Lyn Allison (Victoria, Australian Democrats) Share this | Hansard source

The Democrats support the basic contention of this motion—that is, that the government’s continued mismanagement of the sale of Telstra is hurting not only the prospects of the company but all Australians, the people who currently own just over 50 per cent of Telstra. Like the majority of Australians, the Democrats continue to oppose the sale of this important asset. We do so on the grounds of public and national interest. We argue that telecommunications are absolutely vital to the national security and economic and social development of this country, as essential as good roads, ports and the like. It should be treated as a critical part of our nation’s infrastructure and therefore should remain in public hands.

In this country we are increasingly reliant on e-commerce, e-health and e-banking. High-speed broadband is essential for successful engagement with the modern economy and society, especially by small business and people in rural and remote areas, in overcoming isolation and lack of services. Yet Australia is still behind the OECD average in broadband penetration—ranked only 17 out of 30 OECD countries.

The decision by the government to press ahead with the sale of Telstra in 2006 despite share prices being at a nine-year low, the withdrawal of Telstra from negotiations with the ACCC on a fibre-to-the-node network and ongoing denigration of the federal regulatory regime by senior executives of Telstra, even as recently as the release of the Telstra prospectus no less, suggest the federal government has bungled the management of this sale and the sale of the first two tranches of Telstra shares. The first tranche was undervalued, the second tranche was overvalued and this tranche is likely to be undervalued from what we can gather.

Importantly, the government has mismanaged Telstra and communications insofar as competition is concerned. The telecommunications market has improved in Australia since the introduction of competition, mostly in mobile phones, but Telstra, with its ownership of the copper network and hybrid fibre coax cable delivering pay TV and broadband, is still the dominant player. Telstra has both the ability, through its ownership of the essential elements of the infrastructure, and the incentive, because of its vertical integration, to favour its own interests, and it does that. Telstra has been quite explicit about its intentions to prevent competition, yet the government has done nothing about it and is proceeding with the sale, giving up its stake and influence as though nothing is wrong.

Sol Trujillo in February this year made it clear that he did not think Australia needed competition, that a monopolistic, internationally competitive company is what will drive the best outcome for consumers. I thought that was at odds with government policy, but just a moment ago Senator Ian Macdonald suggested that this is quite okay.

Telstra’s rollout of 3G may bring more sophisticated technology to some consumers, but will ultimately reduce consumer choice, especially in regional areas because competitors who currently resell on the Telstra CDMA service will be shut out. Telstra pulled out of fibre-to-the-node negotiations with the regulator because they could not agree on an access regime for competitors. Telstra also warned the Senate inquiry examining the legislation into the final sale last year that they would not invest in new infrastructure if they were forced to allow competitors to access their network.

The government’s light touch self-regulation has failed, operational separation has failed, and putting the ‘hard word’ on Sol Trujillo and his team has failed. The Prime Minister is now bucking due process by putting an insider on the board in the hope that he will do his bidding. It is our view that this strategy is also doomed to fail. The government has well and truly bungled the management of Telstra and the telecommunications industry. It has said it was on track about competition but has failed to deliver. It has shown itself to be ideologically driven on privatisation, despite the absurdity of proceeding in the current climate. It is the current Telstra shareholders, tax payers and ultimately consumers, all Australians, who will be the losers.