David Hawker (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Rankin proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The importance for productivity growth and future prosperity of small businesses around Australia gaining access to high-speed broadband.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Link to this | Hansard source

Today’s productivity growth is tomorrow’s prosperity. As eminent economist Paul Krugman points out:

Productivity growth isn’t everything, but in the long run it’s nearly everything.

Indeed, our own Productivity Commission has estimated that productivity growth has been responsible for virtually all the increase in national income in our country since the mid-1960s. But productivity growth is not just about the mighty dollar. Productivity growth allows us to take more leisure, to achieve that balance that we seek between work and family life. Productivity growth gives us the resources to provide opportunity for all through a decent education for our young people. And productivity growth also allows us to achieve higher environmental standards.

The problem is that Australia is in a productivity slump. During the 1990s Australia experienced a productivity miracle built on the reform program of the previous Labor governments—the Hawke and Keating governments. The consequence of that reform program designed to lift productivity growth was record-breaking productivity growth of 2.6 per cent per annum, which made us one of the very fastest growing countries in the world in terms of productivity growth. But the reform program has not been continued by this government, and we are already beginning to pay the price. This decade, productivity growth has averaged 2.1 per cent per annum, down from that miracle rate of 2.6 per cent. Since 2003, instead of even 2.1 per cent, we have had just one per cent per annum of productivity growth. And in a little-noticed manoeuvre in budget forecasting in the midyear budget review, the government quietly downgraded the forecasts of productivity growth for Australia over the forward estimates period to 1¾ per cent.

The fact is Australia is losing ground against the United States and the OECD in productivity growth. We have already lost most of the gains that were made during that miracle decade of the 1990s. US productivity growth is projected to exceed two per cent per annum over the next few years. For Australia, officially, productivity growth has been downgraded to 1¾ per cent. That does not seem like a big difference—between two or 2¼ per cent and 1¾ per cent—but the fact is small differences in productivity growth matter a lot over the long term. In fact, if Australia’s productivity growth were just a half a percentage point higher—that is, comparable to the US figure—then Australia’s national income in 40 years time would be 20 per cent higher. So it matters a lot. Yet the Intergenerational report formally adopts an assumption for productivity growth of 1¾ per cent, which has now been confirmed by Treasury in that midyear budget review. What would that mean for Australia’s growth in living standards from the end of this decade onwards? That forecast productivity growth, with the ageing of the population, would mean the slowest rate of growth in income per person in Australia from 2010 onwards since the decade of the Great Depression.

The fact is the government has run up the white flag when it comes to the productivity challenge. The Reserve Bank has said to us that we will now have to get used to economic growth rates with a two in front of them, compared with, in recent periods, a four or even a five. So the government has surrendered on the productivity challenge. If we think that 1¾ per cent might be adequate, do you know what China is achieving in productivity growth per year? Seventeen per cent per annum! And the Australian government is accepting 1¾ per cent per annum.

The trouble is that the Treasurer will not even acknowledge that Australia has a productivity problem. He said on 1 November in this parliament that labour productivity in Australia is ‘at, or marginally ahead of, the last productivity cycle’. So if we have a Treasurer of Australia who does not recognise that there is a problem, how on earth are we going to get this government to implement any solutions? This is a reform-lazy government. It is a government that refuses to invest in Australia’s future. But, of course, Labor does have a plan to lift productivity growth to sustain prosperity into the future. In January, Labor leader Kevin Rudd unveiled the education revolution so essential to lifting productivity growth in this country. And yesterday he and Senator Conroy and the member for Melbourne outlined our broadband plan.

Let us find out what the government thinks about broadband and productivity growth. A report from the government’s own agency titled Forecasting productivity growth 2004 to 2024 says:

Broadband will help to raise business productivity through wider diffusion and better quality services in e-commerce, e-banking, e-government, e-education and e-health.

Government departments understand the importance of it, but the Treasurer does not. Why is the United States expected to outperform Australia on productivity growth in the coming few years? The Productivity Commission released a report just a couple of weeks ago and it tells us the answer. US optimism is based on these factors:

... the likelihood of ongoing rapid technological advances in ICT manufacturing; accompanying rapid price declines, diffusion of technologies ... and continuation of the pace of efficiency improvement elsewhere in the economy as firms continue to find new and more-productive ways to apply new technologies.

That is a long way of saying broadband. It is a long way of saying that the US expects to outperform Australia on productivity growth because it will implement a whole range of new information and communication technologies, which find their life through fast broadband. But the government just does not get it.

How does Australia fare in relation to broadband? On broadband take-up Australia ranks 17th in the OECD, but today in question time the Prime Minister said that Australia has the second highest take-up of broadband in the OECD. That is completely untrue—we are ranked 17th. The Prime Minister said Australia has the second highest take-up in the OECD. Before the Hansard is manipulated, let us make sure that is on the record, because that is what he said and he is wrong. On bandwidth, Australia is ranked 25th in the OECD. That is why Labor yesterday announced Labor’s national broadband network, which will deliver high-speed broadband to 98 per cent of Australians.

Obviously, that will have huge benefits for small businesses. How? Much faster speed—that is, 12 megabits per second, which is very fast by international standards—means that small businesses will be able to make much greater use of information and communication technology solutions, such as better inventory management, for example. It is not good practice to have a whole lot of inventory on your premises. When you make a sale, if you have information and communication technology, that can then trigger a purchase for another item. That is the efficient, modern way of doing business. That cannot easily be done without fast broadband. Small businesses will benefit through better business practices and through better communication and marketing so that they can tell people the goods and services that they have available.

The fact is, figures just released the other day confirm that half of all small businesses in Australia fail within two years of being established. We should do everything we can to support small businesses, to give them that broadband facility, to give them that competitive edge, to ensure that as many of those as possible can survive. Independent contractors and home based small businesses would be huge beneficiaries from fast broadband. Having those facilities at their homes allows them to operate efficiently from home without having to have an office somewhere else and also allows them to balance work and family life, which is pretty important. Small businesses and independent contractors would be huge beneficiaries from Labor’s program.

But this morning the Treasurer said—and it was asserted here again in parliament at question time—that this was always going to happen anyway. But Telstra and the G9 proposals applied only to five capital cities. We have the Minister for Agriculture, Fisheries and Forestry here, a member of the National Party, and again we have a situation where the National Party is only concerned with the cities. What about with the bush? What about provincial Australia? What about regional Australia? The minister and other ministers are happy that the proposal would only apply to five capital cities. Represent your constituents, Minister; represent them.

In addition, the proposals that have been on the board would require major regulatory changes. Where are they? Has the government agreed to make those major regulatory changes? No, it has not. It was not just going to happen anyway, as the government continues to assert. On this question of Labor’s announcement, let us hear from the CEO of Optus, Paul O’Sullivan. He said last night:

Today is a very significant step forward because what you have is a recognition of the need.

The minister laughs because he dismisses the CEO of Optus. He said:

I think all of the groups now, the political parties, Telstra, the industry are all agreed on the need. What we are now moving into—

under Labor’s proposal—

is how we achieve it, and today you have the endorsement of some key principles that the G 9 have been outlining, that is that we can have broadband and we can have competition and that it is important in the national interest to get both.

Yet the minister at the table, the Minister for Agriculture, Fisheries and Forestry, today described Labor’s proposal as anticompetitive. So you have the CEO of Optus saying this is procompetitive, and the minister arguing quite the contrary, that it is anti-competitive. Phil Burgess from Telstra—the minister is laughing again; they are obviously the enemies of Telstra; there is no doubt about that—said:

For too long, backward-looking regulation has locked Australia into old technology, creating the broadband drought that now afflicts consumers, businesses and communities around Australia.

A broadband drought, Minister, under your guidance, under your sloth, under your complacency—

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member will address the chair.

Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Link to this | Hansard source

The fact is, Minister, this government is reform lazy. That is the problem. Phil Burgess then went on to praise Senator Conroy’s initiatives. Also the Internet Industry Association—are you going to laugh about them too?—say, ‘This is good for the IAA and its members.’ The minister at the table today described this as ‘stupid policy’. Let everyone in rural and regional Australia understand that this minister has described the laying out of fast broadband to rural and regional Australia as ‘stupid policy’—as you would expect him to do, because he represents people in the cities and does not give a damn about people in rural and regional Australia.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The member for Rankin will resume his seat. I call the minister on a point of order.

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

Mr Deputy Speaker, I seek leave to make a personal explanation. I have been misrepresented by the speaker at the dispatch box.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

There is no point of order.

Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Link to this | Hansard source

The Treasurer went on to say on radio this morning that we are running down the Future Fund. The fact is that this is a genuine, well-considered investment in Australia’s future. It is an investment to lift productivity growth. It is an investment to improve the viability of small businesses and independent contractors. Why would the government be opposed to that? During question time the Treasurer described respected columnist Terry McCrann as Comrade McCrann—

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

Chairman McCrann.

Craig Emerson (Rankin, Australian Labor Party, Shadow Minister for Service Economy, Small Business and Independent Contractors) Share this | Link to this | Hansard source

That’s right, Chairman McCrann—as if he were from the left wing of the political spectrum around here. Mr McCrann described our policy as really quite sensible. He said it poses no threat to the integrity and purpose of the Future Fund.

It is National Water Day. The government talks about Labor spending money from the Future Fund. On National Water Day, let us remember that, in January, the Prime Minister committed $10 billion with no cabinet consideration and no Treasury costings. We did not oppose that. We asked to see the costings and we agreed with the principles that were outlined. We took a constructive approach. It is a bit rich for the government to say Labor should not be investing $2.7 billion, when the government is quite happy and free to invest $10 billion in a water plan.

Time and time again, we see this Prime Minister being very tricky. He is a very clever politician. The government announce 17 programs and they never get around to spending the money. That is why the Prime Minister had to say today, in response to a question from the member for Grayndler, that $46 million of the $50 million for the metropolitan Broadband Connect program has been carried over—and they spent $1.3 million on administration, so what on earth are they doing? There is a real choice at this election, between a forward-looking, visionary Rudd Labor government and a reform-lazy, slothful coalition government. That choice is going to be made, and it will result in the election of a Rudd Labor government because that is essential to Australia’s future. (Time expired)

Peter McGauran (Gippsland, National Party, Deputy Leader of the House) Share this | Link to this | Hansard source

I am embarrassed for the Labor Party today—the once great party that prided itself on its thoughtful and detailed policy prescriptions on behalf of the downtrodden, the oppressed and the exploited worker—because they have been revealed as mugs for big business. That is what they are. They have committed money for a policy on broadband rollout when Telstra and the ‘group of nine’ telecommunications alliance were going to spend it anyway. Telstra and the group of nine had committed $4 billion to roll out broadband to the commercial areas of metropolitan Australia. But oh no! That is lost on the Labor Party. They come along and pay $4 billion for the same service. This is an absurdity. Now that they have overturned decades of anti-privatisation principles and supported the selling of all Telstra shares, does anybody in the Labor Party really believe that is justified? Do they really now believe that the selling of Telstra to raise money to subsidise Telstra and other telecommunications companies is worth the surrender, when all of them are on the record in the past few months as still opposing the privatisation of Telstra?

The Labor Party cannot be trusted with the financial management of, it seems, any government policy area, let alone the budget. Under the fibre-to-the-node proposal, without any government funding, broadband would have been rolled out. The telecommunications companies must have seen Labor coming. They must not be able believe their luck today that the alternative government of this country is going to fund them for what they were going to do anyway.

In the meantime, who are the losers? The losers are those areas of Australia and those small businesses, families and sole contractors who deserve to have intervention by government on this. That was the purpose of our $2 billion Communications Fund. It was targeted at those areas of regional and remote Australia—together with the $162.5 million universal broadband fund, which would have made sure that people in disadvantaged circumstances were subsidised so that broadband was affordable. That is our governance structure, our communications policy: to ensure the proper rollout of broadband to Australians across the nation—with a sense of equity, not just looking after metropolitan Australia in the interests of big business.

Labor’s plan does not stack up. As the days ago by, more people—and, I suspect, some of the people the honourable member has quoted as being in support of the Labor Party’s current position—will begin to realise its deficiencies. Firstly, it is unbelievable. Only two years ago this same plan was launched. At that time, the then Leader of the Opposition, the member for Brand, attached $2 billion to that plan—and, for all intents and purposes, it has now been rehashed. He was laughed out of court then. Almost to a person, the telecommunications sector derided the plan as lacking any credibility because the $2 billion would provide only a very small footprint. Compare it to South Korea, which is about the size of Victoria. They had a $50 billion rollout. In Singapore, which has half the landmass of Sydney, the rollout is worth $5 billion.

So Labor are attempting a con here. They are promising something that is undeliverable. In attempting to do so, they will fundamentally damage the long-term interests of future Australians, because they are going to deplete the Future Fund by $2 billion—and that is only the first instalment. They will need to return to the Future Fund time and time again to continue to fund this madcap plan—if they are still committed to it. Only three hours after Senator Conroy first launched the proposal yesterday, he revised the figures upwards. He conceded that his $8 billion plan could cost $9 billion—and that was between the one o’clock launch and a four o’clock interview.

What sort of reliability does an opposition have when within three hours of its own policy launch it is revising its figures? Where are they going to get that extra billion dollars, to go from $8 billion to $9 billion? They will just go back to the Future Fund. There are no other coalition specifically targeted communications funds that they can abolish. The irony of it is that today’s matter of public importance submitted by the member for Rankin attempts, unconvincingly, to highlight issues for small business. Well, small business in regional and rural Australia will be the losers without the Communications Fund that the coalition has established and funded but the Labor Party will abolish. Small businesses anywhere in Australia, anywhere that you like, are going to lose out if they are not already connected, so you can forget many small businesses in Orange, Townsville, Traralgon, Ballarat—and the list goes on and on. The simple fact is if the honourable member were concerned about small business he would have fought to retain a target specifically for disadvantaged small businesses outside metropolitan areas.

But above all else it has to be taken into account that the situation in Australia is of world equivalence, although we want to do better and there is no argument here about the importance of broadband and the task that lies ahead. But we should also recognise what has been achieved by the hundreds of millions of dollars—more than a billion dollars—already invested by this government. The Labor Party has come late to this debate. I represent in the lower house the Minister for Communications, Information Technology and the Arts. I stand to be corrected but I cannot remember ever being asked about broadband in several years. But the government does not wait for the Labor Party to wake up to a pressing national issue; we actually go about the job. We have been onto broadband for several years and as a result its take-up rate across Australia is the second fastest rate of the OECD. Small businesses are amongst those that are able to take advantage of the new broadband access and affordability. This is something that is not in the Labor Party policy, and it was not addressed by the member for Rankin today. It is all very well to talk about connecting broadband but you have got to address the issues of pricing—and the biggest determinant of pricing will be the regulatory regime.

Something else is also missing from the Labor proposal—and I am not going to dignify it by describing it as a ‘policy’; it is almost a thought bubble, as it lacks detail, it lacks credibility and it is purely and simply political spin. The news for Labor, now that they have discovered broadband, is that Australians can access high-speed broadband right now; they do not have to wait for five years. Around 54 per cent of Australians in capital cities can access typical speeds of around 16 megabits per second. In fact, 91 per cent of Australians in capital cities can access speeds of around six megabits using ADSL2+ right now. So the problem is not principally in metropolitan Australia, but of course there is unfinished business. The problem is in outer metropolitan and regional, rural and remote Australia. That is the issue, and that is why the government, because of market failure, has specifically designed interventions such as the Communications Fund, which—I will say for the umpteenth time—will be abolished by the Labor Party.

The private optical fibre networks already available in the larger capital cities can provide connections at speeds of between 10 to 100 megabits per second. In fact, around 91 per cent of the population is already connected to exchanges offering ADSL and speeds ranging from around 1½ to 20 megabits per second. Around 2.7 million households in Australia can also access up to 17 megabits per second through the Optus or Telstra HFC cable networks. In terms of access in regional Australia, Telstra’s Next G network covers 98 per cent of the population and offers an average download of up to 3.6 megabits per second.

A great deal has been achieved on this government’s watch. There is no sense of complacency, let alone smugness, on our part. We will always continue to drive reform harder and faster than ever before. We want to provide broadband without exception, and we are prepared to spend to assist those in a disadvantaged position. But we are not going to hand over broadband, communications or any other policies to big business. The simple fact is big business is laughing all the way to the bank with the launch of this proposal because the proposal would be investing taxpayers’ funds, at considerable disadvantage to taxpayers, given the source of the Labor Party’s funding, to the benefit of companies that were already going to invest in the commercial areas of metropolitan Australia. Is there anybody in the Labor Party who believes that smacks of equity? Is there anyone in the Labor Party who believes that the sell-out of their long-held opposition to the privatisation of Telstra, which they now warmly embrace, is worth it? I do not believe so.

Australia has a good record when it comes to broadband take-up. We are about average in the OECD but, as I say, our country’s take-up rate was the second fastest, just behind Denmark’s. The residential take-up of broadband has increased by 63 per cent in regional areas and 41 per cent in metropolitan areas up until September last year, and it has increased since then as well. A major factor in broadband take-up is price. Australia has internationally competitive broadband pricing. A 2006 United Kingdom report ranked Australian residential broadband plans as cheaper than those of South Korea and the United States. In my view, the Labor plan or proposal or paper—however you wish to characterise it, except as a policy—gives no indication of pricing. There is no point in having access to broadband if you cannot afford it. The Labor Party have fallen for the three-card trick: they have disentangled access from pricing, whereas the two go hand in hand. Small businesses are taking advantage of the faster speeds now available with the greater capacity for connection. Almost one in five online small businesses use connections of two megabits per second or greater.

But, as I say, I do not want anybody who might be listening or eventually reading the Hansard, however small those numbers might be, to think that I or anyone in the coalition believe our task is done. Far from it: we know broadband will underwrite much of Australia’s future economic, social and cultural prosperity. But the government’s approach is that all Australians are entitled to share in that future prosperity. It should not be limited to urban Australia at the cost of regional and remote Australia.

ABS data shows that public investment in telecommunications infrastructure is growing at twice the rate of that for the rest of the economy. The government have committed $1.1 billion in the Connect Australia package to provide a platform for investment in next generation broadband infrastructure. We have the $2 billion Communications Fund to provide a revenue stream for ongoing investment in communications in regional Australia. We amended the laws in 2005 to require the Australian Competition and Consumer Commission to consider the actual cost of a new network investment and the commercial interests of the infrastructure owner when settling access prices. That is the regulatory regime that I speak of.

That is a policy. The government have a long-held approach to the issue of the rollout of broadband. We know what is at stake. We have encouraged it for several years; the Labor Party have woken up one day and decided to pursue it as a political issue. They have reverted to form. They are politically lazy. They have cobbled together a policy that was released two years ago and presented it as a fresh, new paper. It is short on detail. It lacks credibility. They have a couple of companies in the private sector making up—at this stage, I hasten to add—only something of a cheer squad. If I were one of those companies potentially being given access to $4 billion at taxpayers’ expense, I would be cheering it along as well. But I believe it is going to dawn on a number of the so-called supporters of the Labor Party proposal in the private sector that it is against their interests, and we as elected representatives certainly believe it is against Australia’s interests.

Steve Gibbons (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

On any assessment the Howard government have completely botched the implementation of a comprehensive broadband plan designed to take this nation into the future and enhance our prospects for productivity growth into the future. It is perfectly obvious that the Prime Minister, the Minister for Communications, Information Technology and the Arts and the minister at the table, the Minister for Agriculture, Fisheries and Forestry, just do not understand the technology, let alone the importance of decent broadband services to secure our economic future. It is not just the implementation of broadband that the government have had major problems with in the communications portfolio—problems of their own making, I might add. When you look at the complete fiasco they made of the implementation of digital television and radio, it is little wonder they failed to grasp and botched the broadband implementation so comprehensively.

2006 ACCC figures prove Australia is falling even further behind in the implementation of acceptable broadband services. For example, the September 2006 broadband snapshot released by the ACCC is just one example of the Howard government’s constant failure of leadership on broadband and its potential effect in lifting productivity. Those ACCC figures illustrated the third consecutive quarterly fall of Australia’s entry-level broadband growth rate in 2006.

Australian broadband take-up grew by only 9.3 per cent in the September 2006 quarter compared to growth of 10.5 per cent and 12.6 per cent in preceding quarters. Last year, the nation’s broadband growth rate was barely good enough for Australia to retain its lowly ranking of 17th out of 30 developed countries surveyed by the OECD. The continuing fall in Australia’s broadband growth rate raises the prospect that we will now fall even further behind our international peers in this important area.

Australia’s broadband growth rates of recent times have come off an extremely low base. The ACCC report confirms that Australia’s broadband growth rate has plateaued and is now falling. On top of this, as Labor has pointed out in the past, the ACCC’s figures measure only the take-up of entry-level broadband. As a result, these figures hide Australia’s even worse performance in the take-up of multimegabit broadband caused by the country’s antiquated broadband infrastructure.

Australia needs a nation-building investment in broadband infrastructure to bring the country back into line with our international competitors and maximise the potential for dramatically increasing productivity for our small businesses. In contrast to the Howard government’s complacency on broadband, Labor has been playing a leadership role in the Australian telecommunications infrastructure debate. Labor has a plan for delivering world-class telecommunications infrastructure for all Australians. Labor’s nation-building broadband initiative will revolutionise Australia’s internet infrastructure by creating a new world-class national broadband network. Labor will invest up to $4.7 billion to establish the national broadband network in partnership with the private sector. This will be over a five-year period.

Part of this initiative involves Labor acknowledging that our policy of no further sale of the remaining 17 per cent of Telstra is now obsolete because the Howard government has a majority in the Senate and has used and will continue to use that majority to implement its ideological obsession with privatisation. As someone who will always oppose the privatisation of our essential services like communications, I am bitterly disappointed that we lost the fight to retain ownership of the majority of Telstra by the Commonwealth government and therefore the Australian people. However, Labor is committed to building for the future rather than fighting over the past. This means delivering high-speed broadband that is accessible and available to virtually all Australians to build the economy for the future and to deliver more economic growth, higher productivity and higher tax revenue to sustain us into the future—initiatives that are critical to the interests of our children and the long-term interests of the nation and essential to lifting our prospects for productivity growth.

This initiative is necessary to boost productivity growth and build long-term economic prosperity once the mining boom is over. Together with federal Labor’s education revolution, the national broadband network plan will provide a platform to build and expand Australian business. The national broadband network will connect 98 per cent of Australians to high-speed broadband internet services at a speed more than 40 times faster than most current speeds. Federal Labor will increase the speed to a minimum of 12 megabits per second, and this means that business, education and household services on the internet, including entertainment, will happen in real time.

The remaining two per cent of Australians, in regional and remote areas not covered by this network, will have improved broadband services. Nation building in the 19th century meant building a national rail network and the Snowy Mountains hydro scheme. Nation building in the 21st century means building a national broadband network, and that is precisely what a future Rudd Labor government will do.

Currently, Australia is 25th in the world for available internet bandwidth, behind Slovenia and the Slovak Republic. If we are to remain globally competitive, we must address this as an absolute priority, and that is precisely what Labor is doing. The new services and benefits of the network, particularly in rural and regional areas, include reduced telephone bills for small business; enhanced business services, such as teleconferencing, video conferencing and virtual private networks; enhanced capacity for services such as e-education and e-health; and high-definition, multichannel and interactive television services.

A new national broadband network is critical to building the platform for economic growth, productivity and prosperity. It is estimated that the new network would deliver the national economic benefits I have just mentioned and also up to $30 billion in additional national economic activity a year. It will make Australian small businesses more competitive, create new international and domestic markets for businesses and new jobs for Australians and provide greater media diversity. Essentially, Labor’s plan will partner with private sector contributors to deliver the national network, undertake a competitive assessment of proposals from telecommunications companies that already have a record on the board, ensure competition in the sector through an open access network that provides equivalence of access, charges and scope for access seekers to differentiate between product offerings, and put in place regulatory reforms to ensure up-front certainty for all investors.

A range of domestic and international studies have reinforced the potential for broadband to stimulate economic growth. The national broadband network will be funded by using existing government investments in communications to provide a public equity investment of up to $4.7 billion in the new broadband network. This will include drawing on the $2 billion regional Communications Fund and the Future Fund’s 17 per cent share in Telstra which, consistent with the legislated position, will earn dividends and be sold down to a normal level over time after November 2008. This broadband revolution is a huge win for small businesses, students and personal computer users across the nation and will change Australian business and computing forever. This will be the greatest national investment in improving information and communications technology and broadband internet access in this nation’s history. This pioneering and much needed initiative will bring enormous benefits to central Victoria and all other regional centres across Australia.

As a former small business operator relying on the information technology field, I know and understand the frustration of small businesses in attempting to access useable internet speeds. But it is not just small businesses in central Victoria that will benefit; the ability for students to access the internet at reasonable speeds will enhance their education to a level that will enable them to function at a much higher potential throughout their working lives. The benefits for the delivery of medical services are almost unlimited, especially throughout rural and remote areas. This bold plan has benefits for each and every Australian, whether they live in our capital cities or in the most remote regions in Australia.

The sheer magnitude of this imaginative and vital piece of infrastructure will deliver this nation a project that could only be compared with the legendary Snowy Mountains hydro electricity project in its importance and benefit for all Australians. It will be the most vital piece of infrastructure for many decades and only Labor has the vision to outline and implement this and other policies so essential to the wellbeing of each and every Australian in both current and future generations.

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

I could not help but notice that because the speaker before me was reading from a prepared speech he finished three or four minutes early in his allotted speaking time on the matter of public importance. Listening to that entire speech, I was struck by the amount of waffle that we have heard from the Australian Labor Party when it comes to broadband. All we are hearing is populist waffle. When one analyses what the Australian Labor Party has put forward and applies a little bit of intellectual rigour to what it is saying about its fancy broadband network, one discovers a couple of things. The first is that the Labor Party is very big on smoke and mirrors and flashing lights. It has had the big announcement and the big launch of their broadband network, but when one pierces through that and passes through the light show one sees that the Australian Labor Party is completely lacking in detail.

We have seen already a clear instance of the inability of the Australian Labor Party to come up to speed when it comes to details and fact. A case in point is the shadow minister. The shadow minister, Stephen Conroy, spoke at the Press Club yesterday and said at lunchtime that the Labor Party’s proposal to cover 98 per cent of the population at 12 megabits per second would cost $8 billion. But by four o’clock that same afternoon the cost had gone up by a billion dollars. We had seen an increase of a billion dollars by four o’clock that afternoon. This is the way the Australian Labor Party throws money around. It throws money around because it is not up to speed with the detail. I say to the Australian people: this is far too important to get wrong. The Australian economy is far too important to be left in the clutches of the Australian Labor Party, because its fast and loose policy record when it comes to both the truth and economic management indicates that the Australian people will pay the price for the Labor Party’s rush to try to get itself elected later this year. It goes out and says at lunchtime, ‘We want to cover 98 per cent of the Australian population for $8 billion.’ By four o’clock we knew that it was going to be 98 per cent of the Australian population for $9 billion.

What do we know about the actual costs involved? It is interesting that Bill Scales, who was Telstra’s group general manager for corporate relations, said two years ago that he anticipated the cost of fibre to the node across Australia would be in the tens of billions of dollars. To quote from the evidence he provided to the Senate estimates hearing of the Environment, Communications, Information Technology and the Arts Legislation Committee on 14 February 2005:

The whole issue of cable is complex, as you began to discuss today. At the very least, it requires literally tens of billions of dollars of investment.

That is what was said two years ago. Independent experts have also suggested to the Senate that at the time the figure was not less than $20 billion. For example, Caslon Analytics is an Australian research, analysis and strategies consultancy and it said:

Estimates of the cost of rolling out fibre to most households are problematical; it is likely that expenditure of over $30 to $50 billion would be required.

We also heard from Professor Gerrand from the University of Melbourne in the same inquiry, who said, ‘I think a safer estimate’—that is, than Telstra’s $30 billion—‘would be about $20 billion.’ So we have industry experts saying that they approximate the cost of providing broadband to the Australian community not at the $8 billion we heard at lunchtime from Labor and not at the $9 billion we heard at four o’clock from Labor but at the cost of at least $20 billion. That is what industry experts say. That is the kind of detail that the Australian people rightly want to look at. Unfortunately, the Australian Labor Party turns its back on the costs.

Let us have a look at some of the comparisons internationally. We know the Australian Labor Party like to talk about South Korea. South Korea is a country that is less than half the size of Victoria with a population that is more than double the Australian population. There are 48 million South Koreans. Rolling out a fibre network cost them in excess of $A50 billion. I think it can be pretty much taken as a given that, despite the light show from the Australian Labor Party, their prediction at lunchtime of rolling out a network to 98 per cent of the Australian population for a cost of $8 billion—it was $9 billion by four o’clock—should in fact be a lot closer to, say, $20 billion or $30 billion. That is the true cost of what Labor are throwing out there and saying they will be able to do for $8 billion or $9 million.

Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Link to this | Hansard source

Which is it, 20 or 30?

Steven Ciobo (Moncrieff, Liberal Party) Share this | Link to this | Hansard source

I will take the interjection, because the Labor Party obviously has no idea. I get a question from the shadow minister as to whether it is $20 billion or $30 billion. It is not my job to provide advice to the Australian Labor Party. What I can say to the Australian Labor Party is that it would be advantageous if the shadow minister actually spoke to his counterpart in the Senate and advised him of the cost, because your counterpart in the Senate does not know if it is $8 billion or $9 billion. You could start by telling Senator Conroy what the cost of your proposal is, because it changed from 12 o’clock to four o’clock. Your Senate counterpart did not even know the cost. Between 12 midday and four o’clock it had blown out by a billion dollars. That is the Labor Party’s record—cost blow-outs all over the place.

More importantly, let us get back to the economic management. We know that the Labor Party is straight-out falling at the very first economic hurdle when it comes to good governance for the people of Australia. We know that because the Australian Labor Party intends to engage in a smash-and-grab, as we heard from the Treasurer. We know that part of the funding for this proposal that has been put forward is to steal from future generations of Australians, our public servants, our Defence Force veterans and our Defence Force employees, their superannuation. That is the Labor Party policy: to take $2.7 billion out of the Future Fund.

Why was the Future Fund established? This government was proud to establish the Future Fund on one core principle, and that was recognition that the Australian population was ageing. With the ageing of the Australian population, we have a responsibility to future generations of Australians to provide for the costs that we are incurring today. And we did that, through the Future Fund, by saying that we will provide $140 billion to meet future liabilities of previous governments, this government and governments after us that will have to be met with regard to superannuation expenses. That was the commitment of this government. We said that we would quarantine those funds and put them into the Future Fund.

The Australian Labor Party has turned its back on that principle. The Australian Labor Party is prepared to steal from tomorrow’s generations in order to get elected later this year. The impact of that thievery, the impact of that economic irresponsibility and the impact of the Labor Party’s inability to manage the Australian economy will be felt by every single Australian. So I say to Australians: look through the light show that the ALP likes to hold up and actually turn to the substance. They will see that there is no substance to the Australian Labor Party. If Labor can turn its back on costings in four hours and have a cost blow-out of a billion dollars, then I shudder to think what will happen between now and the election. The price will be borne when they take out any extra money they need from the Future Fund. If the real cost is not in fact $9 billion but rather $11 billion, $12 billion or $20 billion, the people who will pay that price are the future generations of Australians.

We know that the Labor Party has no problem turning its back on so-called Labor Party principles. For so long we heard from the Australian Labor Party that it was intractably opposed to the sale of Telstra. We heard the Labor Party in this chamber, occasion after occasion, say how it would fight to the death to ensure that Telstra was not fully privatised. Yet it turns its back on that at the drop of a hat. Why did it do it? It did it because it wanted to pursue the populist notion of a national broadband network. I say to the Australian people: we know that the shadow minister cannot even keep the costs under control between lunchtime and four o’clock. We know that the costs blew out by a billion dollars. We know the Australian Labor Party does not have detail and that it is willing to steal some $2.7 billion—at the very least—from future generations of Australians. You cannot trust Labor on detail. You cannot trust Labor to keep its hands off the Future Fund. You cannot trust Labor to make the hard decisions about what is economically responsible for future generations of Australians. Australians should look past this light show and turn their backs on an irresponsible policy that would mean economic chaos in the future if Labor is re-elected. (Time expired)

Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

The internet was promised as the information superhighway, but just as country Australia has put up with a mix of some highway, some main road, potholed or unpaved rural road and bush track for so long in this vast continent so too around 70 per cent of the country is apparently condemned to barely main road and bush track telecommunications in the years ahead.

Nothing in the government’s plans for regional telecommunications, and very little more in Labor’s plan announced yesterday, is going to realistically address the broadband demand for rural Australia outside the major centres because the market is just not interested. Any plan to deliver universal broadband to all Australians will simply not be feasible under private-public partnerships alone. However a future Labor government might structure and fund such a partnership, whether from selling shares in a company it vowed never to privatise or through other means, the fact remains that around two-thirds of the Australian mainland will simply not deliver a private operator any profit unless the pricing regime dramatically changes. Is this the way that it is going to be made attractive?

The Nationals’ own 2005 Page report showed it could cost up to $7 billion to provide fibre optic broadband to the majority of Australian households. Labor’s plan, I understand, is to provide it to the node at the street corner. Which street corner in Tottenham, for instance? Or which street corner in outback New South Wales, where a collection of properties could be spread over hundreds of square kilometres?

Telstra, by the way, have put a figure of $25 billion on universal broadband delivery. That is the price they have put on it. That is the sort of money we are talking about if we are serious about making the superhighway via a homogenous network available to all Australians wherever they live, because the pastoral operation at Louth is as important as a stock agency in Blayney or perhaps a real estate agency in Katoomba. Singapore is spending $5 billion to deliver fibre to the home, on an island city state, which puts the cost of providing fibre optic broadband to all Australians in some sort of perspective.

It is misleading, as it was when the Labor government agreed to switch off analog mobiles in the nineties, to accept delivery of services to 90 per cent of the population as getting the job done. That would cover the so-called ‘Golden Banana’ between Brisbane and Adelaide, and the other major cities. It does not mean that 90 or 98 per cent of the country’s vast geography would be covered under the process.

Rural small business is critically dependent on accessing information from government departments—state, federal and local—on a range of day-to-day issues required for running that business. They need to pull down information on their statutory requirements, like OH&S, industrial relations and so on. This information invariably involves large files, so the need for fast broadband is critical, as it is for distance education. And do not try and kid me that 3G mobile technology is the way we are going to do it. Once that band is being heavily utilised, you might as well go to Sydney for a visit, see the Royal Easter Show and get back in time for anything to be downloaded.

Accessing suppliers’ catalogues online is a major requirement for many businesses that supply and service agricultural, mining or aircraft equipment and so on. Broadband is now by far the most cost-effective and time-critical method available for urban business, but much of rural Australia looks like missing out on the superior terrestrial broadband technology unless the sort of money that is being quoted is available. I heard the minister earlier today talking about $50 billion being spent in, I think, South Korea. The $600 million now and the interest from the $2 billion plan of the government or Labor’s $4.7 billion upgrade—hoping the privateers will come on board—is just not enough.

Broadband shortfalls are not only in rural and regional Australia; they are right across the regional areas. CENTROC—consisting of 13 councils—have put in for $80 million, which is a big slice of the $600 million set aside by the government under its broadband regional infrastructure fund, which again shows how underfunded this whole process is. The $160 million broadband guarantee is quite laughably underfunded.

Yes, fast broadband is vital for small business. Many of the people who are expecting it will still be sitting around waiting, even under the Labor plan and certainly under the government’s plan. The only band they will know about is the band on their hat—unless, of course, the government or opposition is suggesting user pays. Is that the real future plan of the government? (Time expired)

Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

ABN AMRO have concluded that the Labor Party’s policy ought to be termed ‘broadband dreaming’. They have looked seriously at what is already being provided by the government and looked at the 22-page document produced by the Labor Party. They noted that only one page of that 22-page document is devoted to any sort of detail at all. There is no map of coverage provided, no costing table and no level of technical detail. Labor seems to have fixed its mind that the only way to provide high-speed broadband to all of Australia is via a fixed fibre-to-the-node system. It seems to have quite overlooked the use of other technology, such as high-speed wireless networks, which may be a much more efficient way of providing higher speed broadband connections to many parts of Australia.

If you look at the present situation you will see that the government has been working steadily, assiduously and with competence to provide broadband to those who are in need of it. If we look at the ABS stats we will see that 90 per cent of Australian households are connected to exchanges that are providing speeds of between two megabits per second and eight megabits per second. Many people will say, ‘What does that mean?’ It simply means that that is adequate to download movies, conduct videoconferencing, play games, teleconference and undertake everyday internet and email use. Nearly 50 per cent of the population can—that is, right now—access higher speeds of between 12 and 20 megabits per second from ADSL2 and broadband and pay TV cable networks. In other words, we are penetrating the market according to its need.

Australia’s take-up of broadband grew at a faster rate than that of any other OECD country except Denmark in the 12 months to 30 June 2006. To put more statistics to explain how many people that translates to: 3.9 million broadband subscribers are already in existence; around one-third of Australian homes have broadband. We have put into place policies that ensure that we are up there with the best in the world. We are the second fastest in the world for take-up of broadband—as I just said, with the exception of Denmark.

I think it is important that we look very much at the question of small business and the use that small business makes of broadband. If you define, as the ABS does, a small business as a business with fewer than 20 employees, you will find that an estimated 39 per cent of Australia’s economic production is generated out of that small business sector. It employs 3.7 million people, which accounts for almost half of private sector employment. If you look at use of broadband, you will find that small businesses are taking advantage of the faster speeds to the extent that 20 per cent of online small businesses use connections of 20 megabits or greater.

Fixed wireless networks provide speeds of two megabits per second to almost 6.5 million premises in Australia, including 800,000 that cannot access ADSL broadband. There are now four third-generation mobile phone networks operating in Australia, all of which offer broadband services. Since March 2005, the number of broadband subscribers on 1.5 megabit speed connections or greater has doubled to 1.1 million.

What I have described is a situation where the private sector has entered the area of providing broadband for subscribers who need it and want to use it. Where is the evidence in Labor’s plan to address the problem of the interaction between the rollout of a government owned network and the private sector network? Will heavy-handed legislation be required to compulsorily acquire parts of the Telstra’s network?

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

Throughout Australia there is an absolute hunger for productivity growth and an absolute hunger from small businesses Australia wide for real broadband infrastructure that will provide a national backbone. So far we have had bits and pieces. We have had parts of an answer because this government will not devote itself. It cannot imagine devoting the resources to providing what is needed for the 21st century; rather, it looks to the 19th century. What is not taken into account here is that there is national demand and a national need. In the Netherlands, they not only have fibre to the node, which places them at the forefront of world productivity and world access, but also are looking at doing fibre to every single household in the Netherlands. That is an enormous jump forward and will provide them with a great deal of capacity. They will do what Korea has done and they will continue to be world leaders.

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The time allotted for this discussion has expired.