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Friday, 23 August 1985
Page: 295


Senator BOLKUS —My question, which is directed to the Minister representing the Minister for Communications, follows the question asked earlier today, in particular that part of the question which proposed that Telecom Australia be sold off to the private sector. Can the Minister say what the implications of such a proposal would be, particularly in respect of country subscribers to Telecom?


Senator WALSH —The chief implication of the privatisation moves currently being touted by various ideologues in the Liberial Party for Telecom and Australia Post is that there would be few telephone services, if any, provided in rural Australia because telephone services, and postal services, in rural Australia are innately unprofitable. For example, the cost of providing a telephone connection in the remote areas of Queensland and Western Australia is between $20 000 and $25 000. The maximum fee charged is $1 350. People in those areas would have to pay between $20 000 and $25 000 to have a telephone connected or it would not be connected. It is indeed more serious than that because, as potential customers dropped off the system entirely and ceased to be customers because of the extremely high charges, the infrastructure costs would be affected little and therefore the per service cost would be considerably higher again. Attempts to fully recover costs from communications and postal services in the remote parts of Australia are akin to attempts to chase a mirage; one never gets there.

So far as postal services are concerned, the cost of posting a standard letter from, for example, Ingle Downs in central Queensland to Melbourne is $1.70. If a profit-maximising private firm were to take over Australia Post it would seek to recover the full cost of delivering a letter from central Queensland to Melbourne. It would charge $1.70. Then the volume of letters would probably halve and the profit-maximising firm, attempting to maximise its profits, would put up its charges again until eventually the cost would be prohibitive and no mail would be delivered at all. I would be very interested to know what Senator Bjelke-Petersen, for example, thinks about the proposition that it should cost $1.70-indeed, for the reasons I have given it would be more than $1.70-to post a letter from central Queensland to Melbourne. Possibly Senator Bjelke-Petersen would think that a good idea because then Queensland would have no communications with the wicked south! Country Queensland would also have no communication with Brisbane. That might be thought to be a good idea as well.

It has, of course, been suggested that, under a privatisation system, moneys could be paid directly from the Budget to subsidise those innately unprofitable operations. If that were to be done, some $490m or thereabouts would be added to outlays by a Party which purports to be about reducing expenditures. Moreover, if that system were adopted it would fundamentally contradict the rationale for the policy of particular ideologues in the Liberal Party, that rationale being that a private service is more innovative and efficient because it is spurred by the profit motive. If governments were to underwrite losses on innately unprofitable country services, obviously the profit motive would disappear and the rationale for the policy would disappear with it.

I suppose it is not surprising that anybody who puts up a policy like that got the figures in all his five Budgets wrong, as the chief idealogical proponent of this policy in the Liberal Party did. My colleague Senator Button has already mentioned that Mr Valder described this as fiddling at the edges. He has referred to Senator Missen and Mr Hall, the honourable member for Boothby. I note with some regret that Mr Hall is the only non-Labor rural member to have stood up to condemn this policy, and thereby to have stood up for the electors that he purports to represent. No other Liberal or National Party member has yet had the courage or decency to do that.