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Tuesday, 22 October 2002
Page: 5649

Senator WEBBER (7:28 PM) —I rise tonight to talk about the degradation of the Telstra cable network. This, of course, takes place in the context of the proposed sale of the remainder of Telstra. The government would have us all believe that the Telstra network is in perfectly good working order. The people of Australia and potential investors are told that there are no real problems with the network, and Telstra is therefore touted as a good buy. Specifically, we are told that the main cable network is now up to scratch, especially in the Eastern States. The main cable network comprises the trunk cables between the major cities, cables between the exchanges and cables from the exchanges to the pillars—the cylindrical things that are in our streets. This is all in good working order, we are told.

The cables are specially designed to keep out moisture. Under the outer skin, or sheath, there is a space that is maintained under high pressure. This high-pressure area is designed so that, if the outer protective coating is breached, the pressure will keep out the moisture until the cable is repaired. The recommended level for this pressure is 40 kPa. This, I am told, is the standard that Telstra acknowledges. To maintain this pressure, gas is continually pumped into the cables. This work is done by Telstra's CPAS—cable pressure alarm system—section. In administering this system there are three alarm levels: if pressure falls below 40 kPa, if it falls below 20 kPa and if it falls below 10 kPa.

You would expect Telstra to ensure that CPAS is well funded. You would expect that if the pressure fell below these levels Telstra would do just about anything to get those parts of the main cable network fixed, and fixed immediately. Unfortunately, you would be wrong. Three years ago Telstra spent some $39 million on CPAS annually. CPAS work has now been moved to the Telstra subsidiary for construction and maintenance, Network Design and Construction, or NDC Ltd. What value do you think Telstra would put on that business? Once it was outsourced to its wholly owned subsidiary, Telstra reduced its spend on CPAS to $20 million annually. I am led by those within NDC Ltd to believe that this is now going to be reduced to $12 million annually. This will mean that NDC Ltd will have to further reduce costs. Honourable senators will not be surprised to hear that this will therefore mean further job losses.

Telstra and the government are telling all and sundry that the main cable network is up to scratch. Looking at the decrease in funding to CPAS over the last three years, you would think we could assume that the main cable network is in good shape. How could you explain a reduction from $39 million to $12 million in three years unless this was the case? Telstra and the government must be right, apparently, and not simply fattening up the bottom line to make it a good buy for the investors. Surely that is the case. Upon further investigation, it would seem that it is not. The pressure rates in the main cable network do not support that assumption. In fact, if you look at the figures for just one day, you will see some very scary numbers. In the New South Wales region, where there are 4,138 cables, 77 per cent of cables were operating at less than 40 kPa; 1,884 were operating at less than 20 kPa. The numbers from other regions are part of the same grim picture. In South Australia, 83 per cent of the cables were operating with a gas pressure of less than 40 kPa. In my home state of Western Australia, 76 per cent of the cables had a pressure of less than 40 kPa. The only shining light was Victoria, where only 42 per cent of the cables operated at less than 40 kPa.

What sort of shape is the main cable network really in if on a single day so much of the network was operating well below the standard that Telstra itself acknowledges? It seems the height of folly for anyone to be promoting the view that the network is in such good shape when clearly it is not. This same gilding of the lily in a normal share float would, I believe, be the subject of an investigation if it were included in a company's prospectus. But when the government and Telstra are running a line, what hope is there for the ordinary investor? What hope is there that this information will be made public?

The other issue that needs to be of concern to all of us is that the sale of Telstra is also about job shedding. The three-year reduction in funding for CPAS means that jobs are disappearing. Technical and maintenance positions are being shed so that the bottom line looks good. I am advised that NDC Ltd currently proposes to shed eight jobs in Perth and Adelaide, five in country New South Wales, 12 in Sydney, three in country Victoria, six in Melbourne, six in country Queensland and six in Brisbane. I am told that this is part of a plan that has already seen the loss of some 400 jobs, with rumours of even more to follow. That is what this all comes down to: cut the costs to improve the bottom line, get a big return for the government from the sale of Telstra and use that to fund the next round of election cycle giveaways; put jobs at risk, put the main cable network at risk so that the government can pork barrel its way back into office, and put at risk the ability of people from regional and remote Australia to be able to communicate with one another. NCD Ltd workers, Telstra shareholders and consumers and the Australian taxpayer deserve far better.