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Stephen Smith - Two Nations Or A Knowledge Nation //media/0901/ssspkn270901.html Friday, 28 September 2001

Two Nations Or A Knowledge Nation Stephen Smith - Shadow Minister for Communications

Address - The Sydney Institute - 27 September 2001

Check Against Delivery

Introduction

I would like to thank Gerard and Anne Henderson for inviting me to speak here tonight.

The Sydney Institute plays an important role in the intellectual and political life of this nation. As a forum for discussion and debate, it may be less lively than the Federal Parliament from which I have just come, but on occasions it can be more enlightening!

Having said that, the most lively and enlightening forum that we have for discussion and debate about our nation's future is just around the corner.

Key Themes in the Coming Federal Election

The 39th Parliament sat today for what the Prime said earlier today would be its last occasion. The Federal election is currently expected by most observers to be called immediately after CHOGM for Saturday, 17 November 2001.

Accordingly, it is appropriate to contemplate both the political prospects and the policy themes in the run up to that election.

So far as prospects are concerned, you might recall that by the end of last year, most commentators were writing Kim Beazley's and Labor's chances off entirely.

By the end of the first quarter of this year, however, those very same commentators were saying that Labor couldn't possibly lose!

Now, following recent events, those very same commentators are again effectively writing Labor off.

The truth is that none of these analyses was, or is, correct.

The next election will be hard fought and close. That, in my view, was always to be the case.

The Australian community doesn't give federal election victories away lightly. You have to earn them.

Kim Beazley and Labor are firmly focussed on, and dedicated to, that task.

In the coming Federal election we believe the key thematic will be security - a secure future for all Australians. That means security at home through jobs, health and education and security abroad.

It means focussing not just on the last five weeks, but also the last five years. It means focussing not just on the next three months but also on the next three years.

In my own portfolio area, communications, that thematic is perhaps best described as whether Australia wants to be two nations or a Knowledge Nation: a nation with some winners and some losers or one where we all share in the social and economic benefits and opportunities that our nation has to offer in the future.

Five years of a Howard Government have seen Australia increasingly divided into two nations, a nation divided both on socio-economic and geographic grounds: the rich getting richer, the poor getting poorer and the middle being squeezed by financial pressure or the pressure which comes from services and opportunities disappearing.

And the pressure flowing from the disappearance of services and opportunities increases, for more and more people, the further away they live from the capital city GPO of the State or Territory in which they reside.

While in the last five weeks Australians have become increasingly exposed to external security threats to our nation, over the last five years they have become increasingly worried about security in their daily lives. For example, the more financial pressure you are under as a result of the GST, the more insecure you feel for you and your family.

As well, in recent days, we have seen job insecurity return to the national agenda. If your job is not safe with Ansett or Coles-Myer, whose job is?

Under the Howard Government, Australians have also become increasingly concerned about the loss of basic and essential services - like the quality of education in our schools, the quality of care able to be given to family members in our hospitals and nursing homes and, if you live in the outer metropolitan hinterland or rural and regional Australia, key services like banking, transport and telecommunications.

Kim Beazley and Labor will argue that the Howard-Anderson is out of touch when it comes to these issues of personal and family security and that Australians want a Government that will listen to them and act on their concerns.

When John Howard says, as he has recently and repeatedly, that the Government has made its investment in health, education and aged care - what he is really saying is that:

if you are worried about the Americanisation of our hospital and healthcare system, where your credit card is more important then your Medicare card- get used to it; ●

if you are worried about the trashing of our public schools and Dr Kemp's $100,000 university degrees - get used to it; ●

if you are worried about the erosion of living standards and declining local service, like personal banking services - get used to it. ●

By contrast, Kim Beazley will commit to relieving the pressure on Australian families in a number of important ways:

by taking the GST off a range of essential items and simplifying the administration of the GST for small business; ●

by investing more in our children's futures through education initiatives such as the National Public Education Alliance, the University of Australia On-line and The Learning Gateway; ●

by supporting our public health system through the National Medicare Alliance, Medicare After Hours and a Fight Against Cancer; and ●

by building for the future, for better and higher paying jobs, through the development of Australia as a Knowledge Nation. ●

Kim Beazley's aspiration is to build a fairer, more secure Knowledge Nation for all Australians. Where Australians, irrespective of where they live, will have opportunities to share in the great wealth of our nation.

A Great Trading Nation

Australia has survived over the last two hundred years because we have been, or aspired to be, a great trading nation. Whether it has been clipping wheat or wool, exploiting our mineral or petroleum resources, or producing elaborately transformed manufactures, Australia has survived by selling its resources, physical and intellectual, to the world.

We have successfully done this in the past, not only because of our land's abundant natural riches but because as a nation we have over time successfully applied our intellectual capital to the task at hand.

Our wool industries first prospered because of the inventiveness of people like Macarthur who adapted the Spanish Merino to Australian conditions.

Today, for example, our iron ore industry in the North West of my home State Western Australia, retains its international competitiveness not just because of plentiful deposits, but also because Australian technology, engineering and ingenuity have developed one of the world's most efficient computerised railway systems to bring that inland ore to port, and ultimately, competitively to market.

In this new century, Australians will increasingly need to mine our intellectual resources if we are to succeed as a prosperous nation.

And as a nation of only 20 million people, with seventy percent of the population contained in half a dozen metropolitan coastal capital cities, and the remaining thirty percent scattered over the other 70 percent of our vast landmass, we must bring the talents of all Australians to bear, irrespective of where they live.

While many of the skills that we will need to advance Australia will need to be developed in our universities and laboratories, the practical ingenuity workers in all walks of life are just as significant in ensuring Australia remains regionally and internationally competitive.

The Knowledge Nation and Modern Communications

The Knowledge Nation is a key part of Kim Beazley's plan to provide greater security for Australia and

Australians in an increasingly uncertain and competitive world.

If Australia is to succeed in this century then we must not merely become the early adopters of technology, we must also find new and better ways to adapt that technology for the benefit of Australians and for our nation's productive economic development.

The advent of modern communications technology should increasingly mean that no matter where you live, you will have the opportunity to contribute to Australia's and to the global economy.

Overcoming the divide caused by distance is not only vital to the future social cohesion of Australian society, it is essential to our nation's future economic fortunes.

That's why Kim Beazley's Knowledge Nation is so important.

The Knowledge Nation is different from most plans for so-called knowledge or information based economies in two key respects.

First, it recognises the importance of applying our 'knowledge' skills across a much wider field of economic activity than simply the so-called high-tech industries, which are usually the focus of such policies.

And secondly, because in a modern translation of the Australian tradition of a 'fair go', Kim Beazley understands the fundamental importance of ensuring that as many Australians as possible, irrespective of where they live, can participate in and receive the benefits of the development of our economy and society that flows from the application of our 'knowledge' based skills.

The Role of Communications Policy

Communications policy is a vital part of Australia's economic and social future. A true Knowledge Nation will require Australians to have equitable access to the latest communications technologies at affordable prices.

This is important not just so Australians can continue to stay in touch. Communications policy can act as a foundation stone upon which Australia becomes increasingly internationally competitive, particularly in the development of our application and content industries and key communications technologies, such as photonics.

Communications policy must also drive greater equity and access in the delivery of education, health and other government and essential commercial services, including banking. This is particularly important for those who have traditionally been most disadvantaged by communications policy, namely, those living in outer metropolitan hinterland, rural, regional and remote Australia.

Enabling Australians to make the most of new communications technologies and the economic and social opportunities they create, requires a concerted and co-ordinated public policy effort by Governments at all levels, but with clear and consistent national leadership from the Commonwealth. This must be across a broad range of initiatives, only one of which is communications policy.

Labor's focus on the Knowledge Nation will help to bring those strands of public policy together in a way that has been disappointingly absent over the last 5 years.

So, how will Labor develop the Knowledge Nation?

Two Nations or a Knowledge Nation

In my portfolio area, communications, Labor will focus on restoring basic services that have been eroded under John Howard, and at the same time build for the future.

Kim Beazley and I are determined that Australians, no matter where they live, should be able to equitably access these important services.

And if you think equity of access is important in the traditional world of voice telephony that pales into insignificance as Australia and the whole world move to digital and broadband.

In terms of access to important communications services, there are three key important national institutions that focus will fall on during the coming Federal election campaign: Telstra, Australia Post and the ABC.

In all of these areas, Labor offers a plan that is about re-building and improving services for people living in the outer metropolitan hinterland, rural and regional Australia. We want these people to be part of a Knowledge Nation, not two nations!

Labor's view is in sharp contrast to the Howard-Anderson Government's agenda, that will only see these vital national services fully privatised, de-regulated, under-funded or simply ignored and run down to the great detriment of people who live outside or on the fringes of our major metropolitan population centres.

The fortunes of our nation cannot just depend on a slavish commitment to the market and encouraging volunteerism. Australians need a Government with a genuine desire to ensure the economic and social welfare of all Australians, irrespective of where they live, through an appropriate modern public policy framework.

Telstra and Privatisation

Despite their recent efforts to hide the fact, the Howard-Anderson Government wants to fully privatise Telstra: it is in their Budget.

By contrast Kim Beazley has pledged that Labor will maintain Telstra in majority public ownership.

Labor opposes the full privatisation of Telstra for two important reasons.

Fully Privatising Telstra Doesn't Make Cents

First, the economic case for full privatisation of Telstra is a highly questionable one.

In the mid to long-term, Australian taxpayers will lose on the full privatisation of Telstra.

After three and a half years, the Australian taxpayer is now $499 million worse off as a result of the sale of just the first one-third of Telstra.

This is because, over the last three years, the cost of selling Telstra and the amount of dividend lost to the Government has been more than the public debt interest ('PDI') the Government has saved by retiring

debt.

In short, the Howard-Anderson Government has cost Australian taxpayers more than $3.8 billion to save just $3.3 billion!

  1997/98 1998/99 1999/00 2000/01 2001 (1H) Total

Debt retired ($m) $6,930 $5,850        

Public Debt Interest saved ($m) $343 $741 $895 $895 $448 $3322

Actual Dividend ($m) $901 $1,802 $4,247 $2,316 $1,415  

33.3 percent of Dividend ($m) -$300 -$601 -$1,416 -$772 -$472 -$3561

Sale Costs -$260         -$260

Net impact of sale -$303 $140 -$511 $123 -$24 -$499

This situation is only likely to get worse as Telstra's dividend continues to grow, but the interest savings remain static.

Since the partial privatisation of Telstra, the Howard-Anderson Government has committed just over $1.1 billion over eight years (including the financial out years of the current Budget) to improve communications services in regional Australia, the vast majority of which has come from the proceeds of the partial privatisation of Telstra.

However, as a result of its record $4.1 billion profit announced last month, Telstra will pay more than $1.2 billion in dividends to the Commonwealth for just one year's work.

Telstra will pay more for one-year's work than the Howard-Anderson Government has given back to rural and regional communications services in the eight years it has budgeted for!

If Telstra is fully privatised, then the Budget papers show a further $436 million will be paid to the lawyers, brokers and accountants just to sell it. That's more than three times the approximately $140 million in new money that the Howard-Anderson Government has allocated over 4 years to improve mobile phone and Internet services in regional Australia, its response to the Besley Inquiry's report which found that services in rural and remote areas were not adequate.

Labor has continually argued that Australians are better off relying on an ongoing dividend stream from Telstra rather than a one-off flog-off. The figures for the sale of the first third of Telstra clearly show that.

In this regard, Labor believes that the Prime Minister should heed his own advice to Telstra's mum and dad shareholders, namely; the Commonwealth should take a 'long-term' view' (1) of its majority ownership of Telstra. That which is good advice for the minority shareholders is also good advice for the majority shareholder!

Telstra's National Role

The second reason for not fully privatising Telstra is its central role in the delivery of communications services to Australians.

Telstra remains, and is likely to remain, the only carrier that either seeks to, has the potential to, or can provide a comprehensive telecommunications service to all Australians irrespective of where they live.

In many parts of rural and regional Australia, Telstra is the only real provider of services. And in outer metropolitan markets, Telstra's Customer Access Network remains the dominant infrastructure over which competition takes place.

Labor believes that that national role can only be adequately secured through retaining majority ownership of Telstra.

By contrast, the Howard-Anderson Government believes that ownership is not critical and that services are adequately secured, without more, through the Universal Service Obligation and the Customer Service Guarantee.

Labor rejects this argument for a number of key reasons.

First, Telstra's service levels are simply not adequate.

Even the Government's own Besley Inquiry Report found that Telstra's services in rural and remote Australia were not adequate.

This finding is consistent with report after report of the Australian Communications Authority which have repeatedly shown that Telstra's service performance in outer metropolitan, rural and regional Australia does not meet even the lower 90 percent standard of compliance with the Customer Service Guarantee that the Besley Inquiry regarded as acceptable.

Secondly, the USO and the CSG do not secure many services that Australians increasingly regard as being important.

For example, the USO does not providing an adequate guarantee of access to dial-up Internet services.

Further, while minimum levels of mobile phone coverage are mandated, the additional mobile phone coverage currently being rolled out is not.

There are also a raft of other benefits, such as Telstra Country Wide, Seaphone and the new Wide Area and Regional call options, which are not secured by legislation.

Today, outer metropolitan, rural and regional Australia is crying out for more and better mobile services and faster Internet services. Tomorrow it will be for better Third Generation ('3G') mobile and broadband Internet services.

Without a strong Telstra at the heart of our communications system and access to the steady dividend stream that majority government ownership provides, we will not have the ongoing means to help ensure that future Governments continue to invest in equitable and universal communications services for all Australians irrespective of where they live.

Australians Want Telstra to Remain in Majority Public Ownership

This is not just my view, nor just a Labor view, of the role of Telstra.

This is a view that is shared by both a considerable majority of Australians, irrespective of where they

live or their economic circumstances, as well as by comfortable majority of Telstra shareholders.

Why? Because, like Labor, both the Australian community in general and Telstra shareholders in particular recognise and support Telstra's national role.

Telstra's individual investors also take considerable comfort from the security that majority government ownership provides for their investment. The mum and dad investors know that while Telstra remains in majority government ownership, it would not be in the political or economic interest of the government of the day to see Telstra fail, or indeed to act with reckless indifference to it.

Finally, on Telstra, it's a funny world we live in under a Howard-Anderson Government: it's ok to have Australia's second largest telephone company majority owned by a foreign government, but it's not ok for Australia's largest telecommunications company to be majority owned by the Australian Government!

Australia Post

Another area of sharp contrast between the Government and Labor is Australia Post.

The Howard-Anderson Government wants to de-regulate Australia Post, putting at risk services in rural and regional Australia.

The Government's de-regulatory agenda

In March this year, the Government withdrew its Postal Services Legislation Amendment Bill 2000 which would have deregulated some Australia Post services, undermining Australia Post's ability to cross-subsidise services in rural and regional Australia and leading to the consideration of differential pricing for Australia Post's services, in other words, the further away you live from the capital city GPO in the State in which you reside, the more you will have to pay for post and parcels.

But despite this, the Howard-Anderson Government remains committed to the further de-regulation of Australia Post, either before the next election or after.

And how do we know this?

Because on March 29 this year, the Minister for Communications, Senator Richard Alston, said that the Government still supported its Postal Service Legislation Amendment Bill 2000 and would not rule out its re-introduction at some time in the future.

Senator Alston repeated the Government's commitment to its de-regulatory agenda at a speech he gave to an annual conference of big business mail users in July this year.

This is all part of a long-term campaign by the Howard-Anderson Government to fully de-regulate Australia Post, just as they plan to fully privatise Telstra.

The Government's approach is consistent with the National Competition Council's recommendations to increase competition for Australia Post's reserved services.

This approach may well benefit big business mail users and providers but will do nothing to improve services in outer metropolitan, rural and regional Australia.

Nothing in the Government's approach would prevent major international postal service providers, like Deutsche Post or Royal Dutch Post's subsidiary TNT, providing full end-to-end mail services in direct competition with Australia Post's reserved services, with no consequent obligation to even contemplate the provision of non-profitable services to regional and rural Australia.

Australia Post has already advised Senate Estimates that the Government's Postal Services Legislation Amendment Bill 2000 would have cost Australia Post about $200 million in revenue per year.

Further, Australia Post has also advised Senate Estimates that if the Postal Services Legislation Amendment Bill was passed, it may be forced to introduce differential pricing to reflect the real cost of providing services to less profitable regional, rural and remote areas. This would mean that Australia Post's customers in rural and regional Australia would have to pay more than their city counterparts for the same postal service.

The Government Wants to Run Down Australia Post

The Government has also secretly taken a $200 million special dividend from Australia Post in this year's Budget. This dividend is on top of the approximately $165 million dividend Australia Post was scheduled to pay in the normal course of events.

This secret dividend was not disclosed in the Budget papers. And why? Because there was no public policy reason to justify it, the Government was simply too craven to admit it.

Rather than encouraging Australia Post to invest this money in better postal and on-line services for all Australians, particularly for those who live in rural and regional Australia, the Howard-Anderson Government has been secretly lining its own pocket.

Through the taking of this special dividend, the GST costing Australia Post $90 to $100 million and its plans for further de-regulation of postal services, the Howard-Anderson Government has now placed Australia Post under sustained pressure.

Kim Beazley's Better Plan for Australia Post

Kim Beazley's and Labor's plan for Australia Post is in stark contrast to that of the Howard-Anderson Government.

Whereas the Howard-Anderson Government plans to attack Australia Post's ability to cross-subsidise regional and rural services, Labor plans to enhance Australia Post's role in providing services to regional and rural Australia.

Australia Post is a critical part of Australia's communications infrastructure, particularly in regional, rural and remote areas. It plays a unique role in ensuring that all Australians have access to an efficient and reliable postal service.

Opposition Leader Kim Beazley promised on 28 February 2000 that:

Australia Post will remain in public hands; ● No further deregulation of Australia's postal industry will occur; ● Australia Post will continue to provide current postal, retail and financial services, including ●

Giropost, banking and Internet bill paying services; and Australia Post would play a critical role as a platform for the delivery of services, including emerging digital data services, particularly to rural and regional Australia. ●

Australia Post's ubiquitous outlets are probably the only piece of national infrastructure that is now readily accessible by the vast majority of Australians, no matter where they live. Indeed, the further the Australia Post outlet is away from the CBD, the more likely it is currently to be the only piece of infrastructure a small local community has access to.

Labor will encourage Australia Post to provide these enhanced services in its more remote outlets first. These communities are also, more likely than not, to be the ones most adversely affected already by the withdrawal of government, commercial and financial services.

Australian Broadcasting Corporation

Another endangered species under the Howard-Anderson Government is our independent national public broadcaster; the ABC, which the Government has placed under sustained financial and political pressure over the past five years.

Unlike the Howard Government, Labor is committed to the ABC as an adequately funded, genuinely independent and truly national public broadcaster.

Even this year's $17.8 million belated Budget increase for the ABC was a cynical political exercise by the Government.

While I welcome the fact that this additional funding will see a enhanced local radio service established in many communities, that funding decision was made in the context of a pre-election Budget, designed to bolster National Party and regional and rural Liberal MP's chances against a rising political tide. Were the Government not desperate to save its own political skin, the ABC would not have received any additional funding in the Budget.

The decision is also only a limited back fill. It goes nowhere near making up for the $66 million the Government slashed from the ABC's Budget in 1996 and 1997, nor is it an effective response to the ABC's $40 million December 2000 urgent funding submission.

The ABC's $40 million December 2000 urgent funding request sought funding for a range of education, family and business content. These aspects of the ABC's submission appear to have been ignored by the Government simply because they do not suit its political purposes.

Regrettably, this limited additional funding will not resolve other ongoing problems caused by the Howard-Anderson Government's 1996-97 $66 million cut to the ABC.

For example, the ABC's TV production capacity has not recovered since the Howard Government's cuts were first instituted in 1996. As a result, the ABC now has only 440 hours of first run television in its inventory.

Nor does it appear that the Government will provide the ABC with the funding necessary to provide an appropriate level of content for its digital multi-channel, nor is it providing adequate funding for Radio Australia.

By contrast, Kim Beazley has committed to provide additional funding to the ABC, the precise amount to be announced closer to the election.

Labor will also encourage the ABC to be truly national, to better reflect the diversity of our great nation of which rural and regional Australia is an important part.

Just as importantly, a Beazley Labor Government will extol the virtues of the ABC, publicly proclaiming the importance of this national institution: when was the last time you heard John Howard or Richard Alston doing that.

Finally, Labor will provide greater transparency in the appointment process for members of the ABC Board. This will help to restore the public's confidence in the independence of the ABC.

As a result, a vote for Kim Beazley and Labor at this year's Federal election will send a clear message that the Australian community want the ABC to be an adequately resourced, genuinely independent and a truly national public broadcaster.

Access to Broadband: Digital Access for All Australians, not some

While these three iconic institutions will, I expect, be the most identifiable symbols in my portfolio area defining the differences between the Government and Labor during the election campaign, there are other fundamental areas of policy which will determine whether Australia becomes two nations or a Knowledge Nation and on which there are stark contrasts in the policies of the major parties.

Important among these is access to broadband.

Labor has already signalled that we will focus on the growth of broadband technology and services as a key part of our nation's economic future.

The Knowledge Nation Taskforce set Australia an ambitious but achievable long-term goal of universal access to broadband technology.

Unlike the present Government, Labor has joined the rest of the world in recognising the importance to our economy and society of greater access to broadband technology and the services that technology brings.

Most Australians haven't experienced broadband technology yet, but increasingly broadband technology will provide Australians, no matter where they live, with access to an increasing array of services that will help educate our children, improve the quality and accessibility of a wide range of health, government, financial and other commercial services, as well as bringing us the latest in entertainment.

Australia, as a great content producing nation, is well placed to become a world centre for broadband content and applications.

If we properly wire up our nation, we will enable a good content idea in the back-blocks to be just as good as a trading idea in the CBD.

If we don't, then Australia will remain a net technology importer, there will be fewer job opportunities for our children and ourselves and the opportunities that will be available will be increasingly poorly paid.

Five years ago, Australia's telecommunications infrastructure was among the best in the world. Even the current Government recognised this when it came to office. But under the Howard Government, Australia has slipped behind.

As a recent report by the Productivity Commission concluded, Australia is generally behind our major international competitors in terms of the take-up of high-speed Internet services. Australia is well behind many of our European counterparts on the take-up of ISDN services and has precious few ADSL or HFC cable broadband Internet services to speak of.

The Productivity Commission's report supports the findings of an OECD report released in January this year, and recently reported in The Economist, which shows that Australia is only 13th in the world in terms of the take-up of broadband Internet services.

Senator Alston's vision: 'slowband'

Despite this, Senator Alston confirmed the Government's scepticism about the future of digital broadband services when he said on ABC Radio's AM on 3 July this year that:

There have been a number of articles in recent times about broadband and whether it's a mirage, whether it really is going to meet consumer needs and this is precisely why you can't force someone to do something that doesn't make commercial sense.

●

But unfortunately for Senator Alston, he had already admitted in that same interview that Telstra is:

… in the process of rolling out DSL technology to up to 90 per cent of the population over the next 12 months, so we're going to get a long way down this track very quickly. ●

Telstra is also making digital broadband services available to its customers via both satellite and cable modem.

Telstra's competitors are also trying to role out broadband infrastructure using these and a variety of other technologies.

The principal barrier in the way of these competitors is not just Telstra itself, it is also a Howard-Anderson Government that, rather than ensuring that Australia has a genuinely open and competitive telecommunications market has been obsessed instead with the full privatisation of Telstra.

The result has been protracted delays in resolution of essential disputes about access to Telstra's network, delays, which it is now widely accepted the Government has not adequately addressed despite the limited reforms currently before the Parliament.

Despite this, and unlike Senator Alston, Australia's telecommunications carriers believe that there is a commercial case to make digital broadband more widely available to the Australian community.

Labor, together with many market analysts and industry experts, wants to encourage Telstra and its competitors to take further steps in this direction. Unlike Senator Alston, we believe that to do so is in Telstra's, the industry's and the national interest.

In effect, Senator Alston has made it clear that the Howard Government is happy to allow Australia to just muddle along, somewhere in the middle of the pack, in the digital broadband revolution.

Senator Alston wants to leave Australians on the slow boat to the Knowledge Nation, reducing Australia's international competitiveness.

Improving our infrastructure is essential

If Australians are to be able to access this content then improving our nation's infrastructure is essential.

The recent Productivity Commission report found that only 73 percent of Australian households can access dial-up Internet services at 28.8 kbps, well below the rate of many of our international competitors.

Many cannot also access DSL services because of the use of pair gain systems. Some 9 percent of households are connected to Telstra's network using this technology.

Kim Beazley's Better Plan for Broadband Across the Nation

Under a Beazley Labor Government, Australia can and will do better.

How will Labor do this?

First, Labor will pursue further reforms of the telecommunications industry specific competition regime to ensure effective access to the local loop, opening up greater competition in the Australian wholesale market.

These reforms will of themselves encourage Telstra to help grow the broadband market, as well as enabling Telstra's competitors to compete more effectively.

The limited reforms recently passed the Parliament will go some way to improving the current situation. However, there are still significant obstacles to effective competition in the current regime.

In this regard, I welcome the ACCC's recent decision to consider the declaration of spectrum sharing.

More generally, Labor will use the Productivity Commission's Final Report, delivered to the Government earlier this week, as the vehicle for further reform.

Open Digital Cable Networks

Australia's digital cable networks are also key platforms for our nation's broadband future.

The failure to achieve open access on these currently analogue networks over the last five years, let alone the digitisation of these networks, has been another significant policy failure by the Howard Government.

As with competition over Telstra's local loop, competition for the provision of pay television or data services over these networks has been frustrated by the delays in the telecommunications access regime.

In this context, I have argued that further consideration needs to be given to the Productivity Commission's suggestion of 'access holidays' and whether they may be a useful mechanism to overcome regulatory barriers to investment.

In particular, Labor is interested in discussing with the industry whether an 'access holiday' could be appropriately used as a tactical device to ensure that Telstra and Optus digitise their cable as open access

networks.

Senator Alston has indicated a preparedness to consider the issue.

However, some confusion has arisen among a number of industry participants because the Minister has still not ruled out the use of such a device to restrict access to these important networks, rather than to achieve the strategic objectives of open access on these digital platforms.

I hope the Minister will rule out in the course of the coming election such an anti-competitive arrangement. This would enable debate to focus, where it should, on the terms and conditions that could apply to such an arrangement to the potential benefit of the infrastructure providers, Foxtel and Optus, potential access seekers and content providers, like C7, Australian consumers and the nation as a whole.

Only once that discussion has occurred will it be possible to determine whether an 'access holiday' is a suitable device to ensure that the Foxtel and Optus cable networks are digital and open networks.

Of course, that discussion may suggest other mechanisms by which that objective can be more effectively achieved.

Content is King

Bigger and better pipes are only part of the answer.

Australians will not take-up broadband services if the content is not there to match it. And, as in other areas such as television and radio, it is clear that Australians will look for Australian content as a key driver of demand.

Government clearly has a roll to play in this regard by moving Government services on-line and making them increasingly accessible and relevant to the consumer. The current efforts to move Government services on-line are disjointed and often user-unfriendly. Many Government websites are set up for those with a policy bent - not those wishing to process transactions. This must be improved.

Encouraging the development of broadband applications is also vital. Very few major Australian Internet portals feature broadband content. I am pleased to say that the ABC is a leader in this regard, with its broadband news service.

As in South Korea, the world's leading broadband nation, on-line education will also be a major driver. Kim Beazley has already announced his plan for the University of Australia On-line.

Labor will also provide an additional $10 million over 3 years to make broadband access more affordable for regional universities and their staff and students.

And Labor will establish a Learning Gateway, an on-line educational resources for secondary schools students, their teachers and parents.

By contrast, the Howard-Anderson Government has done almost nothing to encourage the development of broadband content in Australia.

Only in August this year, after more than five years in office, did the Government announce a meagre $2.1 million over 3 years for a broadband content fund.

While this funding is welcome, it is manifestly inadequate as a basis for a stronger Australian broadband content industry.

Digital Television

Digital television is still a relatively new service around the world.

To date, digital television has only really achieved a reasonable level of consumer acceptance in one market: the United Kingdom.

The United Kingdom model, unlike Australia's, is subscription based.

The primary driver for the successful take-up of digital television in the UK has been access to sport, in particular the English Premier League on BSkyB.

By contrast, Australia has retained a strong attachment to the principals of live free-to-air sport, access to which is protected through the anti-siphoning regime established by the previous Labor Government in 1994, and enhanced by the anti-hoarding regime established under the current Government in 1999 with the support of Labor.

The Government's Policy Failure

The 1998 Parliamentary framework for digital television and datacasting framework also limits the new content that might attract Australians to pick up digital television.

Almost ten months since digital television was formally switched on, all we can see are a series of policy failures by the Howard Government.

First, there is the 'Spruce Goose' that is the Howard Government's digital television policy, which has seen more interference than take-up.

Secondly, the abandonment of the datacasting spectrum auction under the cover of the Centenary of Federation sittings on 10 May this year was a regrettably but necessary end to the Government's datacasting farce.

Finally, we are yet to see an agreement among the free-to-air broadcasters and the component manufacturers as to the minimum standard back-channel that will need to be provided to allow program enhancements to be wrapped around digital television broadcasting.

And rather than having a Government actively participating and encouraging the parties to resolve these issues, we have had a Government asleep at the wheel that has been content to sit back and see these discussions proceed at a snail's pace.

The failure to date of this Government's digital television and datacasting policies, taken together with its current approach to 'slow-band' and failure to effect a genuinely competitive telecommunications industry is typical of this 'comfortable and relaxed' Government.

Rather than being energetic exponents of our nation's fundamental economic interests, of being active partners with industry to drive our nation's economic development, we have a Government, like its Prime Minister, with one foot off the bus on the way to the golf course.

Labor can, and will, do better.

Datacasting

If datacasting is to provide Australian consumers with the interactive content they will want then, as the Productivity Commission noted:

A step along this path could be taken when a limited amount of new spectrum becomes available for the purposes of datacasting. The Commission recommends that liberal conditions be attached to datacasting licences.

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But rather than heed this advice, the Government sought to strangle the datacasting industry at birth.

The restrictive genre-specific datacasting regime devised by the Government was unworkable, a lawyer's picnic and ultimately resulted in the markets rejection of the datacasting spectrum auction.

I do not enjoy being the harbinger of bad news, but I predicated on 21 December 1999, the day the nature of the Government's datacasting regime was announced, that it ran the risk of strangling this new industry at birth.

That is why Labor took a constructive approach and proposed an alternate liberal and general datacasting regime during debate on the detailed implementation of the digital television and datacasting regime in June 2000.

Labor's regime would have placed minimal restrictions on datacasting, while honouring the 1998 Parliamentary framework, which prevented back door or de facto broadcasting.

Regrettably, we were opposed by the both the Government and the Australian Democrats from achieving a more sensible outcome.

The only blessing to have come out of the sorry saga of this Government's handling of datacasting is that the use of that spectrum has not been prejudiced. The datacasting spectrum is still available and still may be able to be used to foster greater diversity in the Australian media market.

Whether this will occur is another matter. The experience of the datacasting spectrum auction has tainted the view of datacasting for a number of potential industry participants.

This may in part explain the failure of the Minister to provide as promised a new approach to datacasting. Regrettably, despite some modest re-assurances, we are yet to see any tangible sign that the Government genuinely continues to see datacasting as part of the 1998 Parliamentary framework and, if so, what new proposed datacasting services the Government has in mind.

ABC and SBS Multi-channels

Other forms of new content will also help drive the take-up of digital television.

Thanks to the persistence of Labor during debate on the detailed implementation of the digital television and datacasting framework in June 2000, the ABC and the SBS have been given the right to engage in a restricted form of multi-channelling.

The recently launched ABC Kids is the first example of a new digital channel that is not available on

free-to-air analogue television, though it will also be available through pay television re-transmission via Optus and Austar. Both the ABC and SBS are planning to announce more channels in the future.

Labor has already promised to further enhance the ABC's and the SBS's multi-channel services by removing the restrictions currently placed on their content by the Government.

Kim Beazley's commitment to additional funding for the ABC will also give the ABC the opportunity to further enhance its digital multi-channel services.

Other Aspects of the Knowledge Nation

More generally, the targets in the Knowledge Nation Taskforce Report are ambitious, but we must try to achieve them.

However, success cannot be achieved through an overnight, one-off program. It will take years of sustained effort. But if we do not begin immediately, and make substantial progress over the next ten years, we will lose touch irretrievably with the rest of the developed world.

Labor has committed to the long-term goals of:

Doubling Australia's overall Research and Development levels as a percentage of GDP by 2010; ● Reaching this target will make Australia the world leader in R&D investment. Australia must try to achieve it; ●

Ensuring that nine out of every ten young Australians leave their teens with a year-12 or equivalent qualification; ●

Fostering a large-scale environmental management industry; and ● Making Australia one of the world's leaders in biotechnology by building on our excellence in medical research. ●

Labor has already spelt out some of our policies relating to the Knowledge Nation, including:

Doubling the number of research fellowships in our universities to begin the process of reversing the brain drain; ●

Creating 400 new postgraduate training places in regional universities; ● Retraining our primary and secondary school teachers in important subjects including maths and science; and ●

And attracting the brightest maths and science graduates into teaching. ●

Investing in our schools, universities and scientific institutions will be one of the focal points of the election campaign.

Conclusion

Australia is standing at an important crossroads in terms of its history. Australians face important decisions as to the best way to secure for the future both our prosperity and our unity in difficult times.

Many Australians living under increasing financial pressure or suffering from the withdrawal of services and opportunities, while understandably concerned by international events, are also looking for greater

security in their own daily lives.

As they see our nation dividing along socio-economic and geographic grounds, Australians are looking for a national government that will listen to their concerns and act to secure their futures.

So, at the coming federal election, the choice is a stark one. Between:

A Government that wants to sit back and let the market decide, hoping that volunteerism will fill the void, or a Beazley Labor Government that will work to provide a public policy framework which will create greater security and more opportunities for Australians;

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A Government more interested in flogging off Telstra to the detriment of competition and consumers, or a Beazley Labor Government that remains at the forefront of competition reform of Australia's telecommunications market, but which will secure the benefits that come from majority government ownership of Telstra for all Australians;

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A Government content to see basic services continue to be withdrawn from outer metropolitan, rural and regional Australia, or a Beazley Labor Government that will re-invest in key national institutions such as Australia Post and the ABC;

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A Government that is happy to muddle along in the middle of the broadband pack, or a Beazley Labor Government that will work with broadband service and content providers to help Australians make the most of these new technologies;

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A Government that has no meaningful plan for technology important to our future, like digital television and datacasting, or a Beazley Labor Government that understands that new content, whether it be an ABC and SBS multi-channel or better interactive enhanced program and datacasting services, is vital if Australia is to succeed in the new age;

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A Government that is comfortable to see Australians as the users of other people's technology, or a Beazley Labor Government that wants to secure our future by having others use ours; and ●

A Government that continues to sit on the sidelines as Australia increasingly divides into two nations, or a Beazley Labor Government determined to secure our future with the jobs and services will come from a Knowledge Nation.

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(1) Transcript of Interview with Radio 3AW's Neil Mitchell, 1 September 2000 Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.