Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

The package of reforms incorporated in the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 strengthens the regulator’s ability to enforce existing consumer safeguards, mitigating the risk of Telstra reducing service quality on its copper network pre-National Broadband Network. The amendments are focused on retaining and strengthening existing regulations to better protect consumers’ access to and reliability of basic telephone services and also address concerns about the removal of pay phones. They also enhance ACMA’s enforcement powers when issuing infringement notices for breaches of civil penalties sections in the Telecommunications Act 1997, the Telecommunications (Consumer Protection and Service Standards) Act 1999 and the Telecommunications (Interception and Access)Act 1979.

One would have to ask: who could object to these reforms? Not the stakeholders, including Telstra; not business; not leaders in health, education, transport, the law, finance and infrastructure; not a certain member of parliament who, despite his public opposition to the scheme, has 10 million very good reasons to support it. He has, I read, invested in more than five million shares in an IT company which will benefit from the National Broadband Network. Clearly, that particular member recognises the benefits of the scheme. Equally clearly, he is well ahead of his coalition partners in doing so, because it is the coalition that continues to stand in the way of progress. It is the coalition that continues to dwell on what it perceives as a golden past where people knew their place and where ‘wireless’ meant warming up the valves. It is the coalition which, as I have said, consciously and wilfully squandered the opportunities for reform. The coalition would apparently be happy to see our country become a digital rust belt while other countries enjoy the increased competition and economic edge that widespread broadband access confers both now and in the future, when uses we have not yet imagined will be commonplace and accepted as a matter of course.

It is the government that has seized the moment. The Labor government has demonstrated the vision and the determination our nation needs right now. It is the Gillard Labor government that, despite the best efforts of those opposite to wreck and destroy, is determined to provide affordable, reliable, future-proof broadband to people in the city and the bush. It is this government that has accepted and is acting on this crucial challenge.

To conclude, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 is designed to reshape regulation in the telecommunications sector in the interests of (1) consumers, (2) business and (3) the economy more broadly. Its implementation will position the telecommunications industry to make a smooth transition to the NBN environment as the network is rolled out. It includes measures to streamline the regulatory framework to enhance competition and, importantly, to better protect consumers. I commend the bill to the Senate.

Scott Ludlam (WA, Australian Greens) Share this | Link to this | Hansard source

I was expecting some contributions from the National Party, but they do not appear to be in the chamber. I will, however, rise to make some comments on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010. This debate has been a very long time coming. Senators will recall that it was originally scheduled for October 2009. A series of procedural blocking tactics by the coalition prevented this debate from happening more than a year ago. I rewrote my speech early in March, when it looked as though the debate would finally happen; but, in a tactical masterstroke, the coalition put 400 people on the speakers list and paralysed the Australian Senate for several days. I was disappointed but sympathetic when the government withdrew the bill. Given that this place costs something in the order of $1.5 million per day to run, you need to choose your issues carefully if you are going to move a filibuster to bring it to a standstill.

Since Mr Turnbull took over the portfolio there has been a welcome change of direction, as evidenced by the vastly more reasonable list of speakers that confronts us today. We have also seen a recognition by the coalition that structural separation of Telstra is an essential stepping stone toward a healthier telecommunications sector. But there is a reason that we are having this debate now, 13 months after it was scheduled. The coalition’s strategy, passed from Senator Nick Minchin directly to Tony Abbott, is to sabotage and delay the rollout of the NBN, with the ultimate objective of destroying it. As recently as September, post election, Mr Abbott was reported as saying that Mr Turnbull had ‘the appropriate technical expertise and business experience to entirely demolish the government on this issue’—not a lot of ambiguity there. Mr Abbott brought other priorities into the 2010 election campaign, and he funded his election commitments by cancelling the budget for the NBN and replacing it with a bucket with $6 billion worth of corporate handouts in it. It was a bucket held together with rubber bands and technical illiteracy, which was rightfully condemned by everyone who chose to offer an opinion. I am still deeply impressed by the spectacle of the Liberal Party and, to my lasting disbelief, the National Party, having as their key election campaign initiative to cancel the rollout of fast broadband to regional Australia. This miscalculation played a key part, I think, in the Gillard government’s ability to form this minority government.

One benefit of the NBN proposal playing such a key role in the election campaign is that telecommunications are now firmly on the national agenda, which is probably the only good to come from this bill being debated a year late.

The legislation before us is the first real attempt to deal with fundamental regulatory issues and the market structure of the Australian telecommunications sector, which could politely be described as dysfunctional. At the outset, let us speak very plainly about why we are here, at the end of the first decade of the 21st century, debating this legislation. It is because we are engaged in the first stage of fixing a privatisation debacle.

The telecommunications market in Australia for decades has been defined and shaped by the market power of the incumbent, Telstra. The industry still retains some characteristics of the time when telecommunications were seen as an essential service to be provided for all Australians and government provision was seen as the most economic and equitable way to do this. There was an unspoken and bipartisan acknowledgement that the private sector had neither the capacity nor the strategic interest in developing national telecommunications infrastructure. In a country as vast and dispersed as Australia, such an endeavour was a proper role of the national government.

The early 1990s saw a profound shift away from this world view toward one which saw the principles of competition assume fundamental importance and the whole framework of national competition policy established. This rapid ideological shift brought with it a range of sweeping and largely untested assumptions. The most important of these is that the shareholders’ interests will align perfectly with the public interest and market forces will project services cheaper and more efficiently than a stodgy and slow-moving public utility. Modern Australian history is littered with sad reminders of what happens when that ideology collides with reality.

In the example we are considering today, there is of course a strong divergence between the public interest in a fast, inexpensive, open-access broadband network and Telstra shareholders’ interest in achieving high rates of return from the advantages delivered by its incumbent position as the monopoly owner of much of the infrastructure on which its competitors depend. The unthinking belief in the magically redeeming powers of competition and the blind ideology of frictionless free markets culminated in the full privatisation of Telstra, which the Greens, the Democrats and the ALP opposed at the time. And so the sector today is a fractured and unworkable amalgam of these two worldviews—a large, vertically and horizontally integrated company, built over decades of public investment and then sold off and left with enormous power to make its way in the marketplace.

It is no secret to anyone in the industry that Telstra has used its incumbent position to do what its directors are obliged to do by law: leverage its monopoly position to maximise its profits and extend its market power into new areas. On 11 November 2008 Telstra appeared before the Senate Select Committee on the National Broadband Network to express its views, during which Mr David Quilty said:

The bottom line for us is that we have to act in the interests of our shareholders. We cannot do anything that we do not consider is in the interests of our shareholders. There is no doubt in the mind of Telstra management, and all of the analyst reports concur, that further separation of Telstra is not in our shareholders’ interests. We simply cannot contemplate it.

What an extraordinary change between November 2008 and November 2010. In other words, Telstra was more than comfortable with the market power it was able to exercise and could not see any reason to want to change. This is partly an outgrowth of the corporate culture exemplified by the take-no-prisoners approach of Sol Trujillo and his team, but it also reflects a deeply embedded legal obligation: directors of corporations have to put shareholders first, or they betray their fiduciary obligation to act in their shareholders’ interests.

Today we are here to talk about the public interest. A basic principle of competition policy is that in a market as dominated by a single incumbent as telecommunications is in this country, a wholesale provider should not compete with its own customers. There are simply too many opportunities for monopolistic behaviour. Whole slabs of the Trade Practices Act are dedicated to trying to prevent exactly the kind of behaviour that has characterised this sector for as long as most people can remember.

This bill is the first real attempt to deal with this textbook case of what happens when the public interest diverges from corporate self-interest. When I say ‘the public’, I do not refer only to the roughly 1.4 million Telstra shareholders who took up equity in the company on the three occasions in which tranches of stock were put up for sale; I refer to the 22 million Australians for whom telecommunications are now an essential service.

Australia now has some of the most expensive fixed line and broadband prices in the OECD. The most recent data indicate that Australian small-business or home-office customers are paying more than 30 percent above the average for this group of countries. We are paying among the highest prices in the OECD in all speed categories according to a 2008 survey. And we are a vast distance behind in broadband speeds when compared to leading countries, including Japan and Singapore.

Last year, the Telecommunications Industry Ombudsman dealt with half a million complaint issues. Complaints figures detailed in the TIO annual report for 2008-09 show 178,000 compliance issues about mobile phone services alone. That was an increase of 107 per cent on the previous year. The rising discontent is not just at the user end. The ACCC reported in March that, since the inception of the negotiate-arbitrate approach to resolving disputes between Telstra and access seekers interested in offering rival retail services over Telstra’s network, more than 150 access disputes have been lodged with the ACCC. The disputes range across monthly access charges, connection charges and managed network migration or service qualification charges as well as an array of non-price terms, and they are often protracted and expensive as all procedural avenues are exhausted at great expense to all parties. By contrast, in the gas and electricity sectors ‘where the natural monopoly facility is separated from the contestable market elements, and revenue or price is set by the regulator’—that is, sectors that operate in the way that the government is seeking to model the telecommunications sector if this bill is carried—four access disputes have been lodged with the ACCC over the same period.

There are proposals in this legislation which would allow the minister to issue binding rules of conduct to replace the voluntary industry codes which have in some cases been shown to be ineffective. But these powers rely on the minister exercising them—for end-user protection and customer service to improve, this bill must only be seen as the first step. Our national end-user advocate, ACCAN, has pointed the way with Consumers first: smart regulation for digital Australia, a report by the UTS Communications Law Centre published earlier this month. On release of that study, ACCAN chief executive, Teresa Corbin said:

The current self-regulatory system, with its excessive rules, exemptions and exclusions, has failed, …Without a new approach to protection, consumers are going to be left with providers that still don’t care and won’t change.

That new approach can begin today if the minister makes good use of the leverage over the industry that he has written into this bill and that the Greens have approved.

While negotiations between Telstra, the government, the ACCC and NBN Co. continue behind the scenes, there is broad agreement that structural separation with fair compensation for Telstra’s traffic and physical assets provides the simplest and most equitable way forward. Everyone is now on board with this proposal—even Telstra, which spent six months to one year opposing the bill and then changed tack earlier this year when it became apparent that what it had earlier described as a gun to the head was in fact a lifeline.

The proposal is for the publicly owned National Broadband Network to take over Telstra’s wholesale traffic and much of the physical infrastructure of poles, wires and ducts over which telecommunications services are delivered. In return, Telstra is compensated for handing over these assets and relieved of the burden of working out what to do with a decaying fixed-line copper network that is delivering falling revenues and hurting its share price far more dramatically than any regulatory uncertainty generated by this bill.

After a long period of negotiation and under a framework that is still largely opaque, the government has arrived at a heads of agreement which will see $11 billion handed over by the taxpayer to bring Telstra’s wholesale network back into public hands. It is hard to imagine a more complete failure of a privatisation process than this one, which has resulted in this parliament having to bring the system back into the public domain.

At the end of 2008, in our minority report to the first interim report of the Senate Select Committee on the National Broadband Network, the Greens urged the government to consider:

… taking a majority equity stake in the National Broadband Network and operating it as a competitively neutral, open-access network.

Although that is effectively the model we have arrived at, until very recently a number of issues remained outstanding. Most obvious was the government’s incomprehensible proposal to sell down the government’s stake in the NBN within an automatic time frame based on nothing more than a test of whether the market would deliver a fair price for such a sale. After going to all the trouble of bringing the network back into public hands after several years of quite evident market failure, the Greens can see no justification for repeating the privatisation debacle all over again with the NBN.

Over a period of several months, the Australian Greens have been negotiating to put some checks and balances into the NBN bill, which I believe the government will introduce later this week. We sought to remove the automatic triggers for privatisation that were built into the NBN exposure draft bill. Whatever our views might be on the wisdom of privatisation, it is hard to imagine why parliament would want to compel a future government to do so, whether it wanted to or not. The government has agreed with this proposal, and the privatisation provisions in the NBN bill when introduced will be entirely discretionary. If a future government is happy with the operations of the NBN, there will be no obligation to sell it. If, on the other hand, there is a will on the part of the government to sell the network, the government will be required to conduct a full public interest test. The amendments that the Greens propose to the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 include a provision for the establishment of a joint parliamentary committee and a detailed reference to the Productivity Commission to examine the impacts not just on the Commonwealth balance sheet but also on the competitive structure of the market, the implications for governance, the consequences for social inclusion and so on.

The opposition have been going on at some length today both here and in the other place about why we would support Productivity Commission referral at the end of the NBN buildout rather than at the beginning. But our proposal is not for a cost-benefit analysis—we have no issue whatsoever with the Productivity Commission’s coming on board and offering its expertise. The issue is not with the PC; it is with the validity, or the point, of doing a cost-benefit analysis. What we are proposing is that at the end of the buildout there be a comprehensive public interest test which will not rely on formula but on research. The government has agreed to the Greens’ recommendations on privatisation so that, if a proposal for privatisation comes forward, at the bare minimum the government will undertake a study to determine whether or not privatisation is a good idea. If, subsequent to undertaking this public interest test, the government still wishes to proceed with the sale, the decision will need to be approved by parliament through the mechanism of an instrument that either chamber can disallow. Having set these basic checks and balances in place, the Greens are more comfortable with the idea of handing over $11 billion, or whatever the final figure ends up being, to bring Telstra’s wholesale assets back into public hands. Our objective has been to make it as difficult as possible for any future government to repeat the debacle of the sale of Telstra—if it is to happen, we must at least be doing it with our eyes open.

This brings forward some of the recommendations, which were quite strongly worded, in the implementation study that KPMG-McKinsey produced. They said:

The privatisation of NBN Co will significantly reduce the Government’s subsequent capacity to influence its operations and market conduct. At the same time, pressure from private shareholders and the appointment of a new board representing them will create an incentive for NBN Co to focus on commercial returns to the exclusion of other objectives.

The authors of the implementation study had very serious concerns about the competitive outcomes if the NBN Co. was privatised. The Greens’ share these concerns—and we think they were sensibly stated in the implementation study—but we also have much broader concerns. They go to governance issues, social inclusion issues and a whole range of other issues which are encompassed in our amendments to the bill providing for a reference to the Productivity Commission. There have been similar comments and concerns raised within the industry by Optus as well as by the Competitive Carriers Coalition, which represents the more diverse end of the mid-tier and smaller service providers operating in Australia. Let us not repeat history. It is my hope that the amendments we have secured to the NBN bill will never be brought into play and that by the time the NBN has been built there will be a public and political consensus that essential service, natural monopoly infrastructure should stay in public hands and be operated in the public interest. In the meantime, it will be very good to know the Greens’ amendments are in the legislation.

Most of the coalition’s contributions to the debate thus far have centred on the rights of Telstra’s 1.4 million shareholders, whose interests do need to be considered in this rare exercise of parliamentary intervention in a dysfunctional market. I stress that the Greens are not out to get Telstra or its shareholders, and I have no doubt that this process can deliver a fair outcome for Telstra that will see it take its rightful place in a rapidly expanding telecommunications market. A number of issues are worth considering: firstly, whether shareholders might have seen this intervention coming and, secondly, whether in retrospect the current process is necessarily all bad for Telstra. The T3 share offer document, in 2006, included this passage:

The real risk with operational separation, in Telstra’s opinion, lies in the power of the Minister to determine the way Telstra conducts its business by directing it to vary its operational separation plan, subject to the aims and objects of the legislation which are very broad. These regulatory discretions could in Telstra’s opinion be used with a significant adverse effect on Telstra.

Every single share offer document contained some kind of warning to the shareholders that there was a material regulatory risk that the government could move some form of what we eventually saw. That is fair warning—shareholders were made aware of the potential for future changes to the regulatory framework, just as they should have been. We as legislators need to consider the interests of all 22 million Australians in vibrant and healthy telecommunications markets, not just the interests of shareholders in one particular company. This naturally raises the question of whether this process is automatically bad for Telstra. Keep in mind that this debate is happening a year late, during which time Telstra shares have dropped by approximately 25 per cent. I wonder if Telstra’s shareholders realise that if the coalition’s delaying tactics had not been so successful we would be a year further down the track with this process than we are now, and Telstra could have avoided 13 months of uncertainty.

This bill sets in motion a key microeconomic reform that the Greens would support in principle even if the NBN did not exist. In the context of the government’s refusal this week to hand over the business case, there is no point in arguing over whether or not this bill is linked to the NBN, because of course it is. But we agreed a year ago that this bill should be debated because, even if this proposal for the NBN was not on the table, the creation of a government owned, open access wholesale telecommuncations network is, we believe, in the public interest.

I will conclude with some reminders of what has been consistently lost in this debate—that is, what we will use this network for, because we have heard almost nothing about that during this debate. Once this bill has cleared the parliament, I look forward to moving past the overheated clash of political or economic self-interest that has skewed this debate from the beginning. I look forward to talking about what widely distributed Western Desert Aboriginal communities will do with this technology when it finally reaches them; what their health workers will make of remote telemedicine applications; how their administrators will manage when they do not have to download PDF files over a dial-up connection; and what artists, elders and cultural practitioners will do with live videoconferencing across thousands of kilometres of country.

I look forward to engaging more directly in the Gov 2.0 debate to examine how this technology can unlock more direct democracy in Australia, create more diversity in our media landscape and amplify voices at the margins of Australian society.

I look forward to talking with the small business operators who have thought through the consequences of having 469 million broadband users coming online across China, which is the estimated online population there by the end of 2010. Elsewhere in the region there are opportunities of a similar magnitude. We have been considering this debate in isolation from the fact that, at the other end of the line, it will not just be your kids working shifts in Karratha but planet earth.

I do not know whether it is still true that half the population of the world is yet to make its first phone call. There is no doubt that the digital divide is still deeply entrenched and maps perfectly onto areas of poverty and disadvantage whether in Australia or overseas. But is it possible to unlock the transformative educational and community empowerment properties of instantaneous communications between here and Tokyo, here and Nairobi or here and the Swat Valley?

We know there are serious challenges in front of us, and this project brings with it enormous risks. It carries risk not just because of the price tag but also because it attempts to unscramble the mess that privatisation of a vertically integrated incumbent set in train. It carries risk because the government still imagines it can somehow filter the network, and the Attorney General hopes to more effectively spy on all of us over the network. As the government’s inquiry into cybercrime or the cybersafety committee has identified, there are real and present dangers of becoming immersed in these networks if you go in without your eyes open.

This bill should have been carried a year ago. This proposal carries risk and leaves the government open to sustained attack from an opposition that I think has made the dramatically wrong call when it decided to destroy the NBN. The risk arises because it is one of the few genuinely bold initiatives of the Rudd-Gillard period in government. We will be supporting this bill and we look forward to its passage later this week.

Barnaby Joyce (Queensland, National Party, Leader of The Nationals in the Senate) Share this | Link to this | Hansard source

I rise to speak on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010. You can believe in a broadband without believing in an NBN; in fact you have to. I have to commend Senator Ludlam for the research at the front end of his speech, which was quite exemplary, but there are still some major concerns. On the trade practices position, you have to note that especially 577BA—and I take this as research from the parliamentary digest—allows the ACCC to accept such undertakings which are currently likely to be in contravention of the Trade Practices Act. This is just one example of where we need to have greater scrutiny of what exactly is going on here.

Another issue which you must take into account, apart from theatrics, is that the other day the minister responsible for this was unaware of the NBN’s connection to the act. The reason he is unaware, I would suggest, could be incompetence but it could also be that certain sections of this have appeared at a late time and nature. Therefore we need to be far more diligent, because if the minister does not understand it then how on earth are we going to have the proper amount of time to diligently go through this?

There are strong concerns held about legislation which, in its dire haste to be pushed through, has allowed, I would suggest, Telstra to have unreasonable bargaining power in exactly how this thing is constructed. It is constructed in such a way that their engagement will be excluded from the ACCC and in future that gets handed on. It was going to be privatised but apparently the Greens have changed all that. It goes to show the power of the Greens. The Greens have completely changed the government’s direction and put it on its head.

The reason the NBN was going to be privatised is that we had to try and pay back some of the debt. But we are not paying back any of the debt now because we are not selling it—so we are stuck with the debt. Obviously, if it is going to be privatised it just goes to show that the business plan on stringent analysis conducted by the Productivity Commission just would not stand up. It will not stand up, because even the McKinsey report only talks about a six per cent return. Why on earth would you go out and invest $43 billion in something with massive risks if you can put it in the bank and get 5.45 per cent on bond rate? If you put it in a retail bank, you will get better than the return that the NBN is going to give you. There must be bells ringing here that this thing just does not stack up. The only way you can make it stack up is you have to jack up the revenue stream, which means you have to jack up the price of phone calls. If you are not going to jack up the price of phone calls then you are going to have to jack up the tax rate to try and cover it. There are fundamental flaws right at the front end.

We also heard Senator Ludlam say something that was not right. He talked about how they were buying back for $11 billion the structural assets of Telstra. They are not; they are leasing them. It is a long-term lease but it is a lease. We are not buying the pipes and the pits; we are leasing them. I think it is over 21 years, if my memory serves me correctly. This is a day in the park for Telstra. They have got a long-term lease on an asset, which at the end of the day they own, and if it is of no value then they have done very well out of it anyhow. They have done far better out of this lease then they would have out of the ownership. This is part of the reason that Telstra have come round.

Telstra have paid a very astute game because they have got the government exposed. The government are falling over themselves to get this through—and, yes, you did tell the Independents and everybody else that this was the reason they had to vote for you. That is what we heard over and over again: ‘It’s all about the NBN.’ Yes, you have got a great investment in trying to make sure that the NBN stacks up. If it does not stack up, the reason you are there on the Treasury bench is implausible, because this was the warrant you gave to people.

There are so many other things that we should go through but, like most things, when you are talking to a person who is about to engage in a project, you must have a bit of a retrospective about what this person does and whether they have the competencies to do it. We have seen the minister on prime time television show that he does not even understand his own act. But the fault does not just lie with him. I want to go through a few things—and at the end of this list I will ask you a very serious question about whether you believe that these are the people who should be building a telephone network.

The people building the telephone network are also the people responsible for Fuelwatch; GroceryWatch; the war on obesity; the war on homelessness; the war on executive salaries; the war on inflation; Building the Education Revolution mark I; the biggest budget deficit in our nation’s history with the biggest debt in our nation’s history; the ceiling insulation fiasco; the Green Loans fiasco; the computers in schools fiasco; the emissions trading scheme, which was supposed to be the greatest moral challenge of our time but was ditched and the minister became the minister for finance; the idea to cool the planet from a room in Canberra; boat people; the new ETS, the East Timor solution, which they did not actually talk to the government in East Timor about; the citizens assembly, which was a randomly selected 150 people to run climate policy; cash for clunkers, where every young buck could find an old wreck behind a shed and cash in on it; the Strategic Indigenous Housing and Infrastructure Program, where they were meant to build 750 homes but only built six; the hospital takeover, where we were going to take over the hospitals by July 2009 but it never happened; GP superclinics, where they were supposed to build 36 but none will open till next year; childcare centres; schools; and equal pay for women. They are just a few examples for this job application. These are the people who are about to engage in the largest infrastructure project in our nation’s history and build a new telephone company. Call me old-fashioned, but I have some concerns—I really do. What we see now is this haste as the government ramps up the momentum and the pressure is on to make this thing stick together. But it just cannot stick together; it has holes all through it.

The only way we can really get to the bottom of this is, as the Prime Minister said—and I hate to quote her—to ‘let the sun shine in’. That is a sure-fire cure for tinea, but it does not seem to be doing much around here. We must let the Australian people have fair access to the information. In his contribution Senator Ludlum said it is ‘their money’. No, it is not actually the taxpayers’ money; we are borrowing the money. We do not have money anymore; we are $172.8 billion in gross debt. So we are going to borrow the money for this, but the taxpayers will have to pay that money back. They will have to hock themselves up to the eyeballs before they tip themselves over the edge, so we should at least give them a fair capacity to understand what they are getting themselves in for.

Even on the government’s estimates, which are always wrong—we saw that in the Building the Education Revolution program—we are going to borrow $26 billion to $27 billion. A word of caution: if we were to put that on the debt we have at the moment, we would have to introduce another appropriation bill because we would have passed our limit of $200 billion. By the way, we stuck another $2.8 billion on that debt last week, in just one week. No-one seems to be worried about that. It is fascinating. I am a little old bush accountant, but that just scares me to death. Anyway, if we stuck that money on top of the debt we have at the moment, we would have to introduce another appropriation bill because we would have exceeded our $200 billion limit, which in your initial budget forecast you said we would not reach until 2013-14. We look awfully like getting there in around March or April next year, and probably earlier. If we keep going at the rate we did last week, it will happen much earlier.

It is not that the coalition have some pathological dislike of broadband; we do not—we actually proposed a broadband policy ourselves. The difference is that you must cut the cloth to fit the wearer. You must only borrow money that you think you can repay. We are not paying for this project with cash; we will be using money from China, the Middle East and everywhere else. The concern the Australian people have is just how much debt this government is willing to put us in.

Yes, there are benefits to broadband. I am not suggesting there are not, but, if you were to put an opportunity cost against it, would there be the same benefits you would get from inland rail, new port infrastructure, new roads or new airports? When you stack it up against other things, is it the best bang for your buck? That question also has to be asked, by people, to be honest, whose job it is to deliver such forensic analysis—the Productivity Commission. Why do the Labor Party have this passionate dislike of an independent authority to oversee what they stand behind as their biggest reason to exist—their political raison d’etre?

We are now in very unusual territory. Now that the Greens have decided that we will not actually be selling the NBN but keeping it, shouldn’t Mr Swan now trot out the front and give us a little lecture about how we are going to pay this money back? Wouldn’t that be a reasonable thing to expect to happen today? Mr Swan could walk out the front and say, ‘Folks, it looks like we’re going to have ourselves another $27 billion or $30 billion worth of debt. We were going to try to get it back by selling the show, but we can’t sell it anymore because we are held to ransom by the Greens and this is my intention of how we are going to pay it back’—because someone is going to pay this money back. That discussion has not been had with anybody.

When can we expect to see this fiscal angel descending from heaven to pay all these debts back? This is a discussion that is just not had because, basically, the government—the same government that gave you that whole litany from the war on obesity to 190 house fires in the ceiling insulation program—is totally and utterly incompetent and becoming a little dangerous in where it is going.

One of the things that I heard Senator Ludlam talk about was getting broadband fibre to crucial parts of the economy such as schools and hospitals. If that was all we needed, we would not be about to invest $43 billion. It will cost $43 billion because we are about to install broadband into 93 per cent of Australia—so they tell us. I do not even know whether 93 per cent of Australia wants it, so why are we doing it? I know for certain that they are not prepared to pay for it from what we have seen thus far with the testing in such places as Tasmania. I know for certain that in many areas they are going to be getting it where there is probably an optic fibre already approximate to them already delivered. There are probably multiple ones. If we were just talking about getting to remote areas, if we were talking about ring-roading, if we were talking about a deliberative strategy of getting optic fibre to inland hospitals and inland schools, I would bet you that we would be up for vastly less than $43 billion. It was the coalition that put up a broadband policy and the whole premise of it was that we recognised the financial position we were in and we were trying to make sure that we did not take the nation to a precarious position. That seems to be the Labor Party’s trick.

What is the process? The minister has to come in and tell us and the Treasurer has to announce how they are going to pay this money back. They are always great in telling you that in many moons time everything gets better. In many moons time all the debts will be paid back. But you look at how they are actually acting now and you know that that is just a flight of fancy. They are just tumbling down the tube. They have given up the fig leaf of some mechanism mitigating the extent of the debt that we were going to get ourselves into—that is, that they were going to transfer the asset once more back into cash to try to pay some of the debt back—so we are just going to be holders of the debt.

A main reason in the debate that brought about a move for the privatisation of Telstra—for better or for worse, it happened—was that we needed money to put against Labor’s previous debt. We had $96 billion last time and we needed money to put against that previous debt. Whether that all went against it or some of it went against it, that is a discussion piece which many people argue about. But the point was that if the money had not come from Telstra then we would have had to have found money from elsewhere to pay the debt or we would have been able to use that money to put on other things. We do not have any of those assets anymore. Telstra was worth $45 billion. There are no more of those assets about. The idea that we would create a telephone company and then hope and pray that it is an appreciating asset and not a depreciating asset and then realise that as a technology races ahead it might become a superfluous asset, a stranded asset—to realise that you are not buying the pipes and pits, you are leasing the pipes and pits, and to realise that where we are at the moment is not in a position of having $20 billion and cash in the bank but instead a position where we are absolutely maxed out with debt—means that this is an extremely foolish proposition. When we go forward on a proposition like this and find that we have a minister who cannot even answer simple questions about the substantive details of the legislation that he has brought into this parliament you are left absolutely no confidence whatsoever.

I hope that the Greens and the Independents, who have done their homework on this, take the next step. You are not going to get anywhere with the Labor Party. They have gone to the dark side and you will never get them back. I hope the Greens and the Independents take the next step of what is diligent assessment of this project—and diligent assessment is always done at the start. Understand the signs that have been sent to you when people try to stitch you up into six-year confidentiality agreements as a politician. Understand that that is not usual circumstances around here. I do not know the last time politicians were asked to sign a six-year confidentiality agreement. I cannot think of it. It is another little thing to be put on the end of the list of Labor Party fiascos—the idea of new Julia, old Julia, real Julia, fake Julia, ‘six-year confidentiality agreements to talk about’ Julia. If we do not get this right then the pain that you deliver back to the Australian taxpayers will be far in excess of any joy they get from downloading movies quicker.

Christopher Back (WA, Liberal Party) Share this | Link to this | Hansard source

This is an incredibly important issue. It is one that should not be lost on the Australian community. Should it be successful it will be one of the greatest expenditures, if not the greatest, in terms of infrastructure in this country’s history. I think what we are actually seeing is a very, very severe abuse of process. This Prime Minister came to the parliament and she came into government and she was promising a new era of transparency. This was to be letting in the light. I went back and had a look at the bible for this place—Odgers. In the first chapter, ‘The Senate and its constitutional role’, I was frightened by what I read.

The functions of the Australian Senate may be summarised as follows:

I will quote some of them, if I may.

(1) As an essential of federalism, to ensure adequate representation of the people of all the states ...

               …            …            …

(4) To review legislative and other proposals initiated in the House of Representatives, and to ensure proper consideration of all legislation.

That is what we are tasked to do.

(5) To ensure that legislative measures are exposed to the considered views of the community and to provide opportunity for contentious legislation to be subject to electoral scrutiny. ...

(6) To provide protection against a government ... introducing extreme measures for which it does not have broad community support.

Nor a mandate.

(7) To provide adequate scrutiny of financial measures, especially by committees ...

               …            …            …

(9) To probe and check the administration of the laws, to keep itself—

the Senate—

and the public informed, and to insist on ministerial accountability for the government’s administration.

I have asked myself during the debate this year to what extent we, as senators, can look at these principles and satisfy ourselves, the electorate and the wider Australian community that we have discharged our responsibilities. The reality is that we have not. How does this stack up in only the events of the last few days in which some senators, but not all, have selectively been offered briefings on condition, as the previous speaker said, that they sign up to secrecy agreements? Where does that fit into ensuring legislative measures are exposed to the considered views of the community? We now know the Greens have selectively been given advice and have made their decisions, and during question time in this place today we had the responsible minister, the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, say to Senator Birmingham, ‘You will not be included in the opportunity to be briefed in advance on this legislation.’

We have in this place an abuse of process and it is one, as 76, we should loudly be dissatisfied about. In March of this year, when I spoke to this bill as a person who has spent probably the last 30 years owning and operating businesses and as a chief executive of government agencies, I said that anything of this nature starts with the development of a properly structured business plan, only to be laughed at by the minister, who proudly said he could spend $46 billion of taxpayers’ money without a business plan. That was on 10 and 11 March. Apparently, we now have a business plan, some elements of which may or may not be available for scrutiny by the Senate, a selection of some of our peers and colleagues, subject to signing secrecy agreements, being told that they might be able to look at bits of it and a minister who says that upon the writings of the Chief Executive of NBN Co., appointed by himself without any formal selection or advertising process, we are all supposed to accept the legislation and pass it. I say again that this is an abuse of process.

One of the elements that I referred to in the development of a business plan on that occasion was a cost-benefit analysis. We asked who else had indicated the need for such an analysis. None other than the Secretary of Treasury, Dr Henry, who said in September 2009:

Government spending that does not pass an appropriately defined cost benefit test necessarily detracts from Australia’s wellbeing.

That was the senior official of Treasury calling for a cost-benefit analysis. A regulatory economics expert, Henry Ergas, said at the time that taxpayers deserve better. He said:

This is hardly public policy as it should be; nor is it structural reform. Rather it is legislated blackmail. The legislation’s very vagueness makes it clear what the government seeks is not a mandate for clearly defined change but an open-ended discretion to inflict massive costs … most immediately on Telstra and its shareholders.

He could well extend that to the wider Australian community. We have asked that the Productivity Commission be tasked to do an independent economic analysis of this biggest ever infrastructure program in our history. But no, we have been told the Productivity Commission does not need to do that—that we do not need an economic analysis or a cost-benefit analysis—yet we seem to have been asked to take on trust legislation which is deeply flawed.

What are the objectives of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010? The first objective is that Telstra is required to ‘voluntarily’ structurally separate its network and retail businesses. If it does not, the bill penalises Telstra by potentially barring it from 4G spectrum auctions and compels the sale of its HFC cable network and/or its 50 per cent interest in Foxtel. This is not some South American quango or some Eastern bloc communist dominated country; this is the democratic country of Australia. Telstra is a public company with two million shareholders. It has 50,000 or 60,000 employees and it provides services to 17 million people in this country and beyond our shores. The threat is that if it does not then it will be penalised, barring it from 4G spectrum auctions and/or losing 50 per cent of its interest in Foxtel.

The second key objective of the bill—and it causes you to wonder where we are—exempts the proposed NBN Co.-Telstra agreement from the normal operation of the Competition and Consumer Act 2010: ‘Don’t do as I say, don’t do as I do.’ This is an exemption from scrutiny which is visited upon every other public entity, company, in this country. The third objective is to amend the telecommunications access regime to a new approach where the ACCC sets upfront price and non-price terms for periods of up to three to five years. This would shift litigation, reduce the risk of litigation and increase certainty for access seekers. Who else gets this level of benefit economically? Nobody. The fourth objective of the bill is to enlarge consumer protections, including universal service obligations. We should be tearing the walls of this place down when we contemplate what this legislation actually intends to do.

I ask then the question: what has been the response from people in the industry? The past Chairman of the ACCC, Allan Fels, said:

One must have a real concern that the outcome of negotiations between Telstra and the government is that there will be a monopoly National Broadband Network with Telstra and other major telco players all involved but with little competition from anyone else.

All of us know the enormous international competitiveness in the telecommunications world. We can all link up on Skype. We can link up offices around the world and have a one- or two-hour conversation—as indeed I did in the company that I ran prior to coming into this place, where we would have conferences free of charge through internet conductivity with Dubai, Mumbai, Singapore, Kuala Lumpur and Perth. Why would we create a monopoly when there is such competitiveness in telecommunications around the world?

I wish to raise another point, and it relates to the fact that we are of course for improved broadband conductivity; everybody is for improved broadband connectivity, just not this plan. I use the analogy of water reticulation. What are we contemplating here in Australia? We are contemplating a $43 billion project to ‘make the reticulation pipelines around our property bigger and bigger and bigger’—and, you would think, faster and faster and faster. But, as has been pointed out to me by telecommunications experts, we are doing nothing with this expenditure or this legislation to actually increase the diameter of the pipeline internationally. Ninety-five per cent of all our internet connectivity is outside Australia; only five per cent is within Australia. To take my analogy further, if all you have is an 18 millimetre pipeline from the main into your home, the width of the pipes within your property does not matter a toss; you will be limited in your connectivity, you will be limited in the supply, by the diameter of that pipeline—and none of this legislation is directed at improving the quality, the timeliness, the size or the capacity of that pipeline joining us to the outside world. This is effectively a $43 billion intranet, if you take Australia as the one entity. There is no sense in increasing it to 100 megabits or anything else if you cannot increase the connectivity to the 95 per cent of the world where you actually connect into the internet.

I now come to what it is that must be changed. The first thing we must do to preserve Australia’s integrity in the wider business world, including the international business world, is ensure the normal operation of our competition and consumer legislation, which protects the interests of consumers and also promotes competition—and that must apply to the Telstra-NBN Co. deal, however it is structured. Only today have we learnt that, as a result of intervention and dominance by the Greens, the whole ball park has changed in terms of the future ownership of NBN Co. When we rose on Thursday, according to the minister, the NBN Co. was ultimately to be sold. We now know that, as a result of dominance by the Greens Party, the NBN Co. is to remain in public hands—yet another monopoly. Back to Communist Russia!

The second thing we must do is ensure that the ACCC has the capacity to properly review all aspects associated with this legislation, and it must have the long-term interests of all users—consumers, competitors and the parliament—in mind. If we are to regain the parliament’s control over this minister, it is essential that any ministerial direction to the ACCC must come under the umbrella of, and have joined to it, a disallowable instrument. When it comes to spectrum, since we have already seen that one of the objectives of the bill is to penalise Telstra should they not comply with the government’s demands, we must remove the minister’s gun to the head of Telstra and take away his discretion to bar Telstra from bidding for the next generation 4G wireless spectrum—and, again, we must achieve that through a disallowable instrument. We have got to remove that situation and we have to ensure that the private sector has equal opportunity to participate in this activity into the future.

As part of that process, when I spoke in March, as there was not at that time any intention to develop a business plan for this particular project, I considered what might be involved in a risk analysis. What is at risk? The first thing at risk is the incredible sum of money. As indicated by Senator Joyce in his contribution to this debate, it is not taxpayers’ money, it is loan money; it is money that has to be borrowed and repaid. If we do not get a hold of a business plan and a cost-benefit analysis we will never be able to scrutinise just how those funds are to be repaid. But what of the Telstra shareholders? Last Friday the Telstra share price was down to, I think, $2.66, which is near the year’s low of $2.60. So the first thing that is at risk is the debt to the Australian taxpayer and the erosion of the value of Telstra shares.

The second—which I have referred to and will repeat—is the integrity of Australia’s competition laws, the very laws that have held us in good stead and allowed us to be internationally favoured as a country in which to do business. Only over the last five to six months have we seen Australia’s sovereign reputation torn asunder by foolishly prepared, hastily announced mining taxes. Those taxes had to be withdrawn, but do not for one minute overlook the impact they had in Europe, the United States and Asia on the reputation of this country for safety and integrity. As I continue my presentation this afternoon, what is also at risk is the integrity of this chamber and its ability to scrutinise legislation according to that with which it is charged. If we abrogate that responsibility, if we pass that responsibility up, we will be damned—we will be harshly judged, as we should be, by the wider community, who place that trust in us.

We are looking at another monopoly. We are looking at public ownership well into the future. If we believe the Greens—and a deal has now been done between the Labor government and the Greens—we are facing lack of competition and abuse of parliamentary scrutiny. On the part of this minister, we are facing gross incompetence and arrogance. We saw that evidenced—and in fact supported by the minister’s own colleagues—during question time today, when question after question that would normally have gone to this minister was deliberately presented to ministers other than him. What sort of confidence does he enjoy amongst his own colleagues? He certainly enjoys none on this side of the chamber. In terms of his arrogance, I would refer to bullying, and if anybody doubts that they can simply look at the terms to which Telstra would have to agree—not a bad deal for Telstra but one that we would prefer not to have seen.

Finally, it is the effort of a government trying to retain power in this country at whatever cost—and it is a cost to the taxpayer.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I join this debate, on the issue of the moment, on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2010 or, in its short version, the ‘screw Telstra’ bill. This is a bill born out of threats and intimidation, arrogance and desperation by the government. I see Senator Sherry shaking his head.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

I was concerned about your earlier terminology.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Well that is exactly what it is. There are two million Telstra shareholders, Senator Sherry, that would agree with me. That is the plain language. That is all that this bill deserves—a bit of plain speaking. It would not hurt some of you across—

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! Senator McGauran, you will address your remarks through the chair and you will ignore interjections across the chamber. I draw Senator Sherry and other senators’ attention to that.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

This is a bill, I will repeat, born out of threats and intimidation by a desperate government towards one of Australia’s internationally labelled companies, one of Australia’s largest companies. It has, I believe, some two million mum-and-dad shareholders, so it is one of the largest dispersed shareholdings in Australia. This government is legislating to break it up, Venezuela-style. This is unprecedented in Australian history. It has sent a shudder through the market, and Telstra shares have duly been affected.

The government are attacking a privately listed company, forcing it to be broken up, for one reason: to prop up their ailing federal election campaign policy, their field of dreams. This legislation will hit the telecommunications market’s confidence. Senator Back, before me, talked about the integrity of the whole market nationally and internationally. Do not think they are not watching this, and do not think future investors will not be scared off by this. This is an unprecedented step in corporate bullying and, rest assured, it will eventually backfire on the government. The legislation, whilst compensating Telstra to a degree—some $11 billion—effectively hands over Telstra’s infrastructure, all its pits, and ducts and backhaul fibre, so that the NBN Co. can exclusively use it to lay their fibre. The legislation before the Senate is a valiant attempt to plug just one of the viability leaks that the NBN Co. has sprung. Without the exclusive use of Telstra’s copper infrastructure network, the government policy of laying the broadband network to some 90 per cent of households would simply implode.

This will not save the NBN Co. The scheme is already starting to sink, and I make a prediction. As I have said on other pieces of legislation, I have to make my predictions early. Most likely, this time next year the company will signal its distress—along with the minister’s distress. Firstly, take the implementation report, the McKinsey report, for which McKinsey were paid—although I do not want to be sidetracked by how much consultants are paid by this government—an incredible $25 million. I would like to know—perhaps I will have to wait until estimates—whether that is not one of the highest consultancy fees ever paid.

We have been denied access to the business analysis and there has been no cost-benefit analysis but we can garnish from the implementation report, the McKinsey report, certain business facts and realities. The McKinsey report established a rate of return for the company of, at best—it was going to give a glowing report—eight per cent, provided there was a 90 per cent take-up and provided the company borrowed at risk-free bond rates. That was the standard that had to be set for the company to return even an eight per cent rate. Well, you can kiss private investment goodbye if that is the return rate for such an outlay on such assets. But besides that, just for the NBN Co. alone—the government-owned monopoly alone—the assumptions were of eight per cent on a 90 per cent take-up on a very low borrowing rate. That is the cornerstone of the viability of the company. All the assumptions are utterly flawed.

Take Tasmania, where they are rolling out the fibre, as an example. To date there has been a take-up rate, I have been informed, of as low as 11 per cent. We do not know how much of that 11 per cent are 100 megabytes, or even whether it is the whole 11 per cent. In response to this viability leak the government want the states to move legislation to prop up this ailing NBN Co. They want the states to move an opt-out clause: you will get your fibre whether you like it or not unless you sign an opt-out clause. Tasmania has agreed to force people into take-up but, rest assured, I hear the other states are not. They are extremely reluctantly to do that.

Can’t you see the mire that is being created? Every time there is a viability leak in terms of this company the government has to move legislation to fix it. The second thing garnished from the McKinsey report regarding the viability of the NBN was cost blowouts. The McKinsey report did not factor in any cost blowouts but there are cost blowouts all around the government. They must be petrified about how much this is really going to cost them. The first blow-out is in relation to new properties in housing estates. Confusion reigns. Who is going to pay—the developer or the government?—for the connections in the new housing estates? Before the election the government said—naturally they said it before the election; they said a lot of things before the election—that the government, the NBN Co. would foot the bill for the new housing estates. Now we are told that the government are considering—guess what?—more legislation to plug up the viability leaks of NBN Co. They are considering legislation to force the developers in new housing estates to put in the connections.

But it gets worse in regard to the blowouts in terms of old multi-dwelling units—the big housing apartment blocks. The NBN Co. have said that they will refit and rewire these old apartment blocks. I am not talking about those two- or three-storey seventies blocks; I am talking about multistorey buildings. In fact, I am informed that those buildings make up one third of Australia’s dwellings. The NBN Co. never factored that in. It is not factored into their business plan; I am sure of it. I will tell you why: when asked, they duck for cover. That is the surest sign that they have not factored these cost blow-outs.

And there is another cost blow-out coming. The unions are circling the company. I am not surprised at all. The ACTU is circling the NBN. They want their slice of the collective bargaining too. It may be like the Victorian government’s Royal Children’s Hospital or the desalination plant. The unions got hold of those two government projects, shook them down and increased the cost of construction enormously. They probably doubled the cost. I am willing to say it doubled; someone can prove me wrong. If anything like that happens then NBN Co. is in for a big blow-out when the unions want their slice of this cake. And they will get it too. Let me tell the directors of the NBN: you will not get any hope or satisfaction from the Labor government; they will cave in as quickly as they can. After all, it is only taxpayer money! Do not think Senator Conroy is going to defy the union. Do not think he could put up with a strike on the premises of the NBN or a slowdown of the rollout because of the union. That is another cost blow-out on its way, and none of these has been factored in. All the figures are rubbery.

This is a waste of unimaginable proportions. I heard that the minister at question time was even playing down the figure. It is not $43 billion any more; our contribution is actually less. Is it around $26 billion?

Mary Fisher (SA, Liberal Party) Share this | Link to this | Hansard source

So they say.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

They now say that it is $26 billion but when they first announced this project they could not put a high enough figure on it. It was $43 billion, all right, and they boasted about that, but now it is down to $26 billion. What is the difference? The difference is that they are saying, ‘We’ll get private investment into this.’ They say that the costs are not as high as they were going to be but I have just proved that all these blowouts will push it past that figure.

And the government are not going to get any private investment; that is a field of dreams. No investor worth their salt would come near this company—not now and not in five years, when the government pretend they will privatise this company. The government were shameless in announcing that it would cost $43 billion. The figures are rubbery. They are just playing with figures on a day-to-day basis, hoping to get through the politics of the matter each day. But it is all catching up with them, and they know it.

Here is another possibility regarding the NBN that we can garnish from the McKinsey report. I happen to think the McKinsey report was not too bad at all. It told us a lot. I cannot wait now for the business plan to come out next week, because we got so much information from the McKinsey report we are sure to get more from the business plan. I am not listening to Senator Conroy saying it all stacks up. He will say anything on a day to day basis to get through the politics of the day.

We have proved the misrepresentations and falsehoods time and again. I should add that this does not just come from Senator Conroy; it comes from the Prime Minister herself. She stood up in the parliament last week and said that the connection of the NBN to 90 per cent of households—if it gets to 90 per cent—is going to bring internet prices down. Do you know what the McKinsey report told us? It told us that internet prices will have to go up every year to keep the viability of the company. This is a company that is going to be increasing its internet prices to Australian households. That is the way monopolies behave, by the way. There is nothing unusual about that. For it to maintain its viability, the characteristic of any monopoly is to increase prices year in, year out. Yet we have the Prime Minister telling us that the prices will fall. There is a conflict there—and I know where the truth lies.

It just so happens that only 43 per cent of Australian households at the very low income level of $40,000 to $45,000 are connected to the internet. The main reason the rest of them are not connected is cost. It is a cost factor. That is why they do not take up the internet. So now the government is going to take any competitiveness out of the market. It is going to take away any chance these lower income households have of connecting to the internet. It will strip that away from those lower income households because prices on the internet will go up every year. That is according to the McKinsey report and we will see it next week in the business plan. Prices are not coming down.

I really think that Senator Conroy must have been dreading the day that he jumped on the former Prime Minister’s aeroplane just so he could talk to him and cook up this new scheme. Can you imagine it—two big egos at high altitude? The greatest infrastructure plan in Australia’s history, they were going to dub it when the plane landed. It is uncosted, to date. Senator Conroy has been left holding the baby, not even valiantly. He is becoming shrill. He is becoming manic about his defence in all of this. But it is also irresponsible. There is no accountability. It verges on corrupt behaviour towards taxpayers’ money. His fortunes are hooked to this, as is the government’s, because this is the biggest lie since the ETS. In fact, this is another ETS. In the first term you had your ETS and now you have your NBN. Remember the day Senator Wong stood there, loud and vicious? It is a bit like she was today—loud, tough, aggressive Senator Wong defending the ETS to the death. All the rhetoric was blown up to the point where it was said, ‘This is the greatest moral challenge of our time.’ Then the truth dawned. Then they lost a Prime Minister over it. But they have learnt nothing. They have a new ETS around their necks. They are at it again—a minister and a Prime Minister—and their rhetoric matches that of the ETS. Where the ETS had the greatest moral challenge of our time, we have a new one. The new Prime Minister has said the NBN will bring internet prices down. That is the new big claim: it will bring prices down. We know it will not. This will all finally flush through the system. You had your moment in the sun about the ETS. We sceptics on this side were feeling a bit battered and bruised at certain points, but then the truth won out. You got mugged by reality. The McKinsey study has proved it all to us. Perhaps the $25 million was well spent. Perhaps I was a bit hard on McKinsey and Co. I see it has another job. I do not know how many millions that will get it, but—boy! —McKinsey and Co. do very well out of the government. Perhaps the $25 million was well spent.

If you think the pink batts scheme was idiotic and Mr Garrett irresponsible, and if you think the Julia Gillard memorial halls were negligent waste, you have not seen anything yet. This tops the lot. They are dubbing it the greatest infrastructure project in Australia, at $43 billion, and that does not even include the certain blowouts that are on their way. This is beyond farcical. We have a minister, more known for his factional capabilities than his managerial capabilities, who is completely delusional. He has lost all sense of national responsibility. Perhaps he has been told to do it. And then all the Chauncey Gardeners follow in from the other side. They just want to be here. They espouse the lines of the NBN like they did with the ETS. They are all Chauncey Gardeners. They do not care about the reality of spending $43 billion of taxpayers’ money. They are given their lines by the whip. They cannot even deliver them with any excitement, to tell you the truth. There is a lot of drabness coming from the other side. There is no sense of national responsibility. In the end, all this will implode on them. We will keep chipping away and in the end it will all implode.

The media are picking it up. The leaders of society in responsible positions are now coming out. The responsible journalists are all coming out now. That is just the beginning, and then it will sweep through the community because they will see you spending $43 billion, Senator Sherry, whilst their living costs are going up. They will be wondering why you are wasting their money. They could not put up with the pink batts, they could not put up with the memorial halls and they will not put up with the broadband if they think it is waste—and it is going to prove to be wasteful.

This is a debate that has been going on for the last two weeks of parliament and it is really starting to filter through. Don’t think it is not, Senator Sherry. You can live in denial. I think you have even given up on your own government. You are bored with government. The great honour and responsibility of government is being wasted by those Chauncey Gardeners on the other side. We always believed in what we did.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting on Deregulation) Share this | Link to this | Hansard source

If I wasn’t crook I’d be having a real go at you!

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Have a go at me, if you want to—I have been trying to provoke you during the whole debate! You have given up. You cannot defend the indefensible, and that is the stage we have reached. This is more than a political issue. This is an issue of responsibility, just like the emissions trading scheme was. When we really believe, as we do, just how flawed this scheme is, we are not just playing politics. (Time expired)

Debate (on motion by Senator Sherry) adjourned.