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Wednesday, 9 March 2005
Page: 73


Senator CONROY (2:54 PM) —My question is to Senator Coonan, the Minister for Communications, Information Technology and the Arts. I refer the minister to the comments of the Minister for Finance and Administration, Senator Nick Minchin, in today’s Australian Financial Review where he said that the structural separation of Telstra is ‘utterly objectionable’. Does the minister support her colleague Senator Minchin when he says:

One of the great attractions of Telstra from an investor’s point of view is that it is a fully integrated telco, so it would have a potentially significant impact on the sale price if you went down that path.

Is the minister aware that we have now heard absolutely conflicting opinions on the regulatory changes required to sell Telstra from the Minister for Trade, the Minister for Finance and Administration, the Deputy Prime Minister, the Minister for Communications, Information Technology and the Arts and a procession of National Party backbenchers? Minister, is it not true that with respect to privatisation the coalition has more fault lines than Telstra?


Senator COONAN (Minister for Communications, Information Technology and the Arts) —I have to give it to Senator Conroy: he is trying to disguise his ignorance with some appalling attempt at humour. The critical point in relation to this is that the government has always maintained—and in fact Senator Minchin is absolutely correct, and I concur completely with Senator Minchin’s view—that structural separation of Telstra cannot under any circumstance be supported. But I can also support this on a different basis from the basis on which Senator Minchin supports it—that is, on the basis that an integrated telecommunications provider is the reason why there are good services in rural and regional Australia. If you are going to slice and dice Telstra, you are going to send services in rural Australia back to the Dark Ages and you are going to put an unreasonable burden on taxpayers to try to get provided the services that Telstra provides in non-commercial areas. If you are going to try to pull Telstra apart, it is certainly not going to be able to deliver those services.

Whilst it often looks like an appealing solution to people who have not looked at this issue, on no basis could it be supported that Telstra could suffer forced divestment of its assets. That is not to say that Telstra itself may not take a look at its internal structures and do more along the lines of accounting separation or perhaps, if it were able to, more along the lines of operational separation to ensure greater transparency in the operation of its wholesale and retail arms. That is completely different from the government engaging in some futile process of forced structural separation of Telstra where the costs are uncertain and the benefits are unknown—there has never been a cost-benefit analysis that would support that particular view—and in circumstances where, for heaven’s sake, you cannot guarantee that even consumers would be better off. Consumers are protected not only by the broad competition regime and an integrated Telstra but also by price controls. It is completely misguided for people to be thinking that the slicing and dicing of Telstra, the spinning off of bits and the selling off of other bits, will deliver good services throughout rural and regional Australia. I do support Senator Minchin. I support him on the basis that he put in today’s press, and I support him on the basis of the issues for which I have responsibility, which involve the delivery of decent services for Australians.


Senator CONROY —Mr President, I ask a supplementary question. Is the minister aware that the Deputy Prime Minister, Mr Anderson, told the ABARE Outlook Conference last week:

I am not comfortable about establishing a private sector monopoly that does not create the competitive pressures and tensions that we will need to get the best possible service and delivery outcomes, and price outcomes, in the future.

Doesn’t this view directly conflict with that of the Minister for Finance and Administration? What is the government’s primary objective from the sale of Telstra? Is it maximising its share value, or is it ensuring that all Australians benefit from a competitive telecommunications environment?


Senator COONAN (Minister for Communications, Information Technology and the Arts) —Nobody wants to see anything other than an open, competitive regime that is going to increase innovation and investment in what is already one of the most successful and prosperous sectors that we have in the community—that is, the telecommunications sector. The Deputy Prime Minister said that he was not comfortable with the emergence of a private sector monopoly. I do not think anybody would be. In fact, what the government is ensuring in looking at the current regulatory regime is that all of the opportunities for competitive access to new technologies and to new networks will be available should the sale of Telstra proceed. But I should say that that will happen irrespective of whether or not the sale proceeds, because the government does acknowledge that we need to keep the development of new technologies under review. (Time expired)