House debates

Wednesday, 21 October 2009

Questions without Notice

Telecommunications

2:23 pm

Photo of Lindsay TannerLindsay Tanner (Melbourne, Australian Labor Party, Minister for Finance and Deregulation) Share this | Hansard source

I thank the member for Longman for his question. I know only too well from a previous life, as shadow communications minister, how important these issues are in his electorate. The government is committed to building a superfast national broadband network. As part of that commitment, we are also committed to serious regulatory reform in telecommunications to ensure that we create a genuine competitive market to maximise innovation, to maximise choice, to maximise high-quality service and to lower prices for consumers. This program is a fundamentally important microeconomic reform program that is long overdue.

The Howard government was obsessed with privatising Telstra and neglected to tackle the industry structure issues that, as the Minister for Infrastructure, Transport, Regional Development and Local Government just outlined, have been correctly identified by the possibly soon-to-be Liberal member for Bradfield. Under the regime that we inherited from the Howard government, Telstra remains almost two-thirds of the entire telecommunications sector, earning the vast bulk of the profits. The regulatory regime is comprehensively intrusive, burdensome and excessive, and it gives Telstra the incentive to focus much of its energy on ‘gaming’ the regulation rather than innovating, improving its services or reducing prices. Under the Howard government the biggest growth sector of the Australian economy was telecommunications lawyers, and Telstra were employing a lot of them. That might have been good for the lawyers, and it was not bad for Telstra, but it was terrible for the Australian economy. We ended up way behind comparable countries in broadband, with Telstra with little incentive to innovate, to develop new products, to get new services out to the market or to provide better services or to cut prices.

There will be many members in this House who represent small to medium sized towns who will remember that not so long ago, for those towns to have a chance of getting ADSL—the poor person’s broadband—at their exchange, they had to gather 150 signatures and present them on bended knee to Telstra, after which maybe Telstra would think about delivering some broadband services to that community.

The government is committed to comprehensive reform, to a genuine open market, to serious competition and to enabling innovation for what will be the backbone of Australia’s 21st century economy. It is great to see that our old friends in sections of the National Party, led by Senator Joyce, at least understand that, because some of them represent the kinds of rural communities that desperately need high-quality broadband and have little competition, little choice—they get Telstra or nothing. We want to give them a genuine open market, which the opposition used to stand for—a genuine competitive market, where there are incentives to invest, to innovate and to compete, that delivers better outcomes for Australian businesses and consumers.

It is understandable that some Telstra shareholders are concerned about the government’s plans. But I would say this to those in the investment funds market who are trying to stir up that concern: it is important to look at the total picture. Yes, the loss of Telstra’s monopoly dominance does produce some risks and challenges for Telstra. But these changes also involve risks and challenges for other telcos. Also, what the government’s plans entail, of course, is a giant leap into a new telecommunications area with government-underwritten infrastructure that will be hugely beneficial to telecommunications providers. And who is the biggest telecommunications provider in Australia? Telstra. So, although they are challenged on one front, they have huge opportunities on the other—just as, if rail infrastructure is upgraded, rail operators benefit. If the government upgrades telecommunications infrastructure, makes that big advance to genuine 21st century broadband, guess who is best positioned to sell more services, to innovate more and to invest more? Telstra is the answer to that question. Telstra shareholders should not accept the line that they are getting from some fund managers. There are huge positive opportunities for Telstra in the government’s plans.

In the modern economy telecommunications are just as fundamental to economic activity as financial services—just as fundamental. Telstra will continue to be the key player in telecommunications in Australia into the future, but it will be in a genuinely competitive market where the incentives are there for them to innovate, to take risks, to invest, to develop new products and to ensure that Australia can make that giant productivity improvement that we so desperately need for our future.

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