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Thursday, 21 August 2003
Page: 19152

Mr JOHNSON (9:20 AM) —I am pleased to speak in the parliament today on the Telstra (Transition to Full Private Ownership) Bill 2003. This bill is certainly one of the most important bills for members to debate in the 40th Parliament. Those in opposition certainly would say that it is also one of the most contentious bills for debate. This bill is contentious to those in the opposition because as far as the Australian people are concerned they do not have any credible policies whatsoever, so they have to engage in politics rather than policy. That is why the Labor Party opposes this bill.

It is a position which smacks of rank hypocrisy given the former Keating Labor government was only too pleased to sell off Qantas and the Commonwealth Bank. And for no other reason than to pay off government debt, as the Treasurer of the day, Ralph Willis, pointed out when he gave his second reading speech on the Commonwealth Bank Sale Bill in October 1995. I will read into the Hansardwhat the then Treasurer said in the context of the sale of the Commonwealth Bank:

... in the budget deliberations we considered the clear budgetary advantages of selling the government's remaining 50.4 per cent stake. The sale will make a major contribution to the reduction of outstanding government debt, to the benefit of all Australians. The sale should allow public debt interest savings of around $400 million per annum once the bank is fully sold. Our decision to sell the government's shares will also provide an excellent opportunity for small investors to buy into the bank. The bank's management has welcomed the sale, saying the decision will allow the bank to pursue its development with clarity of purpose and that the sale of the shares will be in the long-term interests of existing shareholders.

What is the difference between that and the sale of the government's remaining shares and equity in Telstra today?

The object of this bill is to repeal the current legislative framework that requires the federal government to retain 50.1 per cent of its equity in Telstra, the flow-on being, of course, to facilitate the government selling its remaining shares in Telstra some time in the future. The entire purpose of doing this is to provide a competitive telecommunications market here in Australia—something that seems to be totally lost on the opposition. All Australians know that in today's telecommunications world the boundaries to what technology can achieve continue to be pushed further and further and the means by which consumers benefit is in the form of lower prices and new services, which in turn are of course derived from competition.

Where safeguards and services are concerned, it is not government ownership that will deliver the best quality; it is government regulation that will deliver quality of service and world-class standards. This is especially the case in a fiercely competitive Australian and global marketplace. Indeed, the best regulations will ensure that the services provided will be world beating, not just of the highest Australian quality. Our challenge is to ensure that the regulations we pass are up to the mark and are fully enforced.

Since the introduction of full and open competition in the telecommunications industry in 1997, Australian consumers have benefited from lower prices and greater choice. I think Australians will agree with this government's contention that prices have dropped by some 25 per cent between 1996 and 2002. There are now 89 licensed carriers, as opposed to three in 1996. So, clearly, these benefits have been the direct result of competition.

It is commonly said that Telstra is the dominant telecommunications company in Australia, and few would contest that point. What is not repeated too often outside this parliament and in the community is that, whilst the federal government still holds a controlling stake in Telstra, an unsustainable and inappropriate commercial reality prevails—namely, that there is a substantial conflict of interest between the entity that owns the company and that same entity's other duty to regulate its activities.

As all Australians would know, the government sets the regulatory framework for Telstra and its competitors; yet it also holds 50.1 per cent of Telstra shares. In other words, the federal government finds itself in the position where, being the majority owner in Telstra, it also has a national duty to pass laws and regulations to ensure that Telstra is on equal footing with every other industry telco entity. To put it another way, the largest telco in the country also has the special and unique advantage of the protective arm of the federal government. Is it fair to Telstra's competitors that the same body that owns the majority stake in the dominant telco company also sets the regulations for that industry? Surely this is an unsustainable position?

The contention of the government is that allowing the privatisation of Telstra will remove the commercial risks to investors caused by the continued threat of government intervention in the management of Telstra. The full privatisation of Telstra will put the company in a position where it will need to compete on an equal footing with its competitors and where it will have no special privilege through federal government access or equity. It will also allow Telstra to operate in its own commercial interests within the global telecommunications marketplace.

The Howard government does recognise the critical importance of telecommunications to all Australians, and I want to acknowledge the concerns of the residents of my electorate of Ryan who have approached me to express some of their reservations that Telstra's services might be restricted as a result of its sale—although I must say for completeness of information and accuracy that, like many of my coalition colleagues, those who have approached me have in fact only really been a handful. So, when I hear from the opposition that there is widespread dissatisfaction with the government's privatisation policy, insofar as I am concerned—and I think the overwhelming majority of constituents in my electorate would agree—that sort of position is just talk and bluff.

Let me say to the people of Ryan in general, and specifically to the handful of constituents who have very kindly and very generously taken their valuable time to contact my office, that the federal government is very confident that the quality of Telstra's services will not fall or be diminished simply because of its new ownership structure. To address these concerns, the government has put in place measures to ensure that services will be maintained, especially in remote and regional areas of this country. Australia's regulatory safeguards for consumers are amongst the toughest in the world and will continue to apply irrespective of what happens in this parliament insofar as the sale of Telstra is concerned. Key safeguards will include the universal service obligation, customer service guarantees, a network reliability framework, priority assistance arrangements and retail price control on Telstra.

In addition, this bill will provide for a licence condition on Telstra. Under the licence condition, Telstra will be required to fulfil its responsibilities to all regional and remote customers. It cannot simply sweep them away, as the opposition seems to falsely contend and tell anyone out in the community who will listen to it. The measures in the bill will ensure regional services and technology do not lag behind those in our urban centres. The bill also provides for regular independent reviews of regional telecommunications. These reviews will take place every five years and be conducted by an independent expert committee. I want to make it very clear to the constituents of Ryan that the government's regulations are very critical to Telstra's future success. Therefore, it does not follow that the sale of Telstra of itself will have any significant detrimental impact on the government's ability to regulate Telstra.

The first Telstra float saw many Australian mum and dad investors take up the offer and apply for Telstra shares. Approximately 1.8 million Australians bought Telstra shares in the first share offer in November 1997. For more than half a million Australians—in fact, the figure is some 559,000 Australians—this was their first ever investment in the share market. This represents some 14-plus per cent of the adult Australian population. In all the debate that I have heard in the chamber, I do not recollect any speaker from the opposition pointing out that some 1.2 million Australians currently own shares in Telstra. The opposition might be interested to know that this represents one in 17 Australians—Aust-ralians who voted with their wallets in support of privatisation and in support of the Howard government and also voted at the ballot box to re-elect the Howard government.

So I think it is quite reasonable to conclude that, since the first round offer in 1997, more and more everyday Australians across the length and breadth of this great country have become more active investors in shares and become more and more aware of shares being a vehicle for wealth creation. In light of that, I wonder what the opposition make of those half a million first time Australian investors, and indeed of the 1.2 million Australians, who currently own shares in Telstra. Will the three members of the opposition who own Telstra shares support the government on this issue? Will they cross the floor and vote with the government? I know that they or their spouses own shares and I hope that they will support the government on this legislation, given that they have had every confidence in Telstra to the extent that they are willing to buy Telstra shares.

We all know that when the Howard government came to office in 1996 it was confronted by a massive Keating-Beazley debt of some $96 billion. In the interests of the country's future economic prosperity, steps had to be taken to reduce this iron chain around the national economy. Measures simply had to be taken to get back to fiscal responsibility and pay off the $96 billion of Labor debt. One way in which the national debt racked up by Labor was tackled was to use some of the proceeds from the sale of Telstra, which is what occurred with the proceeds of the first Telstra sale. This allowed the government to make a big dent in the national debt, which would have choked this country's prosperity.

At the beginning of my speech I mentioned the rank hypocrisy of the Labor opposition. It is very important, in the interests of the functioning of our democracy, that people in the electorate of Ryan be made aware of the Labor Party's rank hypocrisy when it comes to the policy of privatisation of government assets. The Australian people should know the difference between what the Labor opposition really think and how they act. Labor say that they do not believe in privatisation, but then go ahead and very successfully privatise two Australian icons, two prime government assets: Qantas and the Commonwealth Bank. My colleagues have mentioned others, but I want to focus on Qantas and the Commonwealth Bank, two leading Australian icons which the then Labor government had no hesitation whatsoever in selling when they thought it was appropriate.

The Australian people are fully abreast of the competing arguments for and against the sale of Telstra—these arguments are not new—and have been fully exposed to the Telstra debate in previous years. The coalition has gone to at least two elections with the very clear position that it would seek to legislate for the full sale of Telstra when in office. The Australian people are aware that the full privatisation of Telstra has always remained an important and unambiguous policy platform of the Liberal Party.

I make it very clear and up-front to the constituents of my electorate of Ryan that this bill does not specify a time for the sale of Telstra, which many in the opposition seem to think. There is no legislative im-position as to when the government's remaining equity in Telstra should be sold. This means that it will be sold at an appropriate time, at a time which max-imises its market value—it will not be sold undervalued; the Australian people will not be short-changed—to the benefit of the Australian people.

If, just once, the Labor Party support the government on a policy that is good for this country, they might earn some regard from the Australian people. The opposition seem to forget that being in opposition means that the onus is on them to demonstrate that they can be an alternative government. How do they do this? They do it by good judgment and, from all indications, their judgment in this important debate seems to be pretty poor. I say to my parliamentary colleagues in the opposition: show some good judgment and support this bill because it is good policy, it is a good legislative decision and it is in the best interests of this country and our telecommunications industry. I commend this bill to the House.