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Partial transcription of speech by the Shadow Minister for Communication, Warwick Smith MP to the NSW Liberal Party Womens Council, 28 October, Sydney

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Whatever emerges as the model for Pay TV, there are some fundamental elements that we, as Liberals, need to state. There was a major speech given by John Hewson - if you haven't read it, can I commend it to you - the Alfred Deakin Lecture that John gave on 14 October. I think in time this speech will be the one that will

be looked back on as being a restatement of what the Liberals stand for. It is a very, very important and detailed speech.

But in this restatement of Liberalism; in the new economic environment in which we find ourselves; in this global village in which communications has such a vital role to play, there are a couple of points we have to make.

We have to recognise firstly that it is a changing world and therefore our economic prescription to deal with the problems of today must be reflective of what the problems today are. So there has to be a fundamental understanding of what the problems are. I think in Fightback! we have enunciated the problems and we've tried to charter a path forward.

But we have to recognise that, all of a sudden, we're dealing with a Labor Party that really is the party of vested interests, and it's one of complacency and it's one of the status quo. It's not now dealing with the emerging problems we have as a nation nor, in any productive sense, the emerging global issues we are dealing with

as a nation. They really are dealing with vested interests and you see that so clearly in the communications area, particularly with the current Prime Minister.

The debate - and this is to quote John - "the debate really is now about the

advocates o f the national interest against the captives o f vested interests". There is nothing more fundamental for Liberalism than making sure that we stand up and say we are going to put consumers first, we are going to put national interest first, and we are not going to bend our knees and service vested interests, because that

has been the hallmark of Labor's ten years in office.

You have seen them go on bended knee to the union movement - that's what the Accord was all about. The essence of our un-competitiveness is that we have too long shied away from addressing our uncompetitive labour unit costs, which Bob Charles would have talked to you about, and what John Howard has been talking about for some ten years - finally achieving a major policy breakthrough. What we

have to understand is that vested interests can no longer be catered for in an environment where technology can provide so much for consumers. And our attack on these problems must be to put national interest first. Now, that's the centrepiece of what John Hewson is saying in the Alfred Deakin Lecture.

What we have to recognise in the Pay TV debate is that we have to have an open architecture approach to technology. That is, you have to provide the opportunity for all the different elements, all those new technologies that are available - MDS,


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optic fibre combining with copper wire, satellite delivery systems, analogue and digital - all those words that we are just coming to grips with. All of that has to be given the opportunity to take place, to be utilised.

We ought not sit here and say:

"we're going to mandate, but you can only use one technology; you have to stay with analogue technology; you can't use the new digital technology to provide the opportunity for proliferation of services and choice to

consumers; you can't use the technology that's going to provide you with digital audio broadcasting capacity in the radio area; you cant use the technology that's going to mean that a consumer can dial-up quickly, or a

school can dial-up quickly, information that they need".

In other words, we don't want to increase the divide between the information-rich and the information-poor. We want to make sure that all have an equal access. And if you go down the path of trying to satisfy the needs of vested interests, by mandating technology, you do the very antithesis of everything we stand for.

What I suggest to you is that what Paul Keating is trying to do is to cater for the needs of vested interests. What we must make sure is that whatever policy emerges in Pay TV, it's an open policy - a transparent policy; that we do utilise to the best advantage the technology that is available; that we do give a migration

path to free-to-air television into Pay. They are going to lose audience from free-to- air and we ought to allow them to get into Pay TV on an equal basis with other particular players and make sure a competitive environment emerges so you don't have the emergence of monopoly players. It is very, very important for us.

The programming provision also becomes extremely important. We don't want to be flooded with Hollywood movies. We want to make sure that we have an indigenous movie industry. I went to Warners Movie World last Saturday to have a look and talk with them about what they see as the future.

We have a very bright future. Look at our more recent past in the movie industry. We've developed very good product - Crocodile Dundee - you can name them yourself. We've developed the capacity to produce a very good product. We want to make sure it has an avenue to be used on your screens, but not in a way that excludes totally the opportunity for others outside Australia to provide product as well. These are very delicate issues that have to be balanced, but certainly we need to be cognisant of them and make sure that we don't pass everything to the kings of Hollywood so as to flood us with their own product. But in so doing, the best way to do that is to make sure that we do have a regime here which is not the product of a deal - to be preferential to one group or another - but does give the capacity for other players to be in there as well.

And we have to make some judgements about how many players. We have to make some decisions about viability. We have to make sure that consumers and that little magic box that I showed you on the diagram has a capacity to receive all

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of these different signals - has a capacity to receive maybe three or four different Pay TV signals, and that you don't have to have separate boxes to receive all of the different signals. This is what happened in the United Kingdom - you had two competing services, so you had to have two sets of equipment (if you wanted to receive both services).

What we have to do is make sure we utilise technology to give us common customer reception capacity. Now, we've talked about this in the Parliament, time and time again, the Government agrees with me that that's the way we have to go. But who owns it? And who collects the money for the material that comes into it? What appears on the screen is one issue, who controls it is another. (If both are

controlled by the one operator) you're getting a direct vertical monopoly which will control everything. What we have to ensure emerging in information-rich areas is that we have some competition. The principles that we stand for have to underpin our approach to these new emerging industries. It's absolutely vital for us all.

So what I stand for, when I talk to my colleagues, are some fundamentals, a shared vision in which we take into account consumers; we make sure the structure that emerges is as competitive as possible; we (maximise) the opportunities for Australia; and we pursue national interests over vested interests.

If we do that, we'll be giving voice to what we stand for and out of that we will get the best advantage from the cornucopia of communications that is emerging in this country.

Thank you for the opportunity to speak to you.

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