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Monday, 9 September 1996
Page: 3076

Senator HARRADINE(5.32 p.m.) —by leave—I thank the Senate. I have only had this report in my hands for some 30 minutes and my remarks will be preliminary only. Naturally they will relate to the issues I have publicly stated are of concern to me in respect of this matter. It is clear that the government intends that it will issue shares to the public for the sale of a third of Telstra. What also has emerged from today is that it intends to do this to ensure that there will be an amount of $1.5 billion for the Natural Heritage Trust. The residue, which is assumed to be about $7 billion, will be used to pay off debt.

I have had to take those matters into consideration and to consider the various statements made by the government on their face value. Areas of great interest to me are whether state-of-the art communications technologies can be guaranteed to regional Australia, including to my state of Tasmania, either by revised universal service obligations or in some other way and whether Tasmania's natural heritage pre-eminence would be recognised in the disbursement of funds from the Natural Heritage Trust.

In respect of the latter matter I notice that the report says that funding of the Natural Heritage Trust should be made out of consolidated revenue or in some other way, including the use of some of Telstra's profits. I have heard the arguments put forward by the Democrats in respect of the latter matter but you would not immediately get the sums of money in that way that you would need to sustain the Natural Heritage Trust Fund.

The second matter is state-of-the-art technology for regional and rural Australia. That matter is partly dealt with in this document. It concerns me considerably that, because there is considerable cross-subsidisation, this may, certainly under full sale but also under partial sale of Telstra, cause a decline in services to rural and regional Australia.

My concern is that this is already happening to a certain extent. The intention of Telstra prior to the decision of the then opposition taken to the people of Australia at the election, as I understand it, was that it would not roll out broad cables to provide top quality broadband services to my state. That is a matter of great concern. That is a matter we ought to be looking at. I will certainly be looking at the matter that has been raised in the report as to whether we can tighten up the legislation, whether or not the third sale goes ahead, to ensure that top quality state-of-the-art technology is provided to regional and rural Australia.

The obligation should fall not only on Telstra but also on the other communications companies. It seems to me that ever since the competition policy was pushed through the Labor Party's federal conference in 1990 or 1991—I think it was 1990—there has been unfair treatment of Telstra to the benefit of the so-called competitor. That is something that we have got to be very concerned with. What has happened, of course, is that a situation has developed in Australia whereby there has been a duplication of cables from Cairns to Perth with something like $8 billion of wasted money. That is a matter of some concern. Even Professor Bob Officer at the National Press Club had something to say about that today. As you know, he is the Chairman of the National Commission of Audit and he expressed his concern about that.

This report does advert to that and I am glad that it does, because it is something that we should be looking at: it is something that the government should be looking at and it is something that we in the parliament should be looking at. If there is this tremendous waste of money in this area then we should be looking at it. Furthermore, let me say this: the previous government—as members of the previous government would know—has been reaping millions of dollars out of Telstra in a number of ways, and that is by the recall of debt and by the enormous dividends that it has received from Telstra. This has been going on and perhaps it may have affected the decision of Telstra not to extend the laying of cables which would give further access in Australia to state-of-the-art broadband technology.

One thing that I did not see in this report—I must say that I have only had it very briefly—was the issue that I in fact raised with Senator Alston, that is, the disadvantage that Telstra has in respect of its structure. I will quote what I said to Senator Alston:

What has been overlooked in the public debate over corporatisation of so-called business enterprises at Treasury level is that the playing field is essentially not level. Government-owned companies such as Telstra are subject to company tax but do not have shareholders who can make use of the dividend franking tax credits in respect of the company tax they pay.

Telstra is disadvantaged. One argument that the government members could have used is that, presumably, if there is an issue of shares—in my view, they should be looking at this question of the issue of redeemable preference shares—in that particular case you would be able to take advantage of the tax system and there would be less advantage to Telstra's competitor. What does concern me is that that particular issue does not seem to have been looked at by the committee, and I believe that it should be looked at. I will study this document further and I hope that I can enter into the debate more fully informed later on.