third, and perhaps most profound, difference lies in the US decision to let technologists and markets, rather than politicians, choose the most efficient technologies.

Listening to the contribution of the member for Shortland, I am reminded why we would allow technologists and businesspeople to make these decisions rather than politicians. When I hear the contributions of those opposite I am reminded that the expertise in this House in terms of the broadband provision is of such a low level that the pontificating remarks of government members about the technology in this bill amount to very little. They really know very little about the provision of infrastructure in this National Broadband Network—how to do it effectively and what it requires to provide for, in a commercially acceptable way, the needs of the market in Australia today.

Today we have seen that the National Broadband Network will cost taxpayers 24 times as much as South Korea’s and deliver just one-tenth the speed. I am not simply raising these concerns to say, ‘This will be a total disaster and it is a pie in the sky’. I think these concerns are valid, because the structure of the government’s bill and the structure of what the government is doing in the Australian marketplace is taking what is a reasonably working, effective market based system and turning it into a massive government monopoly underwritten by the taxpayer. That is a key concept: it is underwritten by the taxpayer. That is a big risk.

The government refers in this bill to the ‘eventual privatisation’ of this asset. It is acknowledging that it is probably a worthy goal to allow the market to recommence provision of broadband in Australia one day—one sunny day in the future. The government is acknowledging that one day, when this government is well out of office, it will be a good idea to privatise it. Maybe it will be Bob Hawke or Paul Keating reincarnated going on a privatisation splurge, but not this government. This government says it is the government’s role to take the risk on behalf of the Australian taxpayer, to put people like the member for Shortland in charge of national broadband network policy, not the experts, the technologists and the business investors, the people who make these decisions every day for a living. That instinct in the Australian Labor Party is completely and utterly foreign to me, and I think it is foreign to the success of the Australian market and our emergence as a modern and dynamic economy.

We have proposed a series of amendments to this bill and I support these amendments. I think at a minimum we can try and make a bad bill better. I think these amendments do that. If you are going to accept that the government will be the single biggest provider of this technology and this service to the economy, you must have the appropriate scrutiny—not ‘should’, not ‘could’; you ‘must’. If you are asking the taxpayer to take the risk on $36 billion of infrastructure investment, then you must have proper scrutiny of this massive government asset. But what we have seen from this government is a continual attempt to evade scrutiny on this, the biggest single investment in Commonwealth history. We have seen a continual attempt to evade the opposition’s comments that we should have the highest levels of oversight on this particular asset. This is a warning to the future. Without the highest levels of oversight, of government scrutiny, on the biggest single investment in Australian history, you will have very unsatisfactory outcomes.

We have seen their evasion of the proposal to have a review by the Productivity Commission; yet ironically this legislation calls for a review by the Productivity Commission. When we get to that one sunny day when the Labor Party says it is now a good time to privatise the asset, we will call in the Productivity Commission, but not before we ask taxpayers to take on the risk of this massive single monopoly, the biggest investment in Australian history. If this sounds like a compelling argument to anybody out there, this is a compelling argument. It is no good to the Australian taxpayer to call in the Productivity Commission when attempting to privatise this asset in the future and not have them look at it now. If you can sense a little outrage in my voice, I can tell you that I am against big government monopolies when we do not need to have them.

This bill restricts the ability of anybody to invest in the future of broadband provision, and that is another one of my great criticisms. Finishing on that scrutiny point—my colleague the member for Ryan raised this point quite accurately—the NBN Co. will be removed from critical pieces of government legislation designed to provide an adequate level of scrutiny, such as the Public Works Committee Act 1969 and, of course, freedom of information laws. These are tenets of our democracy, things that make us Australian and democratic, unlike many of the countries we see deteriorating around the world. This big government monopoly, funded to a level that has never in Australian history been sought from the public purse, will not be subject to key scrutiny pieces of legislation like the Public Works Committee Act and freedom of information laws. It sounds awfully bad for the Australian taxpayer. It sounds like somebody is trying to hide the level of risk. And you wonder: why the rush to evade all of this scrutiny?

Our amendment seeks to prevent the damage that will be done by the so-called level playing field provisions, or what is termed the ‘cherry-picker provisions’. I have spoken to people in the market space and I have read contributions from voices such as the Alliance for Affordable Broadband who have a lot of common-sense things to say about what you need to do and what kind of structure you need to have in your legislation to ensure that you do not stifle innovation in this space. Governments do not innovate. I have never been a believer that government is the way to produce advances in technology or innovation. It is the market that provides these innovative forces, and competitive tensions are one of the best ways to produce these. But here we have a bill before us that mandates prices and reduces returns, preventing private investment in new networks. We have a great concern about this.

Over time, if this legislation goes this way, what you will see is Australia falling further behind. It may make an initial leap on somebody’s ratings around the world but, if you do not have encouragement and incentive to invest, innovate, create and move forward in the technologies of the future, you will fall behind. And we know today’s world moves so fast—much faster even than when I was growing up or when most members here were growing up. Mandating to 2020 the kind of technology that Australia will have and, importantly, preventing other technologies from emerging, I think is a critical mistake in this legislation. It is something that will take Australia backwards.

Of course the bill will make it harder. When we reach that one sunny day when Paul Keating is reincarnated and wants to privatise assets—not this Labor government, because ‘privatisation is bad’—when privatisation is ‘good’ again, when we get some more free-market Labor Party members, which is a day I look forward to, this bill will make it almost impossible to sell. In the coalition’s amendments the member for Wentworth has come up with the right formula in terms of preventing the government from shooting itself in the foot and making this asset very difficult to sell.

Debate interrupted.