Senate debates

Thursday, 14 May 2020

Bills

Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019, Telecommunications (Regional Broadband Scheme) Charge Bill 2019; Second Reading

11:23 am

Photo of Anne UrquhartAnne Urquhart (Tasmania, Australian Labor Party) Share this | Hansard source

I rise to speak on the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and the Telecommunications (Regional Broadband Scheme) Charge Bill 2019. As we've heard, these bills work in conjunction with each other to do two key things. They legislate certainty that all premises in Australia can continue to access high-speed broadband infrastructure beyond the NBN rollout. This obligation already exists, but this gives it certainty, and Labor supports this. The bills also introduce a telecommunications levy that will add $7 per month to the bills of households and businesses on non-NBN networks. While highly critical of the lack of vision by various coalition governments that have led to this situation, Labor will not oppose this levy.

Labor supports legislating a universal right to broadband access, as this was the principle that we first established when the NBN was announced. So we support the establishment of a statutory infrastructure provider regime as is outlined in the bill. It will provide improved certainty that, as we move beyond the initial NBN rollout, every Australian home and small business can continue to access high-speed broadband connection. Labor in government established the National Broadband Network to bring this principle to reality. Universal broadband access is a Labor concept and a Labor achievement that the Liberals tried to prevent at every turn. It took them many years to come to the party and sign up to the principle of universal access, but, in the end, they had no choice. It is the only reasonable approach in a modern Australia with a modern economy.

The NBN, a game-changing national infrastructure project for the 21st century and possibly beyond—that was the vision of the Labor government after winning the 2007 election, the vision of a connected nation able to embrace technology, communicate from remote and regional areas through to high density urban areas, able to do business in new ways, able to teach and learn in new ways, able to interact with the rest of the world in new ways. Try, if you can, to imagine what the last six weeks of COVID-19 crisis would have been like without the NBN: all those Zoom and FaceTime and Skype meetings, all those precious family connections online, all the Zoom conferences, meetings and lectures with literally hundreds in attendance, all those businesses that were able to quickly and innovatively jump online and develop online shops, services and home delivery, the telehealth consultations—most important at this time—and whole television and radio programs that could not have happened without the vision of a connected Australia. Every Labor representative from then and now, and all the workers that are still working daily to connect homes and businesses, deserve our thanks for pursuing that vision.

Now we must turn to the so-called levy. First up, let's call it for what it is. It's a tax. It's a new tax—a new tax from a Prime Minister and Treasurer who've stood up in parliament many times to claim that the coalition does not put up taxes. It is a $7 per month tax on internet services that will impact up to 500,000 residential and business services, some of them consumers and first home buyers in regional Australia.

The government claims they're doing this in the name of regional Australia, but this is a long way from the truth. Let's be sure to remember that the Liberals initially opposed the NBN satellite and ridiculed the idea of the company owning and operating it. They congratulated themselves for oversubscribing the NBN fixed wireless networks, which led to congestion in some areas. Further, in October 2019, it was revealed that shareholder ministers had quietly signed off on a $200 million reduction in investment for a regional fixed wireless network relative to the previous corporate plan. So this government is introducing a broadband tax in the name of regional funding, while reducing regional investment at the same time—an extraordinary contradiction. This bill proposes to apply this new levy on households and businesses connected to non-NBN networks—a poorly designed and highly regrettable tax that has been criticised by the ACCC and the Productivity Commission.

In 2009, the then Labor government decided to build a national broadband network that would extend universal coverage of broadband to regional and remote Australia. This decision to extend high-speed broadband to unprofitable areas was funded through the universal wholesale pricing regime. This internal cross-subsidy amounts to more than $700 million per annum. This meant that NBN revenues from services provided in the cities and suburbs would help cross-subsidise higher cost services delivered over wireless and satellites in the regions. There was no contemplation of having a broadband levy and an internal cross-subsidy. Yet now the government wants to have both. Why the change? The key change has been the abandonment of fibre, on the pretence that Australia would get a much cheaper, albeit inferior, multitechnology mix. But we haven't. We have a more expensive, $51 billion, multitechnology mix that unfortunately cost more and does less than the original plan. These older technologies, according to NBN Co's own analysis, cost $200 million more per annum to maintain and operate, and generate $300 million less in revenue relative to a fibre to the premises network. So there is a $500 million per annum earnings gap—a staggering figure.

Tony Abbott and Malcolm Turnbull decided to spend $51 billion on a technologically and economically inferior NBN that cost more and does less. The NBN is $20 billion over budget and four years behind what the Liberals promised to deliver. Prior to the 2013 election Malcolm Turnbull and the current Minister for Communications encouraged other companies to deploy networks and compete directly against the NBN with full knowledge this would undercut the NBN business model. They set out to sabotage the NBN and now want to introduce a tax to protect themselves against what they began.

The irony is that the minister now wants to increase prices for Australians who are on those competing networks that he once encouraged, some of which are in the regions themselves. However, we of the Labor Party must have the decency to talk straight on this issue. The reality has placed further pressures on the economics of the NBN. Therefore, while the levy is regrettable, Labor will not oppose it because it would undermine the economics of the NBN. We are committed to a sustainable funding arrangement to support and improve NBN services in regional Australia.

We do have a Labor amendment to the bill, which seeks to do two things. Firstly, on the topic of the modelling underpinning the charge, there does remain scope to improve transparency around the charge level and there is broad agreement that the modelling undertaken in 2015 is based on inputs that are no longer accurate and could readily be updated. The government has had two years to update the model but declined to do so. It should also be noted that recommendation 18 of the NBN joint standing committee was that the model be updated in late 2018. This recommendation was agreed by government members, Labor and the crossbench. It was never acted upon. The legislation we are now debating is based on work performed half a decade ago when the NBN fixed wireless and satellite network rollouts were still in their infancy. Today the fixed wireless and satellite networks are largely complete. The real-world costs are better understood.

It was not Labor's preference to deal with this matter through a legislative amendment but, given that the government is not inclined to act, this was the next step that was available. Therefore, Labor will introduce an amendment to require the levy modelling to be updated and a report produced within 150 days. The responsibility for this task will be placed in the hands of the ACCC. The purpose of the proposed report is to provide updated costings using the same model and methodology that was developed by the Bureau of Communications Research while taking into account changes to inputs and assumptions that have occurred since that amount was first determined. This is not a complex exercise given that the model has already been developed and data is available to update it. To provide greater insight into what proportion of the levy charge derives from sunk costs and what proportion derives from forecast future costs, the amendment proposes that the report also provide broken down estimates for historical losses, future losses and total expected net losses.

The other aspect of the ALP amendment is to improve NBN rollout data on the national map website. This builds on an existing ALP amendment to make rollout data available on the national map, which has subsequently been incorporated into this bill. In closing, Labor supports the SIP scheme and welcomes its passage. There are aspects of the levy which are regrettable but we do not want to undermine the economics of NBN. We will support this package and hope our amendments receive the report of the Senate.

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