Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

My question is to Senator Coonan, the Minister for Communications, Information Technology and the Arts. I refer the minister to Telstra’s plans to dramatically increase the prices charged for home phone connections from $209 to $299 from 1 April this year. Isn’t it true that this price rise makes a laughing stock of the government’s promise to freeze the prices of Telstra’s fixed line costs? Does the minister accept that Telstra is able to drive a truck through the holes in the government’s price control regime? Hasn’t this price rise, along with the payphone debacle last week, demonstrated the inadequacy of both the universal service obligation and the Telstra price controls, and shown the government’s complete inability to effectively regulate Telstra?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

Thank you to Senator Lundy for the question. I am aware of Telstra’s recent proposal to increase the cost of new installations, fixed line connections, that actually require a technician to carry out cabling work. This charge will affect only people who require a technician to undertake manual work when they request a new phone connection. The vast majority of phone connections do not require a technician to carry out cabling work and will not be affected by these changes. Instead, most phone connections are made via auto-activation when you call Telstra’s customer service number to connect your phone. This is because there is existing infrastructure in place in most Australian premises.

Importantly, Telstra’s standard line activation cost, which applies to the majority of connections, will remain at the existing price of $59. It is worth noting that this is only the second increase in the cost of new line installations in more than 16 years. In developing this proposal, Telstra did consult with the Low-Income Measures Assessment Committee, or LIMAC, which comprises representatives from welfare agencies and has put in place a number of arrangements to ensure that this increase does not unduly or adversely affect low-income customers.

The government regulates to ensure that the costs of important services are both capped and protected. This includes price caps on telephone line rental and local call costs. The government’s price controls on Telstra constrain its ability to adjust line rental charges and require Telstra to have approved packages to protect low-income consumers. Under the current price control arrangements, Telstra is required to reduce the average price of a basket of local, domestic, long-distance, fixed to mobile and international call services by at least 4.5 per cent in real terms each year. The government also requires Telstra, as part of its carrier licence conditions, to have in place a package of products and arrangements for low-income consumers to protect them from the effects of line rental increases.

The low-income package developed by Telstra contains measures especially targeted at holders of pensioner concession cards, health care cards and low-income health care cards. It enables all those in need of assistance and benefits to claim them. Telstra’s low-income package has been endorsed, as I said, by LIMAC. The representatives of LIMAC are people who know what they are talking about when it comes to looking at people who are disadvantaged in the community—namely, representatives from the Smith Family, the Salvation Army and Anglicare.

So, in response to Senator Lundy’s question, I am satisfied that the price control arrangements do properly regulate essential services for all consumers and that the low-income measures effectively address the special needs of those with requirements that otherwise might be impacted or not met by the normal commercial arrangements that Telstra follows. I am also satisfied that the universal service guarantee does what it says, which is to ensure that basic services and consumers are looked after when it comes to regulating Telstra and, indeed, all other telecommunications providers.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Sport and Recreation) Share this | Link to this | Hansard source

I note Senator Coonan’s attempt to use spin and rhetoric to conceal the facts. Isn’t it actually true that the recent payphone debacle and Telstra’s 1 April home phone price increases are the direct result of the Howard government’s extreme privatisation agenda? Isn’t it also true that the minister was not aware of these skyrocketing prices or these plans to slash services before they were reported in the media? Given that the minister has been completely unable to effectively regulate Telstra or even keep herself informed of its activities, isn’t it true that the past two weeks have left the minister looking like an April fool?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

I will not attempt to deal with Senator Lundy’s rhetoric.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

You haven’t got a clue!

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

What I will say is that it is extremely misleading to highlight a rare price increase on call connection charges—the second in 16 years—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Forty-three per cent.

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

that is limited to connections that really do not apply to most people in any event.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

Paul Calvert (President) Share this | Link to this | Hansard source

Order!

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

I have given a very comprehensive answer about the range of price controls that apply and also the benefits for low-income earners.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Who did they make the $3 million off?

Helen Coonan (NSW, Liberal Party, Minister for Communications, Information Technology and the Arts) Share this | Link to this | Hansard source

It was a very comprehensive response, and I do not really feel, Mr President, that I need to respond to Senator Lundy’s blandishments.