Simon Crean (Hotham, Australian Labor Party, Shadow Minister for Regional Development) Share this | Hansard source

I rise to support the amendment moved by the member for Hunter on behalf of the Australian Labor Party. I say at the outset that Labor do support the recommendations of the Productivity Commission which form the basis of the Trade Practices Amendment (National Access Regime) Bill 2005. We also support the bill’s intention of improving the operation of the national access regime. This regime aims to ensure access to infrastructure where elements of a natural monopoly exist so that we do enhance competition, despite that natural monopoly, and we restrain that monopoly behaviour while at the same time not putting up a barrier to investment, which I think was the point the member for Corangamite was making towards the end of his speech. I am sure he made it at the beginning too, but that is the bit that I heard.

The bill moves to change the act in the following ways. It includes a new objects clause. It includes pricing principles. It provides for the regime to include only projects of national significance. The bill contains new arbitration and appeal procedures. There is restriction of access to the national regime where there is an effective state regime, there is immunity from the regime where a government service is provided by competitive tendering and there are new target time limits and procedures for consultation and reporting of decisions. So this has some important and comprehensive elements attached to it.

In particular, we support the inclusion of pricing principles in the act, as originally recommended by the Productivity Commission but not originally embraced by this government when it first brought the bill into the House. I will come to that in a minute. The point I want to make at this stage is that we urge the government to accept the amendment proposed by the member for Hunter which allows consideration of regulatory risk but does not necessarily mandate that that consideration occur. The government, on the other hand, proposes to mandate the consideration of regulatory risk.

Over recent years we have seen the privatisation of many formerly publicly owned infrastructure facilities. Given that trend, it is essential that we ensure that users have fair and reasonable access to those facilities and that exorbitant monopoly rents are not extracted which will be passed on to consumers or which will make our exports more expensive on world markets. What Labor have concern with is the way the principles are proposed to be worded. It in effect tips the balance too far in favour of the owners, who may well set exorbitantly high prices at the expense of users and consumers. We accept that regulatory risk is and can be a pricing factor for providers and has to be subject to regulatory control. The real issue is: how do we take account of that regulatory risk? In some cases, it may be appropriate to take account of it, in others not. What the government’s amendments do is essentially mandate that in all cases it is taken account of. That means that the owner will be able to pump up prices for what they assert to be that regulatory risk and insist that it has to be taken account of because the act as is proposed requires it. Our amendment effectively provides discretion to the regulator. It would leave it to the discretion of the regulator, and we believe that is the sensible course of action to take.

It is interesting to note—and I said this earlier—that when this bill first came into the House there were no pricing principles included in it. We argued at the time that there needed to be pricing principles. Again, the member for Hunter, on our behalf, put forward a set of those principles. The government has now accepted that pricing principles have to be included and has proposed by way of an amendment to include them, but not to the full extent that we were suggesting. This bill gives an opportunity for greater certainty for both investors and users, and these are the two vital components when it comes to the provision of these services.

In the second reading speech the Parliamentary Secretary to the Treasurer quite rightly listed the reasons why statutory principles are important. Those opposite were late converters to this cause; nevertheless, they have been converted and we welcome it. What we ask is: why don’t they go to the full extent that we have been suggesting? The Productivity Commission recommended statutory pricing principles be established. The parliamentary secretary said that they will provide guidance on the broad objectives of access regimes and how these will be applied, they will provide greater certainty to regulated firms and access users, they will provide guidance for approaches in particular industries and they will help to address the concerns that a regulator will unduly impose its own values.

The government, having thought long and hard over four years, and having brought this bill into the House with no pricing principles included, caved in on the day debate on this bill was first scheduled. That was some time ago, because debate on this bill has been a long time coming, as all members who are prepared for it would know. Whilst the government has adopted Labor’s amendment and suggestions for pricing to a large extent, it has not gone the full extent and this legislation does come to us in a weaker form. Labor’s amendment will strengthen it.

The basic purpose of the Trade Practices Act is to promote competition and to protect users and consumers. The national access regime which this bill amends is a legal regime in the Trade Practices Act to facilitate user access to services provided by essential facilities—essential facilities that operate as natural monopolies such as rail lines, gas pipelines, electricity and water infrastructure. It does not make sense to build duplicate railway lines, roads, electricity grids and so on. We do accept that you need only one of the carriageways, a physical structure, in the forms that I have identified. But, given that we acknowledge that point, putting those monopoly facilities in private hands demands that we ensure that provisions are in place to prevent them from extorting monopoly rent from the natural monopoly they have come to own.

Telecommunications is obviously another vital piece of infrastructure, particularly for the regions—and I will come to that in a minute. It is not dealt with in this legislation; it is dealt with separately. The provision of telecommunications services throughout the nation and particularly in the less populated and less profitable rural and regional areas is of great concern. It is the great enabler for our regions. Without affordable access to fast broadband internet connection, the regions will be left behind. If we want them to participate in the information economy and to establish small businesses in their homes or in their remote communities, they need to have affordable access to this infrastructure. It is the great challenge. It is a debate that we will have, particularly associated with the further sale of Telstra, if the government proceeds down its intended path.

In the context of the national access regime, the principles inherent in it and the access to it, it is interesting to remind ourselves that the pricing of Telstra’s last mile infrastructure, which is in effect a natural monopoly, also presents the same sorts of challenges to the provider of it, unless we also ensure access to users at affordable rates. One of the reasons that we as a nation have failed to properly utilise broadband is the lack of effective last mile access. This is an issue that is going to be debated seriously.

Whilst Telstra is not dealt with in this bill, I think you can see that the sorts of principles that apply to a national access regime also have relevance to this other vital piece of infrastructure. Everywhere that I travel in regional Australia, the need is always raised with me for affordable broadband access. It was underpinned in the recent State of the regions report. In essence, it found that the regions that have good access are doing well; those that do not are left behind.

Labor are committed to fighting for the provision of affordable broadband access throughout the nation. In my view, it is probably the greatest infrastructure challenge that this nation faces. Just as access to the standard telephone was the clarion call of the past, access to fast broadband is the new one. It is about how we link the regions; it is about how we empower them. It is the fundamental issue that regional development will hinge on. Labor believe that the best way to do that is to keep Telstra in government ownership, and to the extent to which there are market failures—and there are many, otherwise we would not be talking about the problem—to fund that market access through a component of the ongoing dividend stream. Labor have always argued that in the past. If anyone doubts the significance of it, we proposed this back in 1998. I got the library to do the calculation. At that stage we proposed a 35 per cent component of Telstra’s dividend stream being applied to a fund to connect the nation. The library has indicated that, had that policy been put in place, there would have been in excess of $5 billion in that fund. That would have taken us a very long way to the connectivity challenge that I have talked of and, in particular, to fund the market failure, which is inherent in the more remote and regional areas of our country.

Our view is that the government’s solution will not work, because they are going to sell it, they are going to get a one-off payment, but they are not allocating sufficient from that payment to meet the task. The National Party have gone along with this—once were Nationals, I might say, Mr Deputy Speaker Causley. I know your allegiances. In our view, they are now just a paid-up branch of the Liberal Party. The defection of Senator Julian McGauran is an example of it. I seriously think that the way in which the sell-out by the Democrats saw their demise as a political party because they ratted on a fundamental commitment to the electorate, so too will the sell-out of Telstra by the National Party herald their demise. We are already seeing the fracturing within that party structure. It has a terribly important political component attached to it, quite apart from this very fundamental issue as to how we connect the nation.

Labor do not just oppose the sale for the sake of it. We oppose the sale because, if we are going to try and address a regulatory regime or control to ensure affordable access, one of the best ways to do it is to have government ownership, but also access to the dividend stream in perpetuity to fund the necessary expenditures.

The ACCC and this parliament, through legislation like this bill, have to ensure that in most cases the monopoly telecommunications providers—certainly at the moment that means Telstra—have to provide competitive access to the networks for other providers or direct access to consumers. This is a debate that is going to run hot. It will be interesting to see next week in Senate estimates how Telstra responds to this. Labor will be taking a very keen interest, but it will also be interesting to see what sorts of questions the National Party will be asking on this crucial issue for the reasons that I have just outlined.

It is my contention that we do need sound principles underpinning an access regime. We all accept the way in which what were monopolies perhaps under government statutory bodies and under government control in the past have moved in different directions, in many cases in the hands of private providers. If we are going to go that way—and we have supported that direction—it is essential that we underpin competitive pressures and opportunities in the community through an effective access regime.

This government has been soft on competition policy. I was interested to note that the Treasurer is calling upon COAG this week to back his plans through greater competitive pressures to start addressing our bottleneck issues. This government has been very poor in supporting a competitive environment. It has failed to allow small businesses access to collective bargaining. It has failed to allow the ACCC to continue to make decisions on mergers. It has failed to reform the Trade Practices Act to constrain abusive market power, especially against small businesses. It has refused to introduce cease and desist orders, which we think are terribly important, where people are exploiting their monopoly or duopoly position, and it has tried to water down third line forcing laws, but we forced it to back down.

There is a deficiency factor in the so-called clarion call of the Treasurer in urging greater competition. Whilst we do support greater competition and regimes that support it, it will count for nought unless the government is prepared to invest in the nation’s ailing infrastructure. That was an issue that I spoke about earlier today in another debate—a debate associated with the Future Fund—a means by which we take the proceeds of a nation’s prosperity and reinvest it in social and economic infrastructure that makes a better return than simply putting the money in the bank.

We have the opportunity to create an environment to better build this nation, to better build it by stronger competition arrangements. This bill forms part of that, but it is deficient in that it does not go far enough on the pricing principles and also on the question of a government being prepared to invest sensibly in the nation’s infrastructure. We need a national infrastructure audit. We need a national strategy involving state and federal governments, and that is what COAG should be addressing and turning its mind to on Friday. How do we identify the infrastructure imperatives for this nation and how do we work together to achieve them?

People are sick of the buck-passing. They do not want to see the unseemly brawls that always come out of these conferences about whose responsibility it is. People want the problem fixed. They want their roads, their ports, their electricity, their gas pipelines and telecommunications infrastructure. Governments have a responsibility to lead. This government is not leading. This bill is deficient on the pricing principles. I urge the government to take a more responsive, cooperative and leadership role at COAG to address the infrastructure needs of this country. (Time expired)

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