Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Broadband, Communications and the Digital Economy (Senator Conroy) to questions without notice asked by Senator Minchin today relating to Telstra.

Today I asked Senator Conroy, as the Minister for Broadband, Communications and the Digital Economy, specifically about the proposed exclusion of Telstra from future spectrum auctions and the consequences of that extraordinary proposal. I draw to the Senate’s attention the fact that this is the very key to this whole package of measures brought to the parliament yesterday by the minister. Today the minister comprehensively failed to answer any of the questions we put to him on this issue. He could not and has not given any policy rationale whatsoever for this quite extraordinary decision that the government has taken:

Telstra will be prevented from acquiring additional spectrum for advanced wireless broadband …

That is the minister’s statement, and that is the key to this whole policy formulation, and he cannot give any policy rationale whatsoever for that extraordinary proposition. I also asked him about the cost to taxpayers—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Order on my right! There is far too much audible conversation. Would senators please either resume their seats or leave the chamber. Senator Minchin.

Nick Minchin (SA, Liberal Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Thank you, Mr Deputy President. I asked him about the cost to taxpayers of this remarkable proposal. He could not give me any estimate whatsoever of the cost to taxpayers of what the government is proposing to do. He could not say why Telstra should be excluded from further participation in the wireless broadband spectrum auctions, even though the market for mobile broadband is the most competitive and the one market in the telecommunications field where Telstra does not have a majority. If Senator Conroy is motivated by a concern about Telstra’s market dominance, which is apparently the motivation for breaking this company up, why on earth in the government’s policy proposals on restricting Telstra would you pick the one market to restrict Telstra where Telstra is not dominant? This is a market where Telstra’s competitors have a majority of the market.

I draw to the Senate’s attention that this proposal does have very significant implications for taxpayers. By taking Telstra out of any future auction for spectrum, you obviously reduce the competitive tension available to the government in selling its highly precious spectrum, which is ultimately the property of taxpayers. It must by definition reduce the value of that spectrum, and Senator Conroy today indicated that he has absolutely no idea. I wonder whether the government has made any costing at all of this or whether it has even thought of the fact that this will cost taxpayers. Indeed, Senator Conroy laughably said in his answer that the whole question was hypothetical, despite the fact that it is very clear in his statement and in his legislation that Telstra will be prevented from participating in future spectrum auctions.

I think the non-answers to our questions today expose the real motive behind the government’s actions. The government is proposing to use the threat of exclusion from future spectrum auctions as the gun to Telstra’s head over the NBN. This whole NBN policy is falling down around the ears of Senator Conroy. It is universally regarded as a complete fiasco. What the government wants to do, and what is nakedly evident from its legislation, is to force Telstra to effectively hand over its fixed line network to the new NBN Co. In his second reading speech, he actually said that the separation that they propose:

… may involve Telstra progressively migrating its fixed line traffic to the NBN over an agreed period of time and under set regulatory arrangements and for it to sell or cease to use its fixed line assets on an agreed basis.

There we have it. That is what this whole circus, this charade, is about. This is about holding a gun at Telstra’s head to force them to come to the table in handing over their fixed line assets to make the NBN viable. The government knows that without Telstra the NBN is simply unworkable and unviable. It has to get hold of Telstra’s fixed line network somehow. It showed through the fiasco of the first failed tender that the method of compulsory acquisition, direct and upfront, would cost it some $20 billion. That is why the first NBN failed and collapsed after 18 months and $20 million of taxpayers’ money. Now the government is going through the back door by using the threat of denial of access to spectrum to force Telstra to come to the table and hand over its fixed line network. This is a naked grab in order to rescue this NBN fiasco from the $43 billion hole into which it has sunk. Telstra’s shareholders are paying the price. They have lost $17 billion in the value of their shares since this circus of a government came to office.

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

I welcome the opportunity to take note of answers on the issue of telecommunications. During this parliamentary sitting we have sat here in question time and listened to questions being asked by the opposition on the government’s economic stimulus package. It was a package that supported jobs and provided to schools and local communities. The package involved making Australian homes more environmentally friendly. It was a package that those opposite voted against. Today we hear a question from Senator Minchin on reforms to the telecommunications regulations and the government’s National Broadband Network. We are told that Senator Minchin, the opposition communications spokesman, yesterday racked up his 150th media release without putting forward a single policy. Senator Minchin was part of a coalition government that put forward 18 failed broadband plans or proposals. We should say proposals because they were not plans.

Yesterday the Minister for Broadband, Communications and the Digital Economy announced reforms to telecommunications regulations here in Australia. We know that these changes will reform existing telecommunications regulations in the interests of Australian consumers and businesses. They will drive future growth, productivity and innovation across all sectors of the economy. In the transition to the National Broadband Network, the existing regime needs to be reformed to improve competition, to strengthen consumer safeguards and to remove unnecessary red tape. The historic reforms will fundamentally reform existing telecommunications regulations in the national interest. These reforms have been welcomed by the ACCC, consumer groups, telecommunication carriers, other senators in this chamber—we know that—and even some members of the coalition. I have some information here from Choice because they have come out in support of these reforms as well. With the minister’s announcement yesterday, today and into the future we are correcting the mistakes of the past, when opportunities to address Telstra’s highly integrated market position were missed.

Earlier this year, the government embarked on a program to transform Australia’s telecommunications industry, in the interests of all Australians, with the largest nation-building investment in our history, the National Broadband Network. Yesterday’s announcement builds on this, and it is the next step in revolutionising Australia’s communications landscape. These reforms are critical to ensuring that our communications services operate effectively and efficiently in Australia’s long-term national interest. The reforms will address the legacy left by those who privatised Telstra without implementing the necessary reforms. The announcement made yesterday puts forward a series of reforms that provide choice for Telstra. It can stay with its existing assets, as the minister has said—the old copper network—or it can move into the future with the new mobile spectrum and the new applications and technologies that that will bring. The reforms address structural problems in the marketplace while giving Telstra the flexibility to choose its future path.

The issue of shares was also raised today. I am surprised that the opposition would want to go there. Let us not forget that under the regime supported and promoted by those opposite the value of Telstra shares fell. How much did the value of Telstra shares fall by? Under the former coalition government, when the former minister appointed Mr Trujillo to manage Telstra, the value of a Telstra share was about $5.20. When Mr Trujillo left Australia to return to his home country, a Telstra share was valued at $3.20. That equals around $30 billion of lost Telstra value under the former coalition leadership. It is a $2 per share loss—some $30 billion in value lost at various points. (Time expired)

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

I rise to join this debate on the motion to take note of answers given by Senator Conroy today in relation to the latest chapter in the government’s great broadband hoax. That of course is what we are witnessing from this government at present: lots of talk, lots of spin, lots of proposals around how it is going to address broadband, but nothing that the Australian public is going to ultimately see delivered. We have a minister who likes to count, apparently. He likes to count Senator Minchin’s press releases. He likes to count what he calls former, failed broadband plans. He likes to count numbers. We all know that, indeed.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

I wonder how many friends he’s got.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Bernardi asks: ‘How many friends has Senator Conroy got?’ That depends on whether or not the deal with Senator Carr is still holding. He likes to count all of these things, but the thing is that we are counting too. We are counting the chapters of failure mounting up in the government’s broadband proposals. They went to the last election with a plan. They did not have policies in every area. In fact, they were sorely lacking in many areas, but they actually had a policy when it came to broadband. They had their fibre-to-the-node policy. They were going to roll out, for $4.7 billion, coverage to 98 per cent of Australian homes. This was the great promise that, close to three years ago, the now Prime Minister and the now Minister for Broadband, Communications and the Digital Economy stood there and staked their credibility on—the fact that this was how they were going to fix broadband services for all Australians.

Instead, what did we get? We got a government that came in and spent tens of millions of dollars on consultants and an assessment process only to realise that they had to ditch that process because their promise could not be delivered. It was not feasible; it did not stack up. The government had not done their sums correctly. Rather than doing what any responsible or sensible government would do and going back to basics and thinking about the right telecommunications regulatory environment and the right sort of outcome, the government decided to say, ‘Double or nothing.’ In fact, it is not double; it is 10 times the amount. The original figure, $4.7 billion, has become $43 billion. Yet, quite miraculously, whilst the government are proposing expenditure of almost 10 times the amount, their new fibre-to-the-home network is now only proposed to cover 90 per cent of Australians. Rather than the grand 98 per cent, it is back down to 90 per cent. You have to wonder what the government are focusing on.

Now the government are coming in and talking about forcibly breaking up and structurally separating one of Australia’s largest companies, Telstra. I feel like I have stepped back to some time in the previous century, to a trust-busting debate or, perhaps even more relevantly, a nationalisation debate. We all know the hidden agenda for the government behind all of this. They know that, even with their $43 billion, they still cannot manage to get their broadband mark 2 plan to work without forcing Telstra to part with large chunks of its current infrastructure to the government’s company. The government claim Telstra’s structural separation will then provide for a more competitive telecommunications environment. If we are going to have that more competitive environment for investment in telecommunications, why on earth did the government think that they still needed to go ahead with establishing a government company, NBN Co? It is $43 billion of investment when they are already forking out, at an amazing rate every single day, thousands of dollars that they do not have for executives to build something that they are not currently building.

The policies of the government are all skew-whiff when it comes to broadband. Their focus has been on picking technological winners. They have chosen fixed fibre as the lucky one when mounting evidence to the contrary says that they are not on a winner at all. Hundreds of thousands of Australians every month are making the switch to wireless options. The private sector is making a massive new investment in wireless options. The government’s solution, though, is to take the biggest company in the sector and ban it from making new investment in wireless. Like everything else on broadband, their policy makes no sense.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I thought for a fleeting moment then that Senator Birmingham was going to start to outline a policy that the opposition have. He nearly got there. He nearly started to say what they would do if they were in government, but he then backed away from it at a million miles an hour. In his contribution to the debate today he talked about a so-called government hoax and about so-called government hidden agendas. He even had the audacity to complain about us having a policy when we were in opposition. That stands in stark contrast to the present opposition, which has no policy, which does not seem to want to develop one and which does not seem to want to have a debate with the government about competing ideas of policy. They simply want to bag what the government is going to do.

The closest the opposition have come to having a policy is what Senator Coonan, the former communications minister, said to the Communications Day, a local industry magazine, on 13 May 2008. I know Senator Conroy quoted some of this, but I want to go through it because Senator Coonan got up and said that she did not say what Senator Conroy had said she had said. It is in the format where questions were put to the former minister and then detailed answers were provided. It is inconceivable that an interview of that nature would not be double-checked by the person giving the interview. If Senator Coonan wants to stand by the statement she has made in the Senate today, she should do so. But if she has in fact misled the Senate then she should come back in here and correct the record.

This is what the magazine article actually says. The magazine puts the question:

If you could have your time in the portfolio again, what would you do differently?

Senator Coonan says a number of things and then says:

… more thought could have gone into a policy that would have separated the network and would have looked down the track at what might happen if you turned a publicly-owned monopoly into potentially a privately owned one.

It was not as if those comments were discreetly tucked away somewhere; they actually ended up being the headline banner. The headline banner on the article, which had a nice picture of Senator Coonan next to it, is ‘More thought could have gone into a policy that would have separated the network’.

We take that article at face value. When we link that back into the policy development that the opposition seems negligent in going through, Senator Coonan seems to be the closest one in acknowledging that the previous government actually got it wrong. When they went through the privatisation process they did not look to the future, they did not understand how Telstra would act—

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

You supported the privatisation of Telstra.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I beg your pardon. We did not support the privatisation. This is a problem when you just make things up, put them forward as if you understand and you make some point about it. Let me make it very clear: we did not support the privatisation of Telstra.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Yes, you did.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

We did not. We rue the day you pushed it through, and so do the Nationals. I think you are confusing us with your coalition allies. They supported it at the end of the day.

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! Senator Marshall, I think you should address the chair.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy President, I am sure that you will recall that the National Party actually voted for the privatisation of Telstra, and I am sure they regret doing so now. They probably regret it more when they look at the remarks of Senator Coonan, who actually regrets not putting more thought into what would happen to a privatised Telstra in terms of its market access and the way it behaves as a monopoly.

The commentary in this area has been very supportive of what the government has done. You only have to go to a couple of commentators. Time is not with me, but I will read what Adele Ferguson says. She states:

… the World Economic Forum recently released a report ranking Australia 17th in the world for availability and use of information and communication technology—well behind many of our trading partners and competitors.

The finger can be squarely pointed at Telstra for this embarrassingly low ranking … Since the telecommunications sector was deregulated in July 1997, Telstra has acted like incumbent telcos the world over—it has sandbagged the competition to protect its market dominance. It has been able to dictate the speed of uptake in technologies such as broadband, wireless and voice over internet protocol … No wonder we are considered backward.

How did we get to being considered backward? It was under your watch.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

It is always a challenge in this place for the Labor side to decide whether to read the scripted speeches, as Senator Wortley did, or to fly by the seat of their pants, as Senator Marshall did. The problem with flying by the seat of your pants, as Senator Marshall has just done, is that, when you do not know what your own policies are, you make a mess of it. In opposition the Labor Party did oppose the sale of Telstra and cost the taxpayers tens of billions of dollars because they delayed and would not allow the government to get on with the policy. As soon as it was sold and transferred into the Future Fund, they changed their policy and said, ‘We now support the sale of Telstra and the privatisation of Telstra,’ and they said they would not try to get it back from the Future Fund. That is the truth, and Senator Marshall is clearly unaware of that.

Senator Marshall did not address the issues that Senator Conroy failed to address. Senator Conroy has claimed the prize that is fiercely contested on that side of the chamber—as the most hapless and hopeless minister in a sneaky and underhanded government. Why do I say that they are sneaky and underhanded? Why is Senator Conroy hapless? Let us have a look. He had his failed broadband tender, which was the policy they took to the last election. It failed because they would not allow Telstra to participate in it. Then he came up with his back-of-the-envelope broadband plan in which $43 billion of taxpayers’ money was scheduled with Kevin Rudd in the VIP jet—

Alan Ferguson (SA, Deputy-President) Share this | Link to this | Hansard source

Order! You should refer to the Prime Minister by his title.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

with Mr Rudd, the Prime Minister, probably sometime between complaining about the lack of food and berating the airline stewardess. Senator Conroy is full of broken promises, he has given false hope and he has had demonstrable failure at every turn. Those are the three trademarks of Senator Conroy. Now we have his most audacious plan yet. It is a plan that sends the wrong message to every significant player that is thinking of investing seriously in Australia. With the stroke of a pen and a press conference Senator Conroy said we will change the laws to advantage the government to make sure that a legitimate private enterprise, with 1.4 million shareholders and 30,000 employees, cannot go about its business.

On the one hand Senator Conroy is saying, ‘This is an old technology and Telstra needs to ditch it.’ On the other hand he is saying, ‘It’s technology that we want to put into our yet to be formed NBN telco,’ the telco which Senator Birmingham said is spending thousands of dollars every week doing nothing. In fact it is paying its CEO $40,000 a week when it has no revenue, no real plan, no employees and no customers. It is trying to get an outdated technology from a company that is providing employment to 30,000 Australians.

This sends a very wrong message to investors in Australia. It sends the wrong message to those who think competition should be allowed to reign free. As Senator Minchin said, broadband access is an area where Telstra is not the dominant player. So what is the agenda behind this? Unfortunately, I think it is once again a desperate clutch at power by a desperate government. It is desperate clutch at trying to reassemble some sort of control over the debate around telecommunications in this country.

The debate has raged all around Senator Conroy while he has fiddled. He has fiddled while Rome has burned in this case. He has failed in his broadband tenders. He has failed to protect taxpayers’ money. He has failed at every step. The problem we have is that this is going to be a very dangerous precedent, a precedent that offers very little opportunity for significant companies that want to come to Australia or are concerned about making major investments in Australia. It is an investment on whose path Senator Conroy has committed the government and it will perhaps leave the government exposed. It will leave the taxpayers of Australia in a position where they may have no alternative except government supplied services. That is wrong. (Time expired)

Question agreed to.