Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Before question time I raised a number of concerns which are shared by many on this side of the chamber. The largest infrastructure spend in the history of the Australian people, $43 billion, is being committed by this government without the benefit of a cost-benefit analysis—which their own organisation, Infrastructure Australia, has requested for any major infrastructure rollout. I asked the question earlier and I will pose it again: why would you create Infrastructure Australia and then not heed their advice or accede to their questions in order to get value for taxpayer dollars?

The first conclusion one could draw is that there is not value for taxpayer dollars. The other conclusion we could draw is: based on the track record of this government, billions of dollars will be squandered under this program. That is their history and a leopard cannot change its spots. Their history is of squandering billions of dollars on half-baked programs that end up with bigger problems down the track. These are legitimate questions, whether you are a Liberal or a Labor person, or even if you are a Green. You deserve to know the truth. The problem is: Minister Conroy and this government are hiding something from us all. They will not release the business case.

What I find absolutely remarkable is the fact that they commit to $43 billion of infrastructure rollout without a business case being made beforehand. We know is was cooked up on a plane, while Kevin 747—

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Bernardi—

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Sorry—the former Prime Minister’s jumbo jet or whatever he was on with Minister Conroy. It was cooked up there because the previous incarnation had failed. We know that. But the Australian people need to know what is behind it. After all, this is taxpayers’ money that has been invested to create a monopoly situation in which this government will be in control.

If anything should scare the Australian people, it is to give this government—an incompetent government riddled with incompetent ministers who still have their jobs no matter what catastrophic disasters they have given us—control of a monopoly situation. That is not good. It is not good for the Australian people.

It is interesting to note that, for all their rhetoric, flourishes and arguments now, Minister Conroy last year in estimates said that he does not support the structural separation of Telstra. This year, he is implementing legislation which effectively makes the structural separation of Telstra virtually impossible for Telstra to resist because of the damage that would be done to their business if it did not accede to these demands by the government. And why should they accede to them? Well, the government is dangling a bunch of cash for them to accede, virtually pushing them into to.

So there are punitive penalties here, such as not being allowed to bid on other spectrum, wireless spectrum, which Minister Conroy has been laughing at and saying it is not a viable alternative. It is quite an extraordinary situation. When he was in opposition I remember him saying that wireless spectrum was going to cause chickens to lay hardboiled eggs, or something equally ludicrous. It was going to cause roller doors to open or microwaves to go off. This is the sort of hyperbole that Minister Conroy is responsible for. But what he will not come up with is some simple facts and figures, something so that we can examine the credibility of this case.

If it stacked up to scrutiny and the assumptions were right and things were good, you could possibly make a case for it. But they will not give us that. They will not give it to us. They want us to take it on face value that this is in the interests of the Australian people. We know what the cost is going to be; we are not really sure of the benefits.

Rather than release it or ask for an independent assessment by someone like the Productivity Commission, they have cobbled together in the last 24 hours a reference to a stacked committee in which they will dominate the terms and the ultimate report. That is not scrutiny. That is not examining whether you are getting good value for taxpayer dollars.

The question ultimately is: what do they have to hide and why do they want to hide it from the examination of this parliament? I am disappointed to note that some of the documents we seek will be released after parliament has risen. Then there will only be six weeks of examination in the next six months in which we can ask questions about this—not that we get many answers from Senator Conroy or from anyone on that side of the chamber.

The Australian people deserve to know. All the time, the clock is ticking, the rollout is continuing and billions of dollars are being spent. We do not know if that money is being spent wisely. In fact, in many instances one could presume it is not being spent wisely. In Tasmania, in order to get people to sign up to the NBN, which is almost compulsory because they are ripping out their copper line networks, they have to give it away for free.

Senator Conroy talked about 100 gigabytes per second. The fact is: very few people are signing up to 100 gigabytes per second, because it costs so much money. Madam Acting Deputy President Troeth, you are from Victoria—perhaps the only people in this country who want 100 gigabytes per second now are those in the Brumby dirt unit, the people responsible for spreading and smearing people on the social networking sites, at taxpayers’ expense. The grubs who trawl through the social networking sites belittling their opposition are probably the only ones. This is what taxpayers are paying for under a Labor government in Victoria. What more can we expect from the Labor government up here with their proven smearing techniques and their dirt units. It is quite extraordinary—

David Feeney (Victoria, Australian Labor Party, Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I seem to recall you did pretty well.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Senator Feeney is of course quite proud of masterminding the dirt unit in Victoria—he was the state director down there. He would know a lot about it, and I am sure he recognises that having 100 megabytes per second would be of great benefit for him to smear more people on more internet sites. But it is not your job now, Senator Feeney; your job is to spend taxpayers’ money wisely and prudently. It is not to take staffers out of Mr Brumby’s office and put them into the smear unit—$43 billion is being spent in this country with no cost-benefit analysis, no public business case and no scrutiny. This is an extraordinary circumstance and it is something that I know will alarm the Australian people.

I am someone with an open mind about most things—and you know that, Madam Acting Deputy President. I am sure I can deal with this bill before us. The coalition is going to move a number of amendments with respect to things like competition. We want to ensure the normal operation of the Competition and Consumer Act 2010. This is the key legislation that protects the interests of consumers and promotes competition. We want to make sure it applies to the NBN, the government monopoly. This government loves monopolies. It loves monopolising information and taxpayers’ money. But taxpayers need to know whether competition is going to ensue with this proposal.

We also want to make sure that the parliament is allowed to disallow ministerial directions to the ACCC regarding the NBN and Telstra deal. We want to make sure that any ministerial direction to the ACCC regarding the criteria for acceptance of a functional or structural separation undertaking shall be a disallowable instrument. We want to make sure this parliament can continue to have a say, so that this government does not have the last word on everything that transpires in this deal.

We also want to remove some of the sticks. There are carrots—there is $11 billion in cash and $100 million a year for eight years to maintain a network that the government is paying Telstra to get rid of, which is quite extraordinary. I remind the Australian people: Telstra is being paid $9 billion in cash to rip out and sell its old copper line network. But what this government has not acknowledged is that it is contracting Telstra to pay the government $100 million per year for the next eight years to maintain that selfsame network, and that strikes me as quite extraordinary. But it is not extraordinary to this government, which only saw that payment as a failing when it was exposed to the scrutiny of light.

We want to remove the gun-to-the head provisions of theTelecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 which provide ministerial discretion to bar Telstra from bidding for next-generation 4G wireless spectrum—‘Separate or you can’t bid.’ This is the same spectrum that Senator Conroy, the Minister for Broadband, Communications and the Digital Economy, has been ridiculing as inefficient and ineffective. But why would the government care who buys the spectrum if it is not going to work properly? We want to remove these provisions, which threaten Telstra with being forced to divest its pay television code and/or its 50 per cent interest in Foxtel if it does not voluntarily structurally separate. This use of the word ‘voluntarily’ reminds me of someone’s going to a Labor Party branch meeting and volunteering to vote the same way all the time. That is what happens in the Labor Party—there is no voice of dissent. As Senator Doug Cameron said, and I think he deserves some credit for belling the cat, there are lobotomised zombies on the other side of the chamber.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

Don’t forget the ballots.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Thank you, Senator Ryan—I will recall that. Senator Ryan interjected, and I know that interjections are disorderly, but his interjection was very pertinent in this case, because the highlight of Senator Conroy’s career was when his mentor, Robert Ray, recognised how talented he was. He referred to him as a ‘factional dalek’ with an inability to see any other side of a position. Robert Ray’s referring to Senator Conroy as a factional dalek— if I recall correctly, he may even have referred to him as a ‘dysfunctional factional dalek’—shows that Senator Conroy has been spending far too much time doing the numbers for his own preselection, getting rid of Kevin Rudd and various things like that and not enough time looking at the integrity of this legislation.

I remind the Australian people once again that I am talking about a minister whose lowlight so far—though I expect there are still lower lights yet to come—was his saying on national television that this bill had nothing to do with the NBN. The bill refers to the NBN 62 times; yet, according to the minister, it has nothing to do with the NBN. What further evidence do we need that we cannot take this government or this minister at their word and that we should not be passing bills like this in an unamended form? That would be wrong.

I want to refer to principle, because some of us hold principle high in the carriage of our duties. I do not think it is right, the previous coalition government having sold Telstra—a fully integrated telecommunications organisation—to the Australian people at a cost of many billions of dollars and to use that money to repay a previous Labor government’s debt, that as soon as Labor gets back into government and is struggling for an agenda it tries to enact legislation which creates another telecommunications monopoly in the hands of a government and which forces Telstra to divest itself of a very big part of its business if it wants to remain competitive in the telecommunications industry.

The principal of this is wrong, and it has been demonstrated again and again that governments cannot run businesses. We accept that governments may fill the void where competition fails, but we should have competition out there; we should have people producing as much as they possibly can and providing as many services as they can in a competitive environment. This government’s proposal will not do that. It will not provide a competitive environment, because the government will set the terms and conditions and the Australian people will not be able to get their money back because of the grubby deal that was done 24 hours ago between the Greens and their alliance partners, the Labor Party.

Scott Ryan (Victoria, Liberal Party, Shadow Parliamentary Secretary for Small Business and Fair Competition) Share this | Link to this | Hansard source

It is with pleasure that I follow my colleague Senator Bernardi’s fine contribution on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010. That is an Orwellian title if ever there was one, because this bill does nothing for competition and nothing for consumers. Australia is one of the few countries—if not the only country—in the world that is seeking to renationalise industry. Not even Cuba is going down that path since Fidel Castro passed control to his brother. Australia is renationalising one of the most dynamic sectors of its economy, its telecommunications sector, and through this legislation it is intentionally destroying existing infrastructure owned by multiple players in the Australian business community. It seems as though the dreams of Ben Chifley are still alive among those opposite. Chifley’s dreams to nationalise the banks and airlines failed miserably in 1949, so now the Labor Party seeks to renationalise the dynamic telecommunications industry. It seems as though the light on the hill has become somewhat smaller. It is now nothing more than a fibre-optic cable.

We have heard a lot about this government, which was elected just short of three years ago. In the extraordinary circumstances of having just changed leaders and for the first time in 80 years lost its bid for a majority in its re-election, it has clearly lost whatever sense of purpose it had under the former Prime Minister. This government has been desperately seeking some sort of rationale for its existence—some sort of sense of purpose—and through the National Broadband Network it has arrived at a contrived and confected sense of purpose. Three years ago, the Labor Party’s policy on broadband involved a $5 billion promise. Then, on a flight of fancy involving the former Prime Minister and the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, it suddenly became a $43 billion promise. I suppose we can only be grateful that Minister Conroy does not get on a plane to discuss the National Broadband Network with the current Prime Minister, because there is no way of knowing what it would cost after such a flight. To go from $5 billion to $43 billion on the basis of a calculation done on the back of an airplane napkin is nothing short of extraordinary, and since that time the government has done everything it can to avoid scrutiny on this proposal. It has reverse engineered the whole process—it has got the whole process backwards—and I will talk about that more in the remainder of my contribution.

The government wants to talk about the National Broadband Network but only in one sense. Yesterday we had a contrived set of questions in this place, to everyone but the minister, about its alleged benefits. A piece written yesterday by an ABC commentator talked about the government’s strategy as being simply to put the letter ‘e’ before every word to justify this broadband network, as if slogans like ‘e-health’, ‘e-education’ and ‘e-commerce’ somehow justified expenditure of $43 billion of current and future taxpayer funds. None of those things will substitute for real doctors, real schools and real commerce, and this proposal does nothing at all to advance those.

Today during question time, we heard a minister suggest that 100-megabit broadband was somehow a utility—a right like access to electricity and water. This legislation represents the first step in many in renationalising our telecommunications network. If the performance of our telecommunications network resembles anything remotely like the performance of our electricity and water networks over the last 10 years under predominantly state Labor governments, I think most Australians should be scared for their telephone as much as they worry every February about whether they will be allowed to use an air conditioner or water their garden. Government ownership simply does not work and renationalising this most dynamic of sectors does not have a rationale.

We send investments, industry support plans and government spending programs for scrutiny to the Productivity Commission that pale into insignificance when you consider the numbers involved here. We have sent car plans and textile, clothing and footwear plans to the Productivity Commission. We have had the Productivity Commission analyse water initiatives and public and private health systems. Yet the one thing this government will not do is allow the Productivity Commission to undertake a cost-benefit analysis of this extraordinarily large program—a record in Australian history—worth tens of billions of dollars.

In the other place, the Prime Minister has occasionally talked about the record of the previous Labor government. We on this side have made it clear that it did some good things, with the support of the opposition. The previous Labor government—and I am not talking about the one that existed before the current Prime Minister came to office only four short months ago; I am talking about the government of the 1980s and 1990s—would not have even considered a plan like this without subjecting it to the most rigorous analysis. There was a time in this country when $1 billion or even $50 million was considered lot of money. Now, to this government, writing $43 billion on the back of an aeroplane napkin on Prime Minister Rudd’s Air Force One is somehow enough justification to send Australians into debt this year and for the foreseeable future.

Minister Conroy is twisting himself into ever more painful contortions to come up with a justification as to why this parliament should not have access to all the information that he does and why we can just take him on trust. Earlier during the debate my colleagues pointed out at length just how wrong this government has got so many programs, from pink batts to school halls, some of them with tragic consequences. Now we are expected to take on trust the idea that this government should be allowed to expend $43 billion to renationalise the telecommunications network but we will not be provided access to all the information.

Most extraordinary of all was the deal with the Greens yesterday—yet another deal to show that the Greens really are the driving force behind this government in an intellectual sense. The government struck a deal with the Greens to send this to the Productivity Commission after the network has been built. So we will not examine whether spending $43 billion makes commercial sense; we will not understand the true cost to the Australian taxpayer so that, even if it did not make commercial sense, we could make an assessment of the social value of it; we will send it to the Productivity Commission after we have built it, as if somehow that will protect Australian taxpayers. The Auditor-General’s reports into the pink batts and Building the Education Revolution programs did not save taxpayers’ money. Ex post facto examinations do nothing because this government does not learn, as it has shown. But it had to do a deal with the Greens because the Greens want scrutiny of the promised privatisation of this to come back to parliament.

We know your government’s form, Senator Feeney, through you, Madam Acting Deputy President. Labor will try to sell anything that is not nailed down when it is in office, usually to somehow make the budget numbers add up. It sold off the Commonwealth Bank and started to sell Qantas. We know it was going to try to sell off Telstra or components of it before the 1996 election, yet the minute it comes to opposition all of a sudden it is a champion of public ownership. Unlike the Labor Party, on this side when we privatised sectors of the Australian economy it went to pay off debt and go into the Future Fund to provide wealth for future Australians.

The truth is that, due to the deal with the Greens, we are going to have an ex post facto examination of whether or not the broadband network was a worthwhile expenditure of taxpayers’ funds. It does not really matter if we find out that it is not because it will all be too late—the money will have been spent. The Labor Party will have guaranteed that, unless they are in government and commit to following through their promise—though it is amazing how often they do not do that—the NBN will never be privatised. Once again, Australia will be left with a publicly owned national telecommunications network that is a monopoly provider with some faux competition at the retail end but no competition in technology or in the provision of that backbone that service providers have to access. It will remain in public ownership.

Madam Acting Deputy President Troeth, you are from regional Victoria and I am sure that you would have many more stories than me about the alleged good old days of Telecom Australia or the Postmaster-General’s department. Some will say that service under Telecom Australia was great. Go and speak to the people who waited months and years for a basic telephone service in regional Australia. Telecom Australia in government ownership was an abject failure, just like every other publicly owned utility. Publicly owned utilities do not have the same incentive. They have union feather-bedding, they overcharge and they, if anything, stifle the development of new technology. If Telecom were still running the place it would be like the old days: we could have any type of telephone we wanted as long as it was black and it had a dial on the front. That is what we are allowed under government owned utilities. Maintaining this network in public ownership, which is what the government deal with the Greens entails, is going to hold Australia back and ensure that we do not benefit from technological development and that consumers pay ever higher costs.

It is not just the opposition that has concerns with this government’s approach to this and its desperation to prevent scrutiny of the business case before this parliament votes. I mentioned earlier how the government had reverse engineered this whole process. The $5 billion program fell in a heap, as the opposition outlined it would when it was in office, because the numbers simply did not add up. So Minister Conroy gets onto a plane, pulls out a napkin and a pen—that is the only time he could speak to the then Prime Minister—and designs a $43 billion network that takes fibre right to the front door. After that they start to undertake some financial analyses to try to find a way for it to add up. You pay McKinsey and Co. $25 million, and they come out with assumptions of 80 and 90 per cent take-up rates, but then you realise this is not going to work, because not everyone wants a 100-megabit service and not everyone wants fibre. I know people who only want a telephone service. What are we going to do then? We had better beat up on Telstra. We had better make sure that this package rests upon tearing up the copper and hybrid fibre-coaxial networks that service all of Australia in the case of the copper network and a lot of urban Australia in the case of the HFC network.

Nowhere else in the world is a government tearing up functioning telecommunications services. Nowhere else in the world would it be considered economically rational to tear up a functioning telecommunications network. The government has had no justification for that and it simply tries to hide behind the assumed 80 to 90 per cent take-up rate. To all those Australians who do not want 100 megabits a second, to all those Australians who just want a telephone or are quite happy with their current internet service, to all those Australians who do not want to go through the undoubted shemozzle that this will become as people are forced to move from one to the other: make sure you remember which party is proposing this legislation, because the Labor Party is proposing to force you to change networks, providers and equipment, and it is doing so simply to try to make the sums add up on its own flawed proposal.

On this particular issue Ross Gittins—not a noted fan of the coalition, I hasten to add—outlined only yesterday in the Sydney Morning Herald and the Melbourne Age this government’s constant refusal to subject itself to the most basic of scrutiny. It is scrutiny that it expects of other people applying for money, scrutiny that you expect of state governments as they apply to Infrastructure Australia for funds for roads and rail lines and scrutiny that we expect of people who are involved in substantial government tenders, but it is apparently not the scrutiny the government will subject this record spending to. Ross Gittins wrote:

The more it resists subjecting the plan to scrutiny, the more you suspect it has something to hide.

We do not suspect; we know. We have a lot of the jigsaw puzzle, and the jigsaw puzzle rests on the house of cards of tearing up existing networks and assumed high take-up rates. We know that it will actually lead to higher costs for consumers.

Let us consider the government’s behaviour over the last 12 months in this regard. The government held back the implementation study until it could get its lines right, and then it released it. It is now holding back the business plan, alleging there is commercial-in-confidence information, expecting this Senate to vote on the expenditure of tens of billions of dollars of government funds without knowing whether or not it is viable. The government throws around commercial-in-confidence as if that is somehow a veil behind which it can hide in order to prevent the release of the business plan. The minister has the gall to say, ‘You vote on it; then I’ll tell you whether or not the sums add up.’ Just like previous reports, this particular plan needs examination. This plan may well be like swiss cheese and have so many holes in it that the government is fearful that it will blow the case for its NBN apart. When the government throws around commercial-in-confidence, all I keep thinking is that it is Macquarie Street come to Canberra. Yet again this Labor Party shows where its true roots lie: in the failed state governments all around Australia, particularly in New South Wales, Queensland and Victoria, as if the veil of commercial-in-confidence is somehow a reason why the public should not know how their money is being spent.

We could talk about that desalination plant that exists in Victoria. Victorian taxpayers are not allowed to know exactly how much this huge plant is going to cost them over the next 30 years. This government expects that in this place it will get away with a similar claim and a similar sense of obfuscation to avoid scrutiny. I think the next time we hear the Australian Greens—the new coalition partners of the Labor Party—stand up and call for transparency we can point this out to them. We should point this out to them because it shows nothing short of hypocrisy. To say that it is okay for some of us to have a look at this but it is not okay for the Australian public or the parliament of Australia to know about this is nothing short of extraordinary. This Senate will stand between the Australian parliament becoming like Macquarie Street or the Queensland or Victorian Parliaments, where the veil of commercial-in-confidence is used to hide massive expenses, massive future debts, feather bedding and union rorts.

We have not just heard from journalists on this point over the last few days and months. Just as the government has asked the people submitting plans to Infrastructure Australia for cost-benefit analysis—just because it expects this of every local council that gets a road or a bridge—business knows that if you are investing any money, let alone an inconceivable sum like this, a thorough cost-benefit analysis is something you make available. It is something you undertake in order to ensure that you are getting value for money. At a business leaders forum in October the chairman of ANZ said:

… the lack of a business case and full publicity of that business case is throwing a lot of doubt in people’s minds about the level of expenditure.

It is very simple: business leaders are now expressing the same concerns the opposition have expressed for many months. The chairman of Wesfarmers said:

I’m not convinced, and feel it needs a cost-benefit analysis …

He went on to also say:

I just see this as another part of infrastructure that we need to go through, stock take and prioritise. And quite frankly I don’t know if it (NBN) will rank in priority.

We would like to know that too. We would like to know the cost.

When an election was coming, ex-member for Wakefield Bert Kelly would say, ‘I can hear a dam coming on.’ Over the last 20 or 30 years we have moved this country away from the idea that a government has a right to spend taxpayers’ money on building boondoggles and wasting money. At the end of the 19th century, railways were built across my home state of Victoria for political purposes. They went to waste and were pulled up only a few decades later, and I mentioned the example of Bert Kelly and he what used to say about hearing a dam coming on.

Those opposite continually like to list the number of towns that will benefit from this. No-one disputes that, but there are many towns that might benefit from something else as well. The basic concept of opportunity cost has to be considered for any program of government expenditure. Money spent on this cannot be spent on something else, yet this government will not allow Australians to know the costs. It will not let Australians know the benefits in a fully assessable way because you need to know what you are paying to find out what the true benefits are. This proposal fails both those tests. We do not get a proper cost-benefit analysis and, even if there was a social value over and above the economic one, we should always know what that number is because that would allow the Australian community to make a fully informed judgment.

About this time a year ago, the same government were trying to ram another piece of legislation through. At that time, they also got hot under the collar as they tried to hide the true cost from Australian taxpayers and they would not release the full Treasury modelling. They tried to hide the fact that that legislation could never be repealed, just as this legislation will have a degree of permanence. The government may try and sledge the opposition by saying we are wreckers, but we are quite happy to stand between these fiscal wreckers and the Australian taxpayer, present and future. The parliament and the Senate should support the opposition amendments to ensure competition remains in the telecommunications space. Indeed, leading to renationalisation of our telecommunications plan is something we will regret in decades to come.

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

I too rise to comment on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010. The government has continually characterised the opposition as having no principle and no policies, but nothing could be further from the truth. We have taken a very principled stand on this and, with acknowledgement of the Parliamentary Library, we have verified this. On 14 October 2010, our shadow communications minister, Mr Turnbull, verified that the coalition would back the government’s telecommunications sector reform legislation subject to key amendments being passed. My colleagues Senators Ryan and Bernardi have outlined some of them. These amendments are intended to remove the gun-to-the-head provision relating to spectrum determinations, ensure that the regulatory oversight applies to the NBN Company-Telstra deal and give parliament the power to disallow ministerial directions. They aim also to restore merit review and procedural fairness to the ACCC’s enforcement of the new access pricing regime.

Mr Turnbull stated that the coalition was committed to policies that were aimed at the delivery of fast, affordable broadband to all Australians. That is our aim, but this should be delivered in a manner that is cost effective, promotes competition and imposes no greater cost on taxpayers than is absolutely necessary. This is where the government’s proposal falls down. Mr Turnbull added that these goals would be assisted by a more competitive telecommunications industry and, in that context, the separation of Telstra’s fixed line customer access network from its retail business would be a welcome development. Mr Turnbull went on to say:

The Coalition therefore has no objection to Telstra separating its retail and network businesses, but does not believe such a separation should occur under duress, or via a deal that is in breach of the nation’s competition laws.

Any such restructure should be on terms which are fair to Telstra shareholders.

The shadow communications minister also proposes a regulatory environment where the separated network company would be given regulatory certainty and the knowledge that as a regulated utility it would be able to charge prices aimed at delivering a reasonable amount of return on its assets, noting that this is the regime that is applied to other utilities such as gas, electricity and water.

The bill facilitates at least two significant outcomes. Firstly, the threat of a spectrum determination preventing Telstra from acquiring bands of spectrum for advanced wireless broadband services should it not provide an undertaking that is accepted by the ACCC to structurally separate and divest its HFC cable network and its interest in Foxtel. Secondly, the bill allows the ACCC to accept such an undertaking, which is currently likely to be in contravention of the Trade Practices Act. Were the ACCC to accept such an undertaking and were that undertaking to be performed, Telstra would effectively be compensated by the taxpayer in order to make redundant existing operational network infrastructure, such as copper line network subscribers and HFC cable network for internet subscribers, thus limiting the infrastructure choices available to retailers and ultimately consumers.

This would act to improve the commercial viability of the NBN but simultaneously move the telecommunications sector in the direction of the identified core impediment to competition—namely, the concentrated ownership of the network infrastructure. In the Bills Digest put out by the Parliamentary Library, the OECD warns against such action. It states that the government:

… should not trigger a weakening of competition in wholesale broadband services to protect the viability of the government project. An alternative to this picking-the-winner strategy would be to let the market guide choices between the various Internet service options on the basis of prices that reflect costs, factoring in externalities that ought first to be evaluated. To that end, it would be desirable to maintain competition between technologies and, within each technology, between Internet service providers. This would be consistent with the planned vertical separation of Telstra and with other aspects of the reform that seek to promote competition.

In those remarks the OECD states that maintaining competition between technologies is consistent with the vertical separation of Telstra. The vertical separation of Telstra and subsequent divestiture of its fixed-line copper and HFC cable networks’ subscribers, with a view to nationwide, fixed-line optic fibre telecommunications infrastructure—outside of the approximately seven per cent of premises in Australia already with next generation wireless and satellite technology connections—is not consistent with competition between access technologies. This approach is identified by the OECD as a picking-the-winner strategy.

Apart from relative academic theorising, we need to look at the track form of the government in its three years of thinking about and operating these reform capabilities in order to bring better services to Australians. So far, we have seen the pink batts scandal, where it took $1 billion to dream up and implement a scheme for putting insulation in people’s houses. Such was the failure of that scheme, and at such a level, that it then took $1 billion to dismantle the scheme and make reparations to all the people who had suffered—in some instances, tragically—because of the implementation of that scheme. If you multiply that by 43 times the fiscal amount, if this scheme takes $43 billion to put in place, what happens if it ultimately falls over? The taxpayer is going to be the person who actually bears the brunt of that, and to put the level of debt and reparation that would be needed on the taxpayer is simply not thinkable in this day and age. Not only that, the implementation of the NBN will waste literally billions of dollars in fibre backhaul investment that has already been by companies such as Telstra, Optus, AAPT, Pipe and others over the past decade, and this will be an astonishing destruction of economic value.

The NBN’s plan to limit the number of points of interconnect on its network to as few as 14, all located in the major capital cities, would strand hundreds of the already existing fibre links between Australian towns and cities. So we would bypass competitive infrastructure that has already been built by numerous private companies, and we would exclude those links from carrying fixed-line traffic. Not surprisingly, the owners of these networks have demanded that the NBN offer compensation and, regardless of how that question is resolved, in the meantime, further private investment in communications infrastructure in Australia will be reduced because of uncertainty and perceptions of sovereign risk.

The government should know better than this. In October 2009 it released Better infrastructure decision-making: guidelines for making submissions to Infrastructure Australia’s infrastructure planning process, through Infrastructure Australia’s reform and investment framework, from which I quote:

... all initiatives proposed to Infrastructure Australia—

the body that is set up with the express purpose of assessing major infrastructure projects—

should include a thorough and detailed economic cost-benefit analysis.

                        …                   …                   …

In order to demonstrate that the Benefit Cost Analysis is indeed robust, full transparency of the assumptions, parameters and values which are used in each Benefit Cost Analysis is required.

Where do we see that here? We see a blanket refusal by the minister to give out publicly any details of the business plan, a refusal to undertake a cost-benefit analysis and a refusal to send it to the Productivity Commission, and all of the members and senators in this place, representing the taxpayers of Australia, as well as many other constituents, are simply invited to take this in good faith and not raise any questions. We would not be doing our work properly if we did that.

The Prime Minister, Julia Gillard, would leave us to understand that what she would normally do in these circumstances is subject this to the sort of analysis that we really need. But, yesterday, in the House of Representatives, the shadow minister for communications and broadband, Mr Turnbull, recalled the election leak—if I can call it that—which suggested that Prime Minister Gillard had opposed increasing pensions. She had defended herself at the time by saying that all expensive programs should be scrutinised carefully. This is what she said in defence of herself:

I am the person who will say let’s look at it, let’s cost it, let’s think about it, let’s question it, let’s turn it upside down, let’s hold it up to the light, let’s ask a billion questions: does it add up? Is it affordable?

When Mr Turnbull asked the Prime Minister this question and asked her to justify that if such scrutiny were good enough for pension increases why wasn’t it good enough for the $43 billion NBN, the Prime Minister’s response was:

It is good enough for the NBN and it is happening.

Why cannot the parliament, the ultimate legislative body in this country, be allowed to know what is going on? I see that Senator Xenophon has entered the chamber, and I do admire his resolution and resolve in refusing to accept such a ridiculous scheme as to be allowed a briefing but then not to be allowed to talk publicly about any details of it for, at first, seven years, then reduced to three years and then reduced to two weeks. As I remarked after question time today, this sounds like something out of Grimm’s fairy tales—and we are all way too grown up for that.

My colleague Senator Ryan mentioned some of the other public criticism that has been made. He also mentioned the article by Ross Gittins, a respected economic journalist, in yesterday’s Age and yesterday’s Sydney Morning Herald. Mr Gittins asked why we would not send it to the Productivity Commission. He said:

I don’t have an in-principle objection to a network with natural-monopoly characteristics being owned publicly rather than privately, provided governments don’t use their powers to shore up or abuse that monopoly in a way any private owner would and should be prevented doing.

I might add that Mr Gittins began his article by saying:

I am starting to get a really bad feeling about Labor’s plan for a national broadband network. The more it resists subjecting the plan to scrutiny, the more you suspect it has something to hide.

He suggested, for example:

The Productivity Commission could be required to ensure its cost-benefit analysis ranged far more widely than a mere commercial evaluation, taking account of present and potential “social” benefits … and acknowledging those whose value it can’t quantify.

For instance, the presence of an accessible high-speed broadband network would enable many people who at the moment live in the cities of Australia not because they want to but because that is where their business is. With a proper network in the rest of rural and regional Australia, many people would be able to live in localities that suited them and their families far better and to telecommute—that is, run their businesses from home. If Labor were prepared to acknowledge this and put the view to the Productivity Commission that it wanted to look at the social benefits, I am sure that we could come up with many good things that would happen if we had a suitably costed broadband network in this very large country of ours. Geoffrey Blainey’s book many years ago was entitled The Tyranny of Distance, and that is what we all live with, but a high-speed, properly costed broadband network would go a long way to relieving some of that tyranny of distance.

Mr Gittins also says:

… it’s false economy to build something today without allowing for reasonable growth in your use of the item.

But he agrees that the idea of building a gold-plated broadband network up to eight times faster than any present application needs so we are ready for anything that might come along one day is all very well but that we cannot possibly anticipate what the needs are going to be in 10, 20 or more years. He says:

… it’s false economy to build something today without allowing for reasonable growth … But there comes a point where allowing for more growth than you’re likely to see in ages becomes a waste of money.

Private businesses that do this—such as home owners who overcapitalise their properties—do their dough. Government businesses survive either by overcharging their customers or falling back on the taxpayer.

The final worry is the way that—notwithstanding the break-up of Telstra—the plan involves deliberately reducing competition from other networks in the telecommunications market. Why’s that a good idea?

We on this side of politics believe that competition is a good thing because it ultimately brings down the price of goods and makes them more affordable for consumers to pay for. If we are not going to see that in this present scheme, I would like to know why we have to adopt it.

The government’s approach is without precedent anywhere in the world. Nowhere else in the world is the government proposing to force a carrier to dismantle its copper just to maximise revenues and eliminate competition for a government owned monopoly regardless of its economic value. Nowhere else in the world is broadband over copper, such as ADSL or VDSL, being effectively banned regardless of whether it provides service of a quality and at a price that consumers want. Nowhere else in the world is competition for fibre from HFC being banished—again, simply to prop up a government owned monopoly. On the contrary, broadband and voice delivered over pay TV cables is the main form of facilities-based competition for copper and fibre in most of the world. Why on earth would the parliament believe Australia has this right and every other country in the world has it wrong? I believe, having read it somewhere, that the sorts of speeds we are looking at in this scheme are way above anything that, for instance, is achieved or indeed necessary in the United States, one of the world’s most advanced countries.

We have had several eminent people commenting on this, and even the Treasury secretary, Ken Henry, stated in September 2009 on the whole scheme:

Government spending that does not pass an appropriately defined cost-benefit test necessarily detracts from Australia’s wellbeing. That is, when taxpayer funds are not put to their best use, Australia’s wellbeing is not as high as it otherwise could be.

We have many public agencies such as the Productivity Commission prepared to look at the NBN, but the project is being rushed through, the way the government rushed through its home insulation scheme, the Green Loans scheme and the school halls scheme, all of which left schools, communities, individuals and small entrepreneurs out of pocket and very sorry that they had ever heard of the schemes in the first place. So, as the shadow minister has recommended, we need to have our amendments in place and we need to have a public scrutiny process for this very important piece of legislation.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I think it is pretty fair to say that most Australian families have a fixed home phone line and at least two mobiles, if not three or four. Many have connection to the internet and quite a few have pay TV as well. There is no question that the telecommunications industry will continue to grow and, as technologies improve and networks advance, it becomes even more essential to safeguard the interests of competition and consumers. Indeed, with a reported figure of more than four billion mobile phone users worldwide, expected to reach five billion in coming years, safeguarding and serving the consumer’s interest remains paramount.

As far back as 1901, the Postmaster-General’s Department was established by the Commonwealth to manage all domestic telephone, telegraph and postal services. Today Telstra is the core provider of telecommunications services in Australia. Telstra has operated and continues to operate as a retailer providing consumers with contracts, handsets and services as well as a wholesaler providing copper cable and mobile access to competitors. Being vertically integrated, with its hands effectively in both wholesale and retail pockets, Telstra has the market captured. While Telstra has around 1.4 million shareholders who are keen to ensure the company makes the biggest profits it can, it is crucial that the market is as fair as possible so that all consumers receive the best access and best services within the competitive telecommunications market.

The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 sets out a framework for either a voluntary structural separation or a compulsory functional separation of Telstra and puts in place a number of safeguards with regards to access, competition and consumers. This is a critical piece of legislation and in some regards it has been a long time coming. This is also critical in the context of the rollout of the National Broadband Network because it effectively gives the parliament the last major opportunity to make sure that we are on the right track.

I have long campaigned for fairer competition and the rights of consumers and I have been aware for many years of the recurring allegations of unfair and anti-competitive practices by Telstra in the past. I do acknowledge the more open and engaging approach that David Thodey has brought to the company as CEO. When it comes to structural separation, yes, I do believe that Telstra should structurally separate in the interests of fairer competition and the interests of consumers. For too long Telstra has monopolised the market. Currently, as a vertically integrated giant with substantial power and market share, Telstra can project that power throughout the sector in a way that allows it to maintain its dominance across the marketplace. I agree with the Senate Standing Committee on Environment, Communications and the Arts which noted:

Telstra is one of the most integrated telecommunications companies in the world.

And that:

Partly because of this integration, it has been able to maintain a dominant position in virtually all aspects of the market despite more than 10 years of open competition.

Above all though I agree with the majority of the committee that

Telstra’s high level of integration has hindered the development of effective competition.

Telstra’s vertical dominance of the telecommunications sector today has put it in an unrivalled position to transfer knowledge and/or engage in pricing tactics that undermine its competitors. The result, I believe, is hindered competition and poorer services. Indeed, without strong and ongoing pressure to compete, Telstra only faces the demand of serving its shareholders, leaving service to customers as an optional extra as many would see it. In response to Telstra’s current vertical integration this bill provides a framework that seeks to lessen Telstra’s dominance through either a voluntary structural separation or a compulsory functional separation. It must be noted that structural separation is subject to a vote by shareholders sweetened by $11 billion worth of taxpayers’ funds.

My office and I have had many, many consultations with Telstra as well as with other key stakeholders in recent months not to mention recent days and nights and Telstra has made it clear that it accepts a separation of some form is on the cards. By structurally separating, Telstra will be split into two parts each an entity in its own right, each with its own CEO, board of directors and shareholders. Under this the board of each separate part will be legally responsible to its respective shareholders and in this way will provide the framework and protections against anti-competitive conduct. The new wholesale company would not be captive to the new retail company with the wholesale company under immediate competitive pressure to deal with all retailers on an independent basis.

The bill also provides a framework for functional separation should the telco choose not to voluntarily undergo a structural separation. Under functional separation Telstra would remain as a whole, but a regulatory framework would be established to keep each part at a distance. While ultimately still reporting to one body of shareholders, changes would be made so that performance is measured by efficiency in performing duties rather than in terms of shareholders.

Specifically, it would mean that Telstra would manage its retail operations separately to its wholesale functions, and thereby provide the same information and access to services on ‘equivalent’ price and non-price terms to its retail and non-Telstra businesses. In my mind, functional separation is a poor second cousin to structural separation and falls well short of the immediate benefits that can be achieved through structural separation. But either way, the clear message is that it is time Telstra is made accountable to all Australian consumers, not just to its shareholders, who, perhaps ironically, are consumers themselves and similarly demand quality service, fair prices and good competition.

As I mentioned before, I am in favour of a structural separation of Telstra. I believe it is the only true way to ensure a fair and competitive telecommunications market in Australia. But we need to know much more before we can pass such a significant piece of legislation. The bill in its current form can and should go further, to ensure that, whether or not Telstra undergoes a structural or a functional separation, the framework under which it takes place is as effective as its intent. It is imperative that the terms and requirements of the separation are as strong, as transparent and as consultative as possible, in how it is carried out, in how it is enforced and in how it is monitored. Currently, there are gaps in the proposed regulatory framework. It is also important that we strengthen consumer safeguards and strengthen the anti-competitive conduct regimes.

Given these concerns, I have circulated a number of amendments, which I will move at the committee stage, which I believe will strengthen this legislation, and I thank competition expert Associate Professor Frank Zumbo from the University of New South Wales for his assistance in drafting these amendments and for providing me with advice on this crucial piece of legislation.

I will not go into these amendments now, but broadly I would like to say that I acknowledge the formal role of the ACCC under the current bill in assessing undertakings and proceedings with enforcement remedies for breaches of undertakings. However, it is crucial that this is not purely discretionary and that the process involves consultation with all stakeholders and that the determinations are made publicly available so as to ensure greater scrutiny and transparency of process. This is one of the most significant reforms, if not the most significant, of our telecommunications sector and it is vital we get this right.

A report by the OECD last year commented that Telstra remains one of the most ‘vertically integrated providers in the world’, and warns that the government must ensure that any involvement of Telstra in the NBN does not ‘end up strengthening the dominant position of the incumbent’. In considering this legislation, we need to ensure that we are heading towards the best possible framework for our telecommunications sector and that we are not eliminating a quasi-monopoly, and replacing it with another without necessary safeguards.

As I have stated, I believe it is crucial that greater safeguards are introduced into this legislation so that the rules of Telstra’s separation—either structural or functional—are transparent and the product of consultation. This is the only way to ensure the strongest possible protections for all Australians using telecommunications services now and into the future, to maximise competition and to lower prices.

I believe there is real merit for the Productivity Commission to be involved this process but as yet I have not secured this assurance from the government. I think it is interesting to note that the agreement secured by the Australian Greens, and Senator Ludlam in particular, is that privatisation of the NBN would be contingent upon the approval of both houses of parliament and an independent study conducted by the Productivity Commission into the ownership of the NBN and its commercial impacts. So there is an acknowledgement by the government that the Productivity Commission can have a useful role in relation to better informing public policy.

However, there is another hurdle, and I see it as a primary hurdle. Madam Acting Deputy President, I approach every piece of legislation in this parliament the same way. I gather all the information I can and that I believe I need, and only then do I make a decision about the merits of any piece of legislation. But the sad fact is I cannot do that in this case because, in part, a crucial piece of information, the NBN Business Plan, is being withheld from the Senate and the public. And this is occurring because the government claims its hands are tied while the ACCC is making determinations about the NBN, and that it will not be available until the 30 November—one week after the parliament has risen.

No-one in this place should be voting blind, and signing a confidentiality agreement that lasts for seven years, three years, or even two weeks, does not resolve the problem for me. I do not believe that is the transparent, robust approach in a parliamentary democracy. I need to be able to explain to my constituents in South Australia, and to the Australian public, the reasons upon which I make such an important decision on this piece of legislation. And I cannot do that right now. It would be irresponsible to stay ignorant of the content of that document.

So while I indicate that I support the second reading stage to allow this piece of legislation to go into committee, I reserve my position as to the committee stage and the third reading of this bill. And finally, I do want to acknowledge that my staff have been working almost around the clock—17- or 18-hour days—for this piece of legislation. I am very grateful to them for their dedication on this important piece of legislation and I thank Rohan Wenn, and in particular Evelyn Ek, because they understand how important it is to get it right.

(Quorum formed)

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I rise to speak tonight on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010, and, indeed, on a matter of principle that I find quite remarkable, and as the rooster-come-the-goose leaves the chamber, I will talk about his involvement in some of these matters as well. I just want to put into some sort of perspective the nature of the moneys that we are talking about. It is $43,000 million. Forty-three thousand million dollars is what the issue relates to. It is a massive investment by the taxpayers of this country. Of great interest is that it is not just the people who are paying tax at the moment, but the people who will be paying taxes, quite frankly, for the next 50 years.

This is not about today. This is actually about tomorrow. This is about the obligations and the noose that we are putting around the necks of our children and our grandchildren in relation to this investment. We have quite clearly articulated in this chamber, led by Senator Birmingham in relation to this matter, where the coalition stands. We believe that it is entirely inappropriate and unacceptable for this government to refuse to show us the business case—not to show us, necessarily, but to show the Australian community their so-called business case.

This is just going from bad to worse for both the government and the Minister for Broadband, Communications and the Digital Economy, Senator Conroy. The ineptitude that is being shown on all fronts in this matter is, quite frankly, absolutely gobsmacking. The minister needs to stop his confected, nervous laughter, which we have seen a lot of during the week, particularly yesterday when we saw probably the most embarrassing question time I have ever seen for any minister in a long time when his own side could not even bring themselves to ask him a question. They moved around the chamber to ask the most remarkably simplistic and stupid questions of anyone other than the minister himself. There was a fair bit of ABC, Anyone But Conroy, yesterday. The Senate tactics group would have said in the morning: ‘Anyone but Conroy. We are not going anywhere near him because we know they are going to be at him all day and because we know he is completely incompetent. We will ask questions of others and hope that they might be able to bat it away.’

Today’s revelation that we have now got someone else involved in this debate is quite remarkable. The corporate advisory firm Greenhill Caliburn have been asked to review the NBN Co.’s 30-year business plan as well as the 2010-11 corporate plan. Clearly, given the answers that Senator Conroy gave today, he was not involved in this decision at all. He is one of the partnering ministers in this and he was not involved. Had he been involved, he had numerous opportunities today to say that he was part of it. His silence in this matter told as much as we needed to know about this whole issue.

Clearly what is happening—and we have been starting to see a bit of it over the last week—is that the Prime Minister is getting extremely nervous about this matter. She knows that out there are some very significant questions being asked about the $43 billion taxpayer investment in the NBN. She knows that she has had to take some ownership of this matter and she knows that Senator Wong will be the one who will deliver it. Senator Wong will deliver it, not Senator Conroy. Senator Wong has now been tasked with the job of trying to sort this mess out. The fact that they have gone behind Senator Conroy’s back and put in place another group to oversee the overseers is remarkable. When asked if we were going to be able to see the NBN business plan, again we have been told no. So we are not going to see the business case and we are not going to see the outcome of this newly commissioned report.

We had the remarkable admission this morning from the Deputy Prime Minister that he had not read this documentation. It is quite remarkable. This is the Treasurer of this country. It is a 400-page study and he has not had the time to read it. It is quite remarkable. What is cabinet actually doing? I think we know the answer to that—absolutely nothing. It is completely and utterly paralysed. Does anyone in this chamber remember a government suffering policy paralysis the way this government is?

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Don Farrell in South Australia may.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

Senator Farrell in South Australia may well have seen this. I get back to the comments of the Deputy Prime Minister this morning that he has not read the business case. I quote my colleague in the other place the member for Wentworth, who said at a doorstop this morning:

So we have the Parliament being asked to pass legislation for the establishment of the NBN—a $43 billion investment, no cost-benefit analysis, the largest expenditure of taxpayers’ cash in our history, a business plan that is secret, that is not being revealed to the public, and a business plan that neither the Prime Minister nor the Deputy Prime Minister are able to say that they’ve read.

Yesterday Senator Conroy confirmed that in 14 days neither he nor someone else in the government have managed to read the 400-page report. That is just so ridiculous in its commentary. But someone is not being truthful. I am not going to accuse anyone of lying, but I make the comment that someone or some people are not being truthful in the responses they have given. Can anyone in this chamber seriously look me in the eye and say that the Prime Minister and the Deputy Prime Minister have not read this report? That absolutely beggars belief.

We have been sitting for 1½ weeks. Every single person is in this place. In the other place they cannot leave under the new paradigm, so they are all here. The ministers in the other place most certainly are here. There is a fair chance that the ministers in this place are here. This is a $43 billion investment. Is anyone really telling me that there cannot be cabinet meeting after cabinet meeting to get this matter resolved?

There is absolutely no doubt that this is a delaying tactic to get the government past six o’clock on Thursday night. Blind Freddy knows this is about getting the government past six o’clock on Thursday night, because at six o’clock on Thursday night we do not come back here until the second week in February. And then next year we are only here for 17 weeks. This is a government completely and utterly afraid of scrutiny, a government which has only four weeks of sittings before the next budget. It is an unprecedented sitting pattern. This is a government that is running and hiding until 1 July when their alliance mates who sit up the other end of this chamber, the Greens, have the balance of power.

What a remarkable coincidence that we will sit in the week that the Greens start running the country. Never before in 17 years have I seen us sitting in July. We are sitting in July because this government has rolled over to the Greens. This alliance now runs this country. Even Michelle Grattan made comment about it in the Age, I think it was, earlier in the week, where she talked about the new power of the Greens.

This is not just about some significant philosophical difficulties we have got with the Australian Greens and the sorts of things which the Greens stand for, which my party will never, ever countenance. It is not just about that; it is a far bigger issue. It is an issue about who is going to run this country in the best interests of this country. If you look at some of the new Greens senators who will be entering this place it beggars belief that some of those new senators will be running this country for anyone’s benefit other than for a very narrow group sitting in the far Left, politically, of this country. That is their agenda and that is who they will be representing.

I want to go back to some of the comments in the newspapers, and I also want to refer briefly to the bill introduced by Senator Birmingham today. I want to talk about the requirements in relation to the Productivity Commission. This bill requires the Productivity Commission to conduct a comprehensive cost-benefit analysis of the NBN and to report back to the parliament by 31 May 2011. I will read from Senator Birmingham’s press release:

The Productivity Commission inquiry will include:

• Analysis of the current availability of broadband across Australia, including the identification of suburbs and regions where services are of a lower standard or higher price than in the capital cities;
• Consideration of the most cost-effective and speedy options by which fast broadband services can be made available to all Australians (particularly those in regional and remote areas and underserved metropolitan areas).
• Consideration of the economic, productivity and social benefits likely to flow from enhanced broadband around Australia, and the applications likely to be used over such networks.
• A full and transparent economic and financial assessment of the proposed NBN.

I have heard my colleagues in the chamber today, Senator Cormann and others, who have been talking about these issues and the lack of transparency with this government. On a number of occasions this week I have heard Senator Bernardi and Senator McGauran talk about a lack of transparency with this government. I have heard all three of those senators take this government to task and question their inability and their outright failure to start being honest with the Australian people.

Why is it that since the election of the Gillard government we have seen anything but openness and transparency? Why is it that the Prime Minister and the ministers in this place constantly refuse to engage the Australian community in open dialogue? What greater obligation is there on a government when spending $43,000 billion than to at least enable the Australian community to have some input into this and make sure that we are spending that money wisely? Let us wait and see what the Productivity Commission says about this expenditure of $43,000 billion. Let us make a decision as a community as to whether this money is better spent than it would be on hospitals, roads and saving Australian lives. Let us make a decision about what way $43,000 billion is better spent.

It is all very well to talk about the information superhighway. But what about some of the highways around this country where people are still getting killed every day of the week? So we have a road network that is still killing people but we are spending $43,000 billion on an information superhighway that has not even had an appropriate parliamentary debate on the back of information that has been provided to the government. This notion that the cabinet will deal with this matter after we get out of here I think is absolutely and totally obscene—completely and utterly obscene.

It is an absolute dereliction of the responsibilities of the Prime Minister to this country. She cannot parade herself in front of the Australian community as someone who has got a new paradigm for how we are going to operate as a government, who has learnt from the mistakes of the past and who will not repeat the lack of engagement of the former and now stabbed Prime Minister Rudd when we have seen exactly the same behaviour from her. Apparently the crime that was committed by Prime Minister Rudd has been replicated by Prime Minister Gillard. So what was the change for? I ask those on the other side of the chamber: what was the change for?

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

So Arbib could be promoted.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

And Shorten could become Prime Minister.

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

I think the latter will happen and the former has taken a bit of a hit today, but he may well be back.

I look at the commentary today in the Australian editorial. I know that there are some—not all—on the other side of the chamber who openly and quite viciously attack the Australian newspaper—I think, quite frankly, totally unreasonably. I think it is a newspaper that has passed the test of time, and I think it is a responsible reporter of political facts in this country. I just want to read from this editorial:

THE unseemly rush to a National Broadband Network says more about the government’s political problems than about adding to national value.

               …            …            …

Labor appears willing to do anything to get the $43 billion network up …

               …            …            …

Australians deserve more open discussion on the NBN …

               …            …            …

The NBN is a Rolls-Royce answer to communication needs when a Holden might do just as well.

Towards the end of the editorial it says:

Even if the NBN delivered a top-of-the-line service rather than becoming an expensive white elephant, as some fear, the government has failed to explain why $43bn should be spent on broadband rather than on schools, hospitals, indigenous housing or other essential infrastructure and services. It is not easy to see, for example, why we still have so much single carriageway on Highway One north of Nambour (where Mr Rudd and Wayne Swan spent their childhoods) when the government thinks nothing of pouring millions into an information highway.

I have rarely seen a minister under more pressure than Senator Conroy is at the moment.

Cory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | Link to this | Hansard source

Senator Bernardi interjecting—

Michael Ronaldson (Victoria, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Link to this | Hansard source

As my colleague quite rightly said, sometimes extreme pressure makes for bad decision making—to paraphrase what he said. That is absolutely what we are seeing at the moment. I say to the government: you have an opportunity now to deliver on the frankness and openness that you have been beating your chests about since the election. You have the opportunity now to put your cards on the table and prove us wrong in relation to the NBN. Prove us wrong and show us that you have got the information that substantiates this expenditure. Prove us wrong and show us that this is a far better investment for the future than schools, hospitals and roads. Prove to us that you are not putting a noose around the necks of our kids and grandkids. The only way you can do that is to put on the table the information that you have—and not hide behind a failure to have a cabinet meeting or behind some extraordinary notion that no-one has had the time to read the documentation. Put it on the table and let us see it. If we are wrong, show us where we are wrong; if we are not, stop wasting an obscene amount of taxpayers’ money which could be far better spent elsewhere.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

We are talking about a huge amount of money when we are talking about the NBN. This is one of the millstones that is still hanging around Prime Minister Gillard’s neck from the old Kevin Rudd days. It has been some time now since the $43 billion price tag for the NBN was put out there. It was at a time when the ABC series The Hollowmen was showing. I well remember all these hollow men standing in front of a whiteboard and having a discussion about how much money to throw at a particular program to make sure they got the appropriate political impact and ensure they got attention from the public about what it was that they were proposing to do and saying, ‘If you want to make people believe that you are taking action and that you are making a difference, you have to get that number right.’ In that episode of The Hollowmen they were standing around the whiteboard and essentially wondering whether the figure they came up with would pass the ‘whoo’ test.

I can just imagine Kevin Rudd and a few of his 30-odd-year-old advisers standing around the whiteboard and wondering, ‘Should we make it $5 billion? No, that’s not enough. What about $10 billion? No, that doesn’t sound like a serious investment. How about $20 billion? Ah, we’re getting closer. How about $40 billion? Oh, that passes the test.’ But the problem with $40 billion is that it sounds too much like you have picked it out of the air. You have got to make it look a bit scientific. So you have to put an uneven number at the back. You have to put a ‘3’ there and make it $43 billion. That sounds like you have at least given it some thought—as if there is some science behind the figure you came up with; as if there is some sort of proper assessment behind the identification of what is a significant amount of money that is supposed to be committed to this.

The former government, under former Prime Minister Kevin Rudd and former finance minister Lindsay Tanner, prided itself on the fact that they had not conducted a cost-benefit analysis. I sat in Senate estimates with the finance department—and it is the same secretary of the department now as it was then—and asked them about all the ins and outs and asked: ‘Wouldn’t it be more consistent with finance department attitudes, policies and best practice to go through a cost-benefit analysis?’ It is on the record—and it is well established—that we have not conducted a cost-benefit analysis for this massive investment of taxpayers’ dollars.

I congratulate Senator Penny Wong, as the new Minister for Finance and Deregulation, for trying, very late in the process, to put a little bit of rigour around all of this. We have got Inspector Clouseau—also known as Penny Wong—out there trying to find out what Minister Conroy was up to. Here we are, two years into this process, and finally there is a minister in the government saying, ‘Hang on; we should put a little bit of independent oversight over all of this. We shouldn’t just take the word of Minister Conroy on this. We shouldn’t just take the word of NBN Co. about all of this. We should have a closer look at what it is that is being proposed.’ One day it is $43 billion and then it is $26 billion and then the government advertising says that the government has committed $43 billion but it is really $26 billion. Then we have an implementation study that suggests that we are going to have super profits in order to make sure that this is a commercially viable venture.

Whatever way you look at this, there has never been a serious attempt to test whether this approach proposed by the government is the best way to deliver faster and affordable broadband to all Australians. We on this side of the chamber are committed to faster and affordable broadband, but we are not convinced that the government and, in particular, the Minister for Broadband, Communications and the Digital Economy have done their homework. They are taking a very cavalier approach in their treatment of taxpayers’ dollars. So we think it is quite legitimate that there ought to be proper scrutiny applied to the way they go about committing to spend these sorts of sums of money.

This is the government that gave us the home insulation fiasco. This is the government that committed $2½ billion to put pink batts into people’s roofs as a stimulus measure and after they have spent half of the money they have to spend the other half to take those pink batts out of the roofs that they had put in there in the first place. This is the government that has had waste and mismanagement wherever you look, whether it is for home insulation or for school halls. There has been secrecy wherever you look, whether it is on the mining tax revenue assumptions or whether it is to do with the NBN or the waste and mismanagement in the Building the Education Revolution.

The government well knows there are many aspects of this legislation we are dealing with here that we can agree with. However, as a former leader of the Labor Party—one that I know Senator Conroy is very close to, and that is Simon Crean, the member for Hotham—once said, you cannot unscramble the egg. In this legislation there are 260 mentions of the NBN, even though the minister does not quite realise this. So this legislation is directly connected to the government’s plans for the National Broadband Network and, on that basis, it is very important that the Senate and the Australian people have the opportunity to properly scrutinise what is behind all of it.

We were promised a new era of openness and transparency by this government. Julia Gillard clearly was very scared in the two weeks after the election that she would not be able to hold on to her seat of power. I am sure that Senator Farrell, who is sitting across the chamber, was very worried that his little initiative towards the end of June in overthrowing the then Prime Minister, Kevin Rudd, was going to result in defeat of the Labor Party at the ballot box. I am sure that Senator Farrell, along with Senator Arbib, Senator Feeney, Mr Bill Shorten and all the other people who were actively involved—

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Cormann, I direct your attention to the bill that is before us.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Madam Acting Deputy President, I am talking very specifically to this bill. This is about the government’s secrecy in not being prepared to release information that is directly relevant to us being able to properly scrutinise this legislation. The government, from the Prime Minister at the top and all the way down, promised us a new era of openness and transparency, but openness and transparency are the important features that are missing in the handling of this bill. That is why I have to go through some of the history, Madam Acting Deputy President, even though I am sure that Senator Farrell would rather that we did not remember.

One of the reasons this government did so badly at the election was that in the last three years we saw a similar track record of secrecy and cover-up, which led to a deep sense of suspicion across the Australian community as to whether they could trust where this government was proposing to take us. This is particularly relevant to the National Broadband Network because, as I have described in my opening comments, it was initially $43 billion worth of taxpayers’ dollars and then later we were told $26 billion of it would be taxpayers’ dollars. Whether it is $26 billion or $43 billion coming out of taxpayers’ pockets, it is a lot of money and it deserves proper scrutiny. It deserves a proper process to ensure that taxpayers are getting value for money. That is something that the Rudd government did not pursue, and of course that is why it had to keep secret what little information there was in order to ensure that people could not understand exactly what was on the table and nobody could prove how ineffective this spending potentially was. The point is that if we are going to invest $43 billion in a project we ought to have a cost-benefit analysis. That is pretty basic: what is the cost and what is the benefit we are going to get out of it? Then we can make a clear and informed judgment as to whether, in light of the benefit we can achieve, the cost required is justified.

I point out again that the Rudd government, in their period in office, prided themselves on the fact that they were not doing a cost-benefit analysis. At least now Minister Wong is attempting to have some scrutiny of Senator Conroy’s activities. She wants to have some independent oversight; she is sending in the detectives and auditors to look at what is on the table. She wants to review independintly the business case. She wants to review the 2010-11 corporate plan by NBN Co. It is very late in the process, but at least Senator Wong is trying to make sure that there is a degree of scrutiny of Senator Conroy’s activities. On this side of the chamber we congratulate Senator Wong for at least making an effort. But, again, our concern is that the outcomes of that process are not going to be appropriately transparent for all the Australian people to review and assess. Today in question time the minister refused to commit to releasing the outcomes of her detective work to the Senate and the Australian people. My concern is that we are being asked to deal with a piece of legislation which is directly driven by the government’s plans for the NBN, yet there are ministers in the government who are having second thoughts about the way the NBN process has been handled so far, to the point where they are commissioning independent reviews and independent scrutiny, and we are expected to make a decision on this legislation before we have the benefit of the results of those reviews and can properly assess what has come out of Senator Wong’s scrutiny of the activities of Senator Conroy.

We do not believe that that is appropriate. If the government is having second thoughts, why should the Senate not be having second thoughts? If the government thinks there is a need for more scrutiny, and if Senator Wong thinks she wants more information to ensure that what is being proposed is the right way to go, why should the Senate not have access to more information to ensure that what is on the table is the right way forward? As I mentioned earlier, it has not been properly scrutinised to date as to whether the government’s proposal in relation to the NBN is the best way to ensure faster and affordable broadband. That ought to happen. We should not go down the road of spending $43 billion on something unless we know it is the best way of doing it. That is simple—policy development 101; it should be, anyway. That is why we are not in a position at this point in time to support this legislation, even though there are bits in it that are quite sensible and do have our support.

The concern we have is that the secrecy that has been displayed by this government in relation to this bill is not an isolated incident. There is government secrecy wherever we look. This is a government that was supposed to let the sun shine in. This is a government that promised that everything was going to change after the scare on 21 August. This is where you interrupted me before, Acting Deputy President Crossin, but this is very relevant to this piece of legislation. Two weeks it took, after the election, to form a government, and a key feature for Mrs Gillard to convince Independents to support her—

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Senator Cormann, it is not ‘Mrs’ Gillard, and I would ask you to refer to people in the other house, and particularly the Prime Minister, by their correct titles.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

Acting Deputy President, I apologise. That might have been the accent. I do not quite know how to properly pronounce ‘Ms’ and ‘Mrs’, but I—

The Acting Deputy President:

Senator Cormann, I think the correct title you are seeking is ‘Prime Minister’.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I might just seek advice—and you might. I understand that I am allowed to refer to people as ‘Mr Kevin Rudd’, for instance, and ‘Ms Gillard’. I would seek your ruling on that again on the basis of advice from the clerks.

The Acting Deputy President:

Senator Cormann, the advice is, and my ruling is, that the correct title is ‘Prime Minister’. But she is certainly not ‘Mrs’ Gillard, and we would ask that you refer to people in the other house by their correct title. Thank you.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

The Prime Minister, Ms Gillard—

The Acting Deputy President:

Thank you, Senator Cormann.

Mathias Cormann (WA, Liberal Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I will say it again. The Prime Minister, Ms Gillard, of course, knows exactly what she did, two weeks after the election. In order to get the Independents to support her, and she committed to a new era of openness and transparency in government. She promised that all of the errors, and all of the losing of the way that happened under the Rudd government, were going to come to an end and that now there was going to be, truly, openness and transparency. Of course, we have experienced the exact opposite. We have experienced the exact opposite in relation to this bill. We have experienced the exact opposite in relation to the mining tax. We have experienced the exact opposite in relation to the Building the Education Revolution fiasco. And I am not confident that we are going to experience anything but secrecy from this government in relation to other matters. This government also wants to take $50 billion off the states in GST revenue. We have been asking it for information in relation to this and that has not been shared with the coalition either. The reality is that there is a pattern developing under this government. They want us to deal with legislation like this, which is directly related to the NBN, without having the benefit of information that was properly requested by the Senate.

The government knows that it is not just the coalition who are of this view. This is a view that is shared by crossbench senators and by crossbench members in the other place. They share our assessment that this government has been very secretive in relation to this and they share our assessment that the government should be much more forthcoming with information.

We take very seriously the need to be very careful in the way we spend taxpayers’ dollars. We think that there ought to be a proper process to ensure that taxpayers’ dollars are spent for maximum effect. This government cannot put its hand on its heart now and say that the $26 billion in government money, and the $43 billion proposed to be invested in the NBN, are going to be invested in the best possible way, because nobody has ever gone through the process. The only person in the government that is trying to ensure a semblance of scrutiny, a little bit late in the process, is Penny Wong, and I found it very amusing when—

Debate interrupted.