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Wednesday, 13 November 2002
Page: 6254


Senator CONROY (4:30 PM) —I move:

That the Telstra Carrier Charges—Price Control Arrangements, Notification and Disallowance Determination No. 1 of 2002, made under subsections 154(1), 155(1) and 157(1) of the Telecommunications (Consumer Protection and Service Standards) Act 1999, be disallowed.

Today, Labor is seeking to overturn the 2002 Telstra price control determination because these new price controls hurt ordinary consumers. Labor opposes these price controls because they fatten up the already hugely profitable Telstra at the expense of struggling low-income families. Labor opposes these price controls because they make owning a home phone, which is a lifeline for many, a luxury. Labor opposes these price controls because the Howard government has cynically and shamefully misrepresented their effect on low-income Australians. Put simply, Labor is seeking to overturn Telstra's 2002 price controls because they are unfair.

Telstra's price rises under the Howard government have hit hard the hip pockets of many Australians. Since the federal election, Telstra has increased its prices for telephone line rentals, directory assistance, wake-up and reminder calls, mobile phone flag falls, text messaging, Internet access and White Pages dual listings. The Howard government have let Telstra off the leash with its new price controls, introduced before the parliament rose for its winter recess in June. Cynically, the government did not introduce this new unfair regime until after last year's federal election. They knew Australians would not cop line rentals going up prior to the election. The new price controls allow Telstra to slug most Australian families with higher line rental fees and higher mobile phone costs, and some are even paying higher local call rates. Telstra is making huge profits and there is no justification for the large line rental increases allowed under the new price controls. They are unfair to low- and middle-income families.

This is part of a deliberate policy by the Howard government to allow Telstra's line rental fees to eventually increase to around $32 a month—that will be an increase of $244 a year per line since March 2000. That is just money for jam, and that mob is just fattening up the cow to try and draw in some extra buyers when they try and sell Telstra. That is what this is really about. Since March 2000, Telstra has increased its line rental charges for most customers from $11.65 to $21.90 per month—an increase of $123 a year per line. For customers using Telstra's most common home line, Complete Plan, that is an increase of almost 90 per cent in just 2½ years. Labor says: enough is enough! Those outrageous rises must stop.

The government talks about rebalancing, whereby line rental costs go up and local call costs come down, but under the August Telstra price rises line rentals went up on common plans and—surprise, surprise, Senator Cherry—there was absolutely no accompanying reduction in local call costs. Most Australian consumers will remember the shock they received in the mail this August when Telstra advised them that their line rentals would be going up by $2 or $3 per month without any accompanying reduction in local call costs.


Senator Cherry —That's not true.


Senator CONROY —Everyone got the letter, Senator Cherry. The shock deepened when Australians started to receive their bills. They had to fork out the extra $2 to $3 a month to pay for their home phone. Many of those receiving quarterly bills copped a $9 increase in line rentals. If you look closely at the bill, you can almost see John Howard's face smiling as he takes another $9 away from the average Aussie so that he can fatten up Telstra for sale. This all goes to the heart of the unfairness of the new regime. Line rentals have a discrete subcap allowing for increases of the CPI plus four per cent—an effective increase of about 7.5 per cent a year—but there is no accompanying discrete local call subcap requiring an equivalent reduction in local call costs. The new price controls do not require Telstra to reduce local call costs by an amount related to the increase in line rentals. This was required under the old price controls. The reductions in call costs promised by the government when they announced these new prices in April have not been delivered. Those promises by the government have not been delivered. There has been some very minor fiddling with STD and fixed to mobile rates. Local call costs have not come down on any Telstra residential plans—not one. Other services, such as mobile phone calls and text messages, no longer have price controls at all under this new regime. Telstra has already started putting up prices for these services. The reality is that phone line rentals of above $30 per month will make owning a home phone a luxury for many Australians.



Senator CONROY —You may well laugh, Senator Cherry, but it is not a laughing matter to millions of Australians. The government's low line rental plan, HomeLine Budget—supposedly for low-income earners—has seen local call costs rise in August from 15c to 22c per call to 30c per call—that is a massive 36 per cent to 100 per cent increase. Some help for low-income earners, thanks to Prime Minister John Howard! The largely low-income customers on this plan have also been slugged with increased costs for STD and international calls. Struggling Australians are effectively being told, `We will let you save on phone rental, but please don't make too many calls.'

The removal of the local call subcap on budget packages is an insidious feature of the new price controls. This not only disadvantages low-income earners but also opens the way for Telstra to introduce a timed local call product, with the long-term aim of squeezing out untimed local calls. That is the hidden agenda here. For those of you who say that would never happen, try finding a phone number from the White Pages with directory service. They are trying to force you onto the other scheme—`call up and we will connect you'—the call connect. That is what this is about. They tell you that you can still have this other service, then they try to make sure you can never find it, and so you have to use the more expensive one. That is what Telstra have been doing and that is what the Democrats are letting them do.

The government has tried to argue that the new price arrangements are revenue neutral for Telstra. This is the biggest furphy of the lot. Even Meg Lees would not swallow this one! Supposedly, consumers lose on the swings but win on the roundabouts. But in October Labor revealed government departmental modelling which showed that Telstra stood to gain $170 million a year under the new price arrangements. How can that be so? It is `revenue neutral', apparently. Telstra would gain $120 million from the fixed line price changes and around $50 million from the removal of price controls from mobile phones—that is the government's modelling, Senator Cherry.

This more than confirmed Labor's own estimate that Telstra would gain up to $100 million from the new arrangements—so we were pretty conservative. We actually tried to give them the benefit of the doubt but their own modelling shows $170 million. It confirmed the views of many from investment banks around the country that Telstra stood to gain from these new arrangements. There are a lot of smart people out there; they do their analysis, they have been given a look at the books—and what did they say? They all said, `Telstra's going to be better off.' But what does this mob on the other side of the chamber say to us? `Oh no, there's no revenue to be gained by Telstra through this.' But the cat is out of the bag. In the money markets, they know Telstra are on a winner. The government's own research says that they are on a winner.

This Howard government modelling also allows Labor to confidently claim that this motion will force Telstra to hand back around $80 million that it would have taken off consumers over the next eight months. If you support this motion, $80 million would be saved for ordinary Australians. Vote with the government and they would be $80 million worse off.

Senator Alston has also had a difficult time defending his new price control arrangements. In Senate question time on September 19, it quickly became apparent that Senator Alston did not even understand the new price control arrangements, but that is no surprise from `the master of detail', as he is known over there in the chamber. In scenes reminiscent of this week's embarrassing revelations that Senator Alston has not read his own Estens report whitewash—


Senator Mackay —That's disgraceful; I don't believe it!


Senator CONROY —Yes, it is true. I know it is hard to believe, Senator Mackay.


The ACTING DEPUTY PRESIDENT (Senator Brandis)—Direct your comments through the chair, Senator Conroy.


Senator CONROY —It is just amazing. I am sure even the President is amazed that Senator Alston admitted that he has not read the report. Are you amazed, Mr President? I am surprised, like you are, Mr President.


Senator Ian Campbell —Senator Brandis is the Acting Deputy President.


Senator CONROY —It was a promotion for George; someone has to look after him! Senator Alston revealed in question time that he did not even know that the 25c `budget package' local call subcap had been blown out of the water under the new 2002 arrangements. How embarrassing! What a gaffe! The minister simply did not know that Telstra were now charging an exorbitant 30c for their local calls on budget packages. In a final clanger which all Australians should remember, Senator Alston said:

if ... you think that line rentals are too high you do not have a phone, do you. No-one is forcing you to be on the line.

That is what Senator Alston had to say a few weeks ago in this parliament when questioned about these increases. I will read that one again:

if ... you think that line rentals are too high you do not have a phone, do you. No-one is forcing you to be on the line.

What a shameful statement. You may well sit there and smirk and shake your head, Senator Alston, but it is in the Hansard and you will weep from that one. This shows just how out of touch with struggling Australian families the Howard government has become. It exposed all the hypocrisy associated with the Howard government's professed concerns about telecommunications services and prices. It was a fitting prelude to last week's Estens inquiry whitewash.

Australian families should not be unfairly slugged under these new price arrangements. While the old price controls were far from perfect, they were clearly fairer to low- and middle-income families. Those who are the hardest hit under these new Telstra price arrangements are low- and middle-income families who do not qualify for any kind of special concession. Once again, John Howard has deserted his so-called battlers. Labor are seeking to protect Australian families by disallowing the Howard government's new, unfair Telstra price controls. We call on the minor parties and the Independents to support this motion. But today we have learnt of another shameful sell-out by the Australian Democrats.


Senator Bartlett —Here we go!


Senator CONROY —I am sorry you were not here before, Senator Bartlett. I was just making the point that even Senator Lees would not have swallowed this rubbish. Even Senator Lees would have got a better deal than you lot have on this little sell-out, this cheap little deal you have done. But now we learn, as I said, that you have sold out and are supporting the government's Telstra price rises, all in exchange for a paltry $10 million from Telstra. Shame on you!

Just for the benefit of Senator Bartlett, who missed the earlier part of the debate, I will make the point again: this is a company that is making $170 million—not $17 million—out of the new price arrangements, based on the government's own calculations. What did the big tough Democrats over there in the chamber get out of them? Ten million dollars. Telstra are making $170 million. The Democrats' decision to side with the government in pushing through unfair Telstra prices shows once again that the Democrats just cannot be trusted.

Thanks to the Australian Democrats and the Howard government, Australians will now be paying more for phone line rentals with no guaranteed reduction in local call costs. You had a big bargaining position here, guys, and you went for 30 pieces of silver. When standard phone line rentals hit $32 per month in the next few years, Australians can thank the Democrats and the Howard government. But, Senator Bartlett, this one is down to you. There is no Meg Lees to blame and nobody else to blame; this one is down to you. The party that gave low-income Australians the GST has now rubbed salt into their wounds by allowing John Howard to drastically increase the cost of their telephones. But given that most of you supported flat taxes before, you will not mind an equivalent flat tax for low-income earners on phone lines. If this motion were to be successful, Telstra would be forced to revert to the fairer 2001 price control arrangements as per clause 25 of the 2001 price control regime, which forces the continuation of the main provisions of the 2001 price control regime until July 2003 in the absence of a new determination.



Senator CONROY —ACOSS supported the GST as well, so do not trot them out as representatives of low-income earners. Do not come in here and try and claim that ACOSS are representing low-income families. They did the dirty, just like some of your colleagues, on the GST. If this motion were successful, Telstra would be forced to comply with the fairer 2001 price control regime for the remainder of the financial year, forcing money back into consumers' pockets—money they would otherwise have taken away. The government would also be forced back to the drawing board to come up with new price controls that do not disadvantage low- and middle-income Australians, which Labor would support. So you had the big chance to make them do it right, and you sold out for 30 pieces of silver.

The government has threatened to abandon price controls from July 2003 if Labor's disallowance motion is successful. What a threat that is: they will just let the gorilla off the leash—they will let Telstra charge whatever they want. Does anyone seriously believe that that is what they would do, that they would sit back and let Telstra just rip people off because it is a huge monopoly? You had the chance here to get a better deal. You could have worked with us to get low-income earners a genuinely better deal, not fatten the cow for this mob to try to sell off Telstra. This is an outrageous threat but it is a hollow threat, and if you had a bit of backbone you would have stood up to them, voted for this motion and forced a decent regime on them next year. If the government got their way, it would mean that we would end up with a privatised monopoly delivering an essential service without price controls. You know you did not have to let them do that. Here we have a government that want to sell Telstra and remove price controls—the true agenda. They want Telstra to be just like the banks. Australians will not cop this and they will know exactly who to blame if Telstra's price controls are removed—John Howard.

Labor has a strong commitment to Telstra and remains the only party which has not wavered in its commitment to oppose the further sale of this vital national institution. Now you can see why this sort of debate today is critical and why you have to keep Telstra in public hands with majority ownership so that that mob over there and their pack of spivs, who want to advise them and make millions and millions in fees, cannot just flog it off so that shareholders can buy it and lose more money, just like they have done on T2. That is what this debate is about. It is about what you can do when you have majority ownership. It is not just saying no; it is what you can do—the social security protections and the community service obligations you can work in are what is important about this debate. The Democrats are now showing that they cannot be trusted on Telstra. They have sold out Australian consumers yet again. Labor opposes the Howard government's new price controls: they are unfair, they hurt low- and middle-income Australians and they should be disallowed.