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Tuesday, 12 November 2002
Page: 6090

Senator CHERRY (3:29 PM) —I move:

That the Senate take note of the answer given by the Minister for Communications, Information Technology and the Arts (Senator Alston) to a question without notice asked by Senator Cherry today relating to the proposed sale of Telstra.

The Minister for Communications, Information Technology and the Arts was responding to a fascinating comment by the Prime Minister on the 7.30 Report last night. When he was asked about Telstra he said:

We have to be satisfied about the bush. We also have to be satisfied, if we were satisfied about the bush, that we sold at a time and a price that would maximise return to the Australian public and that could be quite a factor.

They are very important statements, because the Prime Minister is essentially saying that he has to work out whether he has got the bush service levels up to scratch. The Estens report, released last week, certainly showed that, whilst there has been some progress, we are well short of that benchmark before we even consider the sale of Telstra. He is also highlighting that there is a budgetary issue. That is very significant. That is essentially saying that there is a very strong argument— in fact, an irrefutable argument—that you could not sell Telstra on the current share price that Telstra has been suffering from for some time without there being a significant negative budgetary impact. It is quite clear, when you look at the figures based on the current share price, that you are looking at a budgetary impact of around $980 million over five years, rising quite substantially to almost $2 billion if you take into account the cost of offsetting the superannuation liabilities for Telstra. These are very significant issues.

But, even when you look at the second benchmark that I asked Senator Alston about in my supplementary question on the whole issue of country services, the government cannot sustain an argument based on the Estens inquiry report that Telstra has met a reasonable standard for service in the country. If you look at the Estens report, you see quite clearly that, for example, there has actually been a slight decline in the level of faults over recent years and that these will need to improve before you can say that country services are up to whatever this as yet unspecified benchmark standard is for the government for the Telstra sale to be concluded.

The most important recommendations of the Estens report are the ones that the government seems to have forgotten about. They are about the necessity for continuing aggressive public intervention in a policy sense for maintaining decent service standards in the bush. I refer, for example, to recommendation 9.5. This is about ensuring that the bush gets adequate services, not just current telecommunications services but future telecommunication services. Recommendation 9.5 says:

The Government should provide funding for future service improvements in regional, rural and remote Australia, rather than imposing financial obligations on industry.

Similarly, recommendation 9.1 says:

The Government should put in place a process to regularly review telecommunications services in regional, rural and remote Australia, and to assess whether important new service advancements are being delivered equitably in those areas.

This highlights that, even if you actually got some as yet unspecified benchmark of appropriate service to the bush delivered under the current services, that does not guarantee that the bush will actually get access to any new services, as highlighted in this report, such as the now overwhelming demand in the bush for decent Internet speeds, ISDN and broadband.

Even if we lock in stone the current batch of services provided by Telstra, privatising Telstra will not ensure that the bush enjoys future services. That is why I argued at the time that I think the Estens report—and I stand by this—actually provides a better case for increasing government ownership in Telstra rather than reducing government ownership. I certainly hope that when the minister—whether it be the Minister for Finance and Administration or the Minister for Communications, Information Technology and the Arts—looks at those benchmarks set by the Prime Minister on the 7.30 Report last night he will conclude that, if we are going to have decent services in the bush now and into the future, we will need continuing government subsidies and regulation, preferably government ownership. Secondly, if you are going to sell Telstra at some point, you have to make sure that the budgetary impact is a positive, and that cannot be guaranteed on current share prices or the likely share prices over the next couple of years, given the price of telcos around the world. Certainly there is no case for selling Telstra on current policy.

Question agreed to.