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Tuesday, 8 March 2005
Page: 32

Senator CONROY (2:46 PM) —My question is to Senator Coonan, the Minister for Communications, Information Technology and the Arts. I refer the minister to her comments last week ruling out the structural separation of Telstra as a possible reform to improve competition in the Australian telecommunications market. Has the minister advised The Nationals of this position? Is the minister aware that only yesterday deputy Nationals leader Mark Vaile stated with respect to structural separation, ‘We can’t rule anything out without having an assessment of proposals.’ Is the minister also aware that this position is supported by The Nationals Senator elect Fiona Nash and The Nationals MPs Paul Neville and Kay Hull? Will the government be reconsidering its position on the structural separation of Telstra in the light of these National Party members’ views that nothing can be ruled out?

Senator COONAN (Minister for Communications, Information Technology and the Arts) —I thank Senator Conroy for the question. One of the important points might be what the Labor Party thinks about this, and of course Mr Tanner ruled out very comprehensively structural separation. It will be interesting to see, when and if Senator Conroy ever turns his mind to Labor’s policy on Telstra and the future regulation of Telstra, what he recommends to his party as an appropriate way to consider regulation as we move towards the full privatisation of Telstra.

The government is mindful that we do need to keep a careful watch on the regulatory settings so that they are optimal to encourage both innovation and, in particular, the future roll-out of new networks. Obviously the current framework looks very much at providing access to infrastructure that is already there. One of the big challenges in telecommunications is to provide a good regulatory environment that will enable certainty in investment with new roll-outs. So the government’s approach to improving communication services in Australia has been to promote competition between as many service providers as possible, and it is achieved through the regime that is set out in the Trade Practices Act, parts XIB and XIC. Very importantly, the regime is underpinned by a rigorous consumer protection regime that is certainly among the most comprehensive of any in the world, and that regulatory framework has proven to be very effective. We have recently seen the impact of the competition notice provisions, which have forced Telstra to significantly change its wholesale pricing and to offer a $6.5 million financial settlement to the ACCC. This is evidence of the current regime working effectively.

Senator Conroy —Mr President, I rise on a point of order which goes to relevance. My question was very specifically about whether the government would be reconsidering its position on structural separation. Could you draw the minister’s attention to the question.

The PRESIDENT —The minister has one minute and 51 seconds left to complete her answer, and I am sure she will come back to the question.

Senator COONAN —I was outlining for Senator Conroy’s information and assistance the existing regulatory framework so that I could then address the issues of structural separation. I announced in December last year that I had under consideration looking at the regulatory structure that would best accommodate the new networks and the environment as the government considered whether or not it would proceed with the sale of Telstra. I should emphasise that this does not mean that the government has under consideration any position that would involve the structural separation of the existing structure of Telstra. We do not believe that slicing and dicing Telstra, splitting it into wholesale and retail or hiving off bits of it in a forced structural separation, is something that would suit either the competition regime or the future interests of the regulatory regime if the government did proceed with finally disposing of the remaining investment in Telstra.

We do not think that it has been shown to be in the long-term interests of either investors or consumers that the government should take a role in forcing some slicing and dicing of Telstra—and that includes splitting it into a country arm and a city arm. What delivers benefits for consumers are price controls and the structures that relate to competition. I think a lot of people who make comments about structural separation may not appreciate what particular form of structural separation they are talking about and what in fact delivers benefits for consumers. All commentators have said that it should only proceed if there are cost benefits to doing so. (Time expired)

Senator CONROY —Mr President, I ask a supplementary question. I refer the minister to her comments last week that Senator elect Mr Barnaby Joyce would benefit from a briefing from the minister’s office so that he could better understand the Liberal Party’s view on the privatisation of Telstra. In light of Mark Vaile’s comments yesterday, has the minister issued the same invitation to the Deputy Leader of The Nationals, whose extension is 7420?

Senator COONAN (Minister for Communications, Information Technology and the Arts) —I am very obliged to Senator Conroy for the supplementary. As you will remember, some commentators—in relation to a different issue, admittedly—suggested that Senator Conroy needed to go and have some work experience. I think it is also the case that Senator Conroy should have a briefing on this matter, and my extension is 4780.