House debates

Thursday, 22 October 2009

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009

Second Reading

11:38 am

Photo of Bruce ScottBruce Scott (Maranoa, National Party) Share this | Hansard source

Having listened to the previous contribution, I am amazed that someone who represents some rural areas around the fringes of Brisbane can speak so supportively of this legislation. With so many shareholders’ and superannuants’ shares and dividends at risk, I am at a loss when I hear contributions like that of the member for Oxley.

In speaking on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009, I support the amendments that have been put forward by the opposition. I want to put the words on the public record again:

… given Labor’s rash, unjustified and irrational change of policy to force the break-up of Telstra in an arrogant attempt to prop-up its risky $43 billion National Broadband Network, further consideration of this bill should not proceed until after the NBN Implementation Study is presented to the Parliament …

The opposition is asking for consideration of this bill to be delayed until the study that this government has commissioned is brought before the parliament so that we can consider it in the light of that report. Rushing through this legislation with blinkers on is so typical of this Labor government. We saw the same approach with the emissions trading scheme bill that was introduced into the House this morning. The coalition and many Australians believe the most sensible course of action on the emissions trading scheme, if I can touch on that for a moment, would be to wait until Copenhagen, which is at the end of the year, about 10 short weeks away, to see what the rest of the world is doing. But this government is blindly charging on with that legislation, so it is not surprising that they want to charge on with this legislation as well.

This bill, in essence, demands the functional separation of Telstra. If Telstra does not voluntarily separate, this legislation can force it to do so. That sounds like legislation we might have seen in the former Soviet Union. It is a socialist way of dealing with a public company: ‘If you won’t do as we want, we’ll force you via legislation.’ It is a publicly listed company with shareholders across Australia, including Australian taxpayers through the Future Fund. We know what the Future Fund directors have said that they are very concerned about this legislation because they have a fiduciary responsibility to taxpayers in the administration of that fund. This government wants to force Telstra, if they will not do it voluntarily, to functionally separate its wholesale and retail divisions. The Labor government is also saying that, unless Telstra undergoes this structural separation and divests its hybrid fibre/coaxial cable network and its interest in Foxtel then it cannot acquire a specific brand of spectrum, which is a key factor in the exciting future of advanced wireless broadband. So they have not brought in a little stick; they have brought in a huge sledgehammer.

Interestingly, the Rudd government were not given an election mandate to force the functional separation of Telstra. In 2007, prior to the federal election, the policy they took to the Australian people stated:

Labor will ensure that Telstra’s wholesale and retail functions are clearly distinct within the company …

They said that to the people less than two years ago. It is quite clear: ‘Labor will ensure that Telstra’s wholesale and retail functions are clearly distinct within the company.’ That was a policy before the election. Now we have another policy. So what people voted for, what they saw in the Christmas election commitments document that came to them in the mail, is not what the government are going to deliver.

They also went to the Australian people promising to bring fast internet to every man and his dog. Everyone was going to be able to get this. And yet we are still waiting for this internet revolution. NBN mark 1 was a complete waste of time and money and now the Rudd government is spending some $25 million on consultants to tell them how to put together their $42 billion National Broadband Network. They are down in Tasmania allegedly rolling out more optic-fibre cable as part of the NBN. At the same time, the government have commissioned McKinsey, at a cost of $25 million to the Australian taxpayer, to tell them how to put this business case together.

I wonder if these consultants have told the Minister for Broadband, Communications and the Digital Economy that, in order for his new government run network, Telstra 2, to work and be viable, he will have to make sure that Telstra 1 is not a threat. The previous coalition government was able to make a successful exit from running a telecommunications company. We let the market decide Telstra’s success, but now this government is proposing to re-enter the business. This government wants to take taxpayers’ money and gamble it all on a new network which may not even be viable. Why are people going to switch to Telstra 2 when Telstra 1 is cheaper and better? It is simple: you make sure that Telstra 1 is not cheaper and better. If this government succeeds in forcing the closure of the existing copper network, then it can essentially eliminate competition against the NBN. That seems to be the push behind this legislation.

There are a number of Telstra customers who have not been entirely happy with Telstra over the past few years, particularly with the switchover from CDMA to the Next G network—and I was one of those people. But there have been relatively few problems with Telstra, considering they provide the majority of rural Australians with their telecommunication services—and I should know because I represent a very large area of Queensland which is very dependent on good, affordable, reliable communications. I certainly take this opportunity to commend Telstra Country Wide. The member for Oxley suggested we did nothing in government. Telstra Country Wide is a great success and was an initiative of the coalition government to ensure that Telstra had a physical presence in rural Australia. In the Hawke-Keating era, Labor were quite happy to see Telstra under pressure from competition to move further and further into the cities and establish call centres as part of the service obligation. We as the coalition government were not happy with that and implemented a process whereby Telstra Country Wide had to have a physical presence and a country division of Telstra to look after country areas of Australia.

My local Telstra Country Wide provide outstanding service, particularly in Roma, Longreach and Toowoomba. Once again they have that physical presence for the people of Maranoa in outback Queensland. Our local area general manager, Jeff Little, who has since retired, was a godsend. I am being truly honest when I say he worked so hard for the people of Maranoa regardless of whether they were Telstra customers, Optus customers, Dodo customers or Vodafone customers. He has since retired and I hope he is having a few well-deserved sleep-ins, because he worked tirelessly, I can assure you. He was a physical presence with the office out there, visiting these communities and customers and attending community events. Of course, his successor, Matthew Mocatta, is also a dedicated person. He personifies the new Telstra approach of collaboration and quality customer service. We are lucky to have such a dedicated Telstra Country Wide team in our part of Queensland. Needless to say, I hope this strong working relationship continues. We have had no commitment from the minister yet, but I would certainly be interested to hear what he has to say about Telstra Country Wide’s future, just as I am sure Telstra Country Wide staff and Telstra’s 30,000 employees would be interested to know if they have a future under this government. And I am sure the nine million customers are also wondering what it will mean for their services if this legislation passes.

I am quite confident in saying that Telstra’s 1.4 million shareholders are not too impressed with this legislation. We have read the articles; I have received the emails. They have every right to be angry. These are Australians who bought Telstra shares in good faith in the three tranches of the Telstra sale or have taken a stake in Telstra through their superannuation investments. These are mum and dad shareholders. Many of these people would have voted for this Labor government based on its policy commitment, given before the election, that there would not be a forced separation of Telstra. These people continued to invest in Telstra. These are people who naively thought that investing in a publicly listed company meant that it was certainly free from government interference. They thought wrongly and they have every right to feel deceived by this government’s attack on their little nest egg—the shares that they hold or the superannuation that will provide for, or is currently providing for, their retirement.

In what other democratic country would this be acceptable? In what other Western civilisation can a government decide to fundamentally change the structure of a company that has done nothing wrong except to be highly successful in what it does? They might have done it in the old Soviet Union; it might happen in the Soviet states. I hope we are not going in that direction with this government.

Imagine how foreign investors are looking at Australia now. If Telstra’s entire structure—its entire make-up—is at the whim of a government, imagine what else could be in its path. What would investors around the world considering investing in Australian publicly listed companies be thinking if this legislation passes and allows this government to force a publicly listed company to split its operations into wholesale and retail divisions? What is the minister going to tell the 1.4 million Telstra shareholders? What will happen to their dividends and the value of their share portfolios? Can the minister tell these shareholders and these superannuants whether their shares will go up or down? Will their dividends increase or decrease? In a recent interview the minister suggested that there might be some impact on share value and on earnings. ‘Might’ is not good enough if you are a superannuant out there or you have invested in Telstra as part of your portfolio or an investment strategy. This is just not good enough. It creates so much uncertainty for people out there who have, in good faith, invested in Telstra for their families or their own retirement and their own security. We are just not getting answers from the minister.

The government have made no significant move in telecommunications since being elected. No wonder they are trying to rush this legislation through—so that sometime later next year, when they will probably bring out their ‘first 1,000 days’ report, they can have something to say about communications. Of course, this government have done little for rural and regional telecommunications. As soon as they were elected to government they wasted little time in gutting the Communications Fund and the Future Fund. That was $2 billion that the coalition put aside to ensure that there were earnings that would provide money without having to go back to taxpayers or Treasury to fix the problem when there was a market failure in communications in rural and remote parts of Australia. That Communications Fund has been gutted by this government; it has been raided. They did not tell the people of Australia that they would do that.

In July the minister announced six priority regions for the rollout of optic-fibre cable as part of the NBN network. Tenders were called—I have his press release here—in July with the expectation of construction beginning in September. Well, I am not quite sure which September he meant. The way I read the press release was that it was a priority and he was getting on with the job—that by September this year the contracts would be awarded and construction would begin in September of 2009. Well, September has passed. Maybe he meant 2010, or 2011 or 2012. I am not quite sure. We are still waiting for the announcement of the successful tenderers.

I am a believer in the use of optic-fibre cable. It is a modern technology. It is the technology that is going to form the backbone of the nation’s network long into the future. I hope that the minister will announce the tenders very soon, because the backhaul fibre will have tremendous benefits for western Queensland, as he said in his press release. He mentioned the towns of Emerald and Longreach in Queensland. I think those communities had an expectation that by September they might have heard that this construction would start in their communities. The backhaul optic-fibre cable will have benefits for the people of western Queensland. I made a submission to the National Broadband Network: Backhaul Black spots Initiative. I called for the optic-fibre cable to run loops in far western Queensland towns where the market will always fail to provide optic-fibre connections. The towns of Birdsville, Bedourie, Boulia, Windorah, Betoota, Quilpie, Eromanga, Stonehenge, Jundah, Yaraka, Isisford, Emmet, Barcaldine, Muttaburra, Aramac, Winton, Cloncurry, Kynuna, McKinlay, Mount Isa and Longreach will all be connected, in a spider-like web, with optic fibre. These interconnecting links between these towns would mean that, if one of the links failed, then it would have a loop back the other way.

The optic-fibre cable would bring huge benefits to large properties and huge benefits to small businesses, tourist centres and outback tourism. You, Mr Deputy Speaker, have worked out in that part of the world and would know what it would mean to the people who live and earn a living in those communities. If we had optic-fibre links and loops through that part of western Queensland it would also allow the Royal Flying Doctor Service, that great mantle of safety for the people of outback Australia wherever they live or wherever they have come from, to take advantage of high-definition diagnostic capability. In this harsh time of drought, when many farmers and their families are feeling isolated and alone, having fast internet would certainly give them tremendous access to friends both close and afar.

Those communities are connected in many ways, such as by satellite, by single-channel radio or microwave links, but these are technologies of the past. Maybe there is a back-up future for them, but they are not the technology of the future. They have served those communities well but, as far as I am concerned, they will not serve them well into the future. In fact, when it comes to service, until about 1984 the community in Birdsville, in the Diamantina shire, did not even have a telephone service. It was the community themselves and the local Diamantina Shire Council that raised the money to put in the telephone service for their community through the Royal Flying Doctor network. When it comes to where markets fail, they fail out there all right, and people in that situation had to come forward and put up their own money to bring a telephone service to that community. That was back in 1983, when major cities and regional centres all around Australia not only had telephones but had automatic telephones.

So, when I talk about markets failing and the need for this optic-fibre cable in that part of remote Australia, it will bring huge benefits to them. Markets will fail, but this is a role for government to provide when markets fail. That is why I hope that, in relation to the black spots backhaul money, the minister will very soon announce the successful tenderer so we can start to roll that out into those remote communities around the back of my electorate and in the Kennedy electorate and up through the Northern Territory, South Australia and Western Australia.

Another thing I want to say is that, when we do build and extend the optic-fibre network, we should be building from the outside to the inside—in other words, from the outback into the cities, not from the cities to the outback. I am concerned that the minister has already stated that, under the NBN mark 2, populations of 1,000 people or less will be bypassed and not connected to the optic-fibre network. I hope he is wrong; otherwise, as you leave Brisbane and get to Ipswich and Toowoomba, they would have a big sign up that reads: ‘When you come to a community of 1,000 people or less, Labor is bypassing you with optic-fibre cable.’ The government are suggesting that communities of 1,000 people or less will not get access to this optic-fibre cable under the NBN proposition. Even the Labor Premier of Queensland has rejected the approach by this government in relation to those smaller communities and will not accept a proposition like that. And I hope the minister will soon respond to the Glasson Review in relation to the $300 million that has not been committed.


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