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Tuesday, 23 November 2010
Page: 1944

Senator RYAN (5:19 PM) —It is with pleasure that I follow my colleague Senator Bernardi’s fine contribution on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010. That is an Orwellian title if ever there was one, because this bill does nothing for competition and nothing for consumers. Australia is one of the few countries—if not the only country—in the world that is seeking to renationalise industry. Not even Cuba is going down that path since Fidel Castro passed control to his brother. Australia is renationalising one of the most dynamic sectors of its economy, its telecommunications sector, and through this legislation it is intentionally destroying existing infrastructure owned by multiple players in the Australian business community. It seems as though the dreams of Ben Chifley are still alive among those opposite. Chifley’s dreams to nationalise the banks and airlines failed miserably in 1949, so now the Labor Party seeks to renationalise the dynamic telecommunications industry. It seems as though the light on the hill has become somewhat smaller. It is now nothing more than a fibre-optic cable.

We have heard a lot about this government, which was elected just short of three years ago. In the extraordinary circumstances of having just changed leaders and for the first time in 80 years lost its bid for a majority in its re-election, it has clearly lost whatever sense of purpose it had under the former Prime Minister. This government has been desperately seeking some sort of rationale for its existence—some sort of sense of purpose—and through the National Broadband Network it has arrived at a contrived and confected sense of purpose. Three years ago, the Labor Party’s policy on broadband involved a $5 billion promise. Then, on a flight of fancy involving the former Prime Minister and the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, it suddenly became a $43 billion promise. I suppose we can only be grateful that Minister Conroy does not get on a plane to discuss the National Broadband Network with the current Prime Minister, because there is no way of knowing what it would cost after such a flight. To go from $5 billion to $43 billion on the basis of a calculation done on the back of an airplane napkin is nothing short of extraordinary, and since that time the government has done everything it can to avoid scrutiny on this proposal. It has reverse engineered the whole process—it has got the whole process backwards—and I will talk about that more in the remainder of my contribution.

The government wants to talk about the National Broadband Network but only in one sense. Yesterday we had a contrived set of questions in this place, to everyone but the minister, about its alleged benefits. A piece written yesterday by an ABC commentator talked about the government’s strategy as being simply to put the letter ‘e’ before every word to justify this broadband network, as if slogans like ‘e-health’, ‘e-education’ and ‘e-commerce’ somehow justified expenditure of $43 billion of current and future taxpayer funds. None of those things will substitute for real doctors, real schools and real commerce, and this proposal does nothing at all to advance those.

Today during question time, we heard a minister suggest that 100-megabit broadband was somehow a utility—a right like access to electricity and water. This legislation represents the first step in many in renationalising our telecommunications network. If the performance of our telecommunications network resembles anything remotely like the performance of our electricity and water networks over the last 10 years under predominantly state Labor governments, I think most Australians should be scared for their telephone as much as they worry every February about whether they will be allowed to use an air conditioner or water their garden. Government ownership simply does not work and renationalising this most dynamic of sectors does not have a rationale.

We send investments, industry support plans and government spending programs for scrutiny to the Productivity Commission that pale into insignificance when you consider the numbers involved here. We have sent car plans and textile, clothing and footwear plans to the Productivity Commission. We have had the Productivity Commission analyse water initiatives and public and private health systems. Yet the one thing this government will not do is allow the Productivity Commission to undertake a cost-benefit analysis of this extraordinarily large program—a record in Australian history—worth tens of billions of dollars.

In the other place, the Prime Minister has occasionally talked about the record of the previous Labor government. We on this side have made it clear that it did some good things, with the support of the opposition. The previous Labor government—and I am not talking about the one that existed before the current Prime Minister came to office only four short months ago; I am talking about the government of the 1980s and 1990s—would not have even considered a plan like this without subjecting it to the most rigorous analysis. There was a time in this country when $1 billion or even $50 million was considered lot of money. Now, to this government, writing $43 billion on the back of an aeroplane napkin on Prime Minister Rudd’s Air Force One is somehow enough justification to send Australians into debt this year and for the foreseeable future.

Minister Conroy is twisting himself into ever more painful contortions to come up with a justification as to why this parliament should not have access to all the information that he does and why we can just take him on trust. Earlier during the debate my colleagues pointed out at length just how wrong this government has got so many programs, from pink batts to school halls, some of them with tragic consequences. Now we are expected to take on trust the idea that this government should be allowed to expend $43 billion to renationalise the telecommunications network but we will not be provided access to all the information.

Most extraordinary of all was the deal with the Greens yesterday—yet another deal to show that the Greens really are the driving force behind this government in an intellectual sense. The government struck a deal with the Greens to send this to the Productivity Commission after the network has been built. So we will not examine whether spending $43 billion makes commercial sense; we will not understand the true cost to the Australian taxpayer so that, even if it did not make commercial sense, we could make an assessment of the social value of it; we will send it to the Productivity Commission after we have built it, as if somehow that will protect Australian taxpayers. The Auditor-General’s reports into the pink batts and Building the Education Revolution programs did not save taxpayers’ money. Ex post facto examinations do nothing because this government does not learn, as it has shown. But it had to do a deal with the Greens because the Greens want scrutiny of the promised privatisation of this to come back to parliament.

We know your government’s form, Senator Feeney, through you, Madam Acting Deputy President. Labor will try to sell anything that is not nailed down when it is in office, usually to somehow make the budget numbers add up. It sold off the Commonwealth Bank and started to sell Qantas. We know it was going to try to sell off Telstra or components of it before the 1996 election, yet the minute it comes to opposition all of a sudden it is a champion of public ownership. Unlike the Labor Party, on this side when we privatised sectors of the Australian economy it went to pay off debt and go into the Future Fund to provide wealth for future Australians.

The truth is that, due to the deal with the Greens, we are going to have an ex post facto examination of whether or not the broadband network was a worthwhile expenditure of taxpayers’ funds. It does not really matter if we find out that it is not because it will all be too late—the money will have been spent. The Labor Party will have guaranteed that, unless they are in government and commit to following through their promise—though it is amazing how often they do not do that—the NBN will never be privatised. Once again, Australia will be left with a publicly owned national telecommunications network that is a monopoly provider with some faux competition at the retail end but no competition in technology or in the provision of that backbone that service providers have to access. It will remain in public ownership.

Madam Acting Deputy President Troeth, you are from regional Victoria and I am sure that you would have many more stories than me about the alleged good old days of Telecom Australia or the Postmaster-General’s department. Some will say that service under Telecom Australia was great. Go and speak to the people who waited months and years for a basic telephone service in regional Australia. Telecom Australia in government ownership was an abject failure, just like every other publicly owned utility. Publicly owned utilities do not have the same incentive. They have union feather-bedding, they overcharge and they, if anything, stifle the development of new technology. If Telecom were still running the place it would be like the old days: we could have any type of telephone we wanted as long as it was black and it had a dial on the front. That is what we are allowed under government owned utilities. Maintaining this network in public ownership, which is what the government deal with the Greens entails, is going to hold Australia back and ensure that we do not benefit from technological development and that consumers pay ever higher costs.

It is not just the opposition that has concerns with this government’s approach to this and its desperation to prevent scrutiny of the business case before this parliament votes. I mentioned earlier how the government had reverse engineered this whole process. The $5 billion program fell in a heap, as the opposition outlined it would when it was in office, because the numbers simply did not add up. So Minister Conroy gets onto a plane, pulls out a napkin and a pen—that is the only time he could speak to the then Prime Minister—and designs a $43 billion network that takes fibre right to the front door. After that they start to undertake some financial analyses to try to find a way for it to add up. You pay McKinsey and Co. $25 million, and they come out with assumptions of 80 and 90 per cent take-up rates, but then you realise this is not going to work, because not everyone wants a 100-megabit service and not everyone wants fibre. I know people who only want a telephone service. What are we going to do then? We had better beat up on Telstra! We had better make sure that this package rests upon tearing up the copper and hybrid fibre-coaxial networks that service all of Australia in the case of the copper network and a lot of urban Australia in the case of the HFC network.

Nowhere else in the world is a government tearing up functioning telecommunications services. Nowhere else in the world would it be considered economically rational to tear up a functioning telecommunications network. The government has had no justification for that and it simply tries to hide behind the assumed 80 to 90 per cent take-up rate. To all those Australians who do not want 100 megabits a second, to all those Australians who just want a telephone or are quite happy with their current internet service, to all those Australians who do not want to go through the undoubted shemozzle that this will become as people are forced to move from one to the other: make sure you remember which party is proposing this legislation, because the Labor Party is proposing to force you to change networks, providers and equipment, and it is doing so simply to try to make the sums add up on its own flawed proposal.

On this particular issue Ross Gittins—not a noted fan of the coalition, I hasten to add—outlined only yesterday in the Sydney Morning Herald and the Melbourne Age this government’s constant refusal to subject itself to the most basic of scrutiny. It is scrutiny that it expects of other people applying for money, scrutiny that you expect of state governments as they apply to Infrastructure Australia for funds for roads and rail lines and scrutiny that we expect of people who are involved in substantial government tenders, but it is apparently not the scrutiny the government will subject this record spending to. Ross Gittins wrote:

The more it resists subjecting the plan to scrutiny, the more you suspect it has something to hide.

We do not suspect; we know. We have a lot of the jigsaw puzzle, and the jigsaw puzzle rests on the house of cards of tearing up existing networks and assumed high take-up rates. We know that it will actually lead to higher costs for consumers.

Let us consider the government’s behaviour over the last 12 months in this regard. The government held back the implementation study until it could get its lines right, and then it released it. It is now holding back the business plan, alleging there is commercial-in-confidence information, expecting this Senate to vote on the expenditure of tens of billions of dollars of government funds without knowing whether or not it is viable. The government throws around commercial-in-confidence as if that is somehow a veil behind which it can hide in order to prevent the release of the business plan. The minister has the gall to say, ‘You vote on it; then I’ll tell you whether or not the sums add up.’ Just like previous reports, this particular plan needs examination. This plan may well be like swiss cheese and have so many holes in it that the government is fearful that it will blow the case for its NBN apart. When the government throws around commercial-in-confidence, all I keep thinking is that it is Macquarie Street come to Canberra. Yet again this Labor Party shows where its true roots lie: in the failed state governments all around Australia, particularly in New South Wales, Queensland and Victoria, as if the veil of commercial-in-confidence is somehow a reason why the public should not know how their money is being spent.

We could talk about that desalination plant that exists in Victoria. Victorian taxpayers are not allowed to know exactly how much this huge plant is going to cost them over the next 30 years. This government expects that in this place it will get away with a similar claim and a similar sense of obfuscation to avoid scrutiny. I think the next time we hear the Australian Greens—the new coalition partners of the Labor Party—stand up and call for transparency we can point this out to them. We should point this out to them because it shows nothing short of hypocrisy. To say that it is okay for some of us to have a look at this but it is not okay for the Australian public or the parliament of Australia to know about this is nothing short of extraordinary. This Senate will stand between the Australian parliament becoming like Macquarie Street or the Queensland or Victorian Parliaments, where the veil of commercial-in-confidence is used to hide massive expenses, massive future debts, feather bedding and union rorts.

We have not just heard from journalists on this point over the last few days and months. Just as the government has asked the people submitting plans to Infrastructure Australia for cost-benefit analysis—just because it expects this of every local council that gets a road or a bridge—business knows that if you are investing any money, let alone an inconceiv-able sum like this, a thorough cost-benefit analysis is something you make avail-able. It is something you undertake in order to ensure that you are getting value for money. At a business leaders forum in October the chairman of ANZ said:

… the lack of a business case and full publicity of that business case is throwing a lot of doubt in people’s minds about the level of expenditure.

It is very simple: business leaders are now expressing the same concerns the opposition have expressed for many months. The chairman of Wesfarmers said:

I’m not convinced, and feel it needs a cost-benefit analysis …

He went on to also say:

I just see this as another part of infrastructure that we need to go through, stock take and prioritise. And quite frankly I don’t know if it (NBN) will rank in priority.

We would like to know that too. We would like to know the cost.

When an election was coming, ex-member for Wakefield Bert Kelly would say, ‘I can hear a dam coming on.’ Over the last 20 or 30 years we have moved this country away from the idea that a government has a right to spend taxpayers’ money on building boondoggles and wasting money. At the end of the 19th century, railways were built across my home state of Victoria for political purposes. They went to waste and were pulled up only a few decades later, and I mentioned the example of Bert Kelly and he what used to say about hearing a dam coming on.

Those opposite continually like to list the number of towns that will benefit from this. No-one disputes that, but there are many towns that might benefit from something else as well. The basic concept of opportunity cost has to be considered for any program of government expenditure. Money spent on this cannot be spent on something else, yet this government will not allow Australians to know the costs. It will not let Australians know the benefits in a fully assessable way because you need to know what you are paying to find out what the true benefits are. This proposal fails both those tests. We do not get a proper cost-benefit analysis and, even if there was a social value over and above the economic one, we should always know what that number is because that would allow the Australian community to make a fully informed judgment.

About this time a year ago, the same government were trying to ram another piece of legislation through. At that time, they also got hot under the collar as they tried to hide the true cost from Australian taxpayers and they would not release the full Treasury modelling. They tried to hide the fact that that legislation could never be repealed, just as this legislation will have a degree of permanence. The government may try and sledge the opposition by saying we are wreckers, but we are quite happy to stand between these fiscal wreckers and the Australian taxpayer, present and future. The parliament and the Senate should support the opposition amendments to ensure competition remains in the telecommunications space. Indeed, leading to renationalisation of our telecommunications plan is something we will regret in decades to come.