Senate debates

Monday, 15 March 2010

Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009

Second Reading

Debate resumed from 11 March, on motion by Senator Wong:

That this bill be now read a second time.

12:31 pm

Photo of Michael RonaldsonMichael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State and Scrutiny of Government Waste) Share this | | Hansard source

I think this is my No. 3 go at this, Mr President!

Photo of John HoggJohn Hogg (President) Share this | | Hansard source

Senator Ronaldson, I await anxiously your contribution to the chamber!

Photo of Michael RonaldsonMichael Ronaldson (Victoria, Liberal Party, Shadow Special Minister of State and Scrutiny of Government Waste) Share this | | Hansard source

And I am only some 12 minutes into it too! Any other surprises? Have I got four or five goes at this on the way through?

I think when I last spoke about this, on Thursday, I was referring to the letter that Telstra had sent out to its shareholders dated 2 March 2010 in relation to the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. The letter says:

Telstra’s position on this Bill has not changed: while we support the Government’s National Broadband Network (NBN) vision and sensible reforms for our industry, we have always said this legislation is likely to destroy shareholder value and makes an agreement with NBN Co and the Government harder to achieve. In particular:

  • denying Telstra access to spectrum will harm not only shareholders, but also consumers—especially those in rural and regional Australia who rely on Telstra for their mobile services;
  • the unprecedented and largely unconstrained powers the legislation gives the ACCC and the Minister send a negative signal to investors in our industry and this country; and
  • functional separation could cost Telstra $1 billion and take five years to implement, damaging customer service and providing no real benefits to consumers.

The letter then went on to refer to the NBN Co. exposure draft legislation, which honourable senators would no doubt be aware of. It said:

On 24 February, the Government also released draft legislation that would govern how NBN Co is operated and regulated. Although this is only draft legislation, it raises for the first time the prospect of NBN Co becoming a Government-funded retailer, not just a wholesale network provider. Such an outcome would run counter to the core purpose of the NBN and the Government’s primary policy objective of restructuring the industry to have separate providers for retail and wholesale fixed network services. We are very concerned about this potential change in the Government’s position. If enacted, we would need to factor this into the financial consideration required to achieve an agreement that is in the company’s and your best interests—

that is, the interests of the Telstra shareholders to whom this letter is directed. It goes on:

In closing, let us reassure you that the interests of our investors, customers and staff will remain paramount throughout the negotiations. We are strongly representing your interests to all parties. Our concerns about the potential shift in NBN Co’s scope will be strongly and clearly stated in our submission on the draft legislation due on 15 March. …

Yours sincerely

Catherine Livingstone AO, Chairman

David Thodey, Chief Executive Officer

There has been considerable discussion about this matter in the public domain over the last week, as you would be acutely aware, Madam Deputy President Troeth, and what we have made quite clear is that we are extremely concerned about Telstra’s 1.4 million shareholders and 30,000 employees and we believe this legislation is a direct assault on them.

I want to talk about some of the arguments that have apparently underpinned this legislation, the rationale for it. I look at the competition that has developed over the last two decades to see where this industry has been going, and I can just take one company in particular, Macquarie Telecom—and this is a company that started, I think, in 1992—to show how successful various changes have been over those last two decades. This notion that the government is moving to increase competition within the industry is fascinating when you look at the new entrants, the Macquarie Telecoms of this world, who are very good companies providing a very good service and who are competitive and making money. It is not just Macquarie Telecom; there are many others. This is a competitive industry.

We are not prepared to sit back and watch the government hold a sword or a knife to Telstra’s throat in relation to this legislation. They are, as has been said in this chamber before, blackmailing Telstra in order to prop up their NBN program. Everyone in this chamber knows this will not be commercially viable. This is $43 billion of taxpayers’ funds without so much as a business plan. If you read of a company doing this, you would do one of two things: firstly, if you were an investor you would bail out quick smart or, secondly, if you were not an investor you would not touch it with a barge pole. What we are seeing is a minister who has completely and utterly lost the plot. How could you not have a business plan, and no cost-benefit analysis? It absolutely beggars belief. This is $43,000 million of someone else’s money. I will repeat that: $43,000 million of someone else’s money. This is not the government’s money. This is taxpayers’ money. This is Australians’ money: forty-three thousand million for which there is no cost-benefit analysis or business plan.

Senator Minchin on behalf of the coalition clearly articulated our position in this chamber more than a week ago when he spoke on this legislation. I will just repeat for the public record exactly what we have said. We are more than prepared to debate and engage on the competition and consumer reforms when all the information is available. But these issues should be considered comprehensively, following both the release and detailed consideration of the NBN implementation study—where is this implementation study?—and of the final legislation for the NBN Co., the National Broadband Network Companies Bill 2010 and the Telecommunications Legislation (National Broadband Network Measures—Access Arrangements) Bill 2010, which is currently in its draft form. We are more than happy to sit down and talk about this, but we are not going to see bits and pieces cherry-picked out of a debate as important as this. We are not prepared to sit back and watch cherry-picking of something as important to regional and rural Australians as the outcome of this legislation.

There is this manic desire to put something on the table, anything on the table, to show that something is being done. Our view is this is far too important a decision to be cherry-picked. It is far too important a matter to be done in a piecemeal approach. Let us put all the information on the table, including the implementation study. Let us see a cost-benefit analysis. Let us see a business plan. Let us make an informed and intelligent decision about where telecommunications in this country will go over the next 10, 15, 20 years. At the moment, we are not in a position to do so. At the moment, as legislators we cannot make an informed decision about the way forward. We cannot do that because we have a minister and a Prime Minister who are trying to get some rubber on the road in relation to telecommunications reform.

It is a bit like rubber on the road in relation to the environment, rubber on the road in relation to the pink batt fiasco: being seen to be doing something, anything, to get some rubber on the road so you look as if you are doing something. Invariably, when you do it without proper planning, when you do it without business plans, when you do it without coordination, you see what happens. You get 110 house fires. You see an industry that is actually torn apart. You see people who have lost their jobs, as there are in Colac, where a company that runs insulation as part of its business—a longstanding family small business—has put off 10 people. Why? Because there is complete and utter lack of planning. Why? Because the government has not done the hard work to substantiate these policy decisions. If we can see a government that will start finally doing some matters and doing the hard yards, then we will have a look at it. But don’t come to us after you have put some rubber on the road when all you are doing is wasting good rubber. If we are going to see some rubber on the road, let us at least have it coming from a vehicle that is delivering some long-term outcomes. There is no vehicle delivering any long-term outcome in relation to this matter.

I will finish my contribution, which, as I said, has been going for over a week, on this note. One of the damning outcomes in a policy sense in the last 10 days has been the quite remarkable admission from the government that this NBN Co. will now potentially become a retailer. It just completely and utterly destroys every iota of their rationale for this NBN Co. put up over the last 12 months. It has in one fell swoop removed from this debate any sense of legitimacy at all. It is a cheap assault on Telstra. It is a cheap assault on 1.4 million taxpayers. It is a cheap assault on mum-and-dad investors who invested in Telstra with the legitimate expectation that their government would not do something that was going to destroy that shareholder value, and certainly not after they had purchased their shares. This bill is a disgrace. The government’s approach to telecommunications reform is an absolute disgrace. I thank the chamber for the opportunity to address this matter.

12:44 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

It is my pleasure to speak on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. It is a nicely named bill whose title makes it sound fairly innocuous, but it is a bill that strikes at the very heart of shareholder risk, sovereign risk and issues to do with the long-term structure of not just Australia’s communications market but, importantly, the wealth and holdings of many thousands of Australian families.

I have had the pleasure of serving on the Senate Environment, Communications and the Arts Legislation Committee with you, Madam Acting Deputy President Troeth, which inquired into this bill and every step of this government’s National Broadband Network—all phases of this government’s National Broadband Network; indeed, of course, all the different variations of this government’s National Broadband Network. It is quite apparent to anybody who cares to give this even the most cursory of glances that this is a government that is hell bent on pursuing some type of policy under the name of the National Broadband Network, whatever the cost. We have seen from this government already the tragic consequences of its headlong pursuit of a policy where there has been no consideration of the implications of pursuing that policy.

With much fanfare, back when the Prime Minister was the Leader of the Opposition and Senator Conroy was the shadow minister for communications, the government announced the establishment of a national broadband network as a key part of its election platform. They waved it around to the Australian people and said: ‘This is a fabulous new plan. This is a plan that will fix Australia’s broadband problems and deliver for all Australians.’ The plan was based on a fibre-to-the-node broadband network. The system was based on the premise that upgrading parts of the network would deliver faster speeds and benefits across the network.

When the government were elected they started attempting to implement their fibre-to-the-node network policy. In doing so they spent millions of dollars and failed to meet every deadline they set themselves. Consultants were the major beneficiaries of this. As always when this government seems to spend its money, the winner was the consultants, who reaped millions and millions of dollars from the study of how the national fibre-to-the-node broadband network would be implemented.

What happened? After spending millions of dollars and after investing significantly in the development of that network, they discovered—they claimed—that none of the bids they received could deliver it. Had they listened along the way to the many concerns from people who suggested that the structure and approach the government were pursuing were inadequate and inappropriate, and had they listened to the concerns of the opposition along the way about the issues surrounding their National Broadband Network stage 1 proposal, they would not have ended up wasting millions of taxpayers’ dollars. But, no, they went down that path. As we have seen time and time again with home insulation, green loans and other portfolio areas where this government has pursued an agenda without listening to the warnings and without heeding any of the commentary around it, it resulted in Australian taxpayers being worse off.

So we got to the end of the National Broadband Network stage 1 with the government having spent millions of dollars and not finding a successful tenderer or proponent to deliver on its fibre-to-the-node network. The Prime Minister and the Minister for Broadband, Communications and the Digital Economy, on a few airline flights that crisscrossed the country, decided that the government’s $4-odd billion fibre-to-the-node network was not good enough and could not be delivered, so in a panic they upped the stakes. Boy did they up the stakes—it went from a $4-odd billion network to a $43 billion network. That is upping the stakes all right. That was the Prime Minister saying: ‘We’ll put it all in. We’ll put it all on red.’ This government has a continuous capacity to put it all on red—and to drive us into the red, in fact, in terms of the debt and spending of this government.

So they came up with a new national broadband network. The stage 1 fibre-to-the-node network was placed in the bin and totally forgotten about—never mind the millions of dollars wasted along the way. We now had National Broadband Network stage 2. Some 18 months into the government—never mind that no cable has been laid, no fibre has been laid and no new services have been delivered and there is nothing for Australia’s communication users; do not worry about any of that—we have a new model and a new plan that is even better. We are told it is even better because the government are going to spend some $43 billion on building it.

They believe they are going to miraculously get private sector investors. They believe that somehow they are going to keep the government shareholding in this to $51 billion. They believe that somehow Australian mums and dads are going to part with their hard-earned money to buy Aussie Infrastructure Bonds in this miraculous new National Broadband Network.

We have seen with this new process in place the government again failing to meet all their own deadlines. They are dragging their heels. They are desperately hoping they can hold together this farce of a policy until after the next election, because they know that this policy will not be attractive to investors, they know it will not be attractive to Australian mums and dads who might wish to put their hard-earned money somewhere and they know they are not going to come up with the billions of dollars they need in Aussie Infrastructure Bonds or from investors to cobble together this new fibre-to-the-home broadband network.

Not only were they upping the stakes in the dollars spent but, instead of just taking fibre to the node to a point that would hopefully increase services, they decided to go the whole hog and take it all the way to the home. They did this without any cost-benefit analysis or any study as to how it might be achieved. It was the Prime Minister and Senator Conroy sitting on the Prime Minister’s jet crisscrossing the country saying in panic: ‘We can’t deliver on our first promise, so we’d now better find a new way to deliver a better promise. We’d better find something that is big enough and bold enough that it might capture the public imagination and fool people long enough to get us through the next election.’ That is what this, of course, has been all about.

The government, in introducing this legislation, has attempted to claim somehow that it is not core to the National Broadband Network and not central to the development of the NBN. Yet even strong supporters of this legislation, such as David Forman from the Competitive Carriers Coalition, told the Senate inquiry into this bill:

If you suggested to me that the NBN was likely to succeed in the absence of this legislation I would suggest that that is a pretty big bet.

It is a very big bet; it is all on red already. The government has pushed its $40-odd billion dollars in there. It is all on red and it would be a very big bet to think that this bill is not central to the government’s NBN objectives. It is central to it because of what this bill does to Telstra. The government is using this bill to try to blackmail Telstra into structurally separating, to try to force Telstra’s hand and, in doing so, it is going to jeopardise the shareholder value for hundreds of thousands of Australian families and jeopardise Australia’s reputation as a centre, a nation, where investments are sound, where governments do not go and pull the rug out from underneath investors on an ad hoc basis.

The coalition has argued consistently from day one that this and all other NBN legislation should wait until we see the implementation study. It is not an unreasonable proposition, seeing that we know there was no cost-benefit analysis and no study done into whether fibre-to-the-home broadband could actually be delivered. There was nothing of consequence done by this government before announcing its back-of-the-envelope plan after a couple of plane rides by the Prime Minister and Senator Conroy. We have said, quite reasonably, that the government should release the implementation study into its NBN before we as a Senate and as a parliament go tearing up Australia’s communications framework, rewriting all of the legislation, trampling all over the rights of mum-and-dad shareholders and of a major Australian company, Telstra, risking Australia’s sovereign risk and putting in jeopardy the perceptions of investors right around the world. We have said, ‘Let us see the implementation study.’ Why have we said that? Every time we have questioned the government on its NBN, every time any of us have questioned Senator Conroy or anybody else, their response has been, ‘We have to wait for the implementation study,’ or, ‘That will be in the implementation study.’

Let us just have a look at the implementation study and what the government has said about it. During budget estimates last year Senator Conroy told the committee:

The government will shortly commence its implementation study, which will, among other things, work through the detailed network design and rollout schedule for the NBN. It will also investigate the extent of coverage that will be achieved by [fibre-to-the-premise], next-generation wireless broadband and satellite elements. That implementation study is due for completion in early 2010.

That was a generic statement, a fairly all-encompassing one, mind you, as to what might be in the implementation study.

Let us look at some of the key areas related to how you develop a national broadband network. Let us start with pricing, which is fairly fundamental: what will consumers pay and what will retail providers of broadband services pay? On 14 May 2009 Senator Conroy said:

Pricing levels on the National Broadband Network will be a key issue considered in the implementation study …

When asked on 26 May 2009 by Senator Minchin:

Can you guarantee that the wholesale fixed line prices will be no higher than they currently are?

could Senator Conroy guarantee that wholesalers and retailers who take up this service would not be paying any more in wholesale prices—Senator Conroy replied:

That is why we are having an implementation study.

In relation to the costs of this proposal, Senator Minchin asked:

Are you able to give the committee at least some breakdown of that $43 billion in terms of wages, equipment, capital and expenditure?

Senator Conroy on 26 May 2009 replied:

The implementation study is examining most of those issues.

In response to a question on notice asked by Senator Abetz on 17 August last year:

What is the total Federal Government contribution to its cost …

Senator Conroy responded:

To be determined as part of the Government’s consideration of the Implementation Study.

Asked about what other funding sources might be involved in the project cost, Senator Conroy answered:

Strategies to maximise private sector investment will be investigated as a part of the Implementation Study ...

When asked about the timing of the rollout and completion phases and when we might expect to see some progress, he replied:

The phasing and associated costs for the full rollout will be developed as part of the Implementation Study.

When asked about cost-benefit or other modelling that might have been done before the project was approved, Senator Conroy responded:

The Government has commenced the process to undertake a detailed Implementation Study that will include business case modelling.

When asked about rural and regional Australia and in particular the Glasson report, Senator Conroy has provided little information.

The Glasson report, started under the previous government, detailed a whole range of improvements that were necessary to services in rural and regional Australia, and the coalition funded the National Communications Fund to address those improvements. This government has raided that fund to pour into its $43 billion National Broadband Network. This government has taken the $2 billion of capital that was left to ensure rural and regional Australians were never left behind and it is of course going to pour those funds into this great monolith called the NBN. When asked about the processes for delivery of the Glasson report requirements around broadband services, what was response from Senator Conroy? He said:

We will see what the implementation study provides to us and then we might be in a better position to make an assessment along the lines that you are calling for.

How might this rollout occur? In relation to the cabling issues, will we see fibre strung up and down every street in Australia? Will it all be overhead wiring? How will it be rolled out? Senator Conroy on 16 June said:

... we have said we are having an Implementation Study to go through all these issues.

I am sorry if this is repetitive, Madam Acting Deputy President Troeth, to you or the chamber or the people in the gallery, but it goes to the heart of the fact that, on every detail this government has been asked about when it comes to this National Broadband Network, Senator Conroy has responded time and time again by citing the implementation study as the vehicle that will provide the detailed answers.

In relation to ownership levels, the government has indicated a minimum shareholding of 51 per cent. ‘Has the government indicated a maximum shareholding in this company?’ Senator Minchin asked on 26 May last year, indicating further that at that time, as is still the case today in 2010, the government owned all the shares. The response from officials at Senate estimates was:

… issues relating to the structure of the company will be finally determined after the implementation study.

When asked about equity, where the money will come from, the timing of the program from which the money will come and how much the taxpayer has to put in first before we get any of the private sector money that is allegedly coming to this, the response was:

It is an issue that will also be dealt with as part of the implementation study as the appropriate mechanisms to utilise.

It is transparently clear that this government has charged ahead on this issue, trying to ram legislation through this parliament without having considered, without having publicly released and without having informed the parliament or the senators within it of the details of this implementation study. We knew it was due to the government in February. We understand that the minister has received it.

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | | Hansard source

They’re sitting on it.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

They are sitting on it indeed, Senator Cormann. The minister revealed that he had had a knock at the door at six o’clock on a Friday night to say, ‘Minister, here’s your implementation study.’

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | | Hansard source

Interrupting his snowboarding.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Shadow Parliamentary Secretary for the Murray Darling Basin) Share this | | Hansard source

It could have been interrupting anything, I guess. It was far more likely to be interrupting the minister’s soccer viewing. So the minister has his implementation study. Given that it is canvassing all of these issues—pricing, probity, delivery to rural and regional Australia, cabling, aerial deployment, shareholding, pricing; you name it, it is canvassed in the implementation study—I assume it was a large truck that rolled up to Senator Conroy’s door at six o’clock that Friday night to deliver him the implementation study.

I can tell the Senate what would make life easier for Senator Conroy and make it easier to digest his implementation study, and that would be for him to release it instantly. If he were to release it instantly, I can tell you that there are many people on this side of the chamber, many people on the crossbenches, many people in the telecommunications sector, many business analysts and many reporters who would all love to help Senator Conroy assess the validity of his implementation study. But, most importantly, we would all love—particularly those of us who are asked to make judgments on significant and important legislation like this—to know whether it all stacks up, whether it will all work out or whether it is just going to go the way of National Broadband Network stage 1. Eventually, after millions of dollars have been spent on consultants, after the government has built up expectations throughout the community, after the government has baffled investment in so many other areas of the communications sector—because nobody wants to act, believing that the government is going to come charging through like a herd of elephants and trample all over this sector—we want to know whether it is going to stack up, whether it is actually deliverable, whether Australians will take it up, at what price it is going to have to be subsidised and whether indeed the private sector investment that the implementation study says is needed to make this happen will occur.

We want to know the answers to all of those questions because we are trying to take a responsible approach from this side of the chamber. We are trying to assess whether or not what the government says it can achieve by this can be achieved by this before we go and give it a blank cheque. This bill is effectively a blank cheque to the minister and the ACCC to tear apart the structure of Telstra, to potentially jeopardise the delivery of wireless services in Australia for years to come and to do so without having provided us with the answers to any of the fundamental questions. I and the rest of the opposition will continue to argue against this until such time as Senator Conroy comes into this place, answers questions and gives us his implementation study, rather than continuing to bat them away, saying it is in the never-never somewhere.

1:04 pm

Photo of Mathias CormannMathias Cormann (WA, Liberal Party, Shadow Minister for Employment Participation, Apprenticeships and Training) Share this | | Hansard source

The coalition is totally opposed to Labor’s attempt to force the break-up of Telstra through this legislation. We urge the Senate to join us in opposing it. The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 is, of course, a distraction. Labor’s attempt to force the break-up of Telstra is a distraction. It is a distraction from Labor’s failure to deliver on their pre-election promise to roll out the National Broadband Network. Labor are pursuing a political strategy to develop an excuse. When they go to the people at the next election they want to be able to say, ‘If only this legislation had passed. If only this obstructionist Senate had not stopped us from passing this disgraceful piece of legislation then we would have of course been able to deliver all of the things that we promised you before the last election.’ That is what this is all about.

This minister has been completely incompetent in managing the communications portfolio and, in particular, in managing the delivery of the pre-election commitment to roll out the National Broadband Network. If I were the minister I would start looking over my shoulder and listening for the steps of Minister Greg Combet down the corridor. No doubt the time will come when the Prime Minister will have no choice but to go back to Minister Combet and get him to sort out yet another failed portfolio in his government.

There is a view that some parts of this legislation are good initiatives, that some parts of this legislation would be good for rural and regional Australia. However, the problem is that the things in this legislation that are bad are so bad, and they are so bad for rural and regional Australia. The way the break-up of Telstra is proposed to proceed under this legislation is so bad that this legislation cannot possibly be supported. I say to people in rural and regional Australia that they cannot trust what the Rudd Labor government promise to deliver for rural and regional Australia. They have a very bad track record when it comes to rural and regional Australia.

I just remind people across rural and regional Australia that it was the Rudd Labor government which abolished the $2.4 billion Communications Fund which was established by the coalition for telecommunications upgrades in rural and regional Australia. It was this government that cancelled the $2 billion Opal project, which would have seen fast and affordable broadband services delivered throughout underserved rural and regional areas this year. And it is, of course, this government, the Rudd Labor government, which is winding back the Australian broadband guarantee program, which provides for subsidised services for Australians living in underserved areas. If the government had only proceeded with our plan, rural and regional Australia would have fast and affordable broadband now. But no. For purely political reasons and pride the minister is intent on going down a path that now leaves rural and regional Australia, along with the rest of Australia, sold short. It is a path that, if he had given it any thought or consideration, or if he had listened to the advice that was provided to him at the time, he would have avoided.

Of course, the government’s plan has been widely condemned. I make the point that was made by previous speakers: this is a plan that was put together on the back of a beer coaster or envelope—a $43 billion commitment of taxpayers’ money with no proper business plan and no proper process. Labor’s attempt to roll out the National Broadband Network and the way this legislation has been handled by the government so far has been roundly condemned. I will read a few extracts from some comments that have appeared in the press in recent times. On 8 August last year, Rachel Hewitt in the Herald Sun wrote:

It will take at least 18 years for most Australian homes to be connected to the Rudd Government’s National Broadband Network, according to financial services giant Goldman Sachs JBWere.

In Communications Day, on page 1 on 9 September 2009, it said:

The National Broadband Network is about as risky as it gets for potential investors … and is ‘lacking in any measure of financial or commercial rigour’.

A few weeks later Communications Day said:

Communications, Electrical and Plumbing Union national president Ed Husic was concerned that the new bill had been crafted with very little engagement with unions. ‘Frankly, from our perspective, the Government could have done a lot better on consultation.’

An article from Petroc Wilton, also in Communications Day, said:

According to an AAP report—

I note that our friends from AAP, as always, are in the gallery with us today—

the Australian Shareholders Association decried the proposal as lacking a single positive aspect from a shareholder’s perspective—

there are 1.4 million shareholders across Australia, overwhelmingly mum-and-dad investors, who are going to be seriously impacted by this sort of terrible legislation that has been put forward by the government—

forecasting nothing but pain for Telstra stock owners should the bill pass into law.

I think it’s a giant kick in the teeth for Telstra shareholders; it severely damages the earnings potential of the company and there’s really not one—

positive thing in it. Here is another headline, ‘Rudd playing Ned Kelly with Telstra’, an article by Peter Swan. It says:

We rightly denigrate corrupt communist officials when we see instances of this.

I am quoting. These are not my words; these are the words of Peter Swan. He continues:

Australians believe in fair play, so much so that our forefathers enshrined the right to just compensation for expropriation in section 51 of the Australian Constitution.

But what happens if the asset in question is not a $5 million generator in China but is worth tens of billions of dollars, is here in Australia, right now, and is owned by hundreds of thousands of mum and dad investors.

          …            …            …

The $43 billion scheme was launched with no business plan to speak of and no costings beyond the back of an envelope.

Stephen Conroy’s announcement of ‘historic reforms to telecommunications regulation’ is actually a monumental admission of incompetence, failure and both policy and regulatory weakness. In other, plainer words, it’s a total crock ...

I do not think it can be put any stronger than that. Just reflect on the way this so-called National Broadband Network plan was put together. In those days there was a series on the ABC called The Hollowmen. I am sure senators will remember it. Sadly, the series is not running right now. There is a particular episode that I remember well. There were a couple of ‘hollowmen’—a couple of advisors—standing in front of a whiteboard and they were trying to come up with a plan. The question was: does it have the wow factor? When you stand back, does it have political bang? Is it going to be properly received? I can just imagine Senator Conroy and the Prime Minister sitting in a plane with the proverbial whiteboard somewhere there in the Prime Minister’s suite in his VIP aircraft. They put $5 billion on the whiteboard. ‘Does it have the ‘wow’ factor? Nah, not good enough. Ten billion dollars? Nah. Twenty billion dollars—are we getting closer? Forty billion dollars? Oh yeah—wow! Forty billion dollars is good, but it looks too much like a figure grabbed out of the air; let’s make it $43 billion so it looks like there is some science behind it.’ Straight out of the ABC script—how to put a package together. It is not serious.

Whenever commentators or indeed senators or stakeholders across Australia have questions of this government about the lack of seriousness in what they have put forward, the response is: it will all be in the implementation study. It will all be revealed; never you worry. We know that the government received the implementation study last month. Now that all the answers are going to be revealed, does the government share them with us? No. They are being kept secret. I ask the question that I have asked in this chamber before: what has the government got to hide? If all of the answers are there, if the implementation study is going to show us how this can be realistically delivered, if the implementation study is able to show us how this $43 billion expenditure of taxpayers’ money is a sensible spending of taxpayers’ money, why would the minister not walk into this chamber today and say, ‘Here it is. You have asked us about x, y, and z: here is the answer. You have been concerned about this, that and whatever; here are the answers’? Why would the minister not do it if he had nothing to hide?

The reality is that they have not been serious right from the start. As far as the break-up of Telstra is concerned, the government have never taken it to the Australian people. The structural separation of Telstra is a pretty significant change, with 1.4 million shareholders, 30,000 employees as well as all the families associated with that directly impacted. This is going to have some serious implications for a lot of working families, dare I say, across Australia. Yet did the Rudd government take the Australian people into their confidence before the last election about what they were planning to do and say, ‘We are planning to take billions of dollars off the value of your asset when we get into government’? No, they absolutely did not.

Here we have a circumstance where the government did not put this proposition to the Australia people, so they do not have a mandate and they cannot claim a mandate. They have put a plan together on the back of an envelope without any seriousness whatsoever, and they are keeping the implementation study secret, yet they are saying to us, ‘Take us on trust. Trust us; we are from the government; we are here to help.’ I say to the Senate that we cannot take this government on trust. This government has done nothing over the last 2½ years that would lead us to believe that we can take it on trust when it comes to major expenditure of taxpayers’ money. Just look no further than the absolute debacle that was the $2½ billion Home Insulation Program. If they cannot give $2½ billion away in free home insulation without creating all sorts of issues that have been well documented, then how can we trust them with this? We are spending $43 billion just like that, sight unseen.

Last week we heard Minister Conroy, along with a conga line of failed Labor ministers, whinge and complain about so-called Senate obstruction. It was quite incredible theatre that was being played out last week and it is, no doubt, part of the government’s pre-election strategy. Everything that is happening right now has to be judged against the background of a government totally focused on its re-election and not focused on the national interest. Here we have a government whingeing, moaning and sulking about so-called Senate obstruction. The Senate is here to protect the Australian people from bad government, from bad legislation like this and, of course, from incompetent ministers who want to strip billions of dollars, without any proper explanation and without any proper process, off the value of an asset many people across Australia own.

I say to the minister: if you want to go out there again and complain about the activities of the Senate, just think about it. As legislators we have a responsibility to support good legislation but to vote against bad legislation which is not in the national interest. That is what this process is all about. Sometimes what happens in this chamber will actually force the government back to the drawing board and the government will see the light, negotiate improvements and come up with a better way forward. We have seen some examples of that over the last 2½ years. Then there is some legislation which is so bad or where the government is not prepared at all, for ideological or other reasons, to entertain any change whatsoever. If we are in a circumstance where the government presses ahead, no matter what the view of the Senate is, then of course we are going to vote against it, and so we should. We are elected to do a job. We are elected to scrutinise legislation that the government puts forward, whether the government likes it or not.

I well accept that governments of all persuasions do not like it when they do not get their way in the Senate. But there are two different ways of dealing with that. Either you sit in the corner and sulk and throw your hands up in the air because you cannot do anything, or you actually engage and accept the important role of the Senate, you accept that there is a responsibility in the Senate to scrutinise government legislation, you accept that we have all been properly elected to do a job and you engage with the Senate in a discussion on how legislation can be improved or whether there is any prospect at all of the legislation ever getting up. Quite frankly, why is the government wasting so much time with legislation which falls into the category of ‘will never get the support of this Senate’? We have had weeks and weeks spent on the flawed emissions trading scheme legislation and we have had weeks and weeks of debate on Labor’s broken promise on the private health insurance rebate. We have now spent quite some time on this legislation. They can argue until they are blue in the face, but the government know that the position is so intractable that there is absolutely no prospect that we will ever be supporting it. What are they doing? Other than whingeing, sulking and trying to set themselves up for a campaign in the lead-up to the next election where they are going to use the Senate as an excuse for why they have not delivered on all of their election promises, what is the government actually doing about it?

I read something today that quite astonished me. I do not expect this Prime Minister to meet with us but I would have expected him to have the occasional meeting with crossbench senators. I was astonished to read a transcript today that said that Senator Bob Brown has not had a face-to-face meeting with the Prime Minister in six months. I was astonished to read that the Prime Minister has not had a face-to-face meeting with Senator Xenophon in 12 months. This government is all talk and no action. They are out there whingeing, complaining, sulking, pointing the finger, blaming everybody else and blaming a Senate that is doing its job. What are they actually doing about it? Nothing. It is like the bus that I have spoken about before. They are sitting in the bus which is now the ‘let’s break up Telstra’ bus and they are driving it towards the wall. Rather than apply the brakes or turn the bus around they just accelerate. They are intent on driving that bus into the wall, again and again, no matter what happens to the 1.4 million Telstra shareholders who are on the bus with them.

This is not a way to run a government. This not a way to properly manage public policy and public administration. The people across Australia should be appalled that their government is operating this way. The people across Australia should be grateful that we have a Senate that, again and again, is holding this government to account, scrutinising bad government legislation, forcing improvements to those bills that can be improved and voting down bad government legislation which clearly cannot be improved and which is not in the national interest.

The government should give us one simple reason why we should not see a copy of that implementation study. Given the fact that there has been no business plan, given the fact that what the government is proposing to do here has not been part of a pre-election debate and given the fact that there has been no appropriate scrutiny of both the proposal on the table and the flow-on implications of it, why would the government not put forward and table today a copy of the implementation study? That could be a circuit breaker. The Rudd government could start a new era late in its first and, hopefully, final term. It could follow through on the commitment it made before the last election of increased transparency and accountability. It could come into this chamber and say, ‘Okay, we’ve seen the light, we understand what you’re saying, we understand that we are spending $43 billion of taxpayers’ money without a proper business plan, without giving you a look at any of the documentation that would demonstrate the flow-on consequences and the way we are proposing to manage the risks associated with what comes out of this bill, but we understand that you cannot possibly make a decision without having access to that.’ That would be a sensible and responsible course of action from a government that is prepared to properly engage with the Senate. But looking at the performance of this government over the last week, sending out five ministers complaining about an obstructionist Senate, having the Prime Minister out there shouting, ‘Get out of my way!’ is not the way a constructive government engages with its parliament. And whether the Rudd Labor government likes it or not, the Senate is an integral part of the legislative process in Australia. That is the way it was intended by our forefathers in the Constitution, it is a job we were elected to do, it is the job the Australian people expect us to do and we will continue to do it.

1:24 pm

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | | Hansard source

Rising to speak on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009, I would like to pick up on Senator Cormann’s comments about trust, communications and the operation of this government. I want Senator Cormann and the good Australian men and women in the gallery to have a look at how this Prime Minister conducts himself when dealing with state premiers. He wants to talk about open, transparent and cooperative federalism but this Prime Minister is so conceited and egotistical that he refuses to engage with the Premier of the State of New South Wales. The body language, the vision, capture it all. This government and Prime Minister are absolutely drunk on power and hubris and no more is that reflected than in this bill.

The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 compromises and attacks any number of things which we hold very dear in this country. First and foremost, it attacks property rights. People in Australia have a reasonable expectation. We have a stable and democratic system and we have a common law which protects people so that when they invest in this country, when they purchase shares in public companies, risks will be disclosed appropriately and Australians can rely on a consistent and regular approach to economic policy. Of course, there are going to be variations in this and I have to accept that but investors and consumers can generally make those assessments for themselves. In the case of Telstra, regulatory risks were discussed in the three prospectuses put forward by the coalition government. However, nowhere in the risks which were disclosed was there anything about the structural separation of Telstra.

The Australian people made a reasonable assumption that the Labor Party hated the privatisation of Telstra because they voted against it again and again. It cost the Australian public billions and billions of dollars through the Labor Party’s intransigence in voting against a bill and policies that the government of the time clearly had a mandate to implement. Australia would possibly have no debt today if the Labor Party had allowed the full sale of Telstra much earlier.

Why do I talk about the history of this? Because I still remember that, after the third tranche was sold, the Labor Party, having been steadfastly against it the entire time they were in opposition, walked in here and said, ‘It is now our policy; we agree with the privatisation of Telstra.’ How can we believe them when they are starting to attack the very company which they now agree should have been sold off? A $60 billion apology is what the Labor Party owe the Australian people. This is about principle. I know it is old-fashioned to have some principles in this place but those on the coalition side continue to hold principles. We do not believe that it is appropriate for government to ride roughshod over private industry unnecessarily. We believe that the interests of the 1.4 million Telstra shareholders are of importance. We believe that the 30,000 Telstra employees deserve some certainty in their future.

Photo of Gavin MarshallGavin Marshall (Victoria, Australian Labor Party) Share this | | Hansard source

Senator Marshall interjecting

Photo of Cory BernardiCory Bernardi (SA, Liberal Party, Shadow Parliamentary Secretary Assisting the Leader of the Opposition) Share this | | Hansard source

Senator Marshall is guffawing over the other side. That is his intelligent contribution to this debate. We know that Senator Marshall represents the extreme hard Left of the Labor Party—and he is starting to laugh because we are sticking up for 30,000 employees at Telstra and for the 1.4 million Telstra shareholders!

What we should be laughing at are the claims made by Senator Conroy when he was opposition spokesman for telecommunications. He was out there saying that the coalition’s plan for wireless internet would not work. He made outlandish claims such as: it was going to open garage doors, it was going to turn microwave ovens on, and it was going to make chickens produce hard boiled eggs. He made all sorts of ridiculous claims because he did not support a wireless network. Yet, now, what is he doing? He is threatening one of our largest companies, with 1.4 million shareholders and 30,000 employees, by withholding wireless spectrum, which he previously said was hopeless and would not do anything.

The concerns that arise from this bill go to the very heart of how our government should interact with the economy. I know that there are many on that side of the chamber who have differences with me on that point—it is surprising, but there are. It is logical that markets should function as efficiently as they possibly can, but that has been lost on this government. The government has taken step after step and measure after measure in order to interfere in the efficient operation of our economy, and the results are there for all to see. There have been hasty schemes, there have been bungled schemes and there have been hapless schemes. All of those words could be applied to this government. It is hasty, it is bungling and it is hapless. The insulation program is an ongoing debate. Millions upon millions of dollars have been wasted and people’s lives have been lost as a result of this hasty, bungled and hapless government program.

We have seen the same thing occurring at the schools level with the Building the Education Revolution program. Again, millions upon millions of dollars have been wasted through hasty, bungled and hapless schemes. What about the $900 bonus that went out to people? Dead people got it and people living overseas got it. What has happened to all those billions of dollars which have now gone to places that we know not where? There is now no actual impact and benefit to the economy from that bonus. There has been no long-lasting investment. It was simply a hasty, bungled and hapless scheme, as were Fuelwatch and GroceryWatch and all of the other schemes.

But perhaps the biggest and most hasty scheme that we have seen is the proposal before us today: a $43 billion taxpayer spend that was conceived on the back of an envelope—because there was no plan. There was no in-detail or in-depth study of it. The government has come to the conclusion that the scheme will not work unless it can bully, cajole or bribe Australia’s biggest telecommunication company to participate in it. It does not have to stack up on its merits. It just has to be part of the vision thing that this government wants to pursue and highlight. The government is prepared to do anything to make that happen, even if it is unnecessary or unworkable.

We should not be surprised that words like ‘blackmail’, ‘extortion’, ‘thuggery’ and ‘bullying’—describe it as you will—have been applied to the bill before us. We should not be surprised at the conduct of the Labor government because we have seen this sort of bullying, blackmailing, extortion and thuggery before. We have seen it repeatedly from Labor governments at state and federal level. It comes down to this: this government is just a reflection of other Labor governments, where bluster, the threat of intimidation and coercion mean more than actual substance. If the government were happy to rely on the substance, they would have had a business plan, not just a plan to employ mates at $450,000 a year. Mike Kaiser is now the king of communications at NBN Co. The minister’s mate has a $450,000 a year job, without it being advertised or put under any competitive pressures. It is $450,000 to communicate on behalf of a company that has no business plan and has had no significant employees or operations. It was just an idea. It was an idea that was probably cooked up on that ill-fated plane flight when the Prime Minister attacked a poor stewardess over a substandard sandwich, or was it when he was in Afghanistan attacking his aides for not having a hairdryer available. Whatever it was, it was probably around that time that they cooked it up.

I come back to the principle. Telstra shareholders—the mums and dads of Australia who relied upon government to look after their interests and who relied upon this government when it said to them that they would get a better deal—have been deceived. The government has failed. This legislation is an attack on Telstra shareholders. There is no question about that. If Telstra do not agree to do what the government wants, their commercial viability is at risk. If Telstra agree to it, they have to be part of this government’s plan, which is unviable without Telstra’s participation. The plan actually compromises Telstra’s existing business case.

It is very tough for any business operation, particularly one as big as Telstra, to manage its commercial direction when that is based on the whim of government. And the whim of government was not just about cooking up the $43 billion plan; it was also about the government pursuing its original internet broadband plan. This original plan went through a tendering system that cost millions upon millions of dollars—I think it was around $25 million—and it was spectacularly unsuccessful. At the time it went out to formal tender, I remember Senator Conroy standing up in here, defending the fact that Telstra had put in a one-page submission—and I will stand corrected on that—which was not officially a tender document, and berating us because we were concerned about whether it was a tender or not.

If a $4 billion dollar spend is not going to work very well because this government cannot make it work, what makes this government think that a $43 billion spend is actually going to work better? If $43 billion is their estimate, based on what we have seen of their school hall blowouts, their insulation bungling, GroceryWatch, Fuelwatch and all these other schemes that have probably had a bit more thought put into them than what we have got before us, that $43 billion is likely to turn into $50 billion or $60 billion or maybe even more. The Australian people will be paying for this for decades and decades to come because it will remain on the government’s balance sheet unless they can blackmail and coerce Telstra and other organisations into it to off-load their scheme.

Excusing all the bungling of this government, if they had stuck to their knitting and said, ‘We want to build a broadband network and it is going to be a wholesale provider,’ they could perhaps manage to justify it at some level. But what we have seen is more tinkering around the edges, more thuggery and bullying where they have threatened to go into the retail space. This government appear more intent on recreating their own Telstra and winding back the clock. I know they have wound back the clock on industrial relations. I know they have wound back the clock to Gough Whitlam’s exorbitant spending operations and debt levels. I know they have wound back the clock in so many areas where Australia had previously benefited from advances, but now they seem to want to wind back the clock in telecommunications. They want to control everything, just like Mr Rudd controls what his ministers can say and do, just like Mr Rudd and his kitchen cabinet turn up and tell cabinet ministers what is going to happen and the sheep meekly go along with it.

It is disappointing that with something as serious as this and with so much money at risk we have not got a minister who is actually prepared to stand up and say to Mr Rudd and the others in the kitchen cabinet, ‘There are lots of flies on this; there are too many flies to fix.’ Rather than realising they are in a big debt hole, they just keep digging, trying to tweak it and change things. These are the characteristics of a flawed government. They are the characteristics of a government that are really managing things for the immediacy of today. They are not that concerned with the future; they are more concerned with getting another election win under their belt. There are a number in the Labor Party, as we read on the weekend, particularly in Senator Arbib’s New South Wales Right, that are intent on replacing Kevin Rudd with Ms Gillard. This fusion between the Right and the Left in the New South Wales Labor Party is really quite astounding, but it comes back to principle and it is clear there are very few people of principle in decision-making positions within the Labor Party.

The coalition does want to see adequate broadband, particularly for regional and rural Australia. I remember when we were in government we implemented a program for the Yorke Peninsula, which was assisted by a great South Australian company called Internode. We were providing wireless broadband, the same sort of broadband that Senator Conroy discredited and laughed at, which he now coincidentally wants to implement.

Broadband for Australians is an important thing, but it is a question of at what cost and to what benefit? In other parts of the world there are private companies that are actually expanding their broadband networks. We are seeing a massive investment by Google in some states and cities in the United States for a very, very fast broadband service. Telstra could provide the same here if it wanted to and was allowed to get on with the business that it is in, but it is being compromised by this government. If this government were serious about it, they would let the commercial operations produce the commercial networks that they want to see and the government would focus on providing cost-efficient fast broadband access for those areas that the commercial networks would not be pursuing. This could have been done at a reasonably efficient cost and with a long-term plan in mind that would have accommodated the increasing advances in wireless spectrum, the same sorts of spectrum and technologies that were laughed at by this dinosaur of a minister for communications. He laughed at them, yet they would now provide a viable, efficient and cost-effective alternative. Instead of doing that, the government goes for the whole pie. They are trying to claim it all. They are trying to put pressure on a company that 1.4 million Australians have a shareholding in. They are putting pressure on and threatening the very jobs of 30,000 Australians, and their families will suffer under this bill.

It will not surprise you to learn, Mr Acting Deputy President Marshall, that the coalition is opposed to this bill. It is opposed to it because it compromises what I believe to be the role of government. It compromises the integrity of our system. It compromises the interests of Telstra shareholders and Telstra employees. It compromises the future debt burden and the ability to repay a rapidly escalating government debt by the Australian people. We are prepared to compromise and, if the government were prepared to compromise on providing broadband services to the Australian people, we could come up with a very effective solution. The problem is that this government is intransigent. It is not interested. It trots out the five amigos and says that this Senate is obstructionist. No, this Senate is representative of the will of the Australian people. It represents the interests of everyday Australians that this government is more interested in riding roughshod over. The coalition wants to look after Australia’s future communication needs, but we also want to balance it against Australia’s future debt obligations. That is why we are opposed to this bill.

1:44 pm

Photo of Sue BoyceSue Boyce (Queensland, Liberal Party) Share this | | Hansard source

Telstra and its forebears has always held a rather special place within my family’s history. My father, more than 60 years ago, took his first job as an engineering draftsman with what was then the Postmaster-General’s Department. Its copper networks and the extraordinary changes to them over the last 60 years have occupied a special spot within my family’s history and background. So it is with a lot of concern and disgust that we note the changes, the broken promises, in this bill.

Labor’s policy before the 2007 federal election stated:

Labor will ensure that Telstra’s wholesale and retail functions are clearly distinct within the company.

So we have another example of Labor’s deceit going to the election and their high-handed treatment of promises they make—they change them whenever they are in the mood.

The Minister for the Environment, Heritage and the Arts, Minister Garrett, was alleged to have told journalists before the election: ‘Once we get in, we’ll just change it all.’ He furiously denied saying this. Well, sorry, but the alleged words of Minister Garrett are ringing more and more true. It is pretty obvious that, if this government do not like what they have promised, they just break the promise. This legislation, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009, is yet another example of them doing that. One hopes, given the depth of feeling of the 1.4 million Telstra shareholders out there, that this is the straw that breaks the camel’s back and the people of Australia finally realise that the word of the Rudd Labor government cannot be trusted.

The government not only changes its policies to suit its spin and media manipulation but also changes its ideas. Who can forget that the Prime Minister was an ‘economic conservative’ before the election? He is now a socialist who obviously believes in big government. This government’s willingness to intervene in markets and to destroy competition for its own purposes would be breathtaking if it were not disgusting. We had a bank guarantee that favoured savings accounts over investment accounts and resulted in the freezing of investment redemptions for many, many self-funded Australian retirees. People flocked to move their money to savings accounts and incidentally improved the situation of the big four banks—allegedly the banks that the Labor government wanted to ensure faced more competition. Instead, under Labor’s policies they faced less. We had the means testing of private health insurance rebates—which this Senate dealt with last week, I am pleased to say. The promise before the election was, ‘There’ll be no means testing of private health insurance rebates.’ What did the legislation in this house last week do? Exactly that. We had said no to it once already, but they insisted on bringing it back.

We are now faced with the forced school projects, the so-called Julia Gillard memorial halls, with tenders going to non-local companies, often ill-equipped to complete the job requested. I make the point that this is the job requested by the department and the minister, not the job requested by the schools. It would be far too difficult to allow schools to decide what they need! Part of this big-government approach is to tell schools what they will have, irrespective of whether or not they need it.

Australian taxpayers have been given a very doubtful present by this government. They have been given record levels of public debt, which they will be paying back for generations to come. But what can we expect from a government that is contemptuous of markets and apparently ignorant of unintended consequences? It is certainly not prepared to carry out the rigorous and often time-consuming scrutiny needed to ensure there are no unintended consequences and, as a result, this government lacks economic credibility. This is becoming more and more clear all the time to the 1.4 million Telstra shareholders, who are faced with the outcome of this attempt by the government to split the structural and operational sides of Telstra.

The Rudd Labor government has always been confused about the correct role of Telstra. Under former Prime Minister Keating, in the early nineties, they wanted to sell Telstra. The former Prime Minister even went so far as to hold meetings with BHP. Yet another Labor leader, Kim Beazley, also considered the prospect of selling Telstra to BHP. But, when the Howard government began the privatisation of Telstra in a regulated and sustainable way, to create an efficient, competitive telecommunications market, the Labor Party opposed it every step of the way. Then, suddenly, in 2007, the Labor Party finally overturned its opposition to privatising Telstra. But, like their promise to keep Telstra’s wholesale and retail functions separate but within Telstra, the government has again deceived the electorate, by telling them that the Labor Party would support a Telstra free from government manipulation.

This bill in many ways effectively renationalises fixed-line telecommunications in Australia as a means of propping up the government’s very poorly planned—I hesitate even to call it a plan—and very poorly conceived National Broadband Network. The government are effectively double-dipping. Telstra shareholders have paid to own part of a company that is able to operate without government interference. Now, the government have decided that they need Telstra to prop up their National Broadband Network, which could be privatised in the future. How will we ever know what the plans of the government are, given that they do not stick to their word, and they are becoming known for not sticking to their word. So Telstra will have been sold once, then partly taken over by the Rudd government, then potentially sold again.

Once it gets to government, the Labor Party is willing to benefit from the changes that the Howard government made to telecommunications efficiency in this country, but it will also force structural changes to Telstra in order to implement its own poorly conceived agenda. As we have already seen from the workings of the share market, the double-dipping will be disastrous and has been disastrous for the 1.4 million Telstra shareholders in this country. Telstra has lost 30 per cent of its value since the Rudd Labor government came to office. On the day that the structural break-up was announced, Telstra shares immediately fell by 14c, just on 4.3 per cent. So this is a government that really cares about how the market functions! The most concerning thing is that the government probably had no idea that was going to be the effect of the decision, because it was so poorly thought through and the consequences, as usual, were not considered. The chairman of another large Australian company, Don Argus at BHP, has said that the structural separation is ‘punitive’ towards shareholders. Mr Argus has been quoted in the media as saying:

I’m a shareholder, and I would have to say to you that if someone takes assets out of my balance sheet and doesn’t reward me for it with a premium, I’ve got to think hard about what we are trying to achieve.

That is the way the market works. That is the way business in Australia works. That is how the share market functions. That is what keeps the economy strong. These are points that apparently are completely unknown to this government when they decided they would put heir sticky fingers into whichever pie happens to suit them at the time. Boards of private companies like Telstra have a range of fiduciary duties preventing them from making decisions that are not in the shareholders’ interests. Unfortunately we cannot say the same for this government. If there were fiduciary duty owed to the taxpayers of Australia, this government would already be in jail; not just before a court but in jail. If Senator Conroy or the Prime Minister actually sat on the board of Telstra, they would be liable for destroying the value of Telstra’s assets. But, because they are the government and apparently completely immune from the functioning of the market, they can act to destroy Telstra’s wealth without caring about the shareholders and without caring about the workings of the market which they affect to care about.

The break-up of Telstra has created uncertainty for 1.4 million investors in Telstra. That is not to consider the nine million customers that Telstra has or its 30,000 employees. They too face complete uncertainty. Shareholders invested in Telstra in good faith because the vendor Liberal government was very clear on their plans for Telstra. Labor had said that Telstra should be free from government manipulation. Shareholders invested in each Telstra offer because they believed they were purchasing shares in a company with ownership of structural telecommunications assets and ownership of wholesale and retail telecommunications businesses. In fact, I am sure many other senators have received, as I have, numerous emails in the past week from very angry shareholders and investors in Telstra. I would like to quote from one of them in the Adelaide Advertiser of 11 March. Shareholder Ian Nicholson is described as being blunt when he says: ‘What the government is doing is a bloody disgrace.’ This view would be supported totally by the coalition. Another shareholder, Mr Alan Brunner, from my home state of Queensland, from Brisbane, says: ‘The devil himself could not come up with a more sinister and dastardly plot.’ He went further to say: ‘Rudd and Conroy’—meaning Prime Minister Rudd and Minister Conroy—‘should be thoroughly disgusted with themselves.’ This is a view with which I can only wholeheartedly concur. Shareholders, as I said, invested in Telstra in good faith. They did not expect to see a forced government separation. It was not on the agenda of the Howard government and it was not even on the agenda of this Labor government before the election. It is only now, when they found themselves in a hole, that they have decided that the best way out of this is to, ‘Whoops, let’s change everything, let’s commandeer half of Telstra to suit our own agenda.’

The Senate inquiry into this legislation received many submissions from shareholder groups who were dismayed at the government’s actions. The Australian Shareholders Association told the committee:

If the forced structural separation of Telstra goes ahead as proposed by the Government, Telstra shareholders are likely to see significant destruction in the value of their investment.

And guess what? That is exactly what they have seen. What is being offered to them instead is a bit of a chat between the government and Telstra, but what is on the table? Nothing. (Time expired)

Photo of John HoggJohn Hogg (President) Share this | | Hansard source

Order! It being 2 pm, the debate is interrupted.