Simon Birmingham (SA, Liberal Party) Share this | Hansard source

It is a pleasure to speak on the Telecommunications Legislation Amendment (National Broadband Network) Bill 2008, the first piece of legislation relating to the government’s proposed national broadband network. I and all members of the coalition recognise the fundamental importance of broadband and effective delivery of broadband to Australians across the diversity of our country, in metropolitan and country areas. We recognise its importance to our economic development and to ensuring that Australia prospers now and into the future. We know that broadband and effective communications policies will play a very important role in Australia’s future and in ensuring that we enjoy the same type of economic growth and economic benefits that Australia has enjoyed so much over the last decade. That is why it is so important that we get this process right—that the new Rudd government gets communications policy right. In particular, it needs to get the process surrounding the national broadband network right, because Australia’s future and our economic sustainability into the future will very much depend on correct policy parameters in these important areas.

Our concerns lie in the rushing of this process and the risk that it will not be right and that we will see billions of dollars in taxpayers’ money squandered to get a less than satisfactory public policy outcome for all Australians. We believe it is important to be judicious in the expenditure of the public funds that have been put on the table here. A figure of $4.7 billion was plucked by the then Rudd opposition, and this legislation is now being rushed through just so that it can be spent and they can meet their election promise as quickly as possible, regardless of the implications of this for good communications policy along the way.

Government funds in sectors where the private sector is at play should be invested where there is a clear market failure. That should be the overriding priority for where government funds are expended. The concern with the approach adopted by the government is that it is not focusing on where market failures may exist. Far from it; it is throwing $4.7 billion at a broad and sweeping proposal that does not target the likelihood of market failures in regional Australia. In fact, it probably pushes regional Australia to the end of the queue, so that the likely development of broadband may be hastened in metropolitan Australia at the expense of areas that commercially would not otherwise have been delivered. The market failure may exist in regional Australia. It probably will not exist in metropolitan Australia, where commercial providers have already been working to deliver such services.

I commend to the Senate and to the Minister for Broadband, Communications and the Digital Economy the Australian Financial Review editorial of 22 April, which talks of the risk of the Rudd government enacting:

… a policy blunder with anti-competitive consequences … simply to fulfil some lazy election rhetoric by using a taxpayer-funded sledgehammer to crack a phoney broadband crisis. The “crisis” is gradually being fixed—at least in built-up areas—by competitive investment in fast broadband services …

We are seeing the delivery of services into metropolitan areas and yet we have seen the government kill off the chance of early delivery of services, through the OPEL contract, to areas that were underserviced. We are seeing the government ignore market failure that may exist and simply proceeding with the policy that it did on the run to get a great headline in the lead-up to an election. It wants to ensure that it can rush it through and claim to have implemented this policy, knowing that the long-term consequences for Australia could be very severe.

As the AFR editorial goes on to state:

There is no justification for the rush, apart from politics, and no evidence of market failure sufficient to justify a government intervention on the scale proposed.

It is a damning indictment of the government’s approach here and it certainly highlights the fact that this government is hell-bent on delivering its election promises, regardless of whether they will produce the right outcomes for Australia.

This bill in particular relates to the release of information for the building of the national broadband network, information that is critical for the request for proposals that the minister has released. We accept that clear information is important for those who are going to bid to be involved in this process. It is critical—and that information is largely locked up and held, as we know, by one major carrier, Telstra.

The request for proposals issued by the government states, in section 6.2.1:

The Government intends to make available to proponents network information it considers necessary for the development of proposals.

That of course is a very reasonable approach. This legislation provides a framework for that. It does not actually tell us, though, what information is to be provided. This legislation simply provides the framework for the minister to issue an instrument, or instruments, that will mandate and require telecommunications carriers to provide certain information.

The problem with this is the timing with which it is occurring. Here we are in the Senate on 14 May debating this bill, but the request for proposals went out more than a month ago, on 11 April. Prospective tenderers were given until only 25 July to put their proposals in. That means that, by the time this bill passes and the minister issues his instrument and the consultation period that applies to that instrument passes, we will have seen information provided to telecommunications carriers possibly—or probably—less than two months before they were due to provide proposals and tenders for $4.7 billion worth of government funding.

Quite clearly, this advantages just one player in the market—Telstra—as the holder of most of the information that would be required to put in a substantive proposal. Telstra has all that information at hand already. No doubt it is already effectively working on its proposal in the very short time frame the government have provided for. Other potential bidders are having to wait, having to second-guess what information may be there. They will have to scramble at the end of the process to try to get their proposals together in time, based on the information that is provided. Other bidders will be at a great disadvantage compared to Telstra. The government are looking for a truly competitive proposal through this process. They should be ensuring equity in the treatment of all prospective bidders. They are not. They are failing in that regard because they are giving a very clear advantage to one bidder above all other bidders by ensuring that that bidder has all the information currently at their disposal and other bidders do not.

The G9 consortium, led by Optus—a likely bidder in this and one that you would hope the government wants to have bidding because otherwise the process will be seen to have dramatically failed if indeed the government does not see the second major telecommunications carrier in Australia put in a bid—recently called on the government to extend the bid deadline by five months. This would ensure that all parties actually have the opportunity to assess the information provided and to put in a comprehensive bid. The government appears to be ignoring such a request. It remains hell-bent on putting politics before policy on this issue. This is of great concern to the opposition. It is a concern that we believe needs to be considered by the government to ensure that it can get an effective policy in place if it goes down this pathway.

We have a range of other concerns with this proposal. We are particularly concerned with the gag order that the government appears to have applied to players in the market. This is a gag order that had implications for the Senate inquiry that was conducted into this bill. Section 11.1.1 of the request for proposal states:

Except with the prior written approval of the Commonwealth, Proponents should not make a statement, issue any document or material or provide any other information for publication in any media, concerning this RFP, the proposal evaluation, the acceptance of any Proposal, commencement of negotiations, creation of a shortlist, or notification that a Proponent is a preferred Proponent.

This is a remarkable gag applied to public comment on this issue. It is outrageous that the government is seeking to gag telecommunications carriers in this way. It demonstrates that the government is trying to fly under the radar of any scrutiny or any real criticism of the processes at hand.

The gag order created additional problems in the assessment of this bill by the Senate committee. We saw very limited submissions made to the Senate committee. Feedback provided to the opposition was that, not surprisingly, telecommunications companies and others were concerned about airing their grievances about the processes the government is applying because of the gag provisions that have been put in place. They were concerned that airing such grievances might ensure that they were disadvantaged and that, potentially, they were breaching those provisions. One has to question why it is that the government feels the need to have such a broad-sweeping confidentiality provision that it appears to inhibit all aspects of debate in such a critical public policy area. The government needs to explain why it is imposing this gag and it needs to explain why it is trying to stop bidders from exercising reasonable public criticism of the process.

In contrast to all of the restrictions placed on companies bidding in this process, the government is looking at giving itself maximum flexibility and freedom. Indeed, we have had the rather bizarre situation of the minister indicating that the government will be willing to accept non-compliant bids. This adds further confusion in an already very confused public policy area. We have a request for proposals that is more like a request for policy in that it does not outline any clear conditions as to the regulatory or structural framework. In fact, it invites submitters to tell the government what they think the regulatory and structural framework should look like. So we will have bidders putting in all manner of proposals, based on their impression of the ideal regulatory and structural framework. They will be putting in proposals based not on an equitable assessment of that framework but on their position on what the framework should be. It is a ludicrous proposition that you should not sort out what the ideal regulatory framework should be before you go out and invite—