Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Broadband, Communication and the Digital Economy) Share this | Link to this | Hansard source

I am encouraged by the second reading stage of this bill but discouraged greatly by its contents. The Telecommunications Legislation Amendment (Communications Fund) Bill 2008 aims to amend the Telecommunications (Consumer Protection and Service Standards) Act 1999 to enable money in the Communications Fund to be used for purposes relating to the creation or development of a broadband telecommunications network, if required. That sounds impressive, but it is actually a smash-and-grab raid. This bill is an attempt at legalising a state-sanctioned smash-and-grab raid on resources set aside and quarantined for rural, regional and remote Australia to ensure they have future proofing security of their telecommunications services. The bill that the previous government introduced protected this fund from this very kind of smash-and-grab raid. This smash-and-grab raid would be illegal under the law as it stands.

Labor is trying to make it lawful to reach into the Communications Fund, pinch the $2 billion that has been set aside for rural and regional and remote Australia, pinch the $400 million of interest earned on those funds being invested every three years and then apply them to some vague, yet to be determined city-centric idea that has been a sound bite for the ALP for some time, a sound bite that the Rudd government is struggling to turn into sound public policy. This bill is the first step in pinching those resources from rural, remote and regional Australia.

The background of this matter is well understood by members in this place. The background was partly, I think, a credit to the financial discipline, the long-sightedness and the understanding of public policy challenges that we saw under the Howard government. Under the Howard government’s overall fiscal strategy there was a recognition that resources needed to be set aside for rural, remote and regional communities to ensure that where there were examples of inadequate services something could be done about them. It was also recognised that the resources would be there, quarantined, locked away for those rural, regional and remote communities which needed the assistance and which, on very sound and principled public policy grounds, could call upon the support of the taxpayers of Australia to address those inadequacies, to address the digital divide between the services that they were able to enjoy and access and those that metropolitan communities had at their fingertips. That was the idea, that was the motive and those were the sound public policy grounds on which the Communications Fund was established.

What we are seeing tonight is the first effort to unravel all of that sound public policy, all of the security, the future proofing protection, the very resources that remote, rural and regional Australia had looked for to give them comfort so that, as the technology moved forward, they would not be left behind. Not only do they now risk being left behind if the Rudd government gets its way;  they also risk being left further and further behind, because the structure of the Communications Fund was such as to ensure that those measures were there in perpetuity and that today’s service deficiencies, identified by an independent review, could be addressed with resources—the revenue stream from that $2 billion that had been set aside. If, as technology moved forward, there was a new gap, a new emerging digital divide between the services of metropolitan Australia and those available to rural, regional and remote communities, then, again, a further intervention was possible and the security, the insurance, was there for those people living outside our metropolitan and outer urban communities.

The package that is being unravelled tonight is a stake in the heart of the Howard government’s efforts to protect the interests of rural, regional and remote Australia. The funding which was set aside—and allocated in September 2005 to the fund—with money invested in a short-term deposit with the Reserve Bank, with a low-risk investment framework and subsequently managed by the Australian Office of Financial Management, was an agreed pathway, which this parliament supported. The package, of which this funding was a part, was aimed at addressing concerns about the adequacy of telecommunications in rural, regional and remote parts of Australia and about it going forward.

The income stream from the interest earned on that $2 billion fund, invested conservatively, as was the legal requirement, was $400 million every three years. It was quarantined to be used to finance the government’s response to independent reviews of regional communications services. These funds were then allowed to be available for infrastructure upgrades, if that was appropriate, in regional and remote communities or for the construction of additional mobile phone towers, the availability of broadband or even backhaul fibre capabilities, or to provide the opportunity, where price was prohibitive, for people living outside the metropolitan area to address that price barrier so that the digital divide did not see people living outside our metropolitan cities left behind. This was a measure that had longevity. The perpetual fund was sound, it was fiscally conservative, it was forward looking but it is being abandoned by the Rudd government in the parliament this evening.

The key guiding philosophy, though, was making a commitment to ensure that Australians, regardless of where they lived in this vast continent of ours, had access to affordable and reliable telecommunications services. This was future proofing in perpetuity. The spending of the fund’s resources, as I mentioned, was required under the law to be activated by independent reviews. These independent reviews—one is currently underway, as we speak—would bring forward recommendations to government and the government would respond to those recommendations and be able to draw from the resources of the revenue stream from this fund.

It is extraordinary:  right now, one of these independent review committees, under the chairmanship of Dr Bill Glasson, a highly regarded Australian, is doing the very work that is asked of it—the very work that is the precondition for spending this money. Last week Senator Conroy issued a statement urging the people of South Australia to have their say about the adequacy of rural, regional and remote telecommunications services. How ironic: Senator Conroy and the Rudd government inviting people to have their say, to contribute to a review, a review that under the law as it stands had resources available to implement its recommendations! How ironic: the Rudd government are encouraging people to have their say, while they are raiding those very resources—stealing the tools that are needed to implement the recommendation of the very review that Senator Conroy is encouraging people to participate in!

This statement is similar to one that was made in February this year when there were public meetings in Victoria and Tasmania. Another press release in early February welcomed the launch of the committee’s program of public meetings—18 scheduled over four months. Nowhere did the Rudd government—or Senator Conroy, as the responsible minister—highlight the fact that all of this committee’s work was being undermined by the fact that resources to implement the recommendations were being raided. This is rank hypocrisy. This is deception of the highest order and a betrayal of the people of rural, regional and remote Australia, because this matters a lot to them. We have heard in debates in this parliament over many years that communications is the thing that can bind our vast continent together. The people in rural, regional and remote Australia wanted to make sure that they did not miss out on the information superhighway. The digital divide was something that concerned them. They would look at their cousins, at their family and friends, in the metropolitan area and see the vast array of service options available to them and then reflect on their own circumstances in those regional areas and wonder whether they were going to access the benefits of these emerging technologies.

What we see tonight is the first effort, the start of the smash-and-grab raid by the Rudd government on resources secured for, designated for and quarantined for the people of rural, regional and remote Australia to future proof their communications services. Isn’t it interesting? We have seen in this parliament this week the fiscal conservatives of the Rudd government attack the weakest, the most vulnerable, the selfless people in our community—our carers and our seniors—as some kind of a strategy. We have seen lots of flip-flopping by the Rudd government trying to recover its position, bereft of an understanding of proper government policy and of which Australians need our help and our voice. And they have recovered from that. Do you see the parallels here, though? The same thing is happening. The service rich, those with service choices, under the Rudd government plan are going to be further advantaged while the service disadvantaged, those more vulnerable in terms of service availability, choice and price, are having the resources that have been set aside by the nation and by this parliament taken away from them. So the most vulnerable and the most disadvantaged groups in our community in communications services are having their lifeline, their future-proofing resources, stolen so that there is some prospect that those already advantaged in the metropolitan communities can be further advantaged with the benefit of taxpayer resources. What a remarkable concept. What kind of public policy notion is this? What a reckless raid, what an insensitive act and what thoughtlessness it shows about the disadvantage that this parliament seeks to address. We see the Rudd government trying to further exacerbate that disadvantage by raiding the resources put in place to address it.

If this legislation passes, what will it achieve? It will free up the cash so that the Rudd government may, on some vague idea yet to be defined, spend it on a city-centric fibre broadband proposal that it cannot actually describe yet. No-one knows quite what it is, because it changes every other day. That fails the credible public policy test, particularly when you see that often the fund, in responding to communications service disadvantage, addresses the fact that population dispersal, remoteness and separation from population centres are the very causes of the communications disadvantage that rural, remote and regional communities have. In some cases, the services that people would like are, in the eyes of the private sector, uneconomic and non-commercial to deliver. The Communications Fund can play a constructive role in addressing that uncommercial and uneconomic service barrier by reducing the gap and making the services available, affordable and accessible. Instead, those funds—designed to enhance accessibility and affordability—are getting ripped out of the area of disadvantage and tantalisingly dangled in front of businesses, companies, telco organisations and consortia to be spent on a metropolitan focused broadband network that the private sector says they are happy to fund anyway. Isn’t that bizarre? What a new notion of public policy: displace private sector investment in more highly-populated areas, where broadband and communication services are more commercially viable because of the critical mass of people and users, with taxpayer funding of up to $4.7 billion.

This bill aims to open up the locked box of the Communications Fund and put about $2½ billion into a fantasy—that yet-to-be-defined idea that has got everybody confused and bemused—as the government tries to work out how to turn a sound bite on fibre to the node into sound public policy. We need to watch this space because, if this legislation passes, the Rudd government could make an unconditional grant to telcos for broadband work or whatever. It could even own or operate some of the infrastructure itself or renationalise part or all of the network. It could do all of those things and do them by turning its back on the rural, regional and remote communities for whom this Communication Fund provided future-proofing insurance.

When you look at some of the thinking that is going on around this you just wonder what the motive is. There are vague city-centric plans. They want money so it can be advertised; I think that is a financial management act requirement. The Rudd government are not actually sure what they are advertising, so they have created an expert panel. This expert panel trumped an earlier expert panel that was doing all of this work anyway. This was done, again, for optics for the Labor Party. You would hope that the expert panel would have sound public policy motivating it and the consumer interest shaping its deliberations. Some of the key public policy agencies, like the ACCC and the Productivity Commission, can throw in reports, but whether they amount to anything will be up to this expert panel, and no-one on the expert panel actually has as their motive the long-term interests of the consumer. These are worrying times. These are concerning times. The justification that the Rudd government offer in response to very real fears about what it is planning to do is that it has some kind of a mandate. To recklessly use funds set aside—quarantined—to address service disadvantage in rural, remote and regional Australia and to displace private sector investment in the sectors of the market which are commercially viable is quite a bizarre public policy idea.

When you point this out, you get an arrogant response from the new government. It uses the ‘we have a mandate’ line to justify what it tries to do as it works its way through its self-created fog. But, if you look around, you begin to wonder just what kind of a mandate it is talking about. If you look at the representation of the Liberal and National parties in the regional and rural populations of Australia, you will quickly realise that the mandate in the regional and rural context of this nation very much rests with the coalition, due to its strong representation in those areas. It is trusted to do the right things. By seeing this smash-and-grab raid that is against their very interests, those communities have been further reinforced in their view that the Liberal and National parties will look after them.

It is really quite a worrying time. The President of the National Farmers Federation, David Crombie, hit the nail right on the head when he said in the IT section of the 5 November edition of the Australian:

Given Labor will spend rural Australia’s telecommunications insurance policy—the $2 billion Communications Fund—how will they guarantee rural Australians get telecommunications upgrades into the future?

That is a very good question. It is a question that the Rudd government has failed to answer. If the government spends this money, the future telecommunications needs of the bush will need to be addressed somehow. If the government spends this money and it is not available to be drawn upon, the process of these independent reviews is fundamentally compromised. Given Labor’s track record in relation to rural, regional and remote Australia, you can be very worried about whether those non-metropolitan communities will actually get a look in. So this is an important time.

The justification for this raid, and the underlying motive for this bill, is to free up some resources, to raid the insurance policy for communications into the future for rural, regional and remote communities. Then the government are looking to spend that money on fibre-to-the-node pronouncements which the government and Senator Conroy have spectacularly failed to articulate in a clear way or to ground in sound public policy arguments. They have been musing a lot. I say ‘musing’ as there is precious little detail and repeated redefinition of Labor’s plan—whatever it is.

Is its intervention going to be as a potential owner, an operator, a unit holder, a shareholder, an equity holder, a non-equity holder, a benevolent contributor, a commercial investor or a PPP purchaser? Is it a contestable or a non-contestable grant process? Is it for part of the continent or for all of the continent? Need it only be one partner, if it is indeed a partner at all? Is it fibre to the node or fibre to the home? Is it technology specific? Is it speed specific? Is wireless in or out? VDSL was pronounced by the minister to be something new when most people thought it was something not so new. This is all part of the fog that the Labor government is creating. The only real, tangible thing we see is this smash-and-grab raid on the Communications Fund. Frankly, it is long past time for the Rudd government to work out what it is doing to get past the optics of its fibre optic pronouncements.

We need to remember that Labor tried to convince the Australian public before the election that a vote for Labor would rocket us overnight from the Stone Age into the space age. They said we would go from being the Flintstones to being the Jetsons overnight. We know that is not true. We know that the nation is well placed. It has a solid platform on which to build communications infrastructure choice and competition in this country. The key thing, and the thing this bill fails to address, is what are the clear, justifiable and principle public policy objectives and motivations for engaging in the telecommunications sector, where we have been trying to foster and encourage competition and choice over many years.

We hear talk that this is all about speed being available to people. I have here a very interesting map. Thankfully, it is not a satellite photograph of fires in Sydney. The colours on the map represent the internet broadband speeds that are currently available in Sydney. All the red and orange blotches represent areas that have access to speeds of 12 to 14 megabits per second or above. Yet the Labor Party is running around saying it wants to spend $4.7 billion of taxpayers’ money to achieve the very thing that is already there, as is indicated by the red bits on this map.

This seems to be dawning on the Labor Party, as the minister has announced a show-and-tell requirement of all those currently involved in the provision of telecommunications, particularly those involved in broadband. The member for North Sydney is now looking with amazement at just how many of these areas around greater Sydney actually have speeds of 12 or 14 megabits per second and above. I am indebted to the work of Internode and iiNet for their studies. They have actually done some very good to work to establish the kinds of speeds that are available to the vast majority of metropolitan users of the technology.

This brings me to my next question. Given that the private sector is commercially investing in the technology and delivering those supposed benchmarks of 12 megabits per second and above—as we see represented by all the red bits on this map, and these are just parts of Sydney—if Labor do get to a point where they sort out their own thinking, what are they actually going to do? Are they going to spend the taxpayers’ money putting bits in between the bits that are already there and that are owned by the private sector and get more red bits? Are they going to start again? Are they going to pursue the Axia proposal, which I understand is based on success in Canada and France, where they competed for public money to put a fibre backbone around those areas that were being serviced and then allowed the service providers to bolt on and connect in at a number of connection points? Are they going to do that? Are they going to displace all of the investment that is currently there? Is the $4.7 billion actually going to compensate the private sector that is already doing much of this work as Labor renationalises our telecommunications system?

I was listening at the ATUG conference this morning, where Art Price, CEO of Axia Netmedia Corporation, was talking about the experience in Canada and France. He made a very interesting presentation about the need for an uncompromised wholesale provider, the relationship between the grid backbone, what a federal government may or may not do and localised rollout. It was interesting. He thought the fibre backbone across the continent of Australia would be a $2.1 billion build proposition—with 16,437 kilometres of fibre and with communities-of-interest nodes and connection points all around, which service providers can connect to. He said that is worth a little over $2 billion.

So is the $4.7 billion really about buying out and compensating those private sector organisations that are already operating in this space? Is it about compensating them for the stranded infrastructure that all of a sudden will be dangling off another network that perhaps is not the flavour of the day—and the businesses that are part of servicing the broadband community with a range of speeds and different technologies? Is that what this is really about? Frankly, it is hard to know. I urge the Rudd government to put more of its effort into the important national interest task of translating its pronouncements on fibre networks—its PR, its sound bites—into sound public policy, because there is a lot of work to be done there. A smart way of moving that forward would be to pick up the very credible work that the former government was doing—recognising that there are profound implications for competition, access regimes and competitive frameworks in this decision. You do that by making sure the people involved in those deliberations have the technology, the horsepower, the insight and the expertise to make that contribution.

I touched earlier on the issue of the expert panel that the minister has formed. I called on him today to make sure that consumers have a voice. ATUG should be invited to nominate an expert to participate in that process so that this is not an exercise that sees powerful telcos wrestling with each other and trying to position commercially for their best advantage. The consumers’ long-term interests must be front and centre. They must be the brightest light that is guiding people’s work in this area.

I also called on the Rudd government to release the advice that the expert panel provides. Given the significant amount of public funding involved and the significant public interest, this material should be available so that all can consider it. The Productivity Commission and the ACCC—‘the commission twins’, as I call them—should not just be like any other input provider; they should be front and centre in those deliberations. I think that would go a long way towards enhancing the work of the Rudd government by translating its sound bites on fibre into sound public policy. But even if they get to the point where all that is sorted out, I feel that I have a contribution to make. I have already helped Senator Conroy, who is now starting to realise that there is a whole lot more going on in this area than just running with the pre-chewed focus group lines that were there for the last election. He is coming around on that. He is probably addressing the issue that private sector investment is already being put on hold while telcos hope and wait for the fibre-to-the-node fog to clear.

We have a Labor government that is thinking of displacing private investment with public funding. These are not the actions of a fiscally conservative government that is aiming to properly target taxpayer resources within the framework of sound public policy principles. These are not the actions of a fiscally conservative government that recognises we are in a market economy and that we value competition and choice in the telecommunications sector.

In the few minutes still available to me, let me draw us back to the bill. Even with a successful outcome on more fibre—where somehow the Rudd government finds its way through the self-created fog and works out how to have that intertwined with the considerable private investment that is already there—distance and low-population density equal cost. There is still a need to address the disadvantage in terms of cost and service availability in rural and regional Australia, even if this network of enhanced fibre, or more fibre, or whatever it is, ends up a reality. This is what the Communications Fund aimed to do. The Communications Fund was not there to be raided for a one-off cash grab to spend on a one-off project that will forevermore address the needs of rural and regional communities. You only need to look at some of the discussion that surrounded ADSL services. You only need to look at the cost differences that the ACCC and service providers recognised between those in metropolitan areas and those in the more remote areas. The cost of access for a user in a remote area was four or five times more—in some cases, 20 times more—than it was for a CBD user.

The Communications Fund was able to do something about that. If this bill goes through and that fund is raided, the chance to do something meaningful for rural, regional and remote communities will be lost. Rural, regional and remote communities see in the Communications Fund an assurance that the digital divide will not be widened and that they will have properly targeted support and sound, policy-guided assistance that is funded by the taxpayer. That will be lost. This will be a great shame. It stands as another example of how the Rudd government targets those who are disadvantaged and vulnerable and advantages those who are already well served in terms of choice, opportunity and service availability. I encourage the House to oppose this bill with great vigour.

Debate (on motion by Mr Combet) adjourned.