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Thursday, 13 May 1993
Page: 527


Senator ALSTON (Deputy Leader of the Opposition) (11.50 a.m.) —The Broadcasting Services Amendment Bill (No. 2) seeks to modify the procedures for allocating satellite pay television broadcasting licences. This matter arises directly as a result of the current, long running fiasco in relation to the tender process for pay television licences.

  I am sure that those who have a knowledge of the history of broadcasting in this country would be able to cast their minds back to the late 1980s, when we had an auction system for AM-FM conversion for radio licences. The experience on that occasion was that, at the height of the boom of the market, there were those who were prepared to pay extraordinary sums of money. Indeed, the successful bid for the first licence in Melbourne was by 3KZ, which paid $31 million. The second highest bid was one lodged by Bond Media, which at that time was required to lodge a deposit of $10,000. Subsequently, Bond Media was not in a position to come up with that amount of money and after a significant period of time the bid fell over. It then went to the next in line, which happened to be the then 3DB. It paid about $10 million.

  The lesson from all that was that a great deal of delay and inconvenience was caused, and a great deal of uncertainty by the market, because of what was regarded as a highly desirable tender process. As a result of that lesson learned by the department, it was decided in relation to the MDS licences that there would be a requirement for a five per cent deposit to be paid up front. That was in order to ensure that those who bid for the licence were genuine, that they were serious long-term players and that they had the financial capacity to at least come up with a small proportion of the amount that they were claiming to be able and prepared to pay in due course, if they were ultimately granted the licence.

  That is an approach that made a great deal of sense and commended itself to the department and, indeed, to this very Minister, the Minister for Transport and Communications (Senator Collins), who signed the determination authorising that approach to be adopted in relation to MDS licences.

  As to what then happened, there is no doubt that in reaching that position the Minister took advice, as any reasonable Minister would—advice such as any sensible department would offer. That advice accompanied the determination. One presumes that he read both the advice and the determination before signing it and he was, therefore, fully seized of the intention of the department, the preferred approach, one that the Government itself chose. No doubt he was mindful that the department ought to have learnt from history and would not make the same mistakes again. So there we had a Minister, not inexperienced—one who has been a Minister of the Crown for three years or more—who had been in this portfolio for some months already and was then consciously turning his mind to the requirement for a five per cent deposit to be paid.

  What happened, nonetheless, was that on 19 January the Minister was provided with the determination, accompanied, one can only presume, by advice from the department, which he read. If that is not the case we will presumably hear about it in due course but it is unthinkable that any Minister could simply sign a document without taking other advice. Indeed, there are a number of sources of advice. If one is in any doubt the advice ranges from the experts that Ministers are able to employ on their personal staff to the department, where one has as many experts as can be afforded within budget constraints to advise on all manner of technical and policy decisions. In addition, there is nothing to stop a Minister from going to the outside industry and seeking further advice if so minded.

  In a situation where a determination is presented, one is expected to read that before signing it, otherwise we do not need Ministers. We simply authorise bureaucrats to sign documents and, presumably, if they get it wrong they get the chop. So there is a very clear line of responsibility. That is why we have secretaries to the departments. There are circumstances in which, even through no fault of their own, departments are seen to be under-performing and secretaries get moved around. There is no shortage of sheeting home responsibility to those who are nominally in charge. In this situation, this Minister was presented with a determination which he signed on 19 January. He has given various explanations, one of which has been that he checked it for completeness. He has shied away from conceding outright that he did not read a word of it, but he has effectively said that he did not read the document—


Senator Collins —I did read it.


Senator ALSTON —Oh, the Minister did read it, all right.


Senator Collins —I said so, Senator.


Senator ALSTON —He now says he read it. We clearly argue—


Senator Collins —I said then that I read it.


Senator ALSTON —How long did it take to read it? The point is that one can read, one can glance, one can look at a document. I presume the Minister is saying he did not comprehend the significance of it. If that is the case, one has to ask why, because this is not just another piece of paper. This is arguably the most significant document in the history of satellite pay television in this country, because this is what gets the game formally under way. This is what brings applicants into the game and this is what requires people to apply their minds to very large sums of money, not just in the short term, but over a much longer period of time.   So the Minister was not being presented with just another piece of paper, just another one of the many documents that are presented to Ministers. He was being asked to address his mind to the formal start of the process, the determination that would get the whole game up and running. What did he do? He apparently read, without comprehending, a very significant clause that simply required the payment of a nominal handling charge of $500. Any reasonable person would expect that a Minister of experience, a Minister who had been through this very same process in relation to MDS licences, would be acutely aware, not just of the history of the matter, but of the necessity to have in place a sensible requirement such as a five per cent deposit. Yet for reasons that are not yet clear, he simply chose to sign that document and to return it.

  We do not know whether he had advice. He says staff members were not present. Presumably the whole department was not away on vacation. Even if those people were, they are expected to be on call. Similarly, staff members are expected to be on call; they get overtime built into their salaries. Of course, one would expect them to be ready at all times to cast their eyes over important documents. It is no excuse in the slightest to suggest that somehow, because one staff member is away, a Minister is absolved from applying his independent mind, discretion and judgment to a very significant cause.

  The important aspect of this Broadcasting Services Amendment Bill (No. 2) 1993 is that it is clearly sheeting home direct responsibility to this Minister. He has spent the last 10 days or so trying to blame everyone but himself, trying to shuffle responsibility off to his department, setting up an inquiry to identify all the shortcomings of the bureaucrats. At all times he has been absolutely determined, not only not to acknowledge any breach of ministerial responsibility, but not even to answer questions on the subject, under the dubious and quite wrong basis that somehow that committee overrides the processes of the Senate and the Senate estimates committees.

  In other words, there is absolutely no reason at all why the Minister should not be accountable to the Senate, why he should not provide explanations on these matters. But he has chosen, for damage control purposes, to hide behind the establishment of a committee. One can understand the political imperatives in all that, but suffice it to say it is simply nowhere near good enough. If the doctrine of ministerial responsibility means anything in this day and age, it means that Ministers ought to be responsible for their own decisions. If they sign important documents, they ought to take advice beforehand, and they accept the consequences of their actions. In the situation where the Minister chose not to insert a five per cent deposit requirement, a number of very important consequences flowed. They were that all of the potential applicants then structured their bids around the rules of the game.

  No-one can be critical of that because that is normal commercial sensible practice. Naturally enough, what we had was a whole series of people putting in up to 50 bids when all the experts were guessing that there might be only one applicant for licence B and there was a bit of speculation about two or three international heavyweights who might put in for licence A. Everyone was astounded to discover that there were 50-plus bids. Indeed, the informed speculation is that, of those, 19 are multiple collapsible bids. In other words, it was a complete farce—perfectly proper within the rules, but nonetheless one that presumably this Minister, in his wildest dreams, would not have contemplated if he had bothered to comprehend what he read. Indeed, in my judgment, if one does not comprehend, one has not read—one has looked at the document; and that is nowhere near good enough.

  The fact remains that, the rules having been set and the processes put in train, the rules of the game simply cannot be changed midstream. This is not expressed to apply to the current prospective winners, UCOM and Hi Vision, but of course what this Bill does say is that they are expected to fall over.


Senator Collins —It does not.


Senator ALSTON —The guilty conscience is very evident up front. Almost in the first couple of lines of the press release that announced this immediate and knee-jerk response to Terry McCrann's article we find the Minister saying that this is not in any way intended to reflect on the commercial capacity of these two bidders. That is put in purely and simply because the Minister was acutely conscious of the fact that that was precisely what it did.

  What we say is that it is not proper to pass judgment in that way. It is certainly not proper to introduce amendments before the event has even occurred. Whether or not we might all think it will happen or is likely to happen, whether or not we think these bids are utterly unrealistic, whether or not they are much, much higher than anyone had reasonably anticipated, and whether they are multiples of the bids that were put in by those that might be regarded as serious players, the fact remains that the tender process allowed for bids of $177 million and $212 million respectively to be put on the table. What the Minister then says, in effect, is: `We will assume that that will fall over because then we will put in place arrangements that will ensure that those who come afterwards will have to put up five per cent within three days'.


Senator Collins —You said—


Senator ALSTON —If what I have said is checked, it will be found that I said that there was a widespread expectation in the community, and certainly amongst the players in the game, that that was what would happen. If the Minister wants to say that they will fall over I would be very interested to hear it, because that would seem to be the only possible basis for introducing this amendment at this time. Otherwise he would wait and see, and when the 30 days had expired and these bids had not been successful, he would be proceeding with amendments. He is introducing them at this stage only because he takes the view that A and B will not survive. Not only is that prejudging the matter but, as I have said, it certainly does not make their capacity to raise funds in the marketplace any easier. I would have thought that it simply demonstrates the panic-mode, knee-jerk response to an article written by Terry McCrann, less than 24 hours after which we had the Minister's press release being put out. If ever there was policy making on the run, then this is it. It is certainly not the first time and I am sure it will not be the last. The important thing to remember is that, once a process has been set in train and once the rules of the game have been established, they simply cannot be changed without it being a retrospective process.


Senator Collins —What if you find out it is wrong? Do you just let it go?


Senator ALSTON —Has the Minister decided it is wrong? Has he decided that A and B should not be allowed to proceed, should not be allowed to come up with the money, because, if so, this is all irrelevant, utterly academic, and of no importance at all? This Bill can only ever be relevant if those applicants fall over. From that point on a whole series of things might happen, but the fact remains that, if there are 50, the next 48 went into the process on certain defined terms prescribed by the Minister. They have their acquired rights, they are entitled to assume that those rights will not be affected midstream; and yet that is what this amendment proposes to do.

  It makes it clear that the Government wants to change the rules simply because of what it now acknowledges to have been a monumental error. But one does not change the rules part way through the process. One does not assume, for example, that if these two do not get to the barrier it might be another two or three years because everyone will take 30 days plus 45 days and maybe even longer, and that process will simply multiply right down to the bottom. None of those assumptions can be made because, again, that would be second-guessing what will happen as a result of the process the Government has established. Therefore, not only is it premature to be introducing them before the 30 days expires but it is quite unfair to those with acquired rights. The Minister is attempting to make judgments about what will happen down the track when he has absolutely no idea. He does not know whether any bids will be withdrawn. He does not know whether there will be rearrangements. All of these consortiums are very fluid and are perfectly capable of being restructured on short notice—


Senator Collins —How do you know?


Senator ALSTON —I am saying that they are capable of it. It has certainly been put to me by a number of people that they are, and I would not have thought the Minister would agree that they are locked in cement.


Senator Collins —That is the silliest argument you have ever put.


Senator ALSTON —I am sorry that the Minister does not understand it or follow it. I am not being critical of him for that. The fact remains that the Act itself allows for licences to be transferred, for bids to be withdrawn and for restructuring of arrangements to take place at any time. In those circumstances, the last thing the Minister ought to be doing is making yet another assumption about what will flow after the 30-day period and then introducing amendments that somehow are designed significantly to restrict the activities of subsequent applicants. Therefore, we will be voting against this Bill. Not only is it retrospective but, clearly, it is interfering with rights of all those who are currently bidders. It is, therefore, manifestly unfair. The Minister must stop making policy changes on the run and acknowledge that responsibility stops with him and that he cannot simply blame his department and everyone else. Within the space of about 24 hours of this fiasco—


Senator Collins —You just want the mess to go on until August.


Senator ALSTON —It does not necessarily have to go on to any particular point in time. It can be adequately resolved, in a very short space of time, within the rules that have been established. The Minister knows the commercial realities. Those who are in the game are not juveniles. They know what they can do. They know whom they can talk to. They know how to negotiate. The last thing we ought to be doing is somehow prescribing, or proscribing, the way in which those processes should proceed. Yet that is what this Bill does, simply because once again the Minister has got it wrong and wants to patch it up on the run. That is why it makes a great deal of sense to sit back and have a good think about these things, to let the process take its course, as the Minister intended when he signed that fatal determination. If he does that, I am sure that matters will work themselves out, that we will get licences issued in the not too distant future and that we will have a process that is in accordance with the rules established by the Government. But to change the arrangements at this stage not only is unfair but is further confirmation of the panic mode that is gripping the Government at the present time.