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Friday, 18 October 1996
Page: 4530


Senator McGAURAN(2.33 p.m.) —I rise to speak in the second reading debate on the Telstra (Dilution of Public Ownership) Bill and thank the previous speaker from Tasmania for her most parochial speech. Both sides of the house are used to Tasmanians sticking up for their state—and rightly so.

Unfortunately, on this occasion Senator Denman is much misguided. I put it down to that because I do not think Senator Denman would deliberately get up here and try to push a line she did not believe in. She is not known to do that. Senator Denman, you are greatly misguided in your thoughts on the sale of Telstra. I think you have been fed the line and, unfortunately, you have taken it hook, line and sinker. We have not heard Tasmanian senators from this side of the house expressing the same opinion.

As speakers on this side of the house have pointed out quite clearly, there is a good reason why the sale of Telstra must go forward for the nation as a whole, including Tasmania. For Tasmania and the rural areas of Australia the proper safeguards are in place. We have pointed those out ad infinitum. This debate went on during the 1996 election and has been going on ever since. It ended up in a time distracting and costly Senate committee that travelled around the country. We are now into the second reading stage and no doubt a long and drawn out committee stage will follow.

The arguments are well known; for example, the universal service obligations for the rural districts and states such as Tasmania. We have put them down time and time again, but you are not listening. You are the ones with the ideological bent. If you applied a bit of commonsense to this debate you would see that. You should put the politics aside, if possible, for the sake of the nation. When the Labor government brought its privatisation bills up and tried to sell the Commonwealth Bank and Qantas, we always put the politics aside; we were not obstructionist; we saw the sense in the arguments for the sale of the Commonwealth Bank and Qantas and all the other items it put up when it was in government.

It seems to me that the other side of the house has just become obstructionist and political. There is a time and place for that. But, when it comes to matters of high national importance, you would think commonsense would prevail within the parliament. I know there are times to get bogged down in ideological and political debate on legislation, but this is really and truly not one. The opposition lost the last election when this was one of our main policies. We took this to the people. We received our—to use that overused word—mandate for the sale of Telstra. So there is absolutely no reason for the Senate to obstruct this legislation.

The policy that the coalition did take to the last election we are now dutifully applying. There are three main, crystal clear reasons—not ideologically based—why the coalition seeks a one-third sale of Telstra. Firstly, in the life of the previous government, the parliament supported the complete deregulation of the telecommunications industry as from 1 July 1997—in fact, the parliament supported that—which would allow entry into the market by other carriers such as British Telecom and the American Bell Atlantic company. People will be aware of the very fierce competition between Telstra and Optus since Optus entered the market in the 1990s. It will be even fiercer after 1997 with the entry of the likes of, for example, British Telecom and the American Bell company.

Even though Telstra has announced its latest record profit of some $2.6 billion for the last financial year, for its capital outlay and by world benchmarks Telstra is a grossly inefficient company. So the partial sale of Telstra is designed to inject some commercial discipline into the carrier, to force it to become more efficient and to cut its charges in a very competitive environment.

Given that telecommunications is one of the largest overhead costs for Australian companies, competition that will inevitably drive down costs is most welcome for Australian businesses—as it will be for Australian households.

The second reason that the government wishes to sell one-third of Telstra is to raise revenue to meet our debt commitments without relying on having to raise taxes, which is the only other alternative—and this government certainly is not committed to raising taxes. The government debt problem that it inherited from the previous government can be measured by the following figures. In the last four years, in other words, during the term of the Keating prime ministership, government debt jumped from $30 billion—which was somewhat manageable; we would have loved to have had that amount to manage when we came into government—to $100 billion. They went on an absolute spending spree and, as a consequence, over $10 billion a year in the budget is dedicated to interest repayments.

The previous privatisations of Qantas and the Commonwealth Bank obviously went up in smoke. The billions of dollars raised by those privatisations were just wasted. We do not know where that money went, except to run up debt. Maybe it went up in smoke when it was used for current expenditure. But this government's strategy is quite the opposite. The sale of one-third of Telstra will be used to reduce the debt.

A debt reduction program will improve Australia's international credit rating, which in itself will bring its own benefits. Take the Victorian coalition government. When that government came in four years earlier, it faced a debt of some $32 billion which it has since reduced to $15 billion. It has achieved an improved credit rating and saved billions of dollars in interest payments. That is the flow-on effect of reducing government debt: you improve your credit rating and thus save billions of dollars in interest payments. You also free up taxpayers' money to be used for more worthwhile causes. It is not dead money as we have now with such unwarranted debt.

In the case of the Commonwealth, a debt reduction program will have the advantage, as I said, of freeing up billions of dollars for other budgetary measures. This leads me to the third reason we want this bill to proceed through the Senate. As the Senate is aware, of the estimated $8 billion raised by the sale of Telstra, $1 billion will be used for the establishment of a Natural Heritage Trust. The aim of the trust is to establish a capital base to fund five projects over five years which will result in the much-needed replenishment of Australia's natural environmental capital. As has been stated in this debate before, the five projects are the natural vegetation initiative, the Murray-Darling Basin 2001 project, the national reserve system, the national land and water resources audit and the coasts and clean seas initiative. It is a very rare opportunity indeed to have the funds to tackle Australia's worst environmental problems. The alternative—raising debts or taxes—is not something this government is committed to.

One would have thought the environmental movement would have supported our initiatives by supporting the environmental trust. Certainly the rural sector is eager to have the funds to tackle their most serious problem, the Murray-Darling Basin. There is a very urgent need to restore the health of the Darling and Murray rivers and the lands around those main waterways. The loss of vegetation has contributed to degradation and erosion. In my own state of Victoria, over one-third of the irrigation areas have become salinised. It is proposed that some $150 million will go towards the Murray-Darling Basin 2001 project to tackle salinity, erosion, degradation and even blue-green algae problems.

So the above three reasons for selling Telstra—firstly, that there is a competitive telecommunications industry with the aim of reducing costs to businesses and households; secondly, to reduce government debt so as to free up taxpayers' funds to be used on budget priorities, and, thirdly, to use some of that money, some $1 billion, towards tackling once and for all our worst environmental problems—can hardly be recognised as some coalition ideological bent.

Quite frankly, that argument was put to rest by the Leader of the Opposition, Mr Kim Beazley, in a speech to the National Press Club in 1994. I will give three prime quotes from his speech so as to lay to rest the ideological debate that has been thrown across this chamber as our main motivation—that there is no sense behind our cause and that we do not have any genuine social or economic reason for selling one-third of Telstra. Let me put it in context. Mr Beazley, when he was in government, agreed with privatisation when he said:

The primary objective driving the privatisation program is to make Australia an efficient, internationally competitive economy—and that means introducing competition into our enterprises and into our market sectors.

. . . . . . . . .

Privatisation fits in with the Government's broader imperative to create jobs—

. . . . . . . . .

Of course another benefit of privatisation is that it contributes to the Government budget, helping to reduce debt and providing funds for Government programs. The scale of the asset sales process varies from year to year.

I could not have put it better. If only he had put the proceeds from the Commonwealth Bank and Qantas sales to better use—to reducing debt. However, I quote the Leader of the Opposition to endorse our case. What a difference opposition makes!

In the short time that I have left I will tackle some concerns that have been raised not only in the community but also in this particular debate. The first is the loss of jobs, which is a fair concern.

Jobs will be lost whether Telstra is privatised or not. Job losses have already been announced. Telstra has to meet world's best practice to put it on a footing with the new entrants that will come in after 1997. But the telecommunications sector, right across the world, is in a boom period and, with the deregulation of the industry, prospects for the future are quite bright.

That boom has seen a growth in jobs in the telecommunications sector, with some 35,000 jobs having been created since 1992. There has been a reduction in the Telstra work force—I do not have the figure and I do not want to guess at it—but it is believed that, with the growth in the telecommunications industry, those jobs can be transferred to the new entrants. That was confirmed by a telecommunications union representative, Mr Ian McLean—a former president of the Queensland ALP and now a branch secretary of the CEPU—who told the Senate inquiry into Telstra:

I do not think there will be a difference in the number of jobs, but they will not be working for Telstra; they will be working for Skilled Engineering or some other contractor.

It is true that Telstra will suffer a loss of jobs, particularly after 1997, but it is hoped and believed—it is almost assured—that most of those jobs will be transferred to the new competitors, as happened with Optus.

Another major concern that has been raised, and which is of great importance to my party, the National Party, is that the rural sector will suffer in particular from the partial privatisation of Telstra. As I said in my introduction—I do not know how many times we have to say this; I do not think that those opposite will ever believe it—the fact is that the floor is there; the rural sector will not be disadvantaged. In fact, they will be advantaged by more competition in the telecommunications industry, as the National Farmers Federation, which has the interests of the rural sector at heart, has said.

Under the Telecommunications Act 1991, service providers are obligated by law to provide a range of services to all Australians on an equitable basis regardless of where they live or conduct their businesses. With the one-third sale of Telstra this obligation will not be diminished; it will be enhanced. The government has already announced that it will require Telstra to move forward its future mode of operation program by three years to the end of 1998 instead of the 2002 deadline. The escalation of this particular program shows the government's commitment to rural areas in regard to telecommunications.

Rural and regional residents will have access to the integrated services digital network. As I said, the NFF has endorsed the government's decision, which is estimated by Telstra to be of direct benefit to up to 800,000 people who currently have substandard telecommunications. Some 85 per cent of non-metropolitan exchanges will be converted to digital by the end of 1997, with the remaining 15 per cent to be upgraded within 12 months.

The universal service guarantee will be put into place to ensure standard telephone services and reasonable access to payphones are available to all Australians regardless of where they live or do business. Expansion in technology has certainly made the provisions of the universal service guarantee for country areas easier to adhere to.

Solar powered payphones in the remotest areas of the outback have eliminated the need to have expensive telephone lines laid in those areas. The utilisation of the most accessible resource to those people, the sun, has ensured that compliance with the act is very realistic. The National Party and the coalition government have no doubt that, with the partial privatisation of Telstra and the incoming competition after 1997, the universal service obligation will be upheld and enforced.

That answers the two major concerns raised in this debate—loss of jobs, which is a fair concern, and the universal service obligation, which will be kept in place. If we are guaran teeing the universal service obligation by writing it into law, what is your problem? What is your concern, other than a political one and one of obstruction, Senator Woodley?

What is your concern, since we are writing the universal service obligation into the legislation and toughening it up, and bringing all the services up to date before 1998 within rural areas? There is no concern. The reality is that the obstruction that is being shown towards this particular bill is political and out of sync with the public, as was shown at the last election. We should get on with this debate and pass the bill.