Monday, 29 November 2021
Telstra Corporation and Other Legislation Amendment Bill 2021; Second Reading
It's worth remembering that it was about a decade ago or so that the Liberal-National coalition sold off one of the largest public assets in the nation, one of the biggest telecommunications companies in the country, Telstra. This was part of their ideological bent that they always want to sell off public assets that make a difference to the Australian public, particularly to members of the public regardless of where they live. In cities or in regional Australia, telecommunications are very important and something that people rely upon hugely. We've seen that exceedingly so through the course of the pandemic as well. I remember when the Liberals, under John Howard, sold off Telstra. What a huge impact that had. It cut jobs in their tens of thousands. Telstra went from something like 90,000 employees to 35,000. It wasn't that those employees disappeared; it's that their jobs were reshaped. They were called contractors instead of employees. Their working conditions were slashed, because the Telstra management team, at that point in time, when they were loosened from government accountability, were in the vanguard of industrial relations changes that really put pressure on working Australians and were mimicked in other parts of the business. The privatisation of Telstra at that point in time was not only bad for jobs but bad for conditions.
I say this in all honesty and to be up-front: I was a union official in the union that covered Telstra workers at the time and was deeply concerned about the fate of Telstra workers. We saw this happen. The coalition cheered on this sale and cheered on the agenda that was taken on by the steadily privatised Telstra, until it came back to bite them. The management team, led by Sol Trujillo, refused to consider the heritage of Telstra—previously Telecom and before that Postmaster General's—that had helped to connect the nation and bring in a modern network. It went from the coalition and the conservatives cheering that agenda on to when the management of Telstra stood up to the former Howard government. They knew pressure was on to deliver broadband and they knew what would be coming in the future. That mob in Telstra refused to play ball with the coalition, embarrassed then minister Helen Coonan and refused to acknowledge what was needed for the regions. This is what happens when you sell off a public asset like Telstra that still has huge power the market and cannot be reined in—they just do what they want. It's one of the reasons we had to bring in the NBN: the plans for a broadband network rollout by the then Telstra, prior to the election of the Rudd government, were so woeful. I think about 19 different plans had been put forward or knocked back. So we had to see the NBN created, which, ironically, was then resisted by the coalition in opposition and bagged out. The way that they've gone on about the NBN is shameful.
Some conditions were attached to that sale, which this bill reflects in part. I must say, Telstra management has evolved, going from that very aggressive management team that was there to seeing people like David Thodey become the CEO, and then Andy Penn. These are people I hold in high regard. They moderated that position and were a lot more mindful of their responsibility to the nation and, in particular, communities that were reliant on telecommunications. I would like to say that it's very good that someone like Andy Penn makes himself available to members of this chamber to talk through issues. Andy Penn has done great work in thinking of the cyberthreats presenting themselves to the nation and what we can do to prepare for that. I don't agree with everything that they do, but at least you can talk to them. They're not ideologues, like former generations of managers in that company were.
As I said, Telstra are now a private entity. They're seeking to restructure their company into different legal entities. That has been reflected on throughout the course of the debate. It is in line with the management and operational strategy that they're putting in place. While Telstra doesn't need legislative change or government approval for the restructure, there are key obligations in there that would become ineffective or not apply to successor entities in the way that they currently apply. As was observed through the course of this debate, there are restrictions on foreign ownership and the way the universal service obligation operates. There are some other consumer safeguards like emergency call services, which we're hugely dependent upon, and there are requirements to provide other carriers with access to transmission towers and parts of the network to ensure we have a competitive telecommunications network.
The bill generally takes a suitable approach, in terms of what Labor support. We have spoken up on things that we think don't work in this sector at the hand of the government, in respect of some of the policy and regulations they've sought to introduce. We will maintain our position to call things out as we see them. I make the point again: we introduced the NBN because of market failure as a result of the way Telstra was running—the way it was snubbing its nose at conservative masters, who cheered it on after its sale as a public asset, and then, effectively, bit the hand that fed it. We needed to put in the National Broadband Network. When the Liberal-National government took over, they abandoned fibre and backed a second-rate copper NBN to try to save a few bucks, saying it would cost $29.5 billion. This cost blew out to $41 billion, then to $49 billion, and now it's costing $57 billion. It's the result of things not working that we told them wouldn't work. We now rank 59th in the world for average broadband speed and 32nd out of 37 nations in the OECD. Australians know they deserve better. It's why the federal opposition has said it will keep the NBN in public ownership and expand fibre access for more places—up to 1.5 million homes and small businesses—which is terrific and will create jobs for workers in the sector as well.
The COVID pandemic and the lockdowns it has triggered have shown us how important it is to have reliable, high-speed internet. It's not a luxury—unlike what the coalition said when they were in opposition, bagging out the need for higher speed and suggesting it only would be used for gaming and that it wasn't vital. That is a very backward view that has been totally shredded, along with the credibility of the coalition in opposition when they argued against this and tried to downplay the role of a modern communications network. We know how important it is. It's not just important for the online ordering of goods and services, or video streaming—as much as that helped take the edge off these terrible and divisive lockdowns. Affordable internet access is something we just don't talk about enough in public. It's about being able to access enough data for our needs. It's about accessing affordable hardware. It's about a network that meets the needs of people in that area. It's also about skills, and, in reality, about bridging the digital divide.
In terms of network quality, I'm still surprised that in this day and age—when we look at the rollout of 5G, a fifth-generation mobile network, with the sixth-generation one due to hit us in about eight years time—we still have people concerned about the quality of mobile networks. In my part of outer suburban Sydney, in the Chifley electorate, people in Colebee, Marsden Park and Schofields still comment to me that the network doesn't work in the way they want. They are still frustrated with it, and it shouldn't be that way. I think we should ensure the network works in outer suburban areas.
As a federal parliamentarian I am still concerned, when I look at communities in my electorate, about the affordability of data, the ability to find a good plan among the multitude of plans, the accessibility of hardware, and the know-how to navigate all this. I wish the government would push for better access for average Australians concerned about being left at the bottom of the digital divide. Should we expect better out of this government? I don't think so. They seem to fight more about what Facebook is doing, as opposed to fighting for fairer fuel prices or telecommunications services for average Australians. But we need access to better communications.
I'll give an example. During the pandemic, Rooty Hill High School told me that when the lockdowns hit last year they provided year 12 students with laptops and access to mobile networks, and those year 12 students recorded some of the best outcomes in generations of students. When the network is there and the hardware is available, they can do well. But the year 10 students did not do so well, because they didn't have access to that stuff. Modern communications and access to hardware means a lot, particularly to future Australian students. We should be doing better on that.
I mentioned earlier, in terms of modern networks, that Telstra is a big giant. The other giants I worry about in this space that lever off the network are companies that use online shopping quite a bit, with a platform that is available for people to use—companies like Amazon. With the whipped-up enthusiasm about Black Friday and all the shopping deals that come along with it, it's worth remembering that there are retail workers—those essential workers during the global pandemic—behind those sales. And it's worth remembering that some of these outfits that people rely upon online are the ones working behind the scenes. In the run-up to last week's Black Friday sales the SDA, the union representing those workers—in particular, warehousing workers in places like Amazon—were highlighting that behind the cheap prices at Amazon hides the reality of a major profit-making company that can do a much better job on delivering a fairer and better bargain for its workers. I have been concerned about some of the treatment of those workers in in a modern company like Amazon that obviously uses technology and modern communications networks to deliver services in a different way. Some of the stories about the way technology is being used by companies like Amazon to undertake workplace surveillance of workers, to prevent them from accessing simple things like toilet breaks, to monitor the way they engage with union officials who are trying to help them in their workplace conditions, is a poor reflection on this company. While operating in Australia through the pandemic might have been one of the better workplaces in Amazon's global network, it's worth remembering that our safety net of strong workplace health and safety laws contributed to that. The Australian push to make sure we do better and that workers in these warehouses can have access to workplace health and safety laws that protect them has made a big difference to the way in which people are protected.
I'm surprised to hear that some systems equip supervisors with an augmented reality headset with facial, clothing or gate recognition; and when the supervisor's gaze falls in your direction they are fed real-time data about how you as a worker are going. Another report says there is a potential for a bracelet-like device that can vibrate and alert workers about whether they're processing materials in the right manner. When Amazon uses workplace surveillance as a basis to write to unions to complain that an organiser is standing within two metres of a worker, are they really using it for safety—given that the letter comes 10 days after the alleged incident—or was it the result of carefully reviewing workplace surveillance footage? This is stuff that a lot of people would reckon is beyond the pale and should be changed.
A lot of us welcome new firms that are using technology in new ways and delivering to people in the broader public. This is a good thing. They've been enabled to do so by a network that's evolved to allow for a lot more e-commerce in a way that hadn't previously been envisaged. But we cannot use the glitzy sheen of technology to hide old ways of doing things—the Taylorist way of managing employees, of looking at how much they're doing, of putting pressure on their workplace health and safety, using their market power to get away with it. I think Amazon Retail can do a lot better and I don't think it's unreasonable to push for that message to be driven home. I certainly support the SDA in making this push and pushing for better.
Coming back to the bill: again, apart from the second reading amendment put forward by the shadow minister for communications, the opposition is not standing in the way of this. We think there is a lot of common sense in this. But we need to remember, too, the history of this. The sale of a public asset, and the way it has impacted on workers and communities, should never be forgotten. Labor should always make the case that we can push for better. It's why we think the NBN can be pushed for better and it's why we've put forward positive policies to make that a reality.
I rise to speak briefly on the Telstra Corporation and Other Legislation Amendment Bill 2021. This bill upholds Telstra's regulatory obligations as it undertakes a corporate restructure which will be one of the most significant changes to the company since its privatisation. It ensures legislative obligations continue to apply following these reforms which promote competition, protect consumers and support Telstra's role in Australia's communications network. I was interested to speak on this bill in part because of my longstanding history as an employee of Telstra, an opportunity that gave me very great insight into the communication needs and challenges of consumers, particularly in regional and rural Australia. So I want to outline a number of the key measures in this bill that have a particular focus on the impact on regional and rural areas.
The first key change relates to the universal service obligation and consumer safeguards. Despite significant changes to the telecommunications industry over recent years, Telstra continues to play a key role in connecting people across our nation and particularly in regional, rural and remote Australia. This has long been reinforced by a range of consumer safeguards, including the USO that guarantees the delivery of basic telephone and payphone services in rural and remote areas. This is in addition to the customer service guarantee, the network reliability framework and priority assistance as well as the operation of the triple 0 emergency call service. Delivery of the USO and triple 0 service is further supported by a contract with Telstra which provides for the company's ongoing use of copper to deliver telephone services in rural areas. The bill ensures these arrangements continue to operate effectively following the restructure, which will involve a new service delivery company, ServeCo, and gives the minister new directions powers to ensure longstanding universal service obligations are fulfilled. These measures reflect the Morrison government's commitment to people across Australia continuing to have access to essential communications services.
The recent challenge of summer bushfires and drought in regional and remote Australia have made it pretty clear just how important connection to others via phone or internet really is. Whether it be for business, education or just to be able to connect with family or friends, people in rural and regional areas depend on a reliable telecommunications network. This of course has changed over recent years with the increase in coverage of mobile communications around Australia.
The bill also implements two more minor amendments, including maintaining foreign investment obligations that have applied to Telstra since privatisation. This prevents more than 35 per cent of key Telstra subsidiaries being sold to foreign entities, ensures Telstra's headquarters remains in Australia and prevents more than five per cent of Telstra being sold to a single foreign person. This safeguards Australia's critical telecommunications assets into the future.
The bill also extends the tower access framework, which supports competition in the telecommunications market by providing other carriers with access to tower infrastructure. Telstra's restructure revealed issues with the current framework which could result in the carrier limiting access to its tower assets. This bill addresses this issue and applies to all carriers, not just Telstra. These changes will ensure that our telecommunications network continues to operate efficiently and effectively into the future.
The Morrison government is focused on improving telecommunications in rural and regional Australia through a variety of initiatives. For example, we committed around $300 million to the Mobile Black Spot Program, which helped to fund more than 1,200 mobile base stations around the country, with more than 900 already on air and providing much needed mobile connectivity to rural and regional areas. This is in addition to the $230.6 million for the Regional Connectivity Program and $4.5 billion in NBN network upgrades, including NBN Co's $300 million regional co-investment fund.
In my own electorate of Robertson I fought really hard to be able to deliver funding for a number of mobile base stations, including in Calga, Killcare, Spencer, Wendoree Park and Wisemans Ferry Road. Particularly I think of some of the many conversations with local residents in Spencer and Wendoree Park when they told me of the frustration they had with having absolutely no mobile coverage in those areas and what that meant to them in terms of safety and the ability to connect with people when and where they needed. So I was very pleased to see this investment being delivered.
The issue of improved mobile coverage has been particularly important for residents along the Hawkesbury River. There is nothing more frustrating than needing to make a phone call or access the internet and having the connection drop out or, worse, having no connection at all, which of course could become a very serious issue when you consider areas like Spencer, Marlow and Wendoree Park and the threats from devastating summer bushfires or some of the recent flooding. Residents needed a reliable phone connection in the recent flooding to reach emergency services, and many expressed to me their relief with the arrival of the new mobile base stations. I know that there's still more to do to ensure that the network is expanded even further, but I do really want to congratulate the local community for their advocacy on this issue. I assure them I'm going to continue to fight to deliver more funding for communities along the Hawkesbury River and in areas in my community that really struggle to have access to reliable mobile coverage. At this stage the Killcare mobile base station is the only outstanding project in my electorate. I look forward to seeing local residents have better experience with making phone calls and being able to stay connected.
This bill upholds Telstra's regulatory obligations as it undertakes a corporate restructure, promoting competition, protecting consumers and supporting Australia's telecommunications network. I commend it to the House.
A gentleman called Carl Katter was managing the family store in Normanton in 1904. He'd been managing other stores for the family prior to that. He had three boys. Norman Katter was one of those boys, and he died as a result of the tyranny of distance. Bob Katter Sr was one of those boys, and he died as a result of the tyranny of distance. Bob Katter Sr was my father. He was found on all fours, delirious. We'd got bogged. Then the sun came out and he walked to try and get assistance, because we couldn't get the car out of the bog, and he suffered very severe heat stroke and was effectively hospitalised for three days. It was only the luck of having the Batt brothers that saved us, and I thank them that I'm on the planet today; otherwise, we'd have all perished in the car as well.
I got my first job outside my family at Mount Isa Mines. A gentleman's car broke down outside Mount Isa on a very lonely road, and he attempted to walk to Mount Isa and perished. That's the tyranny of distance. And it's the famous title of a book by Geoffrey Blainey. The story of Australia could well be our determination to conquer the tyranny of distance. Mareeba is the biggest town on the Atherton Tablelands. Some 60,000 people are connected to Cairns by a highway, and it's about an hour's drive from Mareeba to Cairns. On most of that drive there is no coverage. We're talking here about a highway that would carry maybe a hundred thousand cars a week. If you have an accident there, let's say in the middle of that highway, then, by the time the vehicle gets to a range and communicates to the ambulance and then gets the ambulance to come from Mareeba or Cairns, you're looking at an hour's downtime. If it's an hour's downtime, you almost double the number of people that die. Victoria has a much lower road death toll than Queensland for no other reason than you're always much closer to a major base hospital in Victoria than you are in Queensland.
Cyclones are very frequent on the Far North Queensland coastline. During Cyclone Larry a person riding a motorbike came over a crest, there was a big tree across the road and he hit it. He had a very serious head injury. He had a mobile telephone, but there was no coverage in that area. By the time someone discovered him and got the ambulance out it was too late. He had died. Two very good friends of mine were in a plane that went down near the cattle station I've owned for most of my adult life. There was a mess-up in communications. If there hadn't been that mess-up, I think one of those people would have been alive today. It was, again, the tyranny of distance.
Having said that, we thank the government, because I think there has been a very real, continuous and strenuous effort made to provide service to black spots. We appreciate that we've got more than our fair share, I suppose. Forrest Beach, Fishery Falls and numerous other black spots in the Kennedy electorate—Boulia, Dajarra, Julia Creek and, to some degree, Cloncurry—have got upgraded services directly or indirectly from the government.
That brings me to this bill. The Australian people own nothing. This parliament, this House, the people who sit here, have sold off every single asset of this country. The much-maligned Kevin Rudd—the only things we own are the NBN and the Australian postal service. There is not the slightest doubt in anyone's mind that Christine Holgate was sacked because she wouldn't allow privatisation. The ports in Australia have been sold. The biggest coal port in the world, Newcastle, has been sold to China. The only Panamax port in the northern half of Australia, Darwin, has been sold to China. Five of the six major mining companies in Australia have been sold to foreign interests. Five out of six were Australian owned 30 years ago; now five out of six are foreign owned. God bless Twiggy Forrest, the last of the stand-outs and hold-ons.
We're breaking up Telstra. Everyone knows why we're breaking it up. It's because the government are going to have a lot of trouble selling it off and getting permission. The people rose up, almost in revolution, against the sale of the Snowy Mountains—God bless John Laws, Alan Jones and all those people who fought against the sale. This is a break-up with a view to selling it off piece by piece. If they attempt to sell the whole lot they're not going to get away with it, because the people of Australia have had enough.
Even if you don't care about anything but your own miserable political hide, even if you don't care about the people of Australia, even if you haven't got a scintilla of patriotic sentiment in the whole of your body, even if all that's true, look at Queensland, where a Labor government effectively sold the railways and the electricity industry. They were annihilated in the subsequent election. My memory tells me they were down to five seats, but correct me if I'm wrong. They went from being the government of Queensland to having five seats. The incredible stupidity, or obsession with ideology—believe me, people have voted for communists; they had an obsession with communism. Believe me, people have voted for fascism; they had an obsession with fascism. In this place we've had an obsession with free markets. What a disaster they have been! I'll quote one quick example. Our third biggest export, and one of only three significant exports this country has, is gas. It was sold for six cents a unit and we're buying it back for $16 a unit from the foreign corporations that own it. Qatar produces the same amount of gas that we do. They get $39 billion a year from their gas and we get $3 billion a year from our gas.
And here it is happening yet again, and you think that we crossbenchers are stupid enough to go along with what is clearly a sell-off of one of the remaining assets. To my knowledge, and I could be wrong, the only things left in the cupboard now are Telstra, Australia Post, the Snowy Mountains Scheme and the NBN. And it's thanks to the much maligned Kevin Rudd that we've got the NBN. They're the only four assets the Australian people own—and you're going to try to sell one of them off.
When the Liberal Party got in they reduced the ALP to five seats. When they then proposed to sell the rest of the assets they were similarly annihilated. They were reduced to six or seven seats—I can't remember what it was now. It was a most extraordinary phenomenon. A lady who in normal circumstances could never become a premier of a state ended up a premier of a state. But you people don't learn. The people of Australia cry out in their pain as they watch every single asset that their forebears put together as pioneers living nowhere and dying, as I've just described some of my own family dying, as a result of the tyranny of distance and other tyrannies—tyrannies of wage structure—which have slowly been deregulated and undermined and white anted. They see it all go—and you think they don't notice?
It's been intriguing for me because for people it's the little things. Forced immunisation—the reports are that there were 14,000 or 15,000 people out in Cairns. And they knew what they were doing. I'd say one in 50 of them was walking around with a Eureka flag; and I'd say one in 50 of those flags had on it what was written at Eureka. When oppression becomes law then resistance becomes duty. Yet you thieve the assets of the people and sell them when you've got no right to sell them. They don't belong to you, the government; they belong to the people of Australia. One brave little soul, who's not in this place anymore, whose daddy worked for Telstra, got up in here and moved that you can't sell the asset unless it is the will of the Australian people by way of a vote. Needless to say, she's not with us anymore. No surprise. You get paid for standing up for your principles in this place!
We tenaciously oppose the break-up of Telstra. And we know what it's about: at the present moment, there is cross-subsidisation occurring. When the decision to sell Telstra was brought into the party room John Howard was the prime minister. I think he's one of the most genuine and good Australians we've ever seen in the prime ministership. Unfortunately, and sadly, the history books will be very cruel to his government, and deservedly so, but he himself was an outstandingly good person. When he dies he will go to heaven, I'm sure. I was still in the party room then—which demonstrates the ineffectiveness of the party room. I stood up and said: 'Prime Minister, you've got to be joking. Everything's being done by cross-subsidisation. I've had four changes of telecommunications delivery system on my cattle station, but it'd be the same for most small communities in the Gulf Country and Cape York and these places. You've got to be joking.' He said, 'No Bob, we will have universal service obligations.' I said: 'Oh come on, Mr Prime Minister! Mary Murgatroyd in Julia Creek is going to take on a legal battle to enforce the UFOs. She's going to take on Telstra, arguably the biggest company in Australia? There's no way the universal service obligation will be worth two bob.' And, of course, they're not. I could give you 100 cases.
We tenaciously oppose this bill and we know what's going on. We know what sneakiness is going on, with exactly the same argument as the sacking of the head of Australia Post. We know why she was sacked: because she wouldn't sell Australia Post. God bless Christine Holgate; she's a hero. I'll tell you, if you people vote for this you won't be heroes. You'll be going down in the history books all right—and it won't be nice.
I rise to speak on the Telstra Corporation and Other Legislation Amendment Bill 2021. Telstra has a long history of service within Australia, and, as Telstra changes as a business, enacting corporate restructuring means legislation must keep up. Telstra has many obligations to the Australian people, particularly in regard to having restrictions on foreign ownership, the universal service obligation, emergency call services and priority assistance, as well as the requirement for Telstra to allow other carriers to access its transmission towers. This bill stands to ensure that, while Telstra restructures its business, it continues to be controlled under regulatory equivalence, unable to utilise any legal loopholes that may appear due to the reformation and continuing to serve the interests of Australian people in its role as the country's largest telecommunications carrier. This bill stands to ensure that Telstra's operations as a private business will not be to the detriment of the Australian consumer and the services we require. This bill has its technical complexities, but at the end of the day it is here to serve us all and support Telstra's transition and restructuring. This bill will uphold Telstra's current obligations to Australian communities, Australian businesses and, indeed, Australia's broader community by maintaining regulatory equivalence for Telstra's successor entities.
I wish not to reduce this bill to its intricacies but instead to focus on what it stands for. Simply put, this bill stands for protecting consumers, promoting competition and also allowing regional Australia to flourish. Whether it's during bushfires, floods or COVID, we know how essential reliable and accessible telecommunications are to the safety and security of all Australians. The explosion of telecommunications services worldwide has provided opportunities for economic development never thought of before in human history, with services such as telehealth and Netflix and services that help people through emergencies such as bushfires and floods. Consumers want to be able to know that their telecommunications access is both stable and certain.
Since Telstra finalised its privatisation in 2011, it's been required to uphold certain obligations limiting foreign ownership of the company. Telstra's critical role within the telecommunications market means that we want its ownership and headquarters to remain largely on Australian soil, and this bill speaks to that by maintaining the assurance that Telstra's restructuring does not affect its ownership and subsequently its service to the Australian people. This bill ensures Telstra will remain a maximum of 35 per cent foreign owned, with no more than five per cent owned by an individual foreign investor. Moreover, the headquarters must be on domestic soil, allowing proper government oversight mechanisms to protect Australian consumers. This policy reaffirms the government's enhancement of the Foreign Investment Review Board regime, ensuring that critical national assets, including in telecommunications, are protected.
Telstra currently is under an obligation to provide many services that are core to Australia and its people. For instance, the universal service obligation guarantees the delivery of payphone services in rural and remote areas, as well as the operation of crucial emergency services lines like triple 0. As anyone who has lived in the bush knows, it's important to have these services on hand. They're key, and they cannot falter whilst Telstra restructures. Hence, this bill simply serves to ensure that they will continue to operate effectively under Telstra's renamed entity ServeCo, which will handle service delivery.
This bill is just one step towards the commitment of the Morrison government to ensure that all Australians have access to reliable, essential telecom services. In fact, the government has been informed by Telstra that they are already drafting agreements ensuring the smooth continuity of these services after the restructuring. In light of this, the provisions within this bill provide an important safety net of service for the Australian consumer. It's comforting to know that, despite the telecommunications industry having changed so much over the past decades, Telstra's role has remained crucial and steadfast as the sector and the country have changed around us.
The tower access framework is rooted in the motivation to increase competition within the telecommunications sector in Australia. The framework seeks to ensure businesses are running efficiently and those savings are passed on to consumers. This is achieved by providing other carriers with access to the tower infrastructure. This framework does not stop at Telstra as a carrier; indeed, all carriers will be regulated under this bill. Telstra's restructure has revealed, indeed, a loophole within the current tower access framework, in that a carrier could potentially shift its tower assets to a non-carrier subsidiary that it controls to avoid its obligation to provide access to tower assets. This bill will close this loophole and ensure Australian consumers are protected, whichever carrier they use. This bill addresses this information by rigorously defining the meaning of 'owned and operated' so that there are clear requirements in terms of share ownership and executive power.
This bill designates power to the minister to direct an individual Telstra subsidiary to take on the obligations of another subsidiary if it's the case that the initial subsidiary has failed, is failing or is likely to fail to fulfil an obligation. Moreover, if Telstra is failing to comply with a given direction, it may be liable for penalty. This acts as a safeguard to ensure that any potential restructuring of Telstra will always result in the obligations to Australian consumers being satisfied, irrespective of the formation of the parent and subsidiary businesses.
The government has taken significant steps in improving telecommunications across Australia, particularly in our regional and rural areas. Nearly $300 million has been committed to the Mobile Black Spot Program, which ensures that regional and remote Australia has access to the same high-quality mobile coverage available in urban areas. I will also note that, with investment in space being one of the priorities of our Manufacturing Modernisation Fund initiatives, space will continue to be a very important aspect of our strategic direction with regard to things like mobile black spots. And that is because Australia is leading the way with regard to GPS, and the GPS work that is being done under space modern manufacturing will enable black spots to become a thing of the past. I would encourage anyone who is interested in this area to look at the space inquiry of the Standing Committee on Industry, Innovation, Science and Resources, of which I was a member, to see some of the wonderful initiatives being enabled by government and led by industry.
Nearly $300 million has been given to the Mobile Black Spot Program, and over $200 million is going towards the Regional Connectivity Program, which is developing stronger infrastructure across these same areas. And there is an extra $4.5 billion towards the NBN, with particular focus on ensuring infrastructure in regional areas is strong. Of course, there is more to do, and the Morrison government is committed to work towards this, having enlisted the Regional Telecommunications Independent Review Committee to examine further potential reforms in the sector.
The bill before us today is recognition that, as the governance of our critical telecommunications carrier sector changes, it must change in line with business changes. Since its inception, Telstra has played a critical role in Australia's history and it will continue to do so into the future. To guarantee the continuation of its key role in the delivery of things like emergency services and countrywide access to telecommunications, we should all make sure that we support this bill and that we can all be proud that this is delivering for Australians here. With Telstra upholding the universal service obligation, this bill ensures that pay phone services will continue to be available in even the most remote areas of Australia—a crucial policy in maintaining our connection as a country. We need this now more than ever as, together, we face some pretty interesting times. I commend this bill to the House.
I rise to support the second reading of the Telstra Corporation and Other Legislation Amendment Bill 2021, which has two fundamental components to it in response to decisions that Telstra have made to change the structure of the company to ensure the obligations that are currently on the company remain in place for any subsidiaries that they might establish—in fact, which they've indicated they plan to establish—so it's important that we pass this legislation. I note that it seems to have strong support from all members of the House, and hopefully it will equally do so in the Senate.
Telstra, of course, started way back as the old Postmaster-General's Department, when we had the telegraph system. That's why when you walk around the streets of Adelaide you often see manholes—or personholes I think we call them these days—that say 'PMG', which stood for Postmaster-General way back when. When I was a boy, we called Telstra Telecom. They changed their name to Telstra and have been a listed company for the last 20 or so years. When they were privatised, it was important that legislation was put in place to preserve two fundamental responsibilities for which Telstra have an enduring responsibility. They are a universal service obligation, and competition and access for other providers to Telstra's infrastructure. That was one of the fundamental components of that business when it was privatised. Back then it was the copper wire network. Now, of course, telecommunication infrastructure and assets are much more substantial. These are two important areas, and we wouldn't like to see in either case those obligations not to continue to be met by subsidiaries or spinoffs that Telstra might establish, and that's what we're doing here.
As a Liberal and a free market capitalist, I've got a very significant concern about monopolies. As much as possible we don't want to see monopolies operating in markets, but sometimes, unfortunately, they are necessary, and that's why they need specific and bespoke regulation. This is the case for other utilities. It would be ludicrous to suggest we have two different sets of water pipes or two different sets of transmission lines running down the same street so that we could have competition in the water market or in the electricity transmission market. These, of course, are monopolies. Sometimes they are held by governments. Sometimes they've been privatised. In most jurisdictions I'm aware of even when they're held in government hands they've been corporatised.
In South Australia, SA Water is a good example. They are still very much a state government owned entity but they operate like a business. The way in which they charge for water is set through a market mechanism. The Essential Services Commission of South Australia makes determinations on what the costs are to run a water business and what the value of the balance sheet is—ostensibly, the water network. All those things are put together, and a fair rate of return is put determined on the value of the assets. That goes into the sausage machine and comes out as a pricing indication. That's largely the same with electricity transmission as well. There's only one transmission option to get your electrons from a power station to the socket in your wall at home. You can't change providers. There's only the one business that has those poles and wires, so what they earn for that transmission is also regulated.
In the case of Telstra, it's a little bit more complex. Telstra, of course, are a retailer. They also have significant assets, some of which they compete freely in the market with. Mobile phone towers are a good example. Certainly in my electorate, Optus and other providers as well as Telstra have their mobile phone coverage that they pay to put in place, and they compete. Telstra complete with other providers. But there are some parts of Telstra's assets for which there is no competition, for which they are in fact the only holder of particular infrastructure. That's why it's important that we have competition measures in place—so that Telstra can't abuse that monopoly and that particular infrastructure by either charging exorbitant rates to their competitors for access to their infrastructure or, potentially, denying their competitors access at all. That, of course, is a very important fundamental of competition policy in this country, whether we're talking about telecommunications infrastructure, electricity transmission, water pipes or whatever it might be. Where there is a government owned business, privately owned business or a public company, as Telstra is, it's very important that we put in place measures so that they can't abuse that market monopoly where we accept that a monopoly has to be in place because of the ludicrous cost to duplicate infrastructure so unnecessarily.
That, I suppose, segues into the universal service obligation. It's critically important with essential services, whether they be telecommunications or similar examples I've been referencing—electricity, water, gas et cetera—that every Australian has equal access. Telecommunications is one of those. The universal service obligation is in place in a lot of other services. The postal system is probably another good example. The postal network has to operate evenly and equally right across the country. Regardless of where you might live, everyone's got access to a local post office and there's no difference in the cost of sending a letter to your neighbour or to someone on the other side of the country.
With telecommunications, it's equally the right of all Australians to have access to the telecommunications network and for that to be provided by Telstra under their universal service obligation. As we know with other infrastructure, at times they'll have a higher cost for particular types of properties, whether that be because of their remoteness or what have you. But that particular person living in that home can't be penalised particularly; it's spread amongst the costs Telstra have and get a return on through their charges in providing the total network across the nation.
Those two things are fundamental. Regardless of your view and without getting into debates about Telstra's privatisation, as the amendment seeks to do in the second reading, it's very important that the fundamental principles and protections that were put in place when the Howard government privatised Telstra are maintained in any circumstance. It did slightly surprise me that this was at risk. I assumed that, no matter what, it wasn't possible for Telstra to escape the requirements that they have through legislation as part of their privatisation to provide that universal service obligation and, equally, to make sure that they're providing access to their competitors to certain parts of their infrastructure that they have a monopoly over. Evidently, it is important that we pass this legislation to ensure that there is no uncertainty, when Telstra pursue the plans that they have to change their corporate structure to split, that whatever entities are spun off or spun out of the current Telstra do not, through that process, escape the obligation that was put in place. That's a very important principle.
In privatising Telstra, no-one would ever have envisaged or suggested that they would not have an enduring responsibility to do those things; quite the reverse. It's very important that, although we have a public company that is a substantial player in our telecommunications sector industry—as I've said, in some areas they do that in a very competitive market, and it's good that we have competitors to Telstra in certain segments of the market. The market, when working well, hopefully leads to consumers getting the best possible deal and value from the services that they're accessing because they have choice and can choose between a mobile phone package from Telstra, Optus, Vodafone or whoever it might happen to be. There have been other players in the market in the past and there may well be more coming into the market in the future. We encourage that. We encourage any increase in competition.
Something like telecommunications services, and mobile phone services, is an area that is only going to grow enormously in size. We're seeing already a rapid transformation in just a two-year period, where something like a pandemic comes along and people have an enormous increase in their reliance on certain telecommunications services—and that, equally, is going to see more money spent in the sector for more and expanded services. That's why we absolutely want to see increasing competition as that market increases in size and value but also in the types of things we can do through the telecommunications network. As we enter the era or the internet of things and the concept that nothing in our lives is likely to be disconnected or off the grid, from a telecommunications point of view, it's never been more important to reflect on how critical it is that we get competition policy right and that we make the right decisions in this place about the future of an industry that, in many ways, will be the most significant of all of them in the years ahead.
This legislation ensures that we continue to keep that faith and commitment that we made when Telstra was privatised to ensure that the community service obligation is preserved in any future ownership structure of Telstra, and to ensure that the competition and sharing of the monopoly and legacy infrastructure they have in place continues into the future. We want to see a thriving sector. I'm proud of Telstra as a company. I suppose I should draw the House's attention to the fact that on my Register of Members Interests you will find a very minor shareholding in Telstra, which I of course have appropriately declared. Nonetheless, I think it is very important that a great company like Telstra, through this legislation amending existing acts that govern it, is still held to account against the fundamental principles put in place when it was privatised. With those words, I commend the bill to the House.
I'm no fan of Telstra. If BHP is known as the big Australian, then surely Telstra is the big un-Australian because of its appalling treatment of its own customers. Unfortunately, we can't stop Telstra restructuring its business, but we do have the ability to ensure we can maintain ownership of Telstra and that, in a restructured environment, Telstra, the Australian telecommunications company, maintains its obligations with respect to the Australian community.
The Telstra Corporation and Other Legislation Amendment Bill 2021 ensures that in any restructure, Telstra's regulatory obligations, such as the current consumer protection obligations that exist, are reapportioned to the appropriate entity. It also provides a power for the minister to respond to any future changes to Telstra's corporate structure by including or excluding Telstra entities as needed to apply the existing regulatory regime to them. The bill also includes a series of powers that would allow the minister to direct a Telstra entity to assist another Telstra entity to fulfil a regulatory obligation or certain contractual obligations. This legislation will uphold Telstra's current regulatory obligations to Australians by maintaining regulatory equivalency for Telstra's successor entities.
I wish we could have prevented Telstra's restructure until such time as it had improved mobile services to customers who pay bills in communities like mine. I wish we could have prevented the restructure unless it improved its appalling customer service to all Australians. Unfortunately, Telstra doesn't need parliament's approval for restructure. However, without these legislative changes we couldn't ensure the important obligations imposed would remain in force. Let's be clear: Telstra's restructure is not about better mobile service or better customer service; it's just about shareholder windfall. Unfortunately, there are no drivers for Telstra to improve its appalling customer service. I will return to this issue later in my remarks.
Telstra's restructure splits the company into three separate legal entities under a parent company to be called Telstra Group. InfraCo Fixed will own and operate their passive physical infrastructure assets: the ducts, fibre, data centres, subsea cables and exchanges that underpin their fixed telecommunications network. InfraCo Towers will own and operate the physical mobile tower assets. The corporate spin from Telstra says ServeCo will focus on how they create and innovate products and services for their customers and deliver the best possible customer service experience—whatever that means. The restructure raises issues beyond the poor performance of Telstra's mobile and customer service and their preternatural talent for spin over delivery.
As a member of the Parliamentary Joint Committee on Intelligence and Security, I want to say something about telecommunications and our national security. Who controls our telecommunications companies is an increasingly important question. Australia needs to have Australian owned telecommunications companies. This isn't a case of economic nationalism; it's because telecommunications infrastructure is critical infrastructure for Australia. We cannot allow malicious actors, including state actors, to access these networks and use our telecommunications infrastructure to harm our nation.
Just last month, Mike Burgess, the Director-General of Security, said:
I remain concerned about the potential for Australia's adversaries to … preposition malicious code in critical infrastructure, particularly in areas such as telecommunications and energy. Such cyberenabled activities could be used to damage critical networks in the future—
Mr Burgess said the attacks would 'undermine' Australia's 'sovereignty, democratic institutions, economy and national security' capabilities, while also warning espionage and foreign interference attempts by multiple countries remain 'unacceptably high'. It's in this context we must be very careful about who controls and owns telecommunications infrastructure. I therefore welcome Minister Fletcher's actions in preserving the foreign ownership limits on Telstra and its successor companies through this bill.
The arrangements in this bill prevent more than 35 per cent of key Telstra subsidiaries being sold to a group of foreign interests. The bill maintains that the headquarter location of Telstra and its successor entities is in Australia and prevents more than five per cent of Telstra being sold to a single foreign person. This legislation is important to ensure Telstra remains in Australian hands and under Australian control. The foreign ownership arrangements for the bill align with the government's view that the appropriate oversight mechanisms must be maintained for Australia's critical telecommunications assets. This is particularly important given the role Telstra plays in the communications market in this country, essentially operating as a monopoly provider in many parts of the country. The Foreign Investment Review Board regime, which was enhanced by the Morrison government earlier this year, will also continue to protect our critical national assets, including our telecommunications networks.
I want to say something about Telstra's tower business and what this legislation seeks to regulate. Nothing is more important to increasing competition in consumer choice in the telecommunications sector than providers sharing infrastructure. This is particularly when the infrastructure has been erected with public funds. It's vital, therefore, that obligations currently placed on Telstra which require them to provide other carriers with access to telecommunications transmission towers apply in the same way post restructure.
A key set of obligations placed on Telstra is the facilities access regime, which requires that carriers provide other carriers with access to bottleneck infrastructure. The tower access framework is designed to support competition in the telecommunications market by providing other telecommunications carriers with access to tower infrastructure. Telstra's restructure has revealed a loophole within the current tower access framework whereby they could potentially shift their tower assets to a subsidiary that they own to avoid their obligations. And, given Telstra's history of being a monopoly provider and then as a private company continuing to behave like a monopolist, I think this issue is a real concern. Despite all the public subsidies Telstra received, it fights every opportunity to increase competition and share its infrastructure with its competitors. On so many occasions when Telstra is asked to share, it lawyers up and fights proposals. Such behaviour has led one industry participant to remark that Telstra is a law firm masquerading as a telecommunications company.
I'm pleased to say, therefore, that this bill addresses this issue and extends the framework so that all entities within a carrier group that meet a 15 per cent ownership threshold must also provide access to telecommunications towers. The provisions in this bill would be dormant for the first six months following passage to allow the Australian Competition and Consumer Commission to undertake a review of the 15 per cent ownership threshold and provide advice to the minister for communications. The bill seeks to ensure the current tower access framework continues to apply, which, in turn, should promote competition and better telecommunications options for all Australians. It's critical that carriers can access each other's towers to provide the best possible service to customers. Any change could impact the connectivity and services available, which are already substandard in large parts of my electorate and in regional, rural and remote areas in Australia.
Earlier this year, Telstra sold 49 per cent of its tower business for $2.8 billion. The majority of the proceeds from the deal will go to shareholders, with only a very small proportion being invested into network improvements. I've condemned Telstra repeatedly for its failures to more substantially reinvest in rolling out more towers to provide services to those customers who keep paying its bills, and an increasing number of my colleagues across the country agree that this is a major problem.
This bill is also important because, if we don't get the regulations right, Telstra's restructure poses a risk that services Australians rely on might not be available. We could see Telstra stop maintaining the universal service obligation. We could see Telstra no longer required to meet important consumer safeguards. And we could see Telstra not required to provide the triple 0 emergency service facility that it provides and on which all Australians depend. This is something no-one wants to see and a reason why this bill is so important.
Despite significant change in the telecommunications industry over the last decade, Telstra still plays a key role in large parts of Australia. Its role has been reinforced by a range of regulated consumer service safeguards, including the universal service obligation that guarantees delivery of basic telephone and payphone services in areas across Australia as well as the operation of the triple 0 emergency call service. Delivery of the USO and the triple 0 service is further supported by a contract with Telstra, the Telstra USO performance agreement, which also provides for Telstra's ongoing use of copper to deliver telephone services. While Telstra has given clear and repeated undertakings it will continue to deliver on these obligations, this bill makes sure they continue to operate by reapportioning them to ServeCo.
The bill also gives the Commonwealth visibility regarding the assets and contracts ServeCo needs to continue to deliver on these obligations, and a new ministerial directions power should the Commonwealth become concerned that Telstra may fail to fulfil these longstanding obligations. While Telstra has given undertakings it will continue to deliver these obligations, the bill makes sure it follows through with its promise. To reinforce this, the bill provides powers for the minister and, in some cases, ACMA to direct a Telstra subsidiary to meet its obligations or assist in the delivery of obligations to another Telstra subsidiary. ACMA's directions power allows it to ensure its compliance and enforcement activities continue to apply to entities within the Telstra group where satisfied that the relevant entity has failed, is failing or is likely to fail to fulfil an obligation. Similarly, the ministerial directions power allows the minister to direct an entity to assist a Telstra successor company to fulfil obligations where the minister, in this case, is of the view the entity has failed, is failing or is likely to fail to meet those obligations. The powers provide for penalty for failure to comply with a direction.
In short, the purpose of the bill is to maintain the Commonwealth's policy interest in protecting customers, promoting competition and supporting Telstra's public interest roles in Australia and our communications system, and ensuring they are not diminished as a result of the restructure. It's for these reasons I support the bill.
I want to talk a little bit about some other matters that Telstra and the other telecommunications companies are involved in, because telco reform is more than just this bill. As I outlined, I haven't had much good to say about Telstra, and with good reason. Telstra and the NBN's failure to serve my constituents and their inaction to rectify terrible phone and internet reception is putting people's lives at risk. This is despite all the public money on offer to support telcos investing in infrastructure. Telstra like to remind us they're just another public company, but they receive so much public money that it's a hard claim to maintain in any real sense. The campaign we ran in the Berowra electorate, highlighting the parlous state of peri-urban mobile communications, led to Minister Fletcher creating the pilot $16.4 million Peri-Urban Mobile Program, or PUMP, designed to address mobile black spots in bushfire prone communities like mine on the edge of Australia's cities. PUMP will provide grant funding to mobile network operators and infrastructure providers to deploy new mobile phone infrastructure to address mobile coverage in peri-urban areas. I want to put on the record my thanks to Minister Fletcher for his ongoing support in addressing issues faced by my constituents through programs like PUMP. Recent bushfires and floods have shown the importance of reliable mobile services during natural disasters. Shortly the PUMP guidelines will be released, and this program will be opened.
PUMP is a test for the telcos. In some respects it's their last chance. Unlike the last round of the Mobile Black Spot Program, where the telcos applied for zero towers—I repeat, zero towers—in my community, PUMP is their last chance to show whether they care about Australians in communities like mine. My message to Telstra and the other telcos is: if you want to show you are serious, apply for lots of towers in my community and others under PUMP. The Morrison government has done its job by putting money on the table to support telco investment in infrastructure. It's time the telcos did their job and delivered telco services to people across the country paying their bills.
The alternative future for the telco sector has been outlined in my private member's bill, the Telecommunications Reform (Telstra, NBN and Other Providers) Bill 2021. It is currently on exhibition as an exposure draft, recently released by me and supported by 18 colleagues from right across the country A growing number of colleagues are telling me they, too, support the aims of my private member's bill. It's a bill designed to create better infrastructure, better customer service and more accountability for telecommunications companies. Unfortunately, the response from the telco sector shows they just don't take these issues seriously. The telco response should surprise no-one. They effectively said two things: first, 'There's nothing to see here'—they think they're doing a great job—and, second, that the bill asks far too much of them. What the telco sector has failed to do is to recognise that there is a real problem. If there weren't a real problem, why would 18 members of parliament from across the country band together to try to achieve real change?
My bill has been welcomed by consumer groups. Choice's Alan Kirkland said: 'It's unacceptable for people who live in a major city like Sydney not to have mobile coverage in their home, and even worse in a bushfire-prone area. We find it puzzling that the telco industry, particularly Telstra, has been able to get away with substandard service for so long.' Professor Alan Fels, former chairman of the Australian Competition and Consumer Commission, agreed that more needs to be done in the telco space. He said: 'For many years the telco industry has failed to make access to mobile phone services universally available, even in a number of suburbs. Yet such access is an essential service and vital in emergencies. After waiting for so long, it is clear that the only solution is legislation, backed by sanctions compelling it.' Those are the words of Professor Fels. Phone and internet are an essential service that Australians rely on. On a good day, connectivity problems make people seethe with anger. On a bad day, it's simply a matter of life and death. The response from the public has shown me we're on the right track, and I will continue to fight for better telco services for my community.
In conclusion, I wish that Telstra would restructure their business so they actually improve service for customers who are paying their bills, not the size of their executives' pay packets. Telecommunications are more important now than ever. The COVID-19 pandemic has changed the way we live and work, the way we study, the way we access health care and the way we stay in touch with our loved ones. Unlike Labor, the coalition has improved telecommunications in many communities across Australia by delivering the Mobile Black Spot Program, and it will soon deliver the announced Peri-Urban Mobile Program. This bill ensures that the hard-won gains and accountabilities already applying to Telstra are maintained, and I commend the bill to the House.
I thank those members who've contributed to the debate on the Telstra Corporation and Other Legislation Amendment Bill 2021. I also thank the Senate Environment and Communications Legislation Committee for its report on the bill and its recommendation that the bill be passed. This bill will amend a range of telecommunications legislation to maintain regulatory obligations that protect consumers and promote competition, in response to Telstra's proposed restructure. These obligations cover core parts of Telstra's longstanding regulatory arrangements, including its corporate obligations put in place at the time of its privatisation. Without legislative amendment, there is a risk that Telstra's obligations would become less effective or cease to apply to its successor entities following this or any future restructure.
While there have been significant changes in the telecommunications industry over the past decade, Telstra continues to play a key role nationally in metropolitan, regional, rural and remote Australia. Telstra's role has long been underpinned by a range of regulated consumer safeguards, including the universal service obligation, which requires Telstra to deliver basic telephone and payphone services in rural and remote areas; the customer service guarantee; the network reliability framework; priority assistance; and the operation of the triple 0 emergency call service.
The effect of this legislation is that the obligations which presently apply to Telstra under its current organisational structure will continue to apply following Telstra's restructuring. This in turn will be important to achieving the continued protection of consumers, promotion of competition and support of Telstra's public interest roles in Australia's telecommunications market. I commend the bill to the House.
The original question was that this bill be now read a second time. To this the honourable member for Greenway has moved as an amendment that all words after 'That' be omitted with a view to substituting other words. The immediate question is that the amendment be disagreed to.