Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

The Telecommunications Legislation Amendment (Competition and Consumer Issues) Bill 2005, which will be debated tonight and through this week, is one of the most draconian and un-Australian pieces of legislation that this parliament has ever seen. This bill will effectively appropriate property belonging to a private company without any compensation whatsoever. For that reason, the coalition will be opposing that part of the bill that effectively causes confiscation of property without compensation.

The bill does a number of things: it makes changes to the telecommunications access regime, it removes technical impediments to the operation of the anticompetitive conduct regime, it makes the universal service obligation and customer service guarantee clearer and therefore more enforceable, it extends the obligation to provide priority assistance to those with life-threatening conditions to service providers other than Telstra and it enables breaches of civil penalty provisions to be dealt with more quickly.

There are parts of this bill to which the opposition has no objection—in fact, there are some parts which the opposition would be in favour of supporting. But as long as this bill contains the provision of appropriation of property without compensation the opposition will not be supporting it. The provision to structurally and functionally separate Telstra at the pain of great penalties is a step too far and it is one that the opposition, for reasons that the Senate will hear during this debate, will not be supporting.

We hope that the government will see sense—that the Minister for Broadband, Communications and the Digital Economy, Senator Conroy, will get off his high horse and realise that this Senate is elected by the people of Australia and that it has a function to play in this parliament. We have seen all of the media commentary by five under-pressure ministers today—a pretty amateur approach today—to put across a message that the Senate is being uncooperative, which is quite incorrect. But for all the government spin that we have come to accept as normal from Mr Rudd and his government this Senate actually comprises elected people who are here to perform their duties in looking after the interests of all Australians. They have a duty to make sure that the rights of all Australians—and they have obligations as well as rights—cannot be taken away by a government in the capricious way in which this legislation attempts to do it.

This bill seeks to prevent Telstra from acquiring specified bands of spectrum which could be used for advanced wireless broadcast service unless it structurally separates and divests its hybrid coaxial cable network and its interests in Foxtel. In fact, the bill gives Telstra the opportunity to give three binding undertakings: an undertaking to structurally separate its retail operation from all or some of its networks, an undertaking to divest itself of its interest in Foxtel and an undertaking to divest itself of the pay-TV cable network that it owns in Adelaide, Brisbane, the Gold Coast, Melbourne, Perth and Sydney.

If it does not do that, then this bill will provide that Telstra will not be allocated and will not be able to use the designated spectrum that it is assumed is vitally essential to its mobile broadband business. What this really means is that the government and the minister are holding a gun to the heads of the millions of Telstra shareholders to fall in with the government and give away their current network at practically no cost—otherwise they will pay the consequences.

I am pleased that Minister Conroy has come into the chamber, because he will know better than I that, when Telstra was having a little tiff with the former coalition government a few years ago, Senator Conroy became very palsy-walsy with Telstra. He went to them and said, ‘I’ve got no idea of what a communications policy should involve. I have no staff; I have no ability. So you tell me what you would want.’ Telstra gave him some advice and mentioned a figure of $4.7 billion—and, lo and behold, that became the Labor Party policy. When Labor won government, Minister Conroy suddenly found that it was not quite that simple. He first of all destroyed the OPEL network, which was up and running and which, by now, would have been providing high-speed broadband to most of Australia. Senator Conroy, capriciously again, simply cancelled that contract and threatened those involved that, if they wanted to have an interest in telecommunications in Australia in the future, they had better forget about any High Court action against the government.

Then we went through an expensive farce involving the offer to tender process, which cost the Australian taxpayer $20 million. At the end of that, Senator Conroy realised again that his policy and that of his government was up in the air, all over the ship and going nowhere. Then he had this brilliant idea that he would put in $43 billion worth of someone’s money. Because we have not seen the implementation study we are not sure whose money it was going to be, but we were all led to believe that 51 per cent of that money would be Commonwealth investment and 49 per cent would somehow be private investment. With the $43 billion, Senator Conroy was going to build this National Broadband Network, which would effectively take over the trunk lines, if I can call them that, of Telstra, Optus and anyone else who might have them. And the government would not brook any competition from Telstra or Optus because the figures, if you look at them, mean that for $43 billion this NBN network simply cannot operate. It is a commercial lemon. There is no way in the world it could make a profit or even hold its own in competition with Telstra, who effectively have a similar sort of network amongst the high-using parts of our country.

What did Senator Conroy then work out? If he went into competition with Telstra, with the $43 billion and the amount that he would have to charge customers to get the network to even remotely look like paying, he would be out on his commercial ear, one might say. Quite clearly, Telstra with its existing network, and Optus and the other carriers, would be able to provide a service at about the cost they are providing it now. The NBN, on even the simplest back-of-the-envelope figures, would have to double or triple the monthly payment for those people wanting to use the NBN service. Who would go to the NBN service when they could get a service from Telstra or Optus or Vodafone for about one-third of the cost? Nobody. Competition is not what Senator Conroy wants, because NBN would fall flat on its face commercially.

So what did he do? He then came along with the bullyboy tactics and said to Telstra, ‘We want you to give us your network and for you to get out of the wholesale area so that we won’t have any competition in that area and we might—just might—be able to make ends meet.’ This bill actually puts into legislative form that confiscation of property to ensure that Telstra is not there to compete with this NBN, because, if it did, the NBN would have no chance of being commercially successful. Even as it is, it will not have much of a chance of being profitable.

This comes from a government that cannot even run a giveaway insulation program. Surely, if you are giving away insulation, you could devise a program that would work. It is not rocket science; in fact, anyone could do it—anyone, that is, except Mr Garrett and the Rudd government. They have made such a mess of that simple piece of policy implementation; how on earth could they possibly run this National Broadband Network?

What they have done with the network, of course, is fill it up with old mates. We all know of Senator Conroy’s action in ensuring that Mike Kaiser, a defrocked, I might say, member of the Queensland parliament who had to resign from the Queensland parliament for electoral fraud, is now on board with the NBN company. Why? Because of his expertise? Or did he win his $450,000 job in competition with many other people who have expertise in the government relations area? No, he got it non-competitively, because the minister came along and said to the boss of NBN Co., ‘I’ve appointed you to NBN Co. It’s not a bad job and you’re not a bad fellow, but you’re there because I appointed you. I’ve got a mate up in Queensland—part of my faction. He’s looking for a $450,000 job. I think he’d be very suitable for this appointment.’

This is the sort of situation you had with the NBN Co. as it commenced. If that is how it commenced its operations, heaven knows how it will finish up. We might wonder how many of the other NBN Co. appointments were non-competitive. I think someone said that about 40 per cent of them—perhaps Senator Conroy would confirm that—were made without competition, and one wonders how many of them are card-carrying members of the Labor Party and, perhaps more importantly, of the faction in which Senator Conroy is closely involved.

This is the body that the Rudd government wants to give a monopoly to in Australia. To do that, it is going to confiscate from an existing private company certain property by threatening the company with the fact that if they do not give it up the government will make their business life untenable in Australia. This is a draconian and very un-Australian part of the legislation. That part should be defeated and hopefully will be defeated. I call on Senator Conroy again to split this bill so that the consumer elements of this legislation are divided from the rest of the bill and dealt with by the Senate. As I say, generally speaking, that would get the support of the coalition. It is a simple way to get through that legislation. But, no, the Labor Party is playing its old tricks: have some good legislation which everyone agrees with but hook it into something that is draconian and un-Australian and would not get support anywhere. I again ask Senator Conroy to split the bill so that the consumer provisions can be dealt with.

We had a debate earlier today about the implementation study. According to Senate procedure, we were not supposed to be dealing with this bill until the implementation study was tabled. At many an estimates committee meeting, we inquired of Senator Conroy and his department how this would be funded. We asked whether private business interests would be in there, whether it would be done by a government bond, what the interest rate would be and who would pay any losses in this company—all those sorts of things—and from Senator Conroy and his department we continually got the answer, ‘That’ll all been made clear in the implementation study.’ We all expected, as reasonable people, that the implementation study would be released by the end of February. In fact, Senator Conroy implied that. I concede to Senator Conroy that in a recent estimates hearing he said that it might not be released by the end of February 2010. I concede that, Senator Conroy. But your action and the action of your department was that, every time a question was asked, the answer came back: ‘Don’t you worry about that. We can’t answer this now, but when you see the implementation study all will be revealed.’ But, of course, all has not been revealed.

Mr Acting Deputy President Bishop, I ask you to do some sums on the back of an envelope. Work out how many subscribers there are in Australia at the moment. How many are there? There are about seven million households in Australia. Divide that into the income that the NBN Co. will need to earn in order to see what it is going to cost people to hook into the NBN. If you look at average prices now of about $50 to $60 a month for an ordinary person using similar services and then multiply that—anyone can do these figures; you can do them on the back of an envelope—you will see that you simply cannot make money out of this NBN. Senator Conroy said to us: ‘You will see it. All will be revealed when the implementation study is tabled.’ But where is the implementation study? Where is this document that was going to tell us all what needs to be done?’ Senator Conroy, for reasons that only he knows about—I was not in the debate this morning, but I understand that in his 20-minute rant he did not even indicate—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

Ian Macdonald (Queensland, Liberal Party, Shadow Parliamentary Secretary for Northern and Remote Australia) Share this | Link to this | Hansard source

It was only five minutes of ranting? Your rantings have been concise, Senator Conroy! I understand that you did not even indicate why you would not be releasing the implementation study. I will give you a reason: I suspect that the implementation study says that this is a lemon—that this will not work. You simply cannot raise the sort of income you will need from the NBN Co. while making it affordable to Australians who might have to hook up to it. The whole thing is an absolute shambles, Senator Conroy, and you know it. How many backflips have you done so far? Remember we were told that the request for tender process ‘affects everything; we’re going to get good responses here and there will be people lining up to do it.’ What did you do? You made the mistake of having a bit of a fight with Telstra, so you excluded them from it without thinking, and then, having excluded them, you realised that you could not do it without them. This is a shambles to the nth degree, and it will continue to be a shambles whilst this government is in charge of it. I again plead with Senator Conroy, if he is interested in getting the consumer bits through, to split the bill, because the opposition will certainly not be supporting this draconian confiscation of property without compensation.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

I am very pleased to contribute to the debate this evening on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. The Rudd Labor government is determined to have the best possible infrastructure in place to underpin Australia’s economic future and economic prosperity and to ensure that all Australians can enjoy that prosperity. We are committed to building the best possible broadband and telecommunications system, the best transport corridors, the best schools and the best health facilities. Despite the continued obstruction of those opposite, we are determined to honour those commitments to the Australian people.

I note that the government recently released its exposure draft of the legislation intended to establish the regulatory framework for the National Broadband Network company, NBN Co. That was another significant step in the massive reform of the Australian telecommunications sector that the government has embarked upon. As is appropriate, that exposure draft is available for consultation with stakeholders and the government has, as the Minister for Broadband, Communications and the Digital Economy has said, an open mind on any amendments that can improve the bill before us today.

The government is always mindful of the necessity to consult widely about the transformation of Australia’s telecommunications infrastructure and systems; however, the opposition does not participate meaningfully in this debate at all. It just opposes everything we do. While failing to come up with any coherent plan of its own, there have been numerous press releases—currently more than 100—and at least 18 different failed broadband plans. There is no coherent plan and no vision for the future from the coalition. Given the coalition’s recent complete conversion to a party full of extremists, wackos and conspiracy theorists, we can only anticipate that their next pronouncement on telecommunications will be to either institute a national smoke signal system or bring back carrier pigeons.

The amendments proposed in the bill we are debating come after telecommunications companies, industry experts and the regulator have been calling for years for fundamental reforms in telecommunications. The government has listened to those calls and, with this bill, will deliver historical reforms in Australia’s long-term national interests. The legislation before us will address Telstra’s high level of integration to promote greater competition and consumer benefits; it will streamline and simplify the competition regime to provide more certain and faster outcomes for telecommunications companies; it will strengthen consumer safeguards to ensure service standards are maintained at a high level; and it will remove red tape affecting productivity and innovation.

The Senate Environment, Communications and the Arts Legislation Committee inquired into this bill last year. As the committee’s report noted:

The bill seeks to introduce a series of regulatory reforms intended to enhance competitive outcomes in the Australian telecommunications industry and strengthen consumer safeguards. It seeks to ‘promote an open, competitive telecommunications market to provide Australian consumers with access to innovative and affordable services’.

That was a laudable conclusion for the committee to come to. It is a pity that the coalition senators could not support it.

The amendments proposed in this bill will assist us to modernise our telecommunications industry and benefit all 22 million Australians. At the moment, Australia sits in the bottom half of OECD countries in terms of broadband take-up. Australia has slower and more expensive broadband compared to many other countries in the OECD. In fact, the OECD ranks Australia 16th in terms of broadband penetration per 100 inhabitants. We also rank fourth, fifth and ninth for the most expensive low-speed, medium-speed and high-speed average monthly subscription broadband prices respectively. That poor standing of ours on the international scale is largely due to the lack of competition in the telecommunications market.

The bill before us is designed to restructure the regulation in place in the sector in the interests of consumers, business and the economy as a whole. Additionally, it is designed to position the telecommunications sector to make the smooth transition to the NBN environment as the new network is rolled out and implemented across the country. The measures incorporated in the bill will provide flexibility for Telstra to choose its future path and to streamline the regulatory framework.

The bill is split into four elements of reform, which I will now outline in a bit more detail. The first is vertical and horizontal separation. Unlike many other countries, the Australian telecommunications sector is dominated by one company, which owns Australia’s only fixed-line copper network, the largest cable network, half of the largest pay TV provider and the largest mobile phone network in the country. That high level of integration that Telstra has over the telecommunications market is highly unusual when compared to most other countries. Integration to that extent is anticompetitive. To avoid the detriment caused by an anticompetitive framework, many countries have already implemented restrictions to ensure that the total monopolisation of the telecommunications sector does not occur.

The bulk of the current telecommunications regulatory regime has been in place since its introduction in the 1990s. It is the government’s view that, even after more than 10 years of open competition, Telstra’s high level of integration across the telecommunications sector is hampering the development of effective competition. In owning the fixed-line copper network as well as the largest cable network and holding a majority share of the nation’s mobile phone network, the government believes Telstra has disproportionately high levels of ownership and that has contributed to Australia continually lagging behind other developed countries on the availability, price and quality of telecommunications services.

The first element of reform in this bill will focus on the current structure of the telecommunications sector, implementing vertical and horizontal separation and aiming to correct the mistakes of the past. While significant structural reform has occurred in other key infrastructure industries, previous governments from both sides have failed to undertake the necessary structural and microeconomic reform in the telecommunications industry. The government has devised a plan for the functional separation of Telstra, unless of course Telstra decides to voluntarily structurally separate in a way acceptable to the ACCC. Of course, the best outcome for the transition period to the NBN is for Telstra to voluntarily structurally separate in line with NBN arrangements. If the company chooses to voluntarily separate, the minister will provide guidance to the ACCC on the matters it would need to take into account when considering whether to accept a separation undertaking. If Telstra chooses to not voluntarily structurally separate, this legislation provides for the government to impose a strong functional separation framework on the company.

The bill also includes provisions to address the horizontal integration of Telstra across copper, cable and mobile platforms. Telstra will be prevented from acquiring additional spectrum for advanced wireless broadband while it remains vertically integrated; while it owns a hybrid fibre coaxial cable network; and while interests in pay TV channel Foxtel are maintained at the levels they are now. The legislation provides scope for the minister to remove either or both of the second and third requirements in the event that Telstra submits an acceptable voluntary structural separation to the ACCC. I note that functional separation has been used as a regulatory tool successfully in other countries, including the United Kingdom and, more recently, New Zealand. It is also being considered currently by the European Commission. In a range of countries a fixed-line incumbent does not also own the largest mobile carrier, as is the case here in Australia. The government, through this legislation, intends to rectify the deficiencies in our unique and highly integrated telecommunications market with the aim of promoting competition across different delivery platforms while still allowing Telstra to choose its own future path.

I will now go to parts XIC and XIB of the Trade Practices Act. The second element of this bill addresses the competition framework. It seeks to reform the telecommunications access regime and the way in which anticompetitive conduct is handled by the regulator. The existing telecommunications anticompetitive conduct and access regimes in the Trade Practices Act have been widely criticised as being cumbersome, open to gaming and providing insufficient certainty for investment. The government, rightly, wants to change that and to improve the conditions of the current regulatory framework.

As evidence that things are not working well in terms of that regulatory framework, I note that in the period from 1997 until mid-2009 there were 157 telecommunications access disputes lodged with the ACCC. In comparison, other regulated sectors, including the energy and aviation sectors, only saw three access disputes lodged in the same period. It is clear also that access seekers have been frustrated and unhappy with the constant delays and disputes in the industry, a fact that was reiterated during the Senate committee inquiry, where many of the submissions were strongly in favour of improving the process. A reform of the telecommunications access regime is most definitely needed to ensure it is a more effective and therefore a more acceptable regime for access users.

The proposed changes outlined by this bill will also reform the Trade Practices Act to streamline the arrangements through which telephone companies access wholesale services so that, firstly, the ACCC will determine upfront terms and conditions for a three- to five-year period; secondly, the ACCC can determine principles to apply for longer periods; and, thirdly, the ACCC can make binding rules to immediately address problems with the supply of regulated wholesale services.

The bill also reforms the arrangements in part XIB of the TPA so that the ACCC can address breaches of competition law and conduct damaging to the market. These reforms will provide more timely outcomes and greater regulatory certainty for both access providers and access seekers. Providers and seekers will be able to invest in infrastructure and expand their service offerings. Competition in the telecommunications industry will be far improved, and, of course, consumers and businesses will benefit from lower prices, better services and greater product innovation.

Also in this bill there are matters dealing with consumer protection measures. The platform of reforms that we are debating today in this bill takes into consideration the implementation of the National Broadband Network. During the period of transition to the NBN environment the existing telecommunications regulatory regime will remain important for delivering services to Australian consumers and businesses. The government is committed to ensuring that consumers are protected during this phase and that service standards are maintained at an affordable and high-quality level. The reforms proposed strengthen the regulator’s ability to enforce existing consumer safeguards that are in place and will not remove any of the existing protections that are currently in place for consumers. With this bill the government will ensure that Telstra does not reduce the quality and reliability of services on its copper network during the transition to the NBN. In fact, this bill aims to make sure that existing protections are better enforced in order to provide higher quality services and a greater responsiveness to faults.

The government is particularly concerned about access to modern telecommunications. The reforms that this bill presents will be good for all Australian consumers and businesses no matter whereabouts in the country they are located. Rural and regional Australia has suffered disproportionately from the inadequacies of the existing regulatory framework. For example, only 59 per cent of payphones in remote areas provided under the universal service obligation were repaired within the three-day period specified in Telstra’s Standard Marketing Plan—a stark contrast to the 82 per cent repaired within two days in rural areas, and 91 per cent of phones repaired within one day in urban areas. In the Regional Telecommunications Independent Review Committee report released in September 2008, the universal service obligation arrangements were highlighted as being very vague and too difficult to enforce. The government have recognised that the universal service obligation is the key to the ongoing protection of consumers’ rights, although we have also recognised the need to improve quality and service benchmarks.

The measures outlined in the bill reflect the decision to retain the existing USO for voice telephony and payphones, but we require a marked lift in the service benchmarks to increase consumer satisfaction. Improvements to service quality will be made in order to meet the customer service guarantee. New service arrangements will make clear to both consumers and Telstra the services Telstra must supply in fulfilment of the universal service obligation, including reliability and repair requirements, rather than the decisions being left to Telstra’s discretion. The government will consider the broader range of issues associated with the delivery of universal access in the NBN environment once the detailed operating arrangements for our fabulous 21st-century broadband network are finalised.

The fourth plank of the reforms proposed in the legislation before us today is to do with the removal of red tape. The Rudd government have consistently been dedicated to modernising infrastructure and maximising productivity and growth. We have made large commitments to address any impediments that stand in the way of Australia’s long-term productivity growth. The final element of this bill is intended to remove regulation red tape, specifically in areas where it is no longer needed, and, more specifically, in areas where the need for regulation no longer exists. There are a number of these red-tape removal proposals, including exempting all carriers from paying the annual carrier licence charge if their annual revenue is under $25 million per annum; reducing the reporting requirements under the customer service guarantee, priority assistance and network reliability frameworks so long as performance benchmarks are being met; repealing any unnecessary accounting and operational separation requirements once functional separation is in place or Telstra has submitted an enforceable undertaking to structurally separate that is acceptable to the ACCC; and, finally, abolishing the Telstra licence condition that requires Telstra to provide technical assistance to enable customers to achieve 19.2 kilobits per second internet services.

As I have said, the object of the bill, with the splitting of Telstra, is to promote innovation and increase competition and responsiveness within the telecommunications sector. The reforms proposed in the bill are well-timed to benefit both telecommunications providers and consumers. The government wants to create a more efficient telecommunications market with more competitive services for the benefit of all Australian consumers, including businesses and households. Although we have seen attempts from the opposition again today to frustrate the passage of this bill, it is hoped that these benefits will be seen relatively soon so that we can carry them through for the long-term benefit of the country.

The government is determined to act in the best interests of industry, but the coalition, with their activities today, are clearly opposed to doing that. The action the coalition took today to delay debate on this bill fits in with their long track record of failure in the area of telecommunications regulations. After all, the coalition presided over a regulatory system which has failed telecommunications companies, consumers and businesses. They privatised Telstra without ever properly resolving the conflict of Telstra being the network owner while also competing against its customers in retail markets. The opposition are again trying to delay these reforms and they are again failing Australian businesses and consumers.

The reforms in this bill are critical. Every day that these reforms are delayed, Australian consumers and businesses will continue to pay higher prices and have less choice and see less innovation in telecommunications services. In case we were in any doubt about the importance of these reforms, I should point out that many in the industry and stakeholders support them. On Lateline Business last year, ACCC Chairman Graeme Samuel said:

The view of the ACCC for many years is that the reforms proposed in the legislation that’s been tabled by the Government are long overdue, are necessary, are reforms that infuse the whole concept of competition into the telecommunications sector, an infusion that itself is long overdue since about 1992.

I commend this excellent legislation to the Senate.

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

This legislation is simply a gun to the head of Telstra Corporation; it is a gun to the head of a publicly listed major Australian company. The minister pretends that the legislation is all about choice. But it is a Clayton’s choice. It is a choice between ‘cut out’ or ‘get cut out’. It is a choice between ‘volunteer to structurally separate’ or ‘be cut out of future licensing operations’. It is a choice between ‘bear the cost of separation’ or ‘stand fast and bear the cost of being cut out of the market’. The Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 was not Labor policy until the minister announced it as such in September 2009. Labor did not take this policy to the election because they knew it would hurt millions of Australians, millions of mums and dads, Telstra shareholders.

Speaking about the separation at budget estimates last year, Minister Conroy said, ‘I’m not advocating it; I’ve never advocated it.’ The separation was never Labor policy—until the minister announced it in 2009. Why? Because there is no case for this bill. Minister Conroy has spectacularly failed to demonstrate any case for this bill since he forecast the changed policy in September 2009.

Rudd Labor is proposing to solve a supposed problem without any data to quantify its proposed solution. Now why should we be surprised about that, from a government that was elected on the basis of ‘let’s do evidence based policy’ and that has spectacularly failed to do exactly that? Indeed, its record is exemplified by its very failure to do that. So why should we be surprised? The minister’s second reading speech on this bill says simply:

Telstra is one of the most highly integrated telecommunications companies in the world—

as if the statement of the fact that Telstra is highly integrated is proof of the fact that it should be unintegrated—and I use that word, if it be one, in preference to ‘disintegrated’, but that may well be a consequence. Let us hope it not be intended by the minister.

A recent Senate inquiry heard from Foxtel, who said the draft bill proposed dramatic changes to the regulatory regime despite the government not having undertaken a rigorous analysis or inquiry into whether there has been significant market failure justifying any changes. Well, why should we be surprised about that? Why should we be surprised about the government persisting with a bill for which there is no case when that bill is bad for mums and dads and shareholders of Telstra? There are 1.4 million shareholders, nine million customers and some 30,000 workers. What about the workers, Minister Conroy? What about the workers?

Institutional investors are clearly opposed to the erosion of the value in Telstra’s shareholding. Worse, as Maple-Brown Abbott’s submission to the Senate inquiry pointed out:

The bill … runs the risk of damaging Australia’s sovereign risk rating as well as stifling investment and innovation in the telecommunications sector.

It is an extreme and unacceptable way of forcing a company to bargain with the government. Why should we be surprised about that from Rudd Labor? The Australian Foundation Investment Company’s submission warned:

If the Parliament passes this legislation we think Australia’s investment standing could be significantly diminished. Investors, particularly international investors, will perceive substantially heightened sovereign risk if the Australian Government can act arbitrarily in this way.

Synstrat Management’s submission said they considered the bill to be ‘legal trickery’ and an ‘unethical way for the government to conduct its business’. So why should we be surprised that Minister Conroy and Rudd Labor are persisting with a bill for which there is no case when that bill is simply bad for rural and regional customers?

In many parts of rural and regional Australia Telstra is, like it or not, the only service provider. It presently offers competitive, metropolitan comparable pricing to much of rural Australia and recently reduced pricing on Next G wireless broadband services, bringing Next G into the Department of Broadband, Communications and the Digital Economy’s definition of metro-comparable broadband. But if Telstra is separated, will there continue to be some cross-subsidy of the services currently provided to rural and regional Australia? If Telstra misses out on 4G wireless spectrum—and there is a clear prospect under the bill that it may—how long will rural and regional Australians be forced to wait for a new market entrant? What proof or what confidence does the government have that there will be a new market entrant capable of delivering to rural and regional Australia? And what of the universal service obligation? If Telstra is separated, is the government proposing to guarantee that rural and regional Australians will have access to quality and affordable telecommunications services somewhat like those guaranteed under the current universal service obligation provisions? That is yet another question that remains unanswered.

So why should we be surprised about the government persisting with a bill for which there is no case, arguing that it is necessary for competition when there is already significant competition in the marketplace? Data from ACMA and the ACCC indicate the level of competition. ACMA’s Communications report 2008-09 released in January showed that, as of June 2009, there were 175 licensed telecommunications carriers, three mobile carriers offering six networks covering some 96 to 99 per cent of the population, more than 600 internet service providers and almost 400 fixed-line voice service providers in Australia. The Optus submission to the current ACCC review of price controls on Telstra says that prices in retail telephony markets have been falling due to the amount of competition in the market—that is, a large number of retail providers competing vigorously for market share. An ACCC submission to the government’s regulatory reform paper of June 2009 said no specific legislative changes are required to address competition concerns in relation to the allocation of spectrum. So why should we be surprised about Minister Conroy persisting with a bill for which there is no case?

Really, the only case for the bill is to save the National Broadband Network and to save the minister’s ministerial face. It is all about the NBN, stupid. Contrary to the government’s claims that the bill is about enhancing competition and delivering better and more affordable services to consumers, several of the witnesses to the recent Senate inquiry, for example, are in little doubt about the purpose of the legislation. Again, Maple-Brown Abbott say this bill is ‘a high-risk strategy to deliver the NBN’. It is simply a stalking horse for the National Broadband Network. This bill is all about the NBN, stupid. It is a cover for the lack of action thus far on the National Broadband Network. What have we got so far on the National Broadband Network? If there is an implementation study, we have not seen it. Indeed, we are not even sure that we will see it at all. No, there is no implementation study that we know about, Minister, but there is some sort of study by NBN Co. itself. Senator Conroy previously told us that the implementation study would ‘work through the detailed network design and rollout schedule for the NBN’ and ‘the extent of coverage that will be achieved’. So the key issues are network design, rollout schedule and the extent of coverage that will be achieved, amongst other things. Interesting. Presumably NBN Co. has got sick of waiting for your implementation study, Minister, because NBN Co.’s Mike Quigley says NBN Co. is seeking its own answers. He said last week:

We’re looking at the engineering tasks: how do you get this built, how do you define the product, how do you do the network architecture?

That is sounding like some of the things at the very least that Minister Conroy—good on you!—has shot home to the implementation study. It sounds suspiciously like, if nothing else, the minister’s promise that the implementation study will work through the detailed network design for the NBN. Mike Quigley of NBN Co. says the NBN Co. study will look at:

... how do you get this built ... how do you do the network architecture?

Why are Australian taxpayers—Australian mums and dads—presumably paying twice for the same thing? They are paying once through an implementation study that they might not even see and paying a second time through a study being done by NBN Co. We have not got an implementation study, yet we have got a trial rollout in places across the country and we have got the National Broadband Network rollout in Tasmania well advanced before any of these critical questions have been answered, presumably by the implementation study.

Trial NBN Co. rollouts to five locations across Australia might seem like action, but it is a bandaid look for action, covering over the lack of action on the NBN more broadly and proceeding before the minister surely has the critical advice on how the NBN should take shape. The Adam Max wireless broadband project in Adelaide sounds like a great idea. It is covering black spots, it is co-sponsored by the South Australian government, but it is papering over the lack of services that are due to be delivered by the NBN, if it delivers anything at all.

We have not got an implementation study. What have we got? We have got lots of megabucks being paid to NBN Co. CEO, Mike Quigley, and the minister’s mate, Mike Kaiser. There have been lots of megabucks and not one new megabit. What have we got? We have no implementation study but plenty of questions from the government’s own experts. Watch those experts, Minister, because they can turn on you if you do not heed their advice. Reg Coutts is a member of the government’s expert panel. You know that report, Minister, the one that you have not shown us yet either. Professor Coutts said in the media recently:

There has been worryingly little discussion of how the 10 per cent of the population not covered by the fibre network will get their broadband.

Professor Coutts went on to say:

I and many of the community are frustrated at the lack of progress in planning services for the 10 per cent who are beyond the NBN footprint. I do not understand why it has generated so little discussion, either in industry or in the community.

Be careful, Minister, who you pick because they can turn if you fail to heed their advice. The minister has repeatedly shoved aside the critical answers to the critical questions in his now all but infamous implementation study. In Senate estimates, when asked when and how the government will respond to the implementation study, the minister said:

As I have said, we are due to receive it by the end of February and then we will consider it.

Minister, February has come, February has gone and March is on the march. Where is your implementation study?

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

I’ve got it.

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

What about giving us time to look at it, Minister? If you have got it, Minister, how about giving the parliament and the Australian community time to look at the implementation study. This is an implementation study that you have spent, Minister, some nine months gestating. Will you give us nine minutes to look at it? Let us look at it another way: it took some $25 million of Australian taxpayers money to get it; will you give us 25 minutes? Give us a minute per million dollars. Give Australian taxpayers a minute per million dollars to look at it, Minister.

Minister, who is going to answer the ‘Who is going to get what’ under your $43 billion National Broadband Network plan? When are they going to get it? How are they going to get it? And how much will it cost them to get it? At the moment, there remain way more questions than answers. There are so many more questions than answers. The National Broadband Network—the NBN—is starting to sound more and more like ‘No body (k)nows’. Forget NBN aka National Broadband Network because it is looking like NBN aka ‘No body (k)nows’, least of all Minister Conroy; NBN aka ‘No body (k)nows’, least of all Rudd Labor. Yet, for that pleasure, Australian taxpayers are going to foot some $43 billion.

The opposition cannot support this bill, particularly if the provisions in part 1 of the bill are retained where a gun is held to Telstra’s head. Minister Conroy well knows that the Australian people, in a battle of David versus Goliath, will happily back David. Rudd Labor is punting on that, but what Rudd Labor is forgetting in that punt is that the Australian people also believe in fairness. In fact, they vehemently dislike unfairness and they are not going to like a gun to the head.

There is no case for the bill. That is a part of why Labor did not take the bill to the election. It is bad for shareholders, it is bad for rural and regional Australia and it is only to prop up the National Broadband Network. And it is premature. The consumer measures in the bill are not scheduled to hit the deck, the consumer rubber will not hit the road, until July 2010. What is the hurry, Minister? In particular, what is the hurry, Minister, when you are sitting on the $25 million taxpayer funded implementation study?

What is the hurry, Minister? What is the hurry, Minister, and why the bill, when at the same time the government releases an exposure draft of the NBN Co. bill that suggests that the minister will have the discretion to allow this taxpayer funded company—this government company—to go wholesale and retail? There is a bit of legislation that will allow the NBN Co. to do exactly that which Telstra is being told it cannot do. It is being told, ‘Cut out or get cut out,’ at the same time as the government is proposing to seek licence to give the government-sponsored company the right to be bought in, if you like, and to stay in. I think the Australian people will work out pretty quickly, Minister, that that ain’t fair. There is no need to consider this bill before we see the taxpayer funded implementation study. There is no need to consider this bill now, given it will be quite some time before the proposed consumer measures start operating. There is no need to consider this bill before we see the implementation study and there is no need to consider this bill before you, Minister, can convince the Australian taxpayers that ‘NBN’ stands for something other than ‘no body (k)nows’—least of all Rudd Labor and least of all you, Minister.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

You’re going to have to work hard to beat that one, Wacka!

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I rise to speak on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009. It looks like we have got it in stereo, with Minister Conroy already interjecting—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

having his say from his seat over there. And it is Senator Wacka, by the way, Minister! I look back on telecommunications over my lifetime and I think back to the days in Jamestown in South Australia when we had the manual exchange and then we went to automatic—what a great update that was. When I moved to Inverell in 1979, to a farm near Bukkulla, three or four miles down the road, we went back to a manual exchange. If you wanted to ring someone at lunchtime, between one and two, you turned the handle to dial and you would hear, ‘Are you calling Bukkulla? The exchange is closed for lunch.’ As time went on we too went to automatic, which was good. On many occasions I would ring my father to say hello and three minutes into the conversation there would be an interruption: ‘Three minutes has expired. Are you extending?’ Well, you never extended; you could never afford to extend. It had already cost you $3 for three minutes or something to call South Australia. Thank goodness, as time progressed, calls got much cheaper and the service much, much better.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

Labor’s history of telecommunications in regional Australia is not a good history. I can recall when we had the analog phone system, the first of the mobile phone systems in Australia. What a good system it was. The clarity was magnificent and it worked very well. But of course the Keating government did away with the analog system and brought in a digital system, GSM.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

CDMA. That was in between.

John Williams (NSW, National Party) Share this | Link to this | Hansard source

That was all very good if you were standing underneath a tower; then you might have reception. But once you got out of town a bit—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Senator Conroy interjecting—

John Williams (NSW, National Party) Share this | Link to this | Hansard source

you might as well have lit a fire and got a smoke signal going, because the GSM was absolutely hopeless in regional Australia. Senator Conroy, with all his interjections, is probably not very proud of Labor’s history when it comes to the mobile telephone network.

Thank goodness that in 1996 we had a change of government. The coalition, driven by the National Party, introduced CDMA, and many towers were put up. CDMA was a good system. The coverage was much better over distances. With a car kit and a broomstick aerial on your car, you could pick up reception 30, 40 and 50 kilometres away from a tower.

Then we went on to take the next step, to Next G. Despite criticism by many, such as Tony Windsor and others, I find the Next G system also very good. In my car, with, as I said, the car kit and the broomstick aerial, I can actually drive from Inverell to Adelaide, 1,800 kilometres, and not be without a signal for longer than one minute on that trip. In fact, driving around much of the state, as I often do, it is very rare that I cannot get a signal. Thank you to the previous government for building those towers.

The point I want to make is that many of those country towns have only Telstra. I do believe that when something is a monopoly it should be retained by the government. I had reservations about the full privatisation of Telstra—I am being perfectly honest here, Mr Acting Deputy President Bishop.

We now have the NBN plan being put forward by Senator Conroy and the Rudd government. At the last election, I think it was a $4½ billion plan for fast broadband with downloads of 12 megabits per second, to cover 98 per cent of Australians. Now we have 98 per cent getting fibre to the home and a budget blow-out from $4½ billion to a massive $43 billion. It will be interesting to see whether the $21 billion that is expected from the private sector will be forthcoming. The first thing they will want to know is how much of a return they are going to get on their investment—so they will be keen to see the business plan that none of us have seen as yet—to encourage them to put the money in.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Government in the Senate) Share this | Link to this | Hansard source

Why did you sell Telstra?

John Williams (NSW, National Party) Share this | Link to this | Hansard source

I was not in the chamber at the time! The coalition financed and supported the construction of mobile towers over much of Australia.

There are a lot of towns in my area in northern New South Wales that have Telstra only—towns like Manilla, Barraba, Bingara, Ashford and Bundarra. All those little towns and communities have Telstra only. So my question is: as time goes on and we wish to upgrade to 4G spectrum, what is going to happen if Telstra is cut out of the bid for the spectrum network? What is going to happen to that network? What is going to happen in those small towns? If Vodafone and Optus do all the bidding and purchase the spectrum rights, I suppose we could expect those companies to set up mobile networks in these small towns of 400 and 500 people? I do not think so. They are private companies and they are not going to invest money to lose money. It is these small communities that are the ones that will miss out. They will be excluded from the upgrade. Those private companies will not be able to provide the better wireless broadband services to the people living in those communities and the surrounding areas. People in small regional communities will be excluded from it, and once again they will be the losers. But that is typical. That happened when Mr Keating wiped out the analog system and brought in the GSM digital network. Forget the bush; don’t worry about having a signal over any distance! As I said, stand under the tower and you might be able to make a call; move away from the tower and you might as well turn your phone off.

So tradition has not changed with the Labor Party. If Telstra is going to be excluded from the bid, that will be simply unfair to these smaller communities. Those are the communities that will miss out. Now the minister wants to take the big stick to Telstra. He wants to take the big stick and say, ‘You will separate or else I will belt you with the big stick.’ The big stick will be: ‘Telstra, you will not bid for the spectrum rights. You will be excluded.’ And those smaller country towns—and I have just mentioned a few, and there are hundreds of them—will be excluded from upgrading their services, their capabilities and their networks. Those in the small country towns will miss out again. That is what this is about. But it gets worse. As well as saying to Telstra, ‘You’re not going to bid for spectrum,’ the government is going make them sell their shares and make them get out of Foxtel and get out of pay TV. I thought we lived in a democracy, not a dictatorship. Senator Conroy is obviously turning that around. He is going to take the big stick and say, ‘You will do this, you will do that and you will do as I say or you’ll be out of the game.’

I support a one-network system to wholesale around Australia. That is fair and will give even and fair competition. That would be good. What is more: being a monopoly and an essential service, it should be retained by government. That is my opinion. I have thought that since my studies of economics back in 1972. If something is a monopoly and that thing is also an essential service, it should be retained by government. That is the attitude I have. Here we have a situation where the government says it is going to establish the National Broadband Network and set up the wholesale. I do not think it is not going to go into retail; although there are signs it is going to go into retail as well. Then it is going to cash in the monopoly. Why cash it in? I have just done some figures on the NBN, and the minister might be able to give me a reply. With $43 billion, we would be looking at a $5 billion a year gross return, so we would be looking at 12 per cent. We would need five million people to take up the system at $1,000 a year. That is a wholesale of $1,000 and perhaps a retail of $1,400 or $1,500 a year for the household.

What will happen if five million households and businesses in Australia do not take up the NBN? The income will be less, so the price per household will be more. I think the minister would agree with that. It would be interesting to see the planning on this and the expected return. I would be very interested to see what companies will come forward to put in this $21 billion. Or are taxpayers going to put it in? Who is going to fill the hole? If private industry does not come forward with $21 billion, who is going to fill the hole for that money? No doubt the government will have to fill the hole. Is that right, Minister? I ask as you depart the chamber, with a smile on your face. This is a serious problem I have. It would be wonderful to have a fast broadband network right around Australia. It would be great for medical reasons. You can imagine that a nurse in a small country town could set up the facility to have information on a patient go to a doctor in the city to inspect. As far as medical procedures go, it would be great. It would be wonderful. Of course, many in business would enjoy the 100 megabytes download to get on with their job more quickly. There is no doubt about that. But when we look at the cost, I have some reservations about this whole plan.

I will get back to this legislation and the big stick approach of the government—that is, ‘You will separate, Telstra, or else.’ That is what this legislation says. It says, ‘You will separate or else.’ The ‘or else’ means: ‘We will exclude you from the spectrum bid. You will not be able to bid for it.’ So those smaller country towns I mentioned will not be able to have an upgrade to their service. They will not be able to go to faster wireless broadband, for example. It is so common these days for people, instead of having a desktop computer at home, to choose to buy a laptop so they can move it around. In the smaller country towns, they will be excluded. That is simply unfair. Life is about fairness. This proposal for a big stick approach to Telstra is simply unfair. As a National Party senator, I cannot support something that is going to be unfair to those smaller regional communities. It is as simple as that. As for the big stick approach of saying to Telstra, ‘You will separate or you will sell off your interests in pay TV,’ as I said, do we live in a democracy or a dictatorship? That is wrong on all principles. No matter what side of this chamber people may sit on, that is wrong. It is wrong on all principles to say to a company, ‘You will do as we want you to do or else.’ That is what this legislation says.

As I said, telecommunications have come a long way in my lifetime—from the manual exchange of 1979 to the automatic phone to the mobile phone, from the analog system to the GSM digital system, to the CDMA and now to Next G and 3G. It would be good, as time goes on, to progress further. Some small country towns have Telstra only—no Optus, no Vodafone and none of those other carriers—and the customer base in those communities is too small for those other companies I mentioned to invest in mobile phone towers. Those companies will not do that. The cost would be too great and the return would be too little. So those towns that rely wholly and solely on Telstra will be the ones that will suffer the most. We cannot simply sit back and allow that to happen.

As I said, I support a wholesale, across-the-nation system delivering fast broadband and competition even. I know what wholesale and retail are about. When I was importing bolts out of Thailand, I was a wholesaler and a retailer. I know what it is like to compete against the retailers when you have that distinct advantage: you buy cheaper so you can sell cheaper and still cream off a pretty decent profit. That is what it is about when you own the wholesale and a retail network. You have a competitive edge. You can sell cheaper than your competitors. You can drive your competitors out of the market. The negotiations on this legislation to separate Telstra have been going on for months and months. I do not know where they are up to. When Minister Conroy let the cat out of the bag accidentally, I think the government was offering $8 billion and Telstra wanted $30 billion. There is a long way between $8 billion and $30 billion. I do not know where the negotiations have progressed to since then.

We hope that the separation does happen and that we do get a level playing field for all telecommunications carries in Australia. But to have this big stick approach is, I think, simply wrong. I cannot support the bill on those grounds. Many country communities, the smaller regional communities, throughout Australia have Telstra only. You can go out into the sticks, you can go to Cobar, you can go to Wilcannia, you can go where you like and you will find that all the people in those communities rely on Telstra. To have those people excluded because this bill says that Telstra will be forbidden to bid for the spectrum is, I think, simply wrong. It is also simply wrong by those smaller communities. As I said, as far as the other big stick approach goes, to force a company to sell their private interests raises some questions: ‘What are we up to? Where are we going?’ The government has this wrong. They need to negotiate with Telstra. They need to work it out with them and not expect this Senate to just hand a great big baseball bat to Minister Conroy so that he can put the heavies on Telstra and force it to separate. I oppose this legislation for those reasons.

I do hope that one day we have a national broadband network that operates on a level playing field and where there is consistent service, consistent cost and consistent delivery right across Australia. I have my doubts as to whether such a plan would be financially viable or whether it would provide a return. I am in two thoughts about the whole plan. As I said, for the government to want to sell it off later is to return a monopoly back to a private enterprise. My personal opinion is that there are a lot of questions to be asked about the whole program. As far as this legislation goes, it is wrong, it is unfair and I certainly could not support it. I thank the Senate.

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

I rise this evening to comment on the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009, which is a long way of saying ‘a bill for the structural separation of Telstra’. I place on record, in response to a question asked earlier by a senator from across the chamber, that when Labor came to government I took the wise decision of selling the Telstra shares that were under my control. Since I have been in this place, the evidence I have seen has served only to reinforce the wisdom of that particular decision.

When I came into this place I watched very carefully and was most interested to hear the comments of Minister Conroy. When asked about a business plan for the new NBN, he very proudly said to us, ‘There is no business plan.’ Coming from a business background and also a government executive background, I was somewhat dumbfounded and I thought perhaps he was joking. But, in fact, he was not joking. He was very pleased and very proud of the fact that he was going to commit $43 billion of borrowed money—borrowed taxpayers’ money; not money that he had in the bank or money that was left over from the coalition government, because by then it had already gone. He was quite happy to commit 43 thousand million dollars of borrowed money, upon which debt and interest would have to be paid for this ridiculous concept. When I thought about this, I thought to myself that maybe the minister in his arrogance, his ignorance and his inexperience did not commission a business plan because he did not know what they were all about. So, in responding to the bill this evening, I thought I would ruminate for a few moments on a business plan.

Business plans start with a vision. I went through all the documentation and I said to myself, ‘What most appropriately meets a vision statement for an NBN?’ and the best I could come up with was ‘a government owned and controlled enduring telecommunications monopoly’. I have not as yet been able to put that to the test, but it does seem from the documentation that I have read to be a fairly reasonable vision for an NBN and for the minister, had he bothered to commission a business plan. I then said to myself, ‘Well, if there was a vision, what might be the mission and the objectives of this particular exercise?’ As far as I can see from the studies I have done, the main objective of a business plan, if one had been done, would be to achieve the structural separation of Telstra. I will come back to that in some more detail later on.

Having addressed the objectives, one then turns around and says, ‘What are the targets for this new business?’ It seems to me that, in the main, the targets are Australian taxpayers and the shareholders, the customers and the employees of that company—that is, the publicly listed company, not the government owned monopoly called Telstra. I also would have hoped, as a person representing rural and regional constituents in my state of Western Australia, that this NBN Co. would be able to include in its targets improvements in services to the people in those areas. Regrettably, I do not see any evidence of that. Certainly Western Australian senators would say—and I am sure my colleague Senator Sterle would confirm this as he drives around Western Australia—

Judith Adams (WA, Liberal Party) Share this | Link to this | Hansard source

And me.

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

Senator Adams, thank you very much, as one who also comes from rural WA and spends a lot of the time there—that it is an absolute disgrace how short a distance one travels out of major centres, cities and towns in our state before one finds that there is no phone coverage of any sort at all. Talk about, as Senator Williams was earlier, some of the problems of the past! I think it would be very nice to be able to communicate in any way at all. It is great from a convenience point of view! When it comes to emergencies such as fires and floods and other sorts of emergencies, we rely on telecommunications to activate volunteers, and so we come to yet another problem.

But I will return to the business plan. After having looked at the vision and having dealt with objectives and what the targets might be, I think the next phase of the plan is to conduct a cost-benefit analysis. Regrettably, this government has decided that it does not need cost-benefit analyses. I will quote from an article written last year:

The most rational person in the government, finance minister Lindsay Tanner, says that there’s no point doing any cost-benefit analysis. We’ll just spend the money and we know ... they will come.

Presumably ‘they’ are customers in the future. So that was apparently the value of the cost-benefit analysis, or to further summarise:

In short, we are mounting a $43 billion assault on, and confiscating the assets of, Telstra for being a monopoly bloodsucker.

To replace it either with a sharing-caring, inevitably hopelessly inefficient government monopoly bloodsucker. Or a shared government-private bloodsucker.

Either which way having to suck much more blood to pay for the extra $43 billion.

In a properly structured organisation and a properly developed business plan, what do we get out of a cost-benefit analysis? The first thing we start to do is have a look at what revenues we might expect, but we cannot get any figures out of the government as to what they see the revenues will be. The second thing we look at in our modelling are alternatives and options for expenditures. Only then do we learn that this marvellous plan is being rolled out to the most magnificent places. I was delighted to hear the other day that Midway Point in Tasmania is one of the three targets, which is fantastic. I remember travelling through Midway Point often when I lived in Tasmania, and you did not have to spend long doing it. So I hope they are not expending too much money on Midway Point as one of the trial sites. When you come back to the question of expenditure, you learn that in fact the costings for this enormous rollout of wired technology have apparently not included connections to households. Therefore, we do not know yet what it will cost households to actually link into this technology. We heard from Senator Williams earlier. He quite rightly said that for every one or 10 or a thousand residents who do not link up to it, it is only going to cost the others more.

Interestingly enough—and if the minister were here he could get this one down—within a cost-benefit analysis a very important milestone is a thing called GMROII, gross margin return on inventory investment. That is the very thing that drives retail business day to day, the very matter that drives your intention in terms of how much you will invest in inventory, and unfortunately we cannot get any sort of figures because, in the words of Minister Tanner, a cost-benefit analysis is a complete and utter waste of time. Therefore, I simply ask this question from a cost-benefit analysis point of view: how can anybody on this side be asked to vote, to consider or to look at anything associated with this legislation if the most basic building blocks are not being delivered to us?

In our business plan we come next to competition, and what an amazing thing it is. But at this point in time I must seek leave to continue my remarks as I understand there is some administrative business to be completed before we go to adjournment. So I will act on your direction, Madam Acting Deputy President, as to whether I can get started on competition or we revert to administrative business.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Senator Back. You are actually a minute early, but as you have offered up your time we will move on. We will proceed to the next item of business.

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

I seek leave to continue my remarks.

Leave granted; debate adjourned.