Tuesday, 16 November 2010
Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010
Consideration in Detail
Responding to the minister and the members for Greenway and Chifley, there is no dispute about the need for a separation of the customer access network from the retail business. Honourable members have been critical of decisions that were not taken in the past, and it goes back a very long time. Kim Beazley, I think, has pled guilty to an omission in that regard too. We are not dealing with history now; we are dealing with the present.
If the objective is to have a separation of the customer access network from the retail business, and if the objective is to provide affordable universal broadband across Australia, it is reasonable to ask: what is the most cost-effective way of doing that? We had a lecture today in question time from the Treasurer about the importance of ensuring that reducing Australia’s carbon emissions was done in the most cost-effective way. He was getting the assistance of the Productivity Commission and various other wise people to achieve that end. That is exactly what we are talking about today.
There is no point trying to pretend that I or the coalition are opposed to broadband or opposed to universally affordable broadband. There is also no point pretending that everybody is in favour of this. You have some of the leading competitive telcos in Australia—the Alliance for Affordable Broadband—expressing very grave reservations about this project and calling for there to be a cost-benefit analysis done by the Productivity Commission. These are not spokespeople for the coalition. These are competitive telcos—the sort of people that the member for Greenway may very well have had as clients in her legal career.
As far as the issue of competition is concerned, this cannot be brushed aside. Let me return to the OECD’s economic survey of Australia, published on the weekend. This is what they said at page 109. Talking about what government policy should achieve, they said:
… it 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. To develop fibre optic networks more gradually than under the government programme would also allow a better assessment of the new network’s costs and potential benefits and the potential positive externalities.
And, as honourable members know, the OECD went on to recommend that there be a rigorous, independent, public, cost-benefit analysis for a major project of this kind. That is advice that the government is completely ignoring.
There is no point in honourable members sneering and snarling at the OECD as though they are a bunch of idiots. Not only is the OECD a leading economic and political institution in the world but this report has been written with considerable input—enormous input, as every member knows—from the Australian Treasury itself, so there are very real concerns about the way the government is proceeding with this. In terms of the red book, the advice to the incoming government, what were the two concerns that the Treasury flagged? One was the financial risk to the public balance sheet from such a massive, uncosted investment, because nobody has asked or sought to answer the question: can we achieve this policy objective in a more cost-effective way? And the second was the impact on competition, which is what the OECD has written about and what we are debating in the context of these amendments. So these are serious issues.
The proposition that the authorisation or the undertaking acceptance provisions in the bill are a substitute for section 51 is simply not correct as a matter of law or as a matter of policy. If the government thought that section 51’s provisions should be applicable to this, it would not be seeking to remove this transaction from the provisions of the Trade Practices Act. (Time expired)