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Monday, 22 November 2010
Page: 1784

Senator JOYCE (Leader of the Nationals in the Senate) (5:31 PM) —I rise to speak on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010. You can believe in a broadband without believing in an NBN; in fact you have to. I have to commend Senator Ludlam for the research at the front end of his speech, which was quite exemplary, but there are still some major concerns. On the trade practices position, you have to note that especially 577BA—and I take this as research from the parliamentary digest—allows the ACCC to accept such undertakings which are currently likely to be in contravention of the Trade Practices Act. This is just one example of where we need to have greater scrutiny of what exactly is going on here.

Another issue which you must take into account, apart from theatrics, is that the other day the minister responsible for this was unaware of the NBN’s connection to the act. The reason he is unaware, I would suggest, could be incompetence but it could also be that certain sections of this have appeared at a late time and nature. Therefore we need to be far more diligent, because if the minister does not understand it then how on earth are we going to have the proper amount of time to diligently go through this?

There are strong concerns held about legislation which, in its dire haste to be pushed through, has allowed, I would suggest, Telstra to have unreasonable bargaining power in exactly how this thing is constructed. It is constructed in such a way that their engagement will be excluded from the ACCC and in future that gets handed on. It was going to be privatised but apparently the Greens have changed all that. It goes to show the power of the Greens. The Greens have completely changed the government’s direction and put it on its head.

The reason the NBN was going to be privatised is that we had to try and pay back some of the debt. But we are not paying back any of the debt now because we are not selling it—so we are stuck with the debt. Obviously, if it is going to be privatised it just goes to show that the business plan on stringent analysis conducted by the Productivity Commission just would not stand up. It will not stand up, because even the McKinsey report only talks about a six per cent return. Why on earth would you go out and invest $43 billion in something with massive risks if you can put it in the bank and get 5.45 per cent on bond rate? If you put it in a retail bank, you will get better than the return that the NBN is going to give you. There must be bells ringing here that this thing just does not stack up. The only way you can make it stack up is you have to jack up the revenue stream, which means you have to jack up the price of phone calls. If you are not going to jack up the price of phone calls then you are going to have to jack up the tax rate to try and cover it. There are fundamental flaws right at the front end.

We also heard Senator Ludlam say something that was not right. He talked about how they were buying back for $11 billion the structural assets of Telstra. They are not; they are leasing them. It is a long-term lease but it is a lease. We are not buying the pipes and the pits; we are leasing them. I think it is over 21 years, if my memory serves me correctly. This is a day in the park for Telstra. They have got a long-term lease on an asset, which at the end of the day they own, and if it is of no value then they have done very well out of it anyhow. They have done far better out of this lease then they would have out of the ownership. This is part of the reason that Telstra have come round.

Telstra have paid a very astute game because they have got the government exposed. The government are falling over themselves to get this through—and, yes, you did tell the Independents and everybody else that this was the reason they had to vote for you. That is what we heard over and over again: ‘It’s all about the NBN.’ Yes, you have got a great investment in trying to make sure that the NBN stacks up. If it does not stack up, the reason you are there on the Treasury bench is implausible, because this was the warrant you gave to people.

There are so many other things that we should go through but, like most things, when you are talking to a person who is about to engage in a project, you must have a bit of a retrospective about what this person does and whether they have the competencies to do it. We have seen the minister on prime time television show that he does not even understand his own act. But the fault does not just lie with him. I want to go through a few things—and at the end of this list I will ask you a very serious question about whether you believe that these are the people who should be building a telephone network.

The people building the telephone network are also the people responsible for Fuelwatch; GroceryWatch; the war on obesity; the war on homelessness; the war on executive salaries; the war on inflation; Building the Education Revolution mark I; the biggest budget deficit in our nation’s history with the biggest debt in our nation’s history; the ceiling insulation fiasco; the Green Loans fiasco; the computers in schools fiasco; the emissions trading scheme, which was supposed to be the greatest moral challenge of our time but was ditched and the minister became the minister for finance; the idea to cool the planet from a room in Canberra; boat people; the new ETS, the East Timor solution, which they did not actually talk to the government in East Timor about; the citizens assembly, which was a randomly selected 150 people to run climate policy; cash for clunkers, where every young buck could find an old wreck behind a shed and cash in on it; the Strategic Indigenous Housing and Infrastructure Program, where they were meant to build 750 homes but only built six; the hospital takeover, where we were going to take over the hospitals by July 2009 but it never happened; GP superclinics, where they were supposed to build 36 but none will open till next year; childcare centres; schools; and equal pay for women. They are just a few examples for this job application. These are the people who are about to engage in the largest infrastructure project in our nation’s history and build a new telephone company. Call me old-fashioned, but I have some concerns—I really do. What we see now is this haste as the government ramps up the momentum and the pressure is on to make this thing stick together. But it just cannot stick together; it has holes all through it.

The only way we can really get to the bottom of this is, as the Prime Minister said—and I hate to quote her—to ‘let the sun shine in’. That is a sure-fire cure for tinea, but it does not seem to be doing much around here. We must let the Australian people have fair access to the information. In his contribution Senator Ludlum said it is ‘their money’. No, it is not actually the taxpayers’ money; we are borrowing the money. We do not have money anymore; we are $172.8 billion in gross debt. So we are going to borrow the money for this, but the taxpayers will have to pay that money back. They will have to hock themselves up to the eyeballs before they tip themselves over the edge, so we should at least give them a fair capacity to understand what they are getting themselves in for.

Even on the government’s estimates, which are always wrong—we saw that in the Building the Education Revolution program—we are going to borrow $26 billion to $27 billion. A word of caution: if we were to put that on the debt we have at the moment, we would have to introduce another appropriation bill because we would have passed our limit of $200 billion. By the way, we stuck another $2.8 billion on that debt last week, in just one week. No-one seems to be worried about that. It is fascinating. I am a little old bush accountant, but that just scares me to death. Anyway, if we stuck that money on top of the debt we have at the moment, we would have to introduce another appropriation bill because we would have exceeded our $200 billion limit, which in your initial budget forecast you said we would not reach until 2013-14. We look awfully like getting there in around March or April next year, and probably earlier. If we keep going at the rate we did last week, it will happen much earlier.

It is not that the coalition have some pathological dislike of broadband; we do not—we actually proposed a broadband policy ourselves. The difference is that you must cut the cloth to fit the wearer. You must only borrow money that you think you can repay. We are not paying for this project with cash; we will be using money from China, the Middle East and everywhere else. The concern the Australian people have is just how much debt this government is willing to put us in.

Yes, there are benefits to broadband. I am not suggesting there are not, but, if you were to put an opportunity cost against it, would there be the same benefits you would get from inland rail, new port infrastructure, new roads or new airports? When you stack it up against other things, is it the best bang for your buck? That question also has to be asked, by people, to be honest, whose job it is to deliver such forensic analysis—the Productivity Commission. Why do the Labor Party have this passionate dislike of an independent authority to oversee what they stand behind as their biggest reason to exist—their political raison d’etre?

We are now in very unusual territory. Now that the Greens have decided that we will not actually be selling the NBN but keeping it, shouldn’t Mr Swan now trot out the front and give us a little lecture about how we are going to pay this money back? Wouldn’t that be a reasonable thing to expect to happen today? Mr Swan could walk out the front and say: ‘Folks, it looks like we’re going to have ourselves another $27 billion or $30 billion worth of debt. We were going to try to get it back by selling the show, but we can’t sell it anymore because we are held to ransom by the Greens and this is my intention of how we are going to pay it back’—because someone is going to pay this money back. That discussion has not been had with anybody.

When can we expect to see this fiscal angel descending from heaven to pay all these debts back? This is a discussion that is just not had because, basically, the government—the same government that gave you that whole litany from the war on obesity to 190 house fires in the ceiling insulation program—is totally and utterly incompetent and becoming a little dangerous in where it is going.

One of the things that I heard Senator Ludlam talk about was getting broadband fibre to crucial parts of the economy such as schools and hospitals. If that was all we needed, we would not be about to invest $43 billion. It will cost $43 billion because we are about to install broadband into 93 per cent of Australia—so they tell us. I do not even know whether 93 per cent of Australia wants it, so why are we doing it? I know for certain that they are not prepared to pay for it from what we have seen thus far with the testing in such places as Tasmania. I know for certain that in many areas they are going to be getting it where there is probably an optic fibre already approximate to them already delivered. There are probably multiple ones. If we were just talking about getting to remote areas, if we were talking about ring-roading, if we were talking about a deliberative strategy of getting optic fibre to inland hospitals and inland schools, I would bet you that we would be up for vastly less than $43 billion. It was the coalition that put up a broadband policy and the whole premise of it was that we recognised the financial position we were in and we were trying to make sure that we did not take the nation to a precarious position. That seems to be the Labor Party’s trick.

What is the process? The minister has to come in and tell us and the Treasurer has to announce how they are going to pay this money back. They are always great in telling you that in many moons time everything gets better. In many moons time all the debts will be paid back. But you look at how they are actually acting now and you know that that is just a flight of fancy. They are just tumbling down the tube. They have given up the fig leaf of some mechanism mitigating the extent of the debt that we were going to get ourselves into—that is, that they were going to transfer the asset once more back into cash to try to pay some of the debt back—so we are just going to be holders of the debt.

A main reason in the debate that brought about a move for the privatisation of Telstra—for better or for worse, it happened—was that we needed money to put against Labor’s previous debt. We had $96 billion last time and we needed money to put against that previous debt. Whether that all went against it or some of it went against it, that is a discussion piece which many people argue about. But the point was that if the money had not come from Telstra then we would have had to have found money from elsewhere to pay the debt or we would have been able to use that money to put on other things. We do not have any of those assets anymore. Telstra was worth $45 billion. There are no more of those assets about. The idea that we would create a telephone company and then hope and pray that it is an appreciating asset and not a depreciating asset and then realise that as a technology races ahead it might become a superfluous asset, a stranded asset—to realise that you are not buying the pipes and pits, you are leasing the pipes and pits, and to realise that where we are at the moment is not in a position of having $20 billion and cash in the bank but instead a position where we are absolutely maxed out with debt—means that this is an extremely foolish proposition. When we go forward on a proposition like this and find that we have a minister who cannot even answer simple questions about the substantive details of the legislation that he has brought into this parliament you are left absolutely no confidence whatsoever.

I hope that the Greens and the Independents, who have done their homework on this, take the next step. You are not going to get anywhere with the Labor Party. They have gone to the dark side and you will never get them back. I hope the Greens and the Independents take the next step of what is diligent assessment of this project—and diligent assessment is always done at the start. Understand the signs that have been sent to you when people try to stitch you up into six-year confidentiality agreements as a politician. Understand that that is not usual circumstances around here. I do not know the last time politicians were asked to sign a six-year confidentiality agreement. I cannot think of it. It is another little thing to be put on the end of the list of Labor Party fiascos—the idea of new Julia, old Julia, real Julia, fake Julia, ‘six-year confidentiality agreements to talk about’ Julia. If we do not get this right then the pain that you deliver back to the Australian taxpayers will be far in excess of any joy they get from downloading movies quicker.