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Wednesday, 29 May 1996
Page: 1359


Senator KERNOT (Leader of the Australian Democrats)(6.53 p.m.) —For two days I have sought to take note of Senator Alston's answers to several questions in question time but in both cases, unfortunately, the time for taking note ran out before I could speak. Senator Alston said today that the fact that I have not claimed to have been misrepresented served as some kind of evidence that I accepted what he said about what I had said in my article in the Australian . I did not seek to claim misrepresentation because you cannot get to debate the issue. I do not believe that that was the most appropriate avenue.

With the amount of time the government, both here in the Senate and down in the House of Representatives, has devoted to responding to my comments, I believe they are starting to sound increasingly hysterical about this particular issue rather than winning a debate on context. In the last two days, Senator Alston has made much of alleged conflicting figures on the privatisation experience in Britain. Senator Alston chooses to quote from a copy of a letter written to me by British Telecom. I need to deal with this letter. I need to get a few facts on the record here.

Last Friday, British Telecom faxed a letter to my Canberra office. There was no customary indication that that letter was copied to anyone else. On Sunday, we read in the New South Wales Sunday Telegraph that British Telecom has a possible financial interest in the sale of Telstra. The headline in fact is, `British giant eyes Telstra'. The first paragraph states:

The telecommunications giant British Telecom has emerged as the likely buyer of a slice of Telstra.

On Monday, two business days later, the Prime Minister (Mr Howard) referred in the parliament to this letter to me from British Telecom. The point of this chronology is simply this: clearly, British Telecom is not a disinterested observer but a player with a possible financial interest in the outcome of the Senate vote. Their actions, in my opinion, should be viewed accordingly. They are not a disinterested observer. Yet Senator Alston, interestingly enough, continues to rely almost exclusively on information from British Telecom as the source with which to refute figures which other people might raise in the debate. I prefer to rely on more independent sources, such as the National Consumer Council of the United Kingdom and Oftel, the British telecommunications regulator, and the Australian Consumers' Association.


Senator Campbell —Can any communications companies have anything to say in this debate? Are they all going to be interested?


Senator KERNOT —Yes, they can. Let's just get on the record the role of British Telecom in this debate.


Senator Campbell —What about any telecom that wants to comment?


Senator KERNOT —Senator Alston did not quote from any other letter—through you, Mr Acting Deputy President. The National Consumer Council of the United Kingdom, which reported that between 1985 and 1993, domes tic consumers fared far worse than business consumers, is one source that I think we should turn to. I quote from their report:

As far as we can judge, the trends in charges for telephone services important to domestic customers have risen over the years relative to the charges for services used mainly by business customers. This especially applies to the cost of local calls.

Since 1993, the position has improved. I have always acknowledged that. It has been because of a range of changes by Oftel, the British telecommunications regulator. Price capping was an important factor. So too was the exclusion of volume discounts from the price capping formula, which had benefited business customers at the expense of residential consumers. Oftel reports that the degree of variation between business and residential consumers has now reduced. It also notes that regulation has played a key role. I quote from the Oftel report:

UK prices have significantly reduced during the last five years, largely through the use of the price cap on the dominant operator and significant competition in the long distance mobile markets, and growing competition in the local loop—

It is not just Oftel. NUS International, in their worldwide survey of phone prices, also says that it is regulation rather than competition that is causing price falls in the United Kingdom. I quote from their survey:

NUS has seen enough telecommunication deregulation around the world to say that market forces will not automatically send telephone costs lower.

. . . . . . . . .

. Price reductions in the UK result from Government regulation rather than competition;

I do accept that in recent years British Telecom's charges regime has improved. I have said that before. It is regulation which has had the significant impact on this. That is why we have so much in common in this parliament in seeking to strengthen the regulatory regime for telecommunications. I think we know full well that a privatised Telstra, without price caps, would increase prices. Price caps and regulation are an essential precondition to consumer benefits, but privatisation alone is not. That is why the Australian Consumers' Association has called on the minister for communications to get the regulatory regime right. I quote:

The new government needs to put the interests of consumers first by delivering

appropriate consumer safeguards and effective conditions for competition before turning a third of Telstra's equity over to private interests.

I note an article on the AAP wires that states:

The Telecommunications Industry Ombudsman . . . today criticised the federal government's plan for an open telecommunications market, saying parts of it were not in the best interests of consumers.

It is those kinds of concerns which have motivated the majority of this Senate to send the bill off to a references committee. I think the Australian Consumers' Association, representing the consumers of this nation, is actually grateful that the Senate has had the sense to do this.

In conclusion, Senator Alston can bluster all he likes about British Telecom information. The fact of the matter is that Australian consumers have had a decade of privatisation. They know what they were promised on banking—lower fees, for one. They know what has been delivered.


Senator Campbell —What's that got to do with privatisation, for God's sake?


Senator KERNOT —Because you and the previous Labor government told them that privatisation leads to efficiencies, lower prices and lower fees.


Senator Campbell —What's that got to do with the Commonwealth Bank?


Senator KERNOT —It has a great deal to do with the theories that you are continually imposing on this nation. For 10 years now Australians have said, `We listened when you talked about the sale of publicly-owned assets and we are not convinced that what you promised to consumers has turned out at all.' That is one of the major issues in the Telstra debate.

One-third may not sound like much to some people. But let us not be complacent, because one-third leads to two-thirds which leads to total privatisation and, in my view, a disregard for consumer interests first. So let Senator Alston come in here and quote from something else other than British Telecom's figures, because what we need to point out is that reliance on one source like that forms a very small part of the story.