1998-07-103817SENATE544701998-07-10The PRESIDENT(Senator the Hon. Margaret Reid) took the chair at 9.30 a.m. and, with the concurrence of the Senate, read prayers.Bills5447r482Debate resumed.09:31:005447Lundy, Sen KateSenator LUNDY7G6ACTALP00—Because of the importance of Telstra as a service provider, the political stakes surrounding its privatisation are very high. In the context of this second reading debate I think it is a worthwhile venture to examine Telstra the organisation. It is currently a majority publicly owned corporation that has a life and a culture all of its own. As telecommunications become more profitable, successive governments have relied on dividends returned to the public purse to fund social imperatives—that is, until now.Let us introduce a human factor. Telstra workers have borne the brunt of deregulation and competition, and any innovations in efficiencies that have arisen out of that are a credit to them. Then came privatisation. Suddenly the goals that were being pursued—with considerable pain and 25,000 job losses, I might add—and these achievements were no longer in the public good. Any detail surrounding Telstra's restructuring had to be painfully extracted through their estimates process. I am sure many will recall the names Project Strawman and Project Mercury which were internal plans by Telstra to deconstruct Telstra research laboratories in the first instance and sack over 20,000 workers in the second.After all the restructuring, all the tension, the reduced investment in R&D, the job losses, the beneficiaries of Telstra's large dividend will be not the Australian public but private shareholders. Out of the hands of many into the hands of a few. The efforts of everyone who has put their time in with Telstra over the years, or Telecom as it was formerly known, are now focused on cold, harsh and dry economic returns. The focus of a privatised Telstra is on how to extract maximum profit for minimum service. Evidence of this comes in the form of complaints about billing and service having risen by almost 40 per cent.If a customer focus is his weakness, chief executive Frank Blount's strength is to deconstruct a telecommunications company. He brought with him the corporate trends from the late 1980s and has spiced up his life by reincarnating them in Australia. I can picture the four-step plan now. First, sop up all the company loyalty built over many years and refocus it towards a lean, mean corporate machine, ready to compete in the new paradigm of telecommunications. There is some merit in that strategy, although exporting the goodwill of all those Telstra workers leaves a lot to be desired in management practice. Then came the change of government and privatisation raised the stakes.The second step was this: keep the smile on your face while your workers get sacked, your R&D funding is plundered, your export opportunities are squandered and critical regional projects are dumped. The main game here is the bottom line: tidy up the books. The third step in the plan was to brief the minister, give the doormat the lines and promise to say lots of nice things about him, put him in front of a camera or a Senate estimates committee or his party room, wind him up and let him go.The fourth step was to deliver massive salary increases to himself and all his senior management mates, sit back and contemplate retirement. There's another job well done, Mr Blount. You have done over another telecommunications company and made lots of shareholders rich. Won't that look good on your CV? Never mind that Australia's telecommunications infrastructure is left as a shadow of its former self. It is not your responsibility any longer.You may think that I am being unduly harsh on just one participant in this strategy of privatisation, but consider this: corporate trends do not just happen. They do not just miraculously occur overnight. People manage these agendas, they create strategies to forward them and they give them a life of their own. Privatisation of telecommunications carriers around the world is part of that global trend and it is the government that has the responsibility of realising the social and economic value of keeping a carrier in public hands.This government have failed in their responsibility. It is not surprising that they have, given the leadership void. It is not surprising that the Minister for Communications, the Information Economy and the Arts (Senator Alston) does not have the capacity to see that Australia is uniquely placed to show the rest of the world what can be gained from harnessing telecommunications for the betterment of all, be they city dwellers or those in rural communities.I now turn to an issue that I think is one of great importance and looks at more the cutting edge of telecommunications and future communication services—that being the Internet. I believe that privatisation of Telstra will result in increased prices for access to the Internet. We know already that Telstra have a propensity to discriminate against those in rural and regional areas for access. Only 13 per cent of adults living in non-metropolitan areas use the Internet. That is half of city net users. Looking at it another way, about 2½ million Internet users live in metropolitan areas, while only 516,000 live in rural, regional or remote areas.The reason for the slow Internet take-up by rural people is due to a combination of overpricing and inadequate services. There have been a number of reports that the high level of rural interest in the Internet is being hampered by the high cost of access. Telstra's own product, Big Pond, charges remote users $7 per hour plus local call access compared with their city rate, which is between 80c and $1.50. I think Ross Wheeler, manager of Albury Local Internet, summed up the situation best when he told a newspaper that his business survives on antipathy and antagonism towards Telstra.A closer look at Telstra's retail Internet product, Big Pond Business, shows how blatantly they discriminate against rural and regional users. Telstra uses an arbitrary 85-kilometre radius around regional centres to impose a higher charge which they call their rural charge. Regional users themselves have a much larger rate to pay just because they live in the regions. Telstra have been unable to demonstrate the technical need for such higher charging. It has been imposed without any justification, other than an expectation that the market will pay.This structural and economic disadvantage has fuelled genuine concerns by rural constituents about the impact of a privatised Telstra. For instance, the National Farmers Federation has established a company called Farmwide to provide online facilities to 1,000 farm families. This project was funded through the rural telecommunications infrastructure fund and does have some merit. The project itself has legitimate aims, but why didn't Telstra conduct it straight up? The project did not have to come through the regional bribe drawn out through the last one-third privatisation of Telstra. And that is exactly what the RTIF was: it was a $250 million bribe constructed for the sole purpose of securing votes in this place to allow the passage of the one-third sale of Telstra bill.Now we are seeing exactly the same tactics being played out, only the government has put $400 million on the table. This shameful bribe is no better than the emotional plea for the $1 billion for the Natural Heritage Trust leading up to the sale of one-third of Telstra, only this time the government is playing on the needs of rural and regional Australia. This is not even a buy for young people and those who care about the environment. It is a buy on the needs of those who are suffering an inadequate service. It is quite interesting to hear John Howard's latest line, `Well, if we don't sell all of Telstra, these people will not get an improved service.'Let us have a look at the other ways in which these projects could be funded. There is no reason at all that a Telstra in public hands cannot design and manage these projects themselves. That is the value and the beauty of having a corporation such as Telstra in public hands, so they can do exactly these types of projects. But the most telling indictment of Telstra comes from their experience with the ACCC.Even before this bill came before the Senate, the Australian Competition and Consumer Commission was forced to intervene because of alleged anticompetitive conduct in breach of the Trade Practices Act. The issue related to the transfer of data over Internet bandwidth. Telstra have proven once and for all that they are prepared to use the courts to protect their profitability against government regulation. This, more than anything else, shows us why there is folly in the government's plan to reregulate and force Telstra to adhere to a greater level of service for rural and regional customers, or even those in metropolitan Australia. This corporation has shown like every other private corporation around the world that they will use every legal mechanism at their disposal to fight regulations that constrict their ability to make a profit.At the height of this stand-off between Telstra and the ACCC, Telstra's chief executive warned the government that regulatory changes could endanger plans to privatise Telstra. In other words, he is saying, `Look, Mr Howard, if you want to make so many millions of dollars out of Telstra, you had better not regulate us too harshly.' The blackmail goes both ways. Frank Blount said:If we have so many conditions tied around this company . . . if it goes too far I think the Government has to decide `can this really be sold?' [and] if they go too far over the line with conditions wanted around the country, [Telstra] will not be able to be floated.In other words, Telstra is saying, `Do not put restrictions on us that will hamper our profit, because we will take you on or put under threat your plans to privatise.'Telstra is saying that they are not prepared within their own corporate plan to focus on those in need. And what was Frank Blount's response to all of this? He said that Telstra needed to focus on `delivery of increased shareholder value'. Comments like that should send shivers up the spines of all those sitting opposite, because that is what we are dealing with here. We are dealing with a company that, by its nature as a privatised entity, will not have any choice under Corporations Law but to focus on the interests of their shareholder. That is the nature of beast. When you are living in or existing within that environment, then quite fairly Telstra will have no choice but to conduct themselves in this way.The greatest weakness of the minister in this portfolio has been his inability to escape the grip of those within the telecommunications industry sector and the minister's adeptness at constructing political arguments to justify the government's acquiescence to the will of the corporate powers within telecommunications has become his trademark. It would be disappointing if this skill were to be interpreted as having a broad understanding of his portfolio.Minister Alston is incapable of lateral thinking, of stepping outside the corporate agendas which surround his government, and hence the social and economic benefits of exploiting the enabling capability of telecommunications infrastructure has been completely ignored. If there is a vision behind the minister's policy considerations, it will be a shallow reflection of the plans articulated in many a timber-lined boardroom.When exploring the enabling capacity of telecommunications, one cannot help but turn to Australia's unique character and inherent strengths. Australians have shown a willingness to adopt new technologies—in fact, we are running second in take-up rates of new technologies such as mobile phones and personal computers. There are still some structural inequities with respect to accessing new technologies, including the fact that the less you earn the less likely you are to have access.With enhanced services, whole communities have the opportunity to improve their knowledge and understanding of the information revolution. Apart from positively confronting the insecurities that accompany such rapid technological changes, this will empower communities and will give them a voice. (Time expired)09:45:005449Brown, Sen BobSenator BROWNQD4TASAG00—It is such a pity that there were only three members of the government in the chamber to listen to Senator Lundy's talk, which comprehensively covered the field of argument as to why Telstra should remain in public hands and not be sold across into private hands where the power over its future will remain with the Stock Exchange.Essentially this debate comes down to the disempowerment of the people with regard to telecommunications in the future: it will have been taken out of the hands of their elected representatives and put into the hands of the Stock Exchange. As Senator Lundy pointed out so eloquently, the primary duty becomes one of servicing not the telephone system but the profit line. There will be an obligation to try to increase profitability on behalf of the shareholders, even where it will patently mean a loss for the people who are being serviced by the corporation.One of the sad things about the way in which this matter is being handled in this place is the fact that, while the Senate is here debating this issue at the demand of the government, Senator Colston and Senator Harradine, who three times gagged debate last night in the Senate, the so-called deal for the bush which the government has struck in its pre-election panic negotiations with the National Party has not been revealed to the Senate. In fact, this morning, somebody in the coffee shop told me that it would be revealed on this morning's John Laws program—and I do not mention that so that ABC viewers can switch across; I recommend that they do not, that they stay right where they are—but whether or not that is the case what sort of democratic process is it that Senator Harradine, the self-proclaimed father of the Senate, is engaged in? He is gagging his own offspring, so to speak. But there it is. He has become a creature of the government, he has become a creature of privatisation, and we are not here engaged—YW4MACDONALDSenator Ian Macdonald—Have you ever voted with anyone but the Labor Party?QD4Brown, Sen BobSenator BROWN—Senators opposite, Mr Acting Deputy President, all two of them, who wanted this debate but have been abandoned by their colleagues, will have their opportunity to speak when I am finished. They should stop interjecting. The fact is that Senator Harradine has become a creature of the government. We are not here in this debate without the government having reck oned that, at the end of it, it will get a positive vote.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Ferguson)—Order! Senator Brown, you recently said that Senator Harradine was a creature of the government. I consider that to be unparliamentary, and I ask you to withdraw, please.QD4Brown, Sen BobSenator BROWN—I will withdraw, if that is your consideration.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—It is not that it is my consideration; I am just asking you to withdraw.QD4Brown, Sen BobSenator BROWN—Yes, and I will do so if that is your consideration. But, Mr Acting Deputy President, Senator Harradine has become a person who spends maximal time negotiating behind closed doors with the government. People can work that one out for themselves, whatever ruling is made on my description of him. The reality is that, having sold out the indigenous people of this country with whom he danced only a month or so ago, he is now selling out rural and regional Australia, not least Tasmania. But I will come back to that in a little while.When we look at the process that Senator Harradine and Senator Colston are engaged in here with the government, over the next couple of days we will be seeing a forced debate to get through a bill which the government does not intend to enact in the life of this parliament—in fact, it made a commitment not to. It is a forced debate to get through legislation which the Prime Minister (Mr Howard) promised the nation would not be brought before this parliament at all.To do that, the government and the Independent senators have had to kick out of the way a long list of other legislation which the nation requires. This legislation will now not get through this parliament before the government takes the nation to an untimely and unnecessary election nearly a year before it has to happen. If ever there was an argument for fixed date elections, this current politicking by the government highlights it.There is the Data-matching Program (Assistance and Tax) Amendment Bill which will not get through the parliament. There are two bills on radiation protection and nuclear safety in Australia, which one would have thought are of great interest to the people in Sydney's southern suburbs, but they will now not get through the Senate because of this turn of events. There is a bill for Commonwealth Rehabilitation Service reform brought by Senator Newman which will now sit on the Notice Paper and disappear.There is the ANL sale bill brought by the Leader of the Government in the Senate (Senator Hill), which likewise has been kicked aside because of the government's political interest in debating this bill which it has declared will not be enacted. There is an aged care amendment bill, which aged people in this country have a right to expect will be debated in their interest, but it will now not be because the aged are being knocked aside due to this government's political considerations.There is a national transmission network bill. That comes the closest to the matter in hand, but that too has been kicked aside, as has the Adelaide Airport Curfew Bill 1998 and a bill to do with superannuation called the Workplace Relations Amendment (Superannuation) Bill 1997 . All those and many other important matters have been knocked aside by the way in which this legislation was steamrolled into the agenda last night by the government, Senator Harradine and Senator Colston.When it comes to the impending sale of Telstra, I can do little better than reiterate Senator Margetts's contribution last night where she spoke about the `economic disbenefits' of this move. She said:It is important to note that the Office of Asset Sales refused to divulge—to the relevant Senate committee—crucial figures used in their calculations of the economic benefits—of the sale of Telstra. She continued:In particular, it was pointed out in the minority report—to which Senator Margetts contributed—that the estimated future dividend flows were not disclosed, on the basis that it would not be in the financial interests of the Commonwealth. That is, on the basis of cheating by keeping information from the people. Senator Margetts then said:Obviously, the concepts of transparency, accountability and systematic analysis—so crucial to Senator Harradine in the past—were not considered important by the government in this case, despite all the filibustering about the Charter of Budget Honesty.She went on to say:At the end of the day, there is no way to definitely determine whether the sale of Telstra will produce net economic benefits.The government's economic arithmetic bandied about in the press, however, has been strongly disputed. The first error in the government's projections is the calculation in interest savings on government loans. These estimations have been severely questioned. The government calculation of $4 billion worth of savings on interest repayment is more accurately estimated at $2.5 billion per annum. If you stack this interest saving against the ongoing losses, the hope of net economic benefits is nothing to be enthusiastic about.Senator Margetts continued:The sale of Telstra will, in fact, generate losses . . . first, public sector savings produced by profits of over $1 billion per annum, either paid into the Commonwealth or used as retained earnings by Telstra to finance investments . . . That is the current situation. She then said:Secondly, the loss of franking credits: the government does not claim franking credits but private shareholders, however, are sure to claim those credits.Professor Quiggin estimates that this will be a cost to revenue of $600 million, rising to $1.8 billion within three years, if Telstra's profits continue to grow at their current rate. Professor Quiggin has estimated that by 2007 Australia would have sustained a loss of $9 billion and beyond that time the loss will increase. For the glory of contributing to the sweet surplus—that is a much touted government surplus—Australia will lose a revenue stream that could contribute to any number of socially desirable outcomes in the future.Consequently, the Greens (WA) are of the belief that the government should heed the warnings that the sale of Telstra is likely to produce a net loss at the current valuation of $40 billion that has been tossed around.H15CAMPBELLSenator Ian Campbell—Ha!QD4Brown, Sen BobSenator BROWN—The Manager of Government Business laughs at that, Mr Acting Deputy President, but you have to remember that this is a once-off sale of an enormous public asset in circumstances which do not warrant it. If in 10 years from now this government were to be in power in foreseeably much worse economic circumstances than those which currently prevail, what would it do; what would it sell then? Maybe it would look around for someone to buy Parliament House, as is the case in the Northern Territory with even that being privatised. Senator Margetts then told of the response from the government—that is, the minister—to the challenge of Professor Quiggin's figures, and she said:The very warm response that I received from the minister was that, `The last thing I would do is treat Professor Quiggin as any sort of sensible economic analyst on this issue.' The good minister finished his answer with the exceptionally uncompelling evidence that retaining Telstra in public ownership `is simply quite contrary to economic orthodoxy around the world'.It is economic orthodoxy, economic rationalism, which Senator Margetts has fought ever since entering this place, and sometimes on her own—witness the debate on the World Trade Organisation where the legislation went through under the last Labor government, supported by the opposition parties. It is that economic rationalism which is leading to the rapid widening of the gap between rich and poor, both within this country and between this country and other countries. That is, in itself, a recipe for future social disruption.Besides the obvious loss in terms of social equity when a very important part of public infrastructure, like Telstra, is sold on the Stock Exchange, we have the then ongoing difficulty, which Senator Lundy pointed to this morning, of the disempowerment of the regional people of Australia. If the regions are having difficulties with getting a fair go now—and we heard Senator Lundy's reference to the appalling discrepancy between rates paid in Albury and those paid in the big cities—how much worse will it be after Telstra has been put into private hands, where the most compelling argument for the future will be about what good it will do to the profit lines.Senator Lundy outlined the philosophy, as it stands, of the chief executive of Telstra. That let loose will mean that, as we go down the line, the whole aim will be to make Telstra more lean, which means getting rid of more jobs, and more mean, which means the taking of money from the hands of consumers to be put into the hands of Telstra shareholders.When it comes to the issue of jobs, one has to ask the absent Senator Harradine—I wish he were here; he has brought this debate on—what happened to your promise of gaining great benefits for Tasmania with the first one-third sale of Telstra? Senator Carr, who is here, was able to tell the Senate last night that Senator Harradine's much promised gains for Tasmania have flopped.5F4CALVERTSenator Calvert—Rubbish!QD4Brown, Sen BobSenator BROWN—`Rubbish' says Senator Calvert, also from Tasmania, who wants to flood the Liffey River amongst the other crazy projects he has in mind. Senator Carr's figures for employment in Telstra, which were supposed to get special treatment in Tasmania, are that instead of the promised increase of 170 jobs Tasmania has lost 140 jobs—a reduction of 30 per cent in the work force. Between the promised gains and the actuality, Tasmania has been cheated of 310 jobs. Where is the advantage to Tasmania that Brian Harradine, the senator for all things to do with the government—H15CAMPBELLSenator Ian Campbell—Mr Acting Deputy President, on a point of order: under standing order 196, I make the point that this is obviously against the standing order as it relates to hypocrisy. Senator Brown has cost more jobs in Tasmania than any other person in the history of mankind. Under standing order 196, I would ask you to call him to order.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Ferguson)—There is no point of order.QD4Brown, Sen BobSenator BROWN—There is a point of order on the hypocrisy bit, but I will not go into that.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—There isn't.H15CAMPBELLSenator Ian Campbell—You have destroyed more jobs in Australia than any single person. You're probably proud of that. Are you?QD4Brown, Sen BobSenator BROWN—The behaviour of Senator Campbell is typical of the behaviour of the government at the moment. The fact that he can only muster himself plus one other from the government ranks to be here for this debate which has been forced on this place by the government and the contempt with which this government, Senator Harradine and Senator Colston hold this place of elected representatives, and the contempt with which they are handling the electorate, must impress listeners at least as far as the sale of Telstra is concerned.They know that it is a very unpopular move. They know that the people do not believe them when they say that it is going to be good for them. They know that the people are right about that. They are trying to shove this through here in unforecast sitting hours, following a triple gag last night in the Senate, so that that they can get it over and done with and sneak home hoping that nobody has noticed. The appalling thing, as I said earlier today, is that the real information about the government's so-called deal is being announced somewhere else, but not in this place where the debate should be taking place on behalf of the people of this great country of ours.I was talking about the Tasmanian situation. We had much fanfare with the first one-third sale of Telstra about the benefits—benefits by way of jobs and benefits for the environment—that Senator Harradine was going to bring to Tasmania through the extra $100 million. Where is the accounting for that? Where is the presentation of the Tasmanian package so that it can be analysed and put to the test? Once again, the Tasmanian people have been set up and cheated by a pronounced package that has not brought home the goods. As far as people like Senator Harradine and Senator Calvert are concerned, as I said earlier, the promise of 170 jobs has led to the loss of 130 jobs.When it comes to the environment, which Senator Harradine was going to look after through the part sale of Telstra, we currently have in Tasmania environmental indices across the board going from bad to worse. In our forest industry there has been a massive contribution to global warming because of Forestry Tasmania's continued burning of rainforests and tall eucalypt forests as they clear-fell in order to put in monocultures of plantations, and an ongoing shedding of jobs. Another 300 jobs are going west at Amcor, for example, as it closes its pulp facility. That is because the Labor and Liberal parties in Tasmania failed to put conditions on handing across the forests through the resource security legislation at state level in 1991 and on the regional forest agreement between John Howard, the Prime Minister, and the Premier of Tasmania last year.Whether you look at jobs or the environment—it goes way beyond forestry, of course—Tasmania is being made the fall guy for the role that Senator Harradine takes in national politics. He has not just sold out the indigenous people of this country. Through this legislation, he is not just selling out regional and rural Australia. On the evidence we have available, he has sold out his home state of Tasmania so that the power he wields in here could effectively get the government what it wants.Senator Harradine may feel that he has had some breakthroughs and wins, but when you stand back and look at them it is a rather pathetic self-deception. He has done nothing more than become part of a government apparatus. He was elected to be an independent voice for Tasmania, but he has simply become a rubber stamp for the Howard government and the Liberal-National Party coalition. There has been a breach of promise through the sale of the first one-third of Telstra. We have nothing much more than a slush fund coming out of that as far as the environment is concerned. In the minute or so remaining to me, I want to refer to that.In this parliament in the last two weeks, after serial questioning, I have unearthed the fact that $12 million of the money earmarked for the environment through the first one-third sale of Telstra, for catchment management of the Murray-Darling Basin and for environmental repairs, has been put into repair of the Hume Dam—capital works. You could argue that that is as environmentally important as upgrading the Hume Highway. It is a massive breach of promise by the Howard government. It is cheating on the people in the Murray-Darling Basin, it is cheating on environmentalists around this country and it is cheating on those people who thought the promise of the sale of the first one-third of Telstra would be kept. When the government comes up with another deal now and says, `Trust us second time around; we cheated you the first time but the second time around surely you will trust us to the ballot box,' how could anybody in the bush accept its word? I would not encourage anybody in the country to do that.10:08:005454Gibbs, Sen BrendaSenator GIBBS6L6QLDALP00—John Howard's ideologically driven obsession with selling Telstra does not just threaten a long history of service and access for all Australians, it also heralds more job losses. Telstra is too important to be subjected to the whims of such ideology. The government believes that Telstra is first and foremost a business. It is much more than that: it is a key part of our national infrastructure and the major provider of telecommunications services in a country which, for reasons of its size, demographics and future industry development needs, relies on these services as a lifeline.I just do not buy the government's claims that selling off Telstra turns ordinary mums and dads into shareholders. The truth of the matter is that we are all shareholders in Telstra. We already own it and we all share in the benefits of it. It is vital that Telstra not be sold off so that we can all continue to share in the benefits. The question I want to ask the government is this: how will the sale of the remaining two-thirds of Telstra benefit people in the bush? How will those who do not have shares in Telstra benefit?It has become increasingly clear that the government's obligations to broader Australia have suffered as a result of this obsession with privatisation and the bottom line. This growing lack of regard for members of our society has already been made blindingly obvious by the behaviour of the banks, which are continuing to close branches across Australia at an alarming rate, even though they have been making record profits. It is Australians living in rural and remote areas who are most directly affected. And it is not just the actual employees of the bank, Telstra office or Medicare office who are affected; it is also their families and the businesses that rely upon their custom which are affected. All of us pay one way or another. The indirect effects can be felt across the country as unemployment continues to rise in regional areas and small businesses close.This was brought home to me quite recently when the Commonwealth Bank decided to close its branch in Aminya Street, Mansfield, a suburb in Brisbane which has a large number of elderly residents. In fact, over 30 per cent of the residents are aged over 60. Other businesses in the shopping strip relied on the bank's customers for patronage. This included a family business snack bar, which is now on the verge of closing, a Cut Price Deli and a hairdresser. There is an industrial zone close by and the workers there used the bank and the other ancillary businesses nearby. The decision to close this branch has had serious implications for these businesses and for local residents.This may seem like a small example, but we are talking about real people here. The loss of the bank will be catastrophic in that community. Customers picketed outside the main Brisbane city branch in Queen Street one day a week for several weeks in an attempt to force the bank to change its mind, but they did not succeed. The backlash from members of these communities which are so adversely affected has been savage in some cases, but unfortunately banks are not really accountable to their customers for service obligations, only to their shareholders. Is this what we want to happen to Telstra? I fear that we will see people also protesting the loss of services by Telstra and protesting job losses—but to no avail should Telstra become fully privatised. It is just this lack of concern for providing a basic customer service that will be the undoing of small businesses and regional economies throughout Queensland. The introduction of the customer service guarantee scheme to compensate customers where service standards are not met has failed to ensure even the maintenance of existing service levels. People are, and should rightly be, concerned about the future implications of a fully privatised Telstra. It is not enough to say that Telstra will continue to meet basic obligations. We know that service standards have slipped as a result of staffing cuts. It is not good enough to say that facilities and rates of service will be maintained. We also need to be able to give assurances that facilities available to city based people will be available to people living in regional and rural areas.The customer service guarantee under the existing legislation is not working. The Telecommunications Industry Ombudsman has pointed out that the majority of complainants contacting the TIO office are not aware of the existence of the customer service guarantee, let alone the specific performance standards set out in that guarantee. The ombudsman's office has been critical of service providers, who he states have been slow to meet their obligations to advise their customers of its existence and of their rights, even though that is one of their obligations. I fail to be convinced that proposed amendments to the act to include large fines for those service providers who do not meet the customer service guarantee will be effective. Out in rural and regional Australia, in many cases it will be cheaper to pay daily credits than to provide the service in a timely manner. How effective really will these fines be in the long term when they clash with the market values of profit maximisation? In reality, it will be impossible for any government to force a privately owned Telstra to meet service obligations, especially in rural and remote areas.The information age is well and truly upon us. In the future, those with access to information which is provided via a telecommunications system will be the fortunate ones. Those who are information poor and lack quality, affordable access to the services upon which our society increasingly depends will become more and more marginalised.Australia is a country increasingly divided on so many fronts. The privatisation of Telstra will create two classes of citizens, and those people in the bush will disproportionately feel its effects. People in the bush are already doing it tough. When decent, hardworking Australians deserted the coalition in droves in Queensland recently, that should have been enough to tell you that they are hurting. Election results in Queensland show that it is the coalition which suffered damaging swings against it. The coalition was not listening to what people in the bush need, and they still are not. Has John Howard learnt nothing from this debacle, other than the fact that he should put One Nation last in his own seat of Bennelong?This is a case of too little, too late. Maybe he should have listened more attentively to the Leader of the National Party in the Senate. The privatisation of Telstra is a key issue upon which the Labor Party and the coalition stand divided. I am proud of that fact. It ranks right up there with the GST. I have faith in our fellow Australians and I do not think they are going to be taken in by the glib promises of the coalition that they will be better off.The full privatisation of Telstra will disproportionately affect the elderly, people with disabilities and the uneducated—those who are least able to stand up for their rights or to seek redress where their rights have been breached. Telstra's employment levels have declined by about one-third over the last four to five years. This has occurred at the same time that Telstra's before tax profits rose by 26.4 per cent, revenue increased by 13.1 per cent, profit per employee rose 42.2 per cent and labor costs for the period rose 3.7 per cent. Job security and quality of service have suffered as a direct result. And what about foreign ownership? Under John Howard's privatised Telstra, foreign owners will be able to control 35 per cent of the privatised company.I do not really believe the government's rhetoric that ordinary mums and dads in Australia who own a few shares in Telstra will have any real influence on, or be able to exercise any real control over, Telstra. In addition, if Australia becomes a signatory to the MAI, then current limits on foreign ownership of Telstra may well become illegal. Australia is a small economy. Our geographical size and uneven population distribution make service provision a challenge in some cases. The universal standard obligation exists to ensure that where there are shortfalls in revenue over expenses in rural areas, these will be subsidised by a contribution from carriers to a central pool of funds used to reimburse Telstra, which is the nominated carrier.The government has not guaranteed an extension to the services offered to rural and regional Australians under the USO. All that has been written into the plan is that a standard telephone service must be accessible in rural and remote areas. There is no guarantee that, as new services come on line, regional, rural and remote subscribers will have access to them. The USO is central to the provision of telecommunications services across the nation on an affordable basis, and universal access to affordable, quality telecommunications services is essential to be able to participate in our society and economy.As a senator whose constituency includes rural communities, I am very concerned about the disproportionately negative impact that further privatisation will have on people in the bush. This, coupled with the fact that global and national economic reform measures have already disproportionately affected people in the bush, will not be addressed by selling off the major telecommunications carrier in this country. The long-term impact of the privatisation of Telstra must be considered in this context.I have already alluded to the decline in services and business infrastructure in the bush. This trend is very worrying, but there is some hope that telecommunications services can fill the breach in areas like finance, health, education, trade and commerce. However, for regional Australians to be able to take advantage of this potential, they must have access to the most up-to-date technology and services which are delivered in a timely manner. A nationwide poll conducted by Rural Press and published in The Land newspaper shows that country people do not believe Mr Howard's rhetoric that they will not be disadvantaged by the sell-off.Of those people who were surveyed, 49 per cent said that they expected services to be worse under a fully privatised Telstra. Sixty-three per cent of people linked their concern about the sale of Telstra with their overall concern about the continuing deterioration of services in the bush. Even the National Farmers Federation does not support it. In a poll released in the Western Australian Farmers Federation, less than one in 10 farmers support the full privatisation of Telstra.I do not see how the government can guarantee under a privatised Telstra continuing access to timely service and maintenance, a reasonable price for services, equitable common charging regimes, the provision of untimed local calls throughout the network, access to new technology or access to the Internet and data capable connections in the long term. These guarantees cannot be met under a privatised Telstra, which is already struggling to operate as a commercial telecommunications service and under the expectation that it will provide public services at a common cost schedule.Government claims that the vast bulk of the proceeds of the sale of Telstra will be used to retire existing public debt thereby reducing the Commonwealth's public debt interest liability must be measured against the future loss of earnings arising out of the sale of Telstra. This is a false economy. The opportunity costs of selling off Telstra will be enormous; the benefits will be short term indeed. Given that Telstra's dividends have grown at an average of 15.6 per cent per year, if they were to continue to grow at that rate, the value of the dividends will become greater than the interest saved on public debt by 2002-03.On this basis, the government cannot justify selling Telstra for either extra spending or tax cuts on an ongoing basis. At best, one-off commitments can be made, but these will have disappeared by the year 2002-03. This is, of course, assuming that Telstra's dividends do not increase in value and that they maintain the average growth rate of 15.6 per cent, which based upon past trends seems very reasonable, if not a little modest.How can we even think of selling off Telstra when the benefits of doing so will run out by 2002-03? This is unbelievably short-sighted and clearly not in the long-term interests of Australians. Any short-term gains will be at the expense of jobs and employment conditions. The industry development capacity of Telstra will contribute to our telecommunications and electronics industry and to the provision of services to regional Australians.The Telstra bill inquiry evidence clearly showed that there is a lot of support out there for the retention of parliamentary scrutiny of Telstra and the ministerial power to direct Telstra in the national interest. The choice is quite clear: we can have a world-class telecommunications industry in terms of technology, pricing, quality of service and the capacity to sustain support for national competitive advantage across a wide range of industry sectors, as the government has said, or we can have a privatised Telstra which makes some people rich at the expense of most Australians.The lack of revenue going into government coffers after the year 2003 does beg some interesting questions, doesn't it? No clear longer-term economic benefits arising out of the proposed sale of Telstra have been established, nor can the interests of competitors or consumers be adequately safeguarded.Telstra is just too important a part of our national infrastructure to be sold off. If Telstra is fully privatised, I know that it will rank as one of the worst excesses of economic vandalism perpetrated upon the Australian people. In years to come, its sale will be related by economists as one of the reasons why Australia's people and her economy failed to reach their full potential. (Quorum formed)10:29:005457Murray, Sen AndrewSenator MURRAY3M6WAAD00—In this debate, I am proceeding on the basis that Senator Harradine has agreed to sell Telstra. Therefore, we must move on, accept the numbers and see what we can do to improve matters. But before I do that, I want to comment on the economics of it all. First, I want to comment on the sale price. Eight months after floating, Telstra shares are now valued at $6 a share, which is $11 billion more than the government sold them for. At the time of the sale, numbers of commentators, including James Capel, the stockbrokers, told the government that they were selling Telstra too cheaply. The Australian Democrats persistently told the government that they were selling Telstra too cheaply. I recall Senator Alston and the entire government frontbench mocking the Democrats for doing so. The consequence is that the government has let Australia lose billions of dollars that it could have received. So the first thing to do is to question its judgment and ability on the matter of sale price.The second area I want to cover is this astonishing belief in privatisation. It has variously been described as economic devastation, economic rape and an economically illiterate and incoherent policy. Professor John Quiggin, the Senior Research Fellow in economics at James Cook University in Townsville, in the Australian Financial Review on Thursday, 2 July 1998, had this to say:The case for privatisation rests on the claim that private owners could achieve efficiency improvements not feasible under public ownership.. . . . . . . . .By focusing on the dividends from public enterprises, and ignoring their retained earnings, they make it appear that the interest savings arising when privatisation proceeds are used to repay debt are more than the income forgone by the public.In fact, the reverse is almost invariably the case, partly because the rate of return demanded by private holders of equity is considerably higher than the government bond rate. The illusory fiscal benefits of privatisation have led governments to offer over-generous terms to buyers, particularly when they are upper-income "mums and dads". The total loss to taxpayers from privatisations so far amounts to billions of dollars.. . . . . . . . .Most economists, including those in State and Federal finance departments, have now recognised the idea of a pot of gold from privatisation as a fallacy. The work we have done on the sale of Telstra indicates that the total loss to the community from the sale of Telstra, the direct loss, will be $6.5 billion by the year 2006. Frankly, that is appallingly bad economics.The net economic benefit is, therefore, a result of what I would refer to as flat earth accounting. It is that automatic acceptance of an economic dogma which is outdated and which has been proven persistently to be wrong. It is the Australian Democrats who have persistently and consistently told Australian governments both past and present and the people of Australia that fact. This sale of Telstra will not deliver net economic benefit to Australia. I will be moving an amendment to the motion for the second reading in the following terms:At the end of the motion, add: "but the Senate: (a) notes that the following information, requested of the Office of Asset Sales and IT Outsourcing at the hearing of the Finance and Public Administration Legislation Committee on 4 June 1998, has not been provided: (i) a comprehensive balance sheet, or assessment of net present worth, which compares the net Commonwealth financial position, under the two scenarios of selling Telstra and not selling Telstra, including all relevant financial flows, such as, but not necessarily limited to: (A) the value of Telstra dividends to government foregone; (B) the value of retained earnings by Telstra; (C) reduced government debt interest payments; (D) the costs of the sale of Telstra, such as stockbroker and agents fees, and the costs of government administration of the sale; (E) the effect of increased taxation foregone, due to the passing of franking credits from government to private ownership; (ii) separate analyses for the sale of the first third of Telstra and the sale of the remaining two thirds of Telstra; and (b) resolves that the information identified in paragraph (a) be laid on the table by no later than immediately after Questions Without Notice on the first day of the Spring sittings 1998, unless it is sooner provided to the Committee".On 4 June 1998, at the estimates hearing of the Senate Finance and Public Administration Legislation Committee I asked the Office of Assets Sales to:. . . please provide a comprehensive balance sheet or an assessment of net present worth which compares the net Commonwealth financial position under two scenarios: selling Telstra and not selling Telstra. Such an assessment should include all relevant financial flows such as, but not necessarily limited to, the value of Telstra dividends to government forgone; the value of retained earnings by Telstra; reduced government debt interest payments; the cost of the sale of Telstra such as stockbroker and agent's fees and the costs of government administration for sale; and the effect of increased taxation forgone due to the passing of franking credits from government to private ownership. Please provide separate analyses along the above lines for the sale of the first one-third of Telstra and the proposed sale of the remaining two-thirds of Telstra.Mr Acting Deputy President, it will not have passed your attention that that was on 4 June. We are now at 10 July and, surprise, surprise, the government has not yet provided those figures. If it did provide those figures, if it did provide the truth to the Australian public, it would show that this sale of Telstra, on straight accounting, economic and cash flow terms, will deliver a net economic loss to Australia. And that has been the persistent and consistent message of the Australian Democrats, which was mocked by the flat earth economists and the ideologues within the media and on the government benches.However, I believe we are going to lose that debate, so we should attend to what we can do to make Telstra a far better company, at least for Australians as a whole. The consideration of the future of Telstra, Australia's largest corporation, does allow us an excellent opportunity to instigate cutting edge measures for corporate governance. These remarks are particularly directed to the Labor Party, because I believe the Labor Party should support these measures which would improve the governance of this company. It is our company until they sell it; ours on behalf of the Australian people. As representatives of the Australian people, we still have the option to deal with a company which is owned by all Australians, not just the richest 10 per cent and the fat commission-taking people who enjoy this process so much.The Australian Democrats have a strong commitment to democratic principles, openness and accountability and believe that Australian company law continues to need reform to ensure Australian corporations conform to these standards. Our greatest concern is with companies that have the greatest impact on our society—public companies. The fundamental issue is that, while public companies are privately administered, they are publicly owned and should therefore be fully accountable to the public or at least to their individual shareholders, who are large sections of the public. The way in which this accountability is advanced and enforced is the responsibility of every democratic government. We think changes are necessary because corporations in the modern world have enormous power over our communities, the environment in which we live, the society in which we live and the fabric of our relationships.If you do not attend to how these corporations operate you will find that they will do us less good than they otherwise might. If you attend solely to economics it is a bit like making sure somebody is clean and fed but is not nurtured appropriately. The Australian Democrats feel that, in the interests of the public as a whole, matters of accountability and honesty in corporate governance need to come before economics. Economics on its own will damage society unless it is moderated by the principles of justice and democracy.A comprehensive legislative structure to ensure transparency and accountability in the activities of company management is vital. Shareholders, on whose behalf the directors and senior management are working, must be able to monitor the full extent of the decisions taken by company management and directors and have the opportunity to ensure they comply with best commercial practice as prescribed by the law. I am speaking this way because I accept that, if Senator Harradine has determined to sell Telstra, we must attend to the company.The peculiar thing about modern companies is that it is often the shareholder who is left behind in matters of power and matters of decision making. Companies worldwide have been taken over by two classes of people. One is the managerial class, the members of which are very often far from entrepreneurial. Most managers in major companies have never had to earn a dollar on their own account: they have always sat on the back of somebody else's money, somebody else's structure, somebody else's company and they are not at all entrepreneurial. They preserve in a guild-like fashion the benefits and the attributes that go with being part of an elite and a class. Unlike nearly every single member of the cabinet, I would remind the Senate I am one of the few people in parliament who have operated at both an international and a local level at the highest level of business and at the lowest level of business, owning and managing my own businesses. I know of what I speak.Similarly, the directors' class can sometimes be categorised in the same manner. There is a particular person who will find himself—and sometimes herself—repeated on countless companies because of the way the club operates. Directors recommend their succeeding directors and it becomes a kind of mates' class. They, too, operate in a system of power and control which can be to the detriment of shareholders en masse. The average shareholder, in fact, is very little more than simply a paper holder in a company and is as far removed from capitalism as it is really possible to be.We think there are important elements which have to be attended to in terms of the modern relationship between governments and parliaments representing the people and the powerful interests controlling our economies and affecting our societies and communities. Those interests have to be attended to in terms of much greater democratisation, much greater responsiveness to the community as a whole and much greater concern with public interest. Of course, whilst I am illustrating some of the weaknesses of the system as it is, we must recognise that there are many very good pioneers in companies—pioneering managers, pioneering directors and pioneering entrepreneurs—who operate their companies, their corporations and their enterprises in the public interest and who, in fact, advance the cause of good corporate governance, good corporate management and good relations with the societies out of which they make their profits, their sales and their wealth. Those sorts of people are to be congratulated and encouraged.The Australian Democrats have led the way on corporate law reform. When Labor and the coalition sought to make no changes to the Company Law Review Bill by signing off a majority report on that basis, the Australian Democrats issued a comprehensive minority report calling for numerous improvements. Our report forced changes to be considered.When the bill was passed in June 1998, it included the following changes, all prompted by the Australian Democrats' report: companies must now disclose the remuneration of directors and top managers; `whistleblowing' directors can call meetings of members; overseas disclosures must also be made available in Australia; the rights of shareholders to appoint directors are safeguarded; listed companies must give 28 days notice of a meeting of members; performance in relation to environmental legislation must be reported; safeguards against fraudulent lodgment of documents which must be put with the ASIC; proxies can now be sent by fax and the chair must declare all proxies; and directors must declare that financial statements accord with the law.We are pleased to see these advances to corporate law but there is more to be done. I have gratefully accepted the offer from the Parliamentary Secretary to the Treasurer (Senator Ian Campbell) to have the following referred to the Parliamentary Joint Committee on Corporations and Securities: compulsory disclosure to shareholders of their privileges and rights; establishment of corporate governance boards to ensure responsible company governance; the introduction of preferential voting for directors; the establishment of an internal audit committee; and a requirement that companies make disclosures in relation to proceedings against them in relation to the Corporations Law and the Trade Practices Act.Now, with the consideration of the future of Telstra, there is the opportunity to introduce reforms to what is at present our own Australian company, the one that belongs to all Australian people, whom we are here to represent. We want to ensure that Australia's No. 1 company adopts best practice in its corporate structures and processes.I will be proposing amendments in two areas. The first is the area of corporate governance. Perhaps the most important issue affecting accountability in corporate management is the structure applied by law to corporate governance. This issue embodies the basic conflict that advocating greater accountability raises: whether the shareholders' interests and the public interest are better served by a model that promotes minimum accountability, maximum freedom and lowest cost or by an alternative model which includes maximum accountability, ensuring less opportunity for fraud and mismanagement and greater adherence to best commercial and community practice.As fundamental principles, the Australian Democrats always favour greater accountability, greater openness, greater transparency, better representation and more democracy. The existing corporate governance structure gives very wide-ranging operational management duties to the main board of directors. They have powers to determine their own remuneration and to appoint and remunerate company auditors, who are supposed to see that they are being honest. They can nominate themselves for re-election, they can initiate changes in the constitution and they can control the conduct of shareholder meetings and voting procedures.These powers alone create situations where major conflicts of interest, corruption and mismanagement can arise and go unchecked, as the very individuals who may be affected by these things are the ones who are responsible for their management and elimination. Fortunately, it is seldom that corruption and mismanagement does reach that level. Never theless, it has been a danger and it remains a danger.Clearly, this issue goes to the heart of managerial accountability to shareholders and the public interest. At worst, directors and the managerial elite can evade their full responsibilities to the public interest and to all shareholders. These issues are at the heart of managerial and board accountability.As a means of improving this situation, the Australian Democrats propose that companies be required to separate the normal business and internal management functions of the board from the governance functions of ensuring openness and accountability. A new governing board, elected directly by shareholders, not shareholding, should exercise these governance functions. The main directors would continue to be elected by shareholding, representing, of course, where the financial weight lies. They would exercise normal main board functions of business and management.This would have the additional benefits of simplifying and reducing the role, responsibilities and workload of the principal board directors and at the same time increasing their credibility by removing the powers that permit the appearance or reality of a conflict of interest. As a result, directors should be able to make better business management decisions, so improving the company's financial situation and its credibility.Ultimately, this is about re-establishing the balance of company governance in favour of shareholders rather than management. Why do I stress that with regard to Telstra? Because at the moment it is this parliament which ensures, as far as it can, given the attitude to government, that Telstra delivers appropriate services to the Australian community. Once it is in private hands, by all means the community service obligations and other regulations may contribute to better management by Telstra but, ultimately, the real power will reside in the board and the management. We have to make sure that those people are as representative and thoughtful about accountability and community needs as possible. One way to do that is to make sure that their constitution is appropriately structured. Currently, their constitution is not.The second area is the democratisation of voting. There is currently a great disparity between the principles of corporate democracy and the rules set out in the Corporations Law governing the internal operations of companies. For example, the existing method of electing company directors on a limited re-election basis allows dominance by control groups and inhibits the likelihood of support being expressed for particular directors. It does not enable minority interests to be heard through more accessible internal procedures, and it forces minority interests to rely on expensive and time consuming formal procedures like the legal system and the ASIC.To increase the democratisation of company management and operations, the Australian Democrats advocate applying a system of preferential or cumulative voting to the election of directors of listed companies, requiring all directors to be elected annually with each share obtaining as many votes as there are vacancies. The number of directors to be elected would be determined according to the company's constitution. One of the requirements of good company law is that there should be a scheme setting out the steps company management must follow to achieve not only best commercial practice but also best community practice. The scheme should be paired with a comprehensive mechanism to enable shareholders and outsiders to monitor what management is actually doing and, where necessary, require that it comply with the law.Serious deficiencies exist in the current Corporations Law, even as it has been recently amended and improved, which contribute to the disparity between the rules governing the internal operations of companies and the principles of corporate democracy. The existing method of electing company directors on a limited re-election basis is one such deficiency, allowing dominance by control groups and reducing the possibility of support being expressed for particular directors. This is an aspect of all corporate structures which is to be regretted. It does not enable minority interests to be heard through more accessible internal procedures and it forces shareholders to rely on expensive and time consuming procedures. That should not be the case for the over two million shareholders of Telstra.A better alternative would be to adapt the system of preferential or cumulative voting for the election of directors of listed companies. This system would require all directors to be elected annually, with each share obtaining as many votes as there are vacancies. It is a system well understood by Australians and would improve corporate governance. The number of directors to be elected would be determined according to the company's constitution, and the law would need to specify that each shareholder is free to distribute their allotment of votes as they see fit to those nominated as directors. This proposal would improve the democratisation of the relationship between Telstra company directors and shareholders. If we are going to lose Telstra, let us at least structure it in the best fashion. (Time expired)(Quorum formed)10:51:005462Campbell, Sen GeorgeSenator GEORGE CAMPBELLNB5NSWALP00—Telstra for decades has played an integral role in the development of this—C16HEFFERNANSenator Heffernan—Don't read your speech, George.NB5Campbell, Sen GeorgeSenator GEORGE CAMPBELL—Who's reading it? (Quorum formed) I will commence again. Telstra has played an integral role in the development of this nation, not only by bridging the vast distances between population centres in Australia but also by developing an Australian industry that offers world leading technology in communications. The full privatisation of Telstra will mark a momentous degradation of the Australian communications industry and an upheaval of the sorts of communications services that Australians are entitled to expect. The central issue on any further sale of Telstra will be the effects on rural and regional Australia, not only directly through service provision or further job cuts but also in the way that telecommunications will be provided to regional Australia in the future.The further sale of Telstra has become a central political issue. Regional communications has increasingly become the focus of communications policy. The current conflict within the coalition demonstrates that the Telstra privatisation debate and the growing signs of a political rural revolt have significantly raised the temperature of the regional communications debate but so far it has generated more heat than light.The argument has followed the well-worn track of public ownership versus private, tinkering with the universal service obligation and increasing subsidies to Telstra to do what it has never done well—that is, to provide compatible rural services. However, this debate will not be resolved until we address the central issue of regional telecommunications. Before building on structures of the past, which have already been demonstrated to be inadequate in meeting the communications needs of rural and regional Australia, we should be seeking to develop an approach that is compatible with the communications systems of the future.As a publicly owned company, Telstra has a responsibility to the Australian people as a whole. Previously, this responsibility was fulfilled in a number of ways, including a clear obligation and commitment to provide telephone services to all Australians, not only profitable services. Telstra also has a commitment to Australian jobs in direct employment and indirectly through its support and development of secondary industries in Australia. We now have a thriving electronics industry that provides the equipment necessary to run the Telstra network. Efficient telecommunications in all its facets was an integral component of business opportunities and business costs, with increasing reliance on electronic commerce in Australia and throughout the world.Telstra, as one of the world's largest telecommunication companies, spends a significant amount of money in the course of its operations and development of its business each year. According to its industry development plan:Telstra plans to spend up to $4.4 billion on capital expenditures and investments in the 1998 financial year.Traditionally, Telstra has had a significant policy of purchasing locally in order to support Australian industry. This policy has had a particular focus on small and medium sized businesses that supply Telstra from the electronics industry amongst others.For the last 15 years, Australia has developed a significant electronics industry, the bulk of which has come through supplying to Telstra. Its export contribution to the Australian economy has been lifted from $50 million a year to $1 billion per year, although it has to be said that we are still suffering a growing deficit in this area of trade of in the region of 10 to one. This industry has grown solidly through Telstra and its commitment to supporting Australian industry.In Telstra's latest industry development plan, however, only a few months after its part privatisation, the tidings are no longer as supportive for the Australian electronics industry. According to its plan:Differences between global best practice and Australian conditions will not be sustainable. Local industry must meet the same best practice objectives of its offshore competitors.As a privatised company, Telstra will now place the interests of its shareholders first. The overwhelming factor that will drive Telstra will be profit. The previous success of secondary industries in Australia that have been built with Telstra's support will end. There will be sacrifice for off the shelf solutions which will see our telecommunications industry settle for outdated technology instead of being at its leading edge.Telstra will now be shopping in the global supermarket for the best bargains it can find when it purchases its equipment. In light of the Asian crisis, with depreciating currencies all around us and numerous countries desperate to earn export dollars, it is easy to see that, through no fault of their own, many Australian companies will be outpriced unfairly by overseas competition. Telstra points to this in its development plan, when it states:Typically, Telstra's direct spend with Australian SME's has been around 30% of its total spend. This strong support for SME's who offer commercially attractive products and services will continue, but Telstra believes that most of the future opportunities for Australian industry will be in niche market products and services for the regional and world market.The importance of Telstra to Australian industry is not only represented in its direct economic contribution but also in the essential service that it provides. The success of future Australian industrial development, particularly in rural Australia, depends on the communications service that Telstra will provide.For regional Australia to successfully compete in business, it is vital that it has the same services as the metropolitan areas in terms of Internet, fax, mobile phone and digital communications. Without regional equality of these services, industry and business in rural Australia will not survive. A privatised Telstra will be focused on the more profitable metropolitan centres and these services will be reluctantly provided to regional Australia, if at all. Perhaps now is the time to rethink our communications model—particularly as it relates to regional and rural Australia—to reassess its adequacy in meeting the communications requirements of regional and rural communities into the future.The information age is forcing all of us to rethink our assumptions about our society and how it functions. Perhaps this is the opportunity to develop and adopt new and radical solutions for our communications network of the future. Privatisation is not the answer.Since its part privatisation, Telstra has cut its employment significantly. It announced in September 1996 that it intended to reduce its employee numbers by 22,000 in the 1998-99 financial year. It has already cut more than 17,000 jobs, according to the union that represents Telstra workers. The greatest effect of these job cuts has been felt in rural Australia, firstly, as a loss of desperately needed income to those towns and, secondly, as a severe reduction of service by Telstra in rural areas. The government of Western Australia, in the recent Senate inquiry into the full privatisation of Telstra, submitted that:It is expected that full privatisation would have some impact on the number of Telstra staff located in non-metropolitan areas. Telstra has already withdrawn many staff previously located outside the major cities, however, it has not yet put in place adequate arrangements for sending staff to country areas when needed as evidenced by the slow response to some telephone system outages.The slow response in service to rural areas has meant that there are often delays of several weeks both in new connections and to restore faults.In its current position, Telstra is clearly holding a monopoly stranglehold over the provision of Australian telecommunications services. In this position, it can easily exploit consumers, particularly if it is privately controlled. The government insists that Telstra will be forced to maintain its service levels through the customer service guarantee and the universal service obligation. The explanatory memorandum circulated by the Minister for Communications, the Information Economy and the Arts, Senator Alston, contends that:The public interest in telecommunications is protected through the comprehensive community and regulatory safeguards set out in the Telecommunications Act 1997 , the Telstra Corporation Act 1991 and . . . the Trade Practices Act 1974 .This government contends that there is sufficient regulation already to monitor Telstra and that any further regulation will interfere with the rights of other shareholders in Telstra. The Communications Expert Group, in their submission to the recent Senate committee inquiry, disagree with the confidence of the minister and point out that:The customer service guarantee is not effective and is currently not being implemented. There are either deficiencies in the promulgation or enforcement of the customer service guarantee.The Communications Expert Group also highlighted the reality of government's ability to control Telstra as a huge private monopoly. They said:A major concern is the access that a privatised Telstra will have to legal resources, compared to the legal resources made available to government departments and smaller carriers. The access to legal resources makes the imposition of $10 million fines of doubtful value, as it makes commercial sense to mount a $1 million legal defence which will tie up a department's legal, financial and manpower resources to defeat the charge.It makes simple economic sense to retain a monopoly in government hands. A private monopoly is clearly able to exploit consumers without the public benefit that government ownership provides.As a profit driven private monopoly, Telstra will be like any other private company. It will comply with government regulation only when it is forced to comply. Under full privatisation, the government will be waging a never-ending war in the courts if it hopes to enforce Telstra's universal service obligations.Perhaps the opportunity now prevails to resolve this not by privatisation but by a radical restructure of our telecommunications giant in such a fashion that would ensure it is more responsive and in tune to the community it seeks to serve. For example, in the US, telecommunications companies specialising in rural communications are increasingly common and are growing at a startling rate, with some achieving up to 30 per cent of market share. In Canada, for example, New Brunswick Telecom has been instrumental in providing job opportunities and investment in a rural province.What matters most in rural Australia is access to world-class outcomes, not only 64-kilobit per second links but also customer service, networked applications, tailored regional pricing packages, technology optimised for regional geography and corporate focus on their needs. The central objective for regional telecommunications must be nothing less than the achievement of parity between regional Australia and the south-east corner of Australia. A radical new approach to the provision of world-class telecommunications to the bush could be the cornerstone for the revitalisation of regional and rural communities.Even now the government has no understanding of the real issue. The problem is structural and requires a structural solution. Without a structural solution, the options offered by the coalition, such as capital grants schemes or extending the USO, will have a marginal impact at best. The problems with regional telecommunications have been apparent for years—chronic underinvestment and the obsolescence of equipment, the lack of regionalised marketing strategies to drive consumer demand and the physical and psychological distance between regional communities and industry decision makers.Regional communications are very different from metropolitan communications. Demand characteristics, demographics, optimal technology choices, network geography and levels of competition are all different in regional Australia. The imposition of legacy solutions on these markets cannot deliver the world-class competitiveness that regional businesses and homes desperately need. The solution to the communications service that is provided to regional Australia lies in investment. There has to be a separate approach taken to metropolitan and rural telecommunications within a comprehensive telecommunications framework as defined by government through public debate, not developed haphazardly by the privatised carriers around their boardrooms without being subjected to public scrutiny or forced to show commitment.The coalition government does not have a comprehensive telecommunications policy at all. Its approach is one of haphazardly placing bandaids on gaping wounds and making policy on the run. This is again clearly demonstrated by the hastily cobbled together political fix with the Nationals to secure their support for the Telstra sell-off. The tragedy is, however, that if we can believe what is being reported, the so-called fix will not address the communications problems in the bush, nor will it save the National's political hide.Rural and regional Australians are relying ever increasingly on telecommunications services for every part of their personal and business use. Without this service at an equal level and cost it will be isolated. It requires these services before it can be interlinked with metropolitan Australian industry. If it does not have this opportunity it will never be linked to the industrial heartland of Australia that is currently centred on major metropolitan cities.We have already witnessed the results of the sale of one-third of Telstra by this government. Amongst other problems, the quality and level of service provided by Telstra, particularly in rural areas, has dropped significantly. The proceeds of that sale have been squandered in the already well-documented Natural Heritage Trust fiasco. That has been the largest pork-barrelling exercise that this country has ever seen. In short, the one-third sale of Telstra can only be described as a national disgrace.The Australian public are entitled to demand more from their government than short-sighted policies and fire sales. If the recent election result in Queensland contains a message for governments it is clearly that Australians are sick and tired of economic rationalism and its effect on communities. There is no valid reason whatsoever, economic or social, to privatise Telstra any further, just as there was no social or economic reason to privatise any part of it in the first place.What we need is a serious and comprehensive policy approach on the communications and information industries as a whole. We need to ensure that regional and rural Australia has access to these services on at least an equal basis. The Australian Labor Party has a clear policy on communications that will ensure that rural and regional Australia is not left behind.We will not be about making decisions on telecommunications in this country, which in many respects will determine the capacity of us as a nation to compete in the global marketplace on an equal footing, based on the political quick fixes that are needed to stitch up a coalition that is in disunity, disharmony and disgrace. We have a telecommunications policy being driven in this country by the desire of a Prime Minister to get a political fix to be able to go to an election within the next four or five weeks with a policy stitched up with the numbers in this Senate to privatise what can be the cornerstone of our competitiveness into the future.This has nothing to do with any economic rational decision. This has nothing to do with any social commitment to people in the bush. This has nothing to do with bringing rural and regional Australia into the industrial network of this nation. This has everything to do with trying to secure the seats of two or three people on the other side. The strange thing about it is that it will backfire. The one good thing for those of us on this side of the chamber is that when we come back after the next election a lot of your faces will not be there to look at. (Time expired)11:13:005466Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—The Telstra (Transition to Full Private Ownership) Bill 1998 is the legislation that John Howard said we would not see in this parliament, that would not be considered. This legislation is yet another John Howard breach of faith. This legislation before the Senate lacks a mandate. At least half the coalition senators who will be voting on this legislation were elected to the Senate when John Howard said that he would not contemplate in the life of this parliament privatising any more than one-third of Telstra. This breaches yet another John Howard commitment to the electorate.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—Senator Faulkner, you should refer to the Prime Minister as the `Prime Minister' or `Mr Howard'.5K4Faulkner, Sen JohnSenator FAULKNER—This is a political device that is electorally bankrupt. This is another prime ministerial broken promise. Our communications provider in Australia has become a non-core promise. I recall an interview that John Laws conducted on 23 January 1996 with Mr Howard in Sydney. Mr Laws asked:So you'd sell one-third of Telstra in that first term?Mr Howard responded:In that first term one-third of Telstra, no more. Whether we will go further will be something we will make a decision on towards the end of our first term and when we get to the end of that first term, if we decide to sell more, we will put a proposal to the Australian people as part of our policy seeking their support. Now, nothing can be fairer, more open, more explicit, more democratic than that.This is yet another broken promise, and what a massive broken promise it is.This government has an ideological obsession to destroy the public ownership of Telstra before the public has had an opportunity to consider the issue. The `For Sale' sign was put up before Mr Howard had the permission of the owners to sell it. You have got to ask yourself why. Why have we got this situation? It is very simple. This is Mr Howard's only chance. He has got to get this legislation through the parliament before the next election, before the annihilation of the National Party in the Senate and the House of Representatives.You have got to ask yourself what has happened to the National Party in this country. What has happened? Why has there been this evolution from the National Party of John McEwen, Doug Anthony and Ian Sinclair through to the modern National Party of Charles Blunt, Tim Fischer and Ron Boswell? Why has there been this change? You would not have seen John McEwen and Doug Anthony roll over and have their tummies tickled by John Howard or any other Liberal Party leader on a proposition like this. It never happened in the past. Those leaders, in the great tradition of National Party leaders, would at least have stood up to the Liberal Party. But the current National Party has not got the herbs, has not got the bottle, to do it.There are some members of the National Party in the House of Representatives—Mrs De-Anne Kelly and Mr Bob Katter—who say that they would now cross the floor on the issue of Telstra. Of course, Mrs De-Anne Kelly, the member for Dawson, did not say that at the time the bill was before the House of Representatives. Oh, no. She went along with the pack and voted for the full privatisation of Telstra. I have got to say that Mr Katter was a little more careful. We all know what an unprincipled windbag he is. He was clever enough—EU4O'CHEESenator O'Chee—Withdraw that!10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Faulkner, you should withdraw that.5K4Faulkner, Sen JohnSenator FAULKNER—I withdraw that, Mr Acting Deputy President. He was clever enough not to vote at all. Now they say that, if the bill came back to the House, they would cross the floor. But the real action is here in the Senate. The National Party depends on the National Party senators to hold the faith—and what a crew they are depending on! We have Senator Ron Boswell, part of the new Blunt-Boswell-Fischer leadership of the National Party. He is the only man in the history of the National Party in the Senate not to hold a portfolio in a coalition govern ment as Leader of the National Party in the Senate. Even on the occasion when he held a shadow portfolio, when he was part of the shadow cabinet, he became shadow minister without portfolio because he could not make a contribution, because he would not stand up for the bush and because he would not stand up for regional and rural Australia.Look who is behind him: Senator O'Chee. You know what he is like. He puffs himself up full of bombast, pomposity and self-importance. He did that before the last election and, when asked about the distribution of National Party preferences, what did Senator O'Chee say? He said:That's not going to happen, so there is not going to be one seat, not one seat in Queensland, where so much as one preference of the National Party will be distributed to One Nation.Did he come in and apologise when National Party preferences elected eight One Nation members?EU4O'CHEESenator O'Chee—Mr Acting Deputy President, I raise a point of order. My point of order is twofold. First, this is utterly irrelevant. Secondly, when did Senator Faulkner apologise to the Baillieus?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—There is no point of order.Senator O'Chee interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator O'Chee!5K4Faulkner, Sen JohnSenator FAULKNER—Did he come in and apologise when, in eight seats, National Party preferences elected One Nation candidates? Incredibly enough, two of them—Mulgrave and Barambah, I think—were previously held by the National Party, and still National Party preferences elected One Nation candidates.Look at the rest of the team. What about Senator Sandy Macdonald? The first time we even heard of Senator Sandy Macdonald was when he said he would stand up on the issue of Telstra. That was the first time we had ever heard of him. His brief foray into the public limelight was, of course, his last. He is just another patsy for the Liberals. He said he would stand up on Telstra, but that he would never cross the floor.EU4O'CHEESenator O'Chee—On a point of order: that comment is unparliamentary and should be withdrawn.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I would ask you to withdraw, Senator Faulkner.5K4Faulkner, Sen JohnSenator FAULKNER—I withdraw it, Mr Acting Deputy President. What about the contribution of Senator Brownhill, the Parliamentary Secretary? At least he has got a frontbench job, unlike the Leader of the National Party in the Senate, Senator Boswell. They would not give him a ministry or even a parliamentary secretaryship.EU4O'CHEESenator O'Chee—Mr Acting Deputy President, on a point of order: this speech is amusing, but I am at a loss to find any relevance between frontbench ministerial arrangements and the Telstra privatisation bill which is currently before the chair.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—There is no point of order.5K4Faulkner, Sen JohnSenator FAULKNER—I looked up Senator Brownhill on the parliamentary database. I found that, in 1998, he made 10 contributions in this chamber. Eight of them, I might say, were tablings and incorporations. He has made two speeches in this calendar year, one of which was of 20 seconds duration. That is the contribution of Senator Brownhill and the National Party in New South Wales.What about Senator Tambling? Senator Tambling is well known. He was elected to the House of Representatives as the member for the Northern Territory, as a Liberal. He joined the Liberal party room in the House of Representatives as a member of the Country-Liberal Party in the Northern Territory. When he came to the Senate he chose to be a member of the National Party. He joined the National Party party room. You could understand why. He thought that was the way to advancement. He thought that, amongst that group of lacklustre, low-life hacks, he had a real opportunity to have a career. He has proved it, hasn't he? He also has now become a parliamentary secretary in the Senate.Then, of course, there is Senator McGauran, the last member of the National Party team in the Senate, the man that Jeff Kennett—EU4O'CHEESenator O'Chee—I raise a point of order. Mr Acting Deputy President, I understand why you would want to give Senator Faulkner a lot of latitude in trying to get to the point, because he has a lot of difficulty, but for five minutes now he has failed to address the bill before the chair. I strongly suggest that this contribution is irrelevant. If it is not, Mr Acting Deputy President, I would be grateful if you could explain how it is relevant to the Telstra privatisation bill.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—There is no point of order, but I would draw Senator Faulkner's attention to the bill before the chair and ask him to address his comments to that bill.5K4Faulkner, Sen JohnSenator FAULKNER—As I was saying, Mr Acting Deputy President, the fate of this bill is in the hands of all senators. The National Party particularly have been waxing lyrical about how they will stand up to the government on Telstra. I think their record needs to be exposed in this chamber. I mentioned Senator McGauran. Mr Kennett, the Premier of Victoria, put his weights up. He said that he was simply not up to it. The man who, when he entered parliament, found the ringing of the bells so offensive that he actually taped over the speaker system so he could not hear them and consequently missed a whole number of divisions was simply not up to it. This is the standard of the National Party representation in this chamber.The National Party will not stand up to the Liberal Party. The new Blunt-Fischer-Boswell leadership does not compare with the old days of McEwen and Anthony. They will not stand up to the Liberals. They will roll over. They will sell out their rural constituency. The only major political party in this country that will stand up for the bush in the next election on the issue of Telstra will be the Labor Party. We will not let rural Australia down. We will not let the bush down on this issue.We know by what amount the National Party have betrayed their constituency. Apparently the figure is around $400 million. They have been sold a $400 million pup by Mr Howard. They are stark raving mad to sign up to this deal with Mr Howard and the big end of town. They are crazy from the point of view of their own political survival. They have to have rocks in their head because the bush will not forgive them for what they have done. They should look at what Labor is doing in opposing this act of stupidity on the part of the government.What the Nationals are doing is leaving themselves open to political replacement on the national political scene by the ultra-rightists of the One Nation party. They are ensuring their own electoral oblivion. The National Party membership and branches know it. The people in regional and rural Australia know it and they are furious about it. They will not cop it from the National Party. What about Margaret Smith, the President of the Country Women's Association, who made it absolutely clear that the bush would be the losers in these issues of privatisation? She said that privatised organisations become beholden to shareholders rather than to clients—shareholders like Senator Parer.I do not think the CWA is stupid. I think it is right on the ball. It knows what is coming if full privatisation occurs. In the same interview Ms Smith said, `I think it is time the coalition government, and certainly the National Party entity of that coalition, took notice of what we are saying.' They will not do so. There is a deal, signed, sealed, delivered, with the weak reeds of the National Party in the Senate and the House of Representatives and, of course, with Senator Harradine and Senator Colston, to sell Telstra.We had Tim Fischer giving a bad impression of a mobile phone salesman with his announcement on analog and digital phones yesterday, which he admits himself was not predicated on the privatisation of Telstra. We had Mr Fischer and Senator Alston behaving like a couple of spivs at a media conference, waving a replica of a mobile phone around, trying to blind the bush with science. They are not wearing it. They are just not copping what the National Party is saying. You do not have to flog off Telstra to do that. I think the bush knows it. It should be done anyway.The people of Australia, particularly the bush, will not cop this level of spivery. They are not going to cop a short-term allegedly social benefit package which runs out when the short-term windfall from the sale of Telstra runs out. People want jobs into the next century. They want permanency put back into employment, into country towns, into regional cities. That is what they want. That is what the rural and regional constituency of the National Party are asking of their leadership. They want a publicly owned communications system that delivers to clients—in other words, to them—rather than the Parer-type clan.What we have seen in this debate is an unprecedented gagging of the Senate on this issue. We saw three gag motions last night successfully moved by the government with the support of Senator Colston, who of course holds a tainted vote in this place, and the support of—9L6MACKAYSenator Mackay—He's gone home.5K4Faulkner, Sen JohnSenator FAULKNER—He has gone home, has he? He was happy enough for us to stay here and debate this and he has gone home himself. Nothing would surprise me with Senator Colston. He is here because Queensland electors elected a Labor senator. It is a tainted vote, bought by Mr Howard and the Liberal Party—YW4MACDONALDSenator Ian Macdonald—On a point of order, I think that casts a reflection on a colleague in this chamber who, as we all know, has very great health problems and who may well be seeking some attention for his health problems. On that basis, I suggest it is improper to—656FORSHAWSenator Forshaw—You don't know what he has gone home for.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—Order! Senator Macdonald is making a point of order.YW4MACDONALDSenator Ian Macdonald—In fact, I do, but I am not going to tell you. I am suggesting that it is casting aspersions against a senator who we know is not well.5K4Faulkner, Sen JohnSenator FAULKNER—On the point of order, I deliberately intended to cast an aspersion on Senator Colston. I said he had a tainted vote and that he was bought by the Howard government. Quite clearly it was an aspersion and intended to be such.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I think you should withdraw that comment.5K4Faulkner, Sen JohnSenator FAULKNER—I withdraw it. We have a situation where the Howard government has bought Senator Colston's vote and stitched up a deal with Senator Harradine. This is all over; this issue is all over. Don't be under any illusions—the full privatisation of Telstra is as good as done. The National Party does not have the bottle or the guts to stand up for their constituency. They are going to roll over and let the Liberal Party walk all over them. They are going to vote for the full privatisation of Telstra.There is no-one in the National Party contingent in this chamber who has the courage and intestinal fortitude to stand up to the Liberal Party and Mr Howard. They want to; they would like to be able to. They would like to be able to shake off this aura of weakness that surrounds them, but they will not do it. Sure, Mr Katter, Mrs Kelly and perhaps a few other Nationals might in the House of Representatives, but that will be purely symbolic—the deed is done. It matters in the Senate and they will not stand up. The deal is done with Senator Harradine and Senator Colston. With Senator Colston it was through the buying of this tainted vote to ensure he got the deputy presidency of the Senate. And Senator Harradine, the great democrat—the man who said he would never vote for a gag motion—voted for three in succession last night. A slimy deal has been done in relation to this particular matter.I am absolutely confident and quite certain that the Telstra privatisation bill will go through. I said it last night and I say it again: it will go through with the Labor Party fighting it every inch of the way. Not only will we fight it in the parliament, but also we will fight it in the election. We will make it a centrepiece of what Labor stands for.We will not back down and we will make absolutely clear to the Australian people that the only way this bill will not be proclaimed is for a Labor government to be elected. We will ensure that every single person in Australia, particularly those who live outside the major capital cities, understands that commitment from Labor. It will become absolutely clear that the only way that the privatisation of Telstra can be stopped is, of course, to vote Labor.There is no urgency about this matter. Last night Senator Harradine would not let one Labor member of the Senate actually put a case to argue against the urgency of this bill. They could not put the obvious case that there is no urgency with this bill, because even the government is not planning to proclaim the legislation until after the election.What they are worried about is the numbers in the Senate after the election. They know the National Party will be wiped out. They are fearful that the government will be wiped out and that they will be replaced with One Nation senators who apparently are opposed to the privatisation of Telstra.What a sell-out from the government, Senator Colston and Senator Harradine! We want to know what the details of the deal that has been done are. We really do want Senator Harradine for once to come into this chamber, own up and say what has gone on behind closed doors with the government. Forget about his dealings behind closed doors on the native title bill; that has occurred. Tell us the truth for once about Telstra. Own up to what you have done behind closed doors and the deal with Mr Howard. But, rest assured, Labor will never sell out. We will fight it right through and I am confident in the election we will win.11:35:005470West, Sen SueSenator WEST1X4NSWALP00—I start by quoting the opening lines I made in a speech on 18 October 1996 when the first tranche of the sale of Telstra was being debated. At that time I said:Today we have heard from government senators their usual diatribe about why they should be able to sell a third of Telstra.There is a big difference between this debate and that debate, because this time we are not hearing from government senators as to why the remainder should be sold off. We are certainly not hearing from National Party senators as to why it should be sold off.But it is interesting, because we have certainly seen what they have had to say in the media in recent weeks about it and some of their lower house colleagues have a lot to say about it even today. What happened? What bought them off? Why isn't the government here contributing to this debate? Let me tell you, the people of Australia want to know the reasons.I have a very large quantity of press clippings here that I have accumulated in very recent times from the rural areas of western and northern New South Wales, west of the Great Dividing Range. They are absolutely horrified at the sale of Telstra. They do not approve of the sale of Telstra. If the National Party were reflecting to the coalition forces what people out there were saying, they would be in here speaking very volubly in opposition to the continued sale of the remainder of Telstra.Telstra should not have been sold in the first place. Why sell an asset that brings in over $1 billion worth of revenue in dividends—revenue that is spent for the good of this country, for schools, for hospitals and for infrastructure? But this government wants to sell the farm. As a letter to the editor in a local paper said, once you sell the farm you are gone. You can only sell the farm once. You cannot sell Telstra two or three times.What replaces that $1 billion worth of dividends that Telstra has been paying the government and the people of Australia? What happens to the resources and the services that those dividends actually purchase and provide for the people of this country? They will have to find an alternative source. I guess we can all hang onto our hip pockets because it will have to come from there.Infrastructure does not need to be built and maintained once; it needs continual refurbishment and upgrading. It seems that this government has forgotten that. They are talking about the infrastructure services that they will build with the money from the sale but, once that infrastructure has been built, it will require additional funding to keep the infrastructure current and technologically advanced in areas where we do not have the population and the businesses to ensure that revenue is coming in.I am sure that Telstra, or the communications companies, will do exactly what the banks have done to us in rural areas where there is not very much service demand, where there is lots of land between individual people or individual services. What will happen? We will be neglected. It will get to be a two-tier service. In the cities, where there is lots of turnover, lots of revenue generated, it will be kept at the absolute peak of performance. But they forget about those of us who live west of the great sandstone curtain. That is what happens: they forget about those who live west of the great sandstone curtain.It is important to remember, when this government talks about a community service obligation or a universal service obligation, that it will apply to Telstra. But they are only talking in terms of a phone service; they are only talking in terms of the handset and the copper wires that are strung around. They are not talking about alternative technology that is being developed or other technology that Telstra and other telecommunications companies are into providing.That is something that people in rural areas need to be very conscious of. I think it is something that coalition senators opposite, and particularly National Party senators, need to remember: their universal service obligation is not for the whole raft of Telstra services and telecommunications that they think it is, or for what might happen in the future regarding telecommunications advances that are made. And services and communications advances are being made at a very rapid rate and are improving markedly.If we do not have access, and if there is no universal service obligation applying, those of us in the bush will have to pay for it, and we will have to pay more because, as there is no USO, it will not get any cross-subsidy. If there is some subsidy from the government, pray, may I ask, where will that money come from? They will not have the dividend stream that they have had with Telstra.I cannot imagine that a fully privatised Telstra will be any different from any other large business in this country. They will be able to get up to all sorts of dodges. They will want to minimise their tax, and they especially will want to reduce the dividends they are paying. Up to 35 per cent of Telstra can be sold to foreign ownership; 35 per cent of the dividend could be going overseas and not staying in this country. That is another thing that is of grave concern to people. We know that the government is putting a five per cent ceiling on the number of shares that people from overseas can purchase, but it will only require seven large organisations to take up five per cent each to basically control Telstra.How the devil can the thousands of mums and dads in this country, to whom we are told these shares will be sold, have a shareholders' vote to control the directors? Of course, it will be stacked by the seven from overseas with the 35 per cent. Can you imagine, if a million mums and dads have shares, how many of them will turn up for shareholders' meetings? What venue in this country will you be able to use to hold these people if they all turn up?CX5MACDONALDSenator Sandy Macdonald—The same ones that they use for Qantas and BHP.1X4West, Sen SueSenator WEST—As you have just said, the same ones. That means that very few people will turn up. The major investment organisations, the overseas companies and owners will turn up, but not the mums and dads. What control, what input, will the mums and dads of this country have? They might have their 200 shares. They certainly will not have 28,000 shares like some ministers here have. What control and what access will they have regarding future directions? They will have none, because they will have no power. They will get their small dividends each year.But when it comes to this country's future directions, when it comes to the important decisions being made, the mums and dads, the battlers that Mr Howard talks about, will have no power in the boardrooms. Can you imagine someone with 200 shares getting a seat on the board of Telstra in competition with somebody from overseas owning five per cent or one of the major institutional investors in this country? There only needs to be a couple of the major institutional investors ganging together, and what they want they will get. That is the danger and the problem with this legislation. People need to be reminded that we will be allowing 35 per cent of our telecommunications system, our major one—basically it is a monopoly—as a company to be owned by overseas people, overseas companies. It may be that it is to be owned by as few as seven entities, because five per cent is the maximum percentage of shares they can have. I do not think that is particularly what people in this country want.WP6LIGHTFOOTSenator Lightfoot—It still leaves 65 per cent in Australian control.WP6West, Sen SueSenator WEST—You do not seem to understand about control and who has power when holding a certain number of shares. When you have 200 shares as opposed to a five per cent share of the company—WP6LIGHTFOOTSenator Lightfoot—What about Qantas? How dare you criticise us.1X4West, Sen SueSenator WEST—I know who has the power, and it certainly is not those with the 200 shares. It is absolutely ridiculous. Obviously, those opposite are continuing on with the attitude of arrogance, the born to rule attitude of, `We know best and we'll tell you.' It is absolutely appalling. The government is taking no heed, no cognisance, of what people in rural and regional Australia need.I think it is important to remember community service obligations in rural and regional parts of New South Wales. Let us go back to about the year 1995 and look at a number of those electorates: in Gwydir, there was a cross-subsidy of $13.54 million; in Parkes, there was a cross-subsidy of $15.21 million; in Calare, $3.29 million; in New England, $4.24 million; and in Riverina, $4.06 million. This will be a universal service obligation only when they have to get the money, and it will be for their phone line only, nothing else. It is just not appropriate; it does not make commonsense for the shareholders to want to continue making those sorts of payments.YW4MACDONALDSenator Ian Macdonald—Sue, we know what you're going to say. Why don't you give it a break?1X4West, Sen SueSenator WEST—Why don't you actually say something, Senator Macdonald? Why don't you go out and talk to people in the bush and really listen to them? You are not doing that. It did not help in Queensland with One Nation. We saw what happened there. The coalition got absolutely demolished because they took no notice of the people in the bush.H15CAMPBELLSenator Ian Campbell—I am just trying to save Australia.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Patterson)—Order, Senator Macdonald. Senator West, just so we can both live through this, try to avoid responding.1X4West, Sen SueSenator WEST—It is important for people to recognise that many, many of those in the bush who comprise the natural constituency of the conservatives are very concerned about this. We have seen comments from groups such as the CWA who have concerns about the creation of a telecommunications underclass, that the government has failed to guarantee a single extension to the services offered to rural and regional Australia under the universal service obligations. For that failure, the government is to be criticised.Written into the universal service plan is that a standard telephone service be accessible. But people in rural areas now want more than a standard telephone service. A standard telephone service will not allow people to expand their businesses. We also hear people talk of there being a push for timed local calls for business; it is an option.EU4O'CHEESenator O'Chee—He announced it for everybody this morning.1X4West, Sen SueSenator WEST—What will that do? The introduction of these things is the thin end of the wedge.EU4O'CHEESenator O'Chee—It has been announced this morning for everybody, Senator.1X4West, Sen SueSenator WEST—Who is going to pay for it? The pork barrel must be out. There must be an election coming up. They have got the pork barrel going. Some of these guarantees that have been given to various individuals around the place in the last 24 to 48 hours are becoming public. If that were happening in New South Wales, I suspect that ICAC would be taking a very close look at some of them—and I mean that very seriously. I think it ill-behoves people to make some of these promises and to say that they have been given guarantees, with nobody else knowing about them. I suspect that, if this were happening in New South Wales, ICAC would be extremely interested.I have mentioned foreign ownership. As I say, it will take telecommunications out of the hands of the people in the bush, the mums and dads and put it into the hands of those who have larger shareholdings. I do not know why this government has this hang-up that private is more efficient than public. A lot of research is being done on that, and it is not being borne out, but this government does not tend to want to agree with that or even listen to it.We have also seen in recent times—unless, of course, this got changed too in the last 24 hours—a cut in access to the remote access channel called Reach. This access channel enables television stations to feed their signal down the line to city areas. This will result in less coverage of local events that have national and international significance. This will mean less coverage of those local events on the national media. It will further remove from people in the bush, and remove from city people, knowledge of what is going on out there. It is very, very concerning that this has already started to happen. We know the service to country areas has deteriorated in the last two years. That has been admitted here by the minister, and he says that he will up the fines. But I think on occasions it would be cheaper to pay the fines than actually provide the service.I would draw the Senate's attention to a street survey undertaken in Parkes. The town of Parkes is not a rabid Labor town; it is a country town. Of seven people surveyed, four were totally opposed to the sale of Telstra, two said yes and one did not care. Those sorts of snapshots of what the feeling of the community is are vitally important.There are headlines like `The bush will not cop the sale of Telstra', that `Telstra guarantees are being sought'. These guarantees were being sought by National Party candidates. There is `Questions on the Telstra sale'. There are editorial headlines like `Telstra float not as good as it appears'. That was in the Daily Advertiser in Wagga—and that is not some socialist rag, let me tell you, it is a conservative newspaper, but it obviously taps into the feelings and thoughts of its community. The Daily Liberal in Dubbo—well named—`The Telstra carrot a real danger'. These are the sorts of headlines that all the regional and rural New South Wales newspapers in particular are full of. I think it is important that people recognise this situation: people in the bush are very scared and very concerned that they are going to lose out in this situation.I wait with interest to see some of these plans that they have unveiled today—the old pork barrel gets greased up—and I wonder if it is going to be like the telecommunications infrastructure package that was announced last time. I wait for people to remember that it was a per capita funding worked out on the percentage of each state's population living outside non-capital areas. It took no cognisance of the size of the state. And guess which state got the most money? Guess whose votes changed in here and enabled the legislation to pass? Guess which states got the most money?In New South Wales, the per capita funding was $15.99. In Victoria, it was $22.21 a head. In Queensland, it was $29.70 a head. In South Australia, it was $67.60; they did quite well. I do not have the Western Australian figures with me. But it is quite obvious that, when the Tasmanians were getting $208.41 per head, the Tasmanian people were doing far better in a much smaller size state than those of us who came from the larger states and the more populous states. It was not a fair distribution of this allocation of money, and I wonder what has happened this time. What has the government got up to this time with its smoke and mirrors to make it appear that this is a wonderful salvation and a wonderful solution for everybody? We have the situation, of course, where the second two-thirds of Telstra was not going to be sold, was it? We now have another promise that has been broken.Today, we have an outline of a whole lot of promises that the government have made that they are going to deliver on Telstra. Why would we believe that when they have core and non-core promises—they have broken any number of promises—and now they have come out with a whole stack of further promises that are pork barrel type promises? They are the ones that go up in a whiff of smoke and all you get is a very aromatic bacon smell as it burns. That is all that people are going to get. People need to realise that this organisation should remain within the ownership of the people who already own it—the 18 million Australians who already own two-thirds of Telstra. (Time expired)(Quorum formed)11:56:005474Lees, Sen MegSenator LEES8U4SAAD00—The Telstra (Transition to Full Private Ownership) Bill 1998 is about broken promises and about compounding the errors, failures and misrepresentations of the first one-third of Telstra sale and multiplying them threefold by selling the rest. The sale of the remaining two-thirds of Telstra is poor policy. It will enrich the most wealthy 10 per cent of our community while impoverishing the rest. It will exacerbate the service failures in telecommunications by creating an effective private sector monopoly when the current regulatory system is clearly not succeeding in delivering better consumer outcomes. And it will create a huge accountability problem by setting free Australia's largest company—a company twice the size of BHP or the National Australia Bank—whose profitability will depend entirely on its ability to lobby government and resist and restrict the rigours of regulation. On every front, the sale of the rest of Telstra will be a disaster.I cannot believe that a government that prides itself on fiscal rectitude and sound budgeting could present the Telstra sale bill before this parliament and argue that it is good policy. In the heavy and entirely misleading selling of the privatisation of Telstra by a string of ministers, we have been told that the sale will leave Australia debt free in a few years. Yes, if you sell off two-thirds of Australia's biggest company and raise $40 billion, you can retire a lot of debt, but that is not the full picture.The real question is this: is the amount of debt being retired greater than the value of the company being sold? In Telstra's case, the answer is very clearly no. The value of debt is reflected in the budget by interest. The value of the company is reflected in Telstra's profit stream. No matter which way you want to measure it, within a few years at the very outside the interest savings will be less than the lost profit stream. That means that the budget will be left worse off, not better off, by the sale of the rest of Telstra.Telstra's profitability is expected to grow sharply in the coming years with profits rising to about 10 per cent a year. This is because its revenues keep rising on the back of its dominant market position. Its multibillion dollar capital spending program is being wound back and its deep and savage retrenchments have reduced costs. A wide range of analysts, including Deutsche Morgan Grenfell, Merrill Lynch, Macquarie Equities and CS First Boston, are all predicting double digit growth for Telstra.Investment analyst Ord Minnett, for example, is forecasting Telstra's profits will rise from $2.6 billion last year to $3.6 billion by the year 2000. Two-thirds of that is $2.4 billion and that would flow to the government as dividends or as capital gains in terms of retained earnings—but obviously not if Telstra is sold. If Telstra is sold, then this $2.4 billion is lost to government. In the year 2000, at least it will be offset by a $2.4 billion interest saving, but as Telstra's profitability continues to rise the budget black hole continues to grow and grow substantially.In evidence presented to the Senate inquiry on this bill, economics professor John Quiggin forecast that, assuming modest growth, the budget black hole will rise to $3.3 billion by 2007. I might add that, in assessing the impact of Telstra's sale on public finances, it is essential to look at the reported profit and not just the dividend. This follows the asset pricing theories of Nobel Prize winning economists Miller and Mogdiliani and is cited by various analysts as the most appropriate way of determining the value of an asset.But the situation is likely to be even worse than that. As Professor Quiggin correctly points out, the privatisation of Telstra also has income tax implications. Privatised companies are generally able to manipulate dividend payouts to deliver dividends which are fully franked, that is, dividends on which the shareholders need pay no more income tax. At present, whilst Telstra pays company tax, its franking credits are not paid out because the government owns the shares. Telstra this year will generate about $500 million in unrefundable franking credits, rising to about $1.2 billion within a decade. Adding the cost of franking tax credits to dividends and retained profits results in a loss to the budget bottom line of $500 million in the year 2000, rising to $4 billion a year by 2006.These are incredibly big figures. If Peter Costello or John Fahey were facing a budget blow-out in the social security area of up to $4 billion a year within a decade, they would be screaming from the rooftops and we would have all sorts of allegations about black holes and intergenerational equity, and they would be moving to cut entitlements willy-nilly. They have already shown that they are happy to slash and burn in this area. Despite the great yawning hole that Telstra will leave in our public finances, this government continues to promote the sale as somehow financially prudent. It is not. Selling Telstra will mean that, in less than a decade, we will need to cut services across the board by $4 billion just to balance the books. Each year after that, the gap will get worse. What sort of a legacy is that to leave to future generations?That is just the loss on the remaining two-thirds. If we include the fire sale price at which the first third of Telstra was sold, the loss blows out to cost the government over $1.2 billion in the year 2000, rising to over $6.5 billion by 2006. The Democrats view the price at which the first third of Telstra was sold last year as positively scandalous. Unfortunately, the scandal of it has not set in the public mind yet. People out there do not realise just how much this government ripped off the 90 per cent of Australians who could not afford to take part in the sale.Let me go through the arguments again. The government set a share price of around $3.35 a share. Within a day of listing, that rose to over $4, delivering a paper profit to shareholders of $2.6 billion, at public expense. Within a month, the publicly funded windfall gain was up to $5 billion. Eight months later, it now stands at over $11 billion and is still rising. Let us make this very clear: this government sold the first third of Telstra for $11 billion less than it was worth, effectively transferring $11 billion of windfall gains from the public ownership by 100 per cent of Australians to the private ownership by 10 per cent of Australians. And they dared call that a successful float.Let us look at who profited. Within two months of the float, in a massively publicised $7 billion speculative orgy, over a third of Telstra's shares changed hands. Of the 20 largest shareholders lucky enough to be allocated shares, only one did not take the money and run. One of the biggest winners was the largest foreign investor, the Bank of Ireland, which for its one-month investment in Australia made a profit of over $28 million. In fact, most of the foreign investors sold within the first few months, with windfall capital gains of almost $1 billion, again at public expense. If the government had got the pricing of Telstra right, there should not have been such outrageous windfall gains. Months before the float, stockbrokers were valuing Telstra at between $3.70 and $4 a share. So why did the government set a share price that undervalued the float by $3 billion?I believe that a massive undervaluation will happen again with the sale of the rest of Telstra. Even with the Commonwealth Bank, when 49 per cent of the company had already been floated, the government still got the final price wrong by about $2.8 billion. I have absolutely no confidence that if this sale bill is approved—and it looks like it will be—the next government, whether it be coalition or Labor, will sell Telstra at a price that is fair to the 90 per cent of us who do not own shares in it. I have complete confidence that they will again deliver a huge, publicly subsidised windfall gains to their friends in the finance sector, to the banks, to the foreign investors and to those who can afford to buy in.The failure to deliver a genuine improvement in public sector finances by selling one third of Telstra is just one of the many pre-election promises that this government has failed to keep on the Telstra sale. Remember the customer service guarantee? It was supposed to guarantee that service levels would be enhanced on what they were under Labor. Well, on every indicator, they have gotten worse. According to the Australian Communications Authority, the percentage of new rural services provided by the agreed date has fallen from 82 per cent in 1996 to just 64 per cent in March this year. The number of faults in rural areas cleared within a day has fallen from 74 per cent to 59 per cent. No wonder the bush is screaming about the prospect of more of Telstra being sold off. The reason for this decline in service is not hard to find. It is there in the 3,000 Telstra jobs lost from rural areas last year. That includes 248 staff in Tasmania and 517 in Queensland. Even the government's minimal promises last time to Senators Harradine and Colston about keeping jobs in Tassie and rural Queensland were not kept.Then there was the promise to spend the money on the environment. The Natural Heritage Trust Fund, as we all know, was set up, and Senator Harradine got it topped up by $100 million. But then the bulk of its funding was allocated to the primary industries portfolio. The few increases in environment spending within the fund have been offset by reductions in environment programs within the Department of the Environment proper, where the funding has fallen by $70 million a year, or 30 per cent, since this government took office.YW4MACDONALDSenator Ian Macdonald—That is quite untrue, and you know it.8U4Lees, Sen MegSenator LEES—It is $70 million a year less, Senator, since you took office. So many holes have developed in the NHT bucket that much very valuable funding has gone to projects previously funded by states, local governments, individuals and other organisations.This bill shows a breathless contempt indeed for parliament, and also for the constitutional separation of powers doctrine, by leaving the decision of whether this bill becomes law in the hands of the executive rather than the parliament. This is because the proclamation of whether this bill becomes law is left up to the incoming government. The constitution of Australia is quite clear about who makes the laws, and it is not the cabinet. Section 51 says that the parliament shall have the power to make laws, but this bill gives cabinet—or, more correctly, Executive Council—the power to make laws, and that is not appropriate. If the government wants this bill passed before the election and actionable only if its mandate is proven, then it should recognise that its mandate can be tested only by the parliament, and that parliament consists of two houses: the House of Representatives and the Senate.Finally, I wish to move to my second reading amendment. We are discussing this bill in a vacuum—blindfolded—because we do not yet have the report from the Australian Communications Authority on how the universal service obligations can be improved. That report is due on 15 August. It is premature to discuss this bill before that date and before we know what legal changes will be needed to deliver service obligations to the public on things like digital services. Let us remember that the government's customer service guarantee has failed to deliver better services under the partly privatised Telstra. Surely this government would want to ensure that they get the regulatory system right this time before they proceed to sell off the rest. My amendment seeks to defer consideration of the bill until after that report is received, and I would hope that any senators genuinely interested in improving Telstra services would want this information before they consider the sale bill any further.In conclusion, let me state that the government has not a shred of credibility in insisting that this bill be passed now. Every precondition that the government—or, indeed, Independent senators—set on the first float has been breached. The float was a failure in every sense: in terms of public finance, in terms of customer service and in terms of improving competition. The Telstra one-third sale was a monumental mistake and a monumental public policy failure that enriched a few at the expense of the many. This Senate would be compounding folly and failure threefold if it agreed to the sale of the rest of Telstra, and it would be flying in the face of the 62 per cent of Australians who, according to the recent Morgan poll, are stridently opposed to the sale of Telstra. Those National Party senators, who all seem to be missing at the moment—and, indeed, all senators in this place—should take careful note of the overwhelming and growing public opposition to this sale.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Patterson)—Senator Lees, you have foreshadowed that amendment, haven't you?8U4LEESSenator Lees—Yes.12:11:005477O'Brien, Sen KerrySenator O'BRIEN8O6TASALP00—I rise in this debate to oppose the Telstra (Transition to Full Private Ownership) Bill 1998 and to support the second reading amendment to be moved on behalf of the opposition that further consideration of this bill be postponed and be an order of the day for the first day of sittings in 1999.One would understand members of the public being bemused by the fact that we are debating a bill which this government has promised will not be put into effect until after the next election. That is the promise this government has put on the record, if it can be believed, so we are debating a bill in circumstances where the Australian people are to exercise their options and vote on this prospect at some time in the future.One wonders why it is necessary for this government to seek to anticipate the mandate of the Australian people on this issue by pursuing the resolution of this bill in the Senate now. Firstly, it could have waited until the next sittings, which are due to commence on 10 August, but probably, more appropriately, it could have waited until it actually had the mandate of the Australian people, which I do not believe it will get. But, if it is convinced that this measure has the support of the Australian people, why isn't it prepared to wait until the Australian people have had a chance to consider this proposition, fully fleshed out, with all of the detail laid before them, before the next election?There are a couple of answers to that. The first is the question of what the coalition will confront in terms of the numbers in this place after the next election. If one is to place any credence at all on recent polling on the issue of Senate voting—and I will refer particularly to the Morgan poll finding No. 3099, which was published in the Bulletin on 30 June 1998—the answer is plain to see. The Morgan poll indicates that the Liberal-National Party representation in this place would fall to 32 seats, the Labor position would remain the same or grow, the Democrat position would be nine—YW4MACDONALDSenator Ian Macdonald—Down.8O6O'Brien, Sen KerrySenator O'BRIEN—Not down actually. According to that poll, it would be up.YW4MACDONALDSenator Ian Macdonald—This is on a double.8O6O'Brien, Sen KerrySenator O'BRIEN—No, it is on a half Senate, and I invite you to go and look on your computer. You can access this through the Internet, and I can give you the address later if you need to have a look at it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Patterson)—Senator O'Brien, address your comments through the chair.8O6O'Brien, Sen KerrySenator O'BRIEN—I am happy to do that if Senator Macdonald is going to be orderly. The Greens' position appears to fall to one, and One Nation would have five to six seats. There is some uncertainty, but clearly the position on that poll is that the representation of the Liberal-National Party in this place will fall to the point where it would face the ALP, the Democrats—if they remain opposed to the sale of Telstra—and the Greens having a majority. Therefore this legislation would not pass.YW4MACDONALDSenator Ian Macdonald—And to One Nation.8O6O'Brien, Sen KerrySenator O'BRIEN—Thank you for reminding me about the One Nation position, Senator Macdonald. Their numbers on that poll, even if they joined with the Liberal and National parties, would still not be a majority. The majority of votes would lie with the ALP, the Democrats and the Greens, which are opposed to this particular legislation. That is the information that is on the public record.If we look at the poll recently conducted in Queensland, there is a bit of a different position. Senator Macdonald would probably prefer the Morgan poll result, in terms of the Senate outcome, to the application of the Queensland poll result, because that result would probably see Senator O'Chee maintain his seat but the Liberal Party's representation would be reduced to one. So I am sure Senator Macdonald would prefer the outcome of the Morgan poll to the application of the Queensland poll to—YW4MACDONALDSenator Ian Macdonald—Reduced to two? Two of us are long-term senators. What a stupid thing to say.8O6O'Brien, Sen KerrySenator O'BRIEN—Thank you for correcting me, Senator Macdonald. I was referring to the numbers that come up in the half-Senate election that is coming. Of course the position could be considerably worse. The Liberal-National Party representation in a double dissolution, according to the Morgan poll, would have fallen from 37 down to 28, based on that poll. The Senate is being asked to consider legislation which is not urgent and which the government says it will not proclaim, if the bill is passed, until after the next election—which would see no possibility of this legislation being passed. The government is doing it with a number of senators who would not be returned at the next election were those poll outcomes to be reflected. That is a matter which will concern the Australian people, given that, on this issue, we do not have the detail as to exactly what the government is proposing to do with the proceeds of the sale.We have heard in the past that this measure is to pay off government debt. There have been all sorts of claims made about the position that this government faced when it came into office. Let us contrast that position with the position that the Labor government faced when it came into office in 1983. There have been all sorts of claims about so-called budget black holes. In 1983 the Hawke government was elected. In the budget preceding the election, the then Treasurer had indicated that a proposed deficit for the 1983 budget—this is the Prime Minister (Mr Howard), who was then Treasurer—would be in the vicinity of $6 billion. During the campaign, it became known that it was going to blow out to at least $8 billion. What did we find out after the election? We now know that there was not a truthful position presented to the Australian people by the then Prime Minister, Mr Fraser, and his Treasurer, Mr Howard.After Saturday, 5 March, the new Labor government found out that the projected budget deficit for the next year would be in the vicinity of $9.6 billion. This is 1983 dollars. What does that translate to? In today's dollar terms, something in excess of a budget black hole—Mr Howard's budget black hole—of $22 billion. The position that John Howard and Malcolm Fraser, former Prime Minister, left the country in in 1983 was far worse than the position that allegedly applied to the Liberal government when it came to office in 1996.We are considering this bill in the context that we really do not know the detail of the government's proposal as to what they will do with proceeds of sale if this bill is passed into law, given assent and acted upon. We really do not know. All that we can do is say, `How can we judge the statements of this government and its actions?' How can we transform the promises that this government makes into actions it might take, if it is in the extremely fortunate position of securing government after the next election. The polls at the moment are saying that that is an extremely unlikely eventuality.We are going to have to rely upon the statements of the Prime Minister. This is the Prime Minister, let me remind you, who, as Treasurer, was responsible for one of the greatest turnarounds in public policy that ever occurred. This is the Prime Minister who, according to newspapers of the day, in 1977, after the budget, described the position of the government as `lies, lies, lies'. What had occurred is this. Tax cuts were promised. People were actually told that they could ring up a certain number and be told what they would get out of those tax cuts. What happened after the election? The next budget took those tax cuts away. So not only do you have to look at the detail of the package, not only do you have to have the opportunity to examine the package in detail and understand exactly what it means, but also you have to be able to accept that this government will act on those promises and not act in the way that it has.One has only to look at the situation that we now face—the proposal that this government will pursue the introduction of a goods and services tax. That is a tax which the current Prime Minister said would never, ever be introduced. This Prime Minister has said that it was a dead issue and would never, ever be revisited. It is now obviously going to be a key plank in this government's re-election strategy. That is the form of this government in terms of its credibility on promises that it makes. This is a situation which we will carry into the next election. This is the contrast that we will present to the Australian people in relation to this government's promises and its actions. And there are many, many, other issues.We are starting to see bits and pieces of the detail of the proposed package trickle out. We heard an announcement this morning about untimed local calls. Frankly, I will wait to see the detail on that. There was an announcement the day before about mobile telephone services.YW4MACDONALDSenator Ian Macdonald—The analog that your government shut down.8O6O'Brien, Sen KerrySenator O'BRIEN—Le me tell Senator Macdonald what the Australian Financial Review says about that today. It is on the back page, so you might like to look at it. It says:Take the announcement by the Deputy Prime Minister Tim Fischer and Communications Minister Richard Alston, which was made with great fanfare in Canberra yesterday about an hour after Blount made his speech.. . . . . . . . .Admittedly Blount may not have wanted to steal the ministers' thunder, but there was some speculation yesterday that the boys in Canberra had jumped the gun on a Telstra board which is yet to sign off on the technology, even though Government minders rejected this talk.There is no doubt, however, that the minister got a little over- enthusiastic on the total spend involved.Alston told reporters that Telstra would spend $426 million upgrading its mobile phone network for the bush. He said $176 million was being spent on the 800 megahertz spectrum and $250 million on the network upgrade.But what goes next?YW4MACDONALDSenator Ian Macdonald—I don't know; you tell us.8O6O'Brien, Sen KerrySenator O'BRIEN—Senator Macdonald can look it up, too. It continues:What was not said was that Telstra had already spent the $176 million and that was for both the 800 megahertz and the 1800 megahertz spectrum.. . . . . . . . .What also was not made clear was that the spectrum for remote areas, those which the Government was targeting with its announcement, was only a small portion of the total spend.Analysts estimate it to be $5 million to $6 million of the total $176 million spent.That was because Telstra, with its community service obligations, was obliged to bid for the spectrum while its competitors did not.In other words, this spending in the bush was probably more of an accident to do with the commitments of successive governments to preserving community service obligations—obligations which will be in jeopardy if this legislation passes. But the important point is this: when you cut the gloss away from the announcement made yesterday and when we are given enough detail to analyse it, the gloss falls away.YW4MACDONALDSenator Ian Macdonald—Do you oppose it?8O6O'Brien, Sen KerrySenator O'BRIEN—Of course I am not going to oppose it. It was already committed in substance. It had nothing to do with this package. It had nothing to do with this government's announcements. This article makes it clear that it was a decision of the board which is to do with the community service obligations of Telstra. They are obligations which are maintained without the passage of this bill. It has nothing to do with this bill, but it is being dressed up by this government as a justification for this package.We have very little detail of the announcement today, which is being trumpeted as some great leap forward. Let us wait and see what the detail is. Let us see exactly what comes out of it for rural and regional Australia. There is a lot of scepticism out there. This government will not get away with a glib announcement that some magnificent thing is going to change. People will want to see the detail. They are going to think very carefully about promises that this government makes. They will analyse those commitments in the light of broken commitments that this government has made—whether you go back to the 1977 actions of the current Prime Minister, which were described on the front page of the Illawarra Mercury as `lies, lies, lies' or whether you go to the budget black hole in 1983 where the Hawke Labor government was left with an over $22 billion black hole in today's dollar terms or whether you go to the Prime Minister's commitment that there would never, ever be a GST and that he would not be pursuing it. You can see the contrast on that. The Australian public will look very carefully at this announcement. Certainly the bush will. We have seen the passing of the National Party and Liberal Party vote in some areas to One Nation. That is a reflection of people's lack of confidence in the Liberal Party and the National Party—the coalition. It is about their desire to replace that group with another group of people.Some of the Liberal Party vote has clearly come to Labor. We expect that there will be a very significant movement to Labor at the next election, particularly in my state of Tasmania. If you look at the most recent polling there, the Liberal Party polling is showing up at about 28 or 29 per cent. That may well be an overstatement of the vote, but I can assure you that in terms of the privatisation issue, the community has overwhelmingly rejected the proposal to privatise any part of the Hydro-Electric Corporation—the Hydro—in Tasmania, if you can believe the myriad opinion polls on the issue. Yet the Liberal government in Tasmania is continuing to pursue that option, irrespective of obvious opposition in the community. At the same time, there is obvious opposition to the privatising of Telstra. But what is this Liberal-National Party coalition doing? They are pursuing it with a bill which they are seeking to pass prior to gaining a mandate from the people on the issue. The reason that they are pursuing it is that they know after the next election they will not have a mandate for it; they will not have the numbers in this place.Senator Lee suggested that the Labor Party would act on this bill if it were elected in the next election. Let me say very clearly—YW4MACDONALDSenator Ian Macdonald—This will be good.8O6O'Brien, Sen KerrySenator O'BRIEN—I will give you a commitment, Senator Macdonald. We will not act to privatise Telstra on the basis of this bill.YW4MACDONALDSenator Ian Macdonald—You said that about the Commonwealth Bank.8O6O'Brien, Sen KerrySenator O'BRIEN—I certainly did not say anything of the sort. I will give you the commitment, and it will be honoured.YW4MACDONALDSenator Ian Macdonald—Do you speak for Mr Beazley?8O6O'Brien, Sen KerrySenator O'BRIEN—I speak for Mr Beazley and Labor Party policy. I am repeating exactly what Senator Faulkner said earlier today in this place. The Labor Party will not act upon it. I know that there is a desperation about this and that the government is seeking to say, `You will get this any way so that you may as well vote for us.' People are not going to believe that. We are committed to having Telstra retained in public hands. The infrastructure that Telstra provides to the Australian community is critical. The infrastructure should not be handed to private concerns. It is a key part of Australia's information technology infrastructure. To put it all in private hands would be a travesty. This bill ought to be rejected. (Time expired)Sitting suspended from 12.31 p.m. to 1.15 p.m.13:15:005480Allison, Sen LynSenator ALLISON1M6VICAD00—I think that, as we enter another debate about selling Telstra, we should reflect on the very recent history of the sell off of one-third of Telstra. I think that the carrots and promises of the government should be examined before we again jump in to sell our most important business. My colleague Senator Lees dealt this morning with the flawed economic arguments for selling such a profitable public asset as Telstra and the hash the government made of the float; the value of the Telstra shares is, I understand, around $10 billion higher than when they were sold.What I want to address today is the extraordinary sweetener that was used by the government to sell one-third of Telstra. Of course, I am referring to the Natural Heritage Trust Fund. This was the sell: the environment would be the winner and unprecedented amounts would be spent on repair, restoration and protection. My colleague Senator Lees rightly called the offer blackmail. She quoted a senior government adviser, who said in Scitech magazine:We are appalled at the lies and the deception involved in this issue. It is an exercise based on just one thing—finding a way to sell off Telstra. The linkage to the environment is just a sop, designed to cloud the Telstra sale issue and to try to blackmail other parties and the general community into accepting it.Anyone who looks at the figures can quickly see that the Natural Heritage Trust is a blatant and cynical political fraud. There is simply no way the interest from the $1 billion supposedly to be diverted from the Telstra sale could possibly pay to rectify the enormous environment problems confronting Australia.And those who closely follow political debate in Australia will soon see the chasm between the proposed Telstra funding and the government's own admissions about the extent of these problems. Several senior ministers including Senator Hill have publicly declared that these problems are already costing us a minimum of $1.5 billion a year and are rapidly getting worse.Leaving aside, just for a moment, all the short termism associated with the use of the revenue for a five-year program—after which, who knows what will happen to the environment?—we discovered that large amounts of this $1.25 billion have already replaced core environment funding. The minister said over and over again, `This is additional funding.' In the very first sentence of the glossy package which invites community groups to make application for funds, it says:The Commonwealth will invest an additional $1.25 billion from the Natural Heritage Trust over five years.It could not be plainer. Again, my colleague Senator Lees warned that the Natural Heritage Trust Fund would be a perfect vehicle for cost shifting. She pointed out the problems with unclear definitions and objectives. She moved amendments designed to eliminate cost shifting by the states, but of course these were not taken up.The Labor Party tried to make a big deal out of the discovery that 80 per cent of NHT money had gone to coalition electorates—and, indeed, it has. We would have liked to have seen much more interest in repairing and protecting natural environments in urban areas, but by and large community groups in the city have not been so financially affected by the degradation of the environment as have farmers and they have not come forward in such large numbers as landcare groups and the like. So, whilst that is an issue, I do not think it is anything compared with the shonky deal that the government has done in siphoning off funds to projects outside the environment; projects which should be funded by other means and by other governments.It is very difficult to get figures from the states and local government to determine the level of cost shifting, but there were some spectacular examples in the last round of grants which showed that Natural Heritage Trust funding is now paying for the most basic state and local government works. I will go through some examples: an irrigation drainage system for northern Victoria costing more than $1 million, with no matching dollars from the state government; management strategies for flood prone urban areas; levee banks for Cobram; the Myrtleford breakaway program to stop the Ovens River breaking into Happy Valley Creek; the Leadbeater possum recovery plan, $86,000 to save possums when the state government's approval of logging programs presents the greatest threat to those possums; a flood plain strategy for Myrtleford; and the Nyah Nyah West sewerage system. Also, just the other day Senator Parer admitted that $12 million of Natural Heritage Trust Fund money would be used to repair the Hume Dam.I am not saying that these are not worthwhile projects—I am prepared to accept that many of them are—but I think we need to ask whether the money should come from the Natural Heritage Trust Fund. We have to remember that that was promised for the environment. We need to ask whether these projects should have been funded out of public infrastructure moneys. The point I want to make is that millions of dollars have gone from the Natural Heritage Trust Fund, often without any matching dollars from the states, on work which should have been funded in any case.Most of the projects that I mentioned earlier are in Victoria, and Senators will be aware that the Victorian state government is running a huge surplus. Why should the Commonwealth help Mr Kennett make a hero of himself amongst the business world with his obscene surplus? In case Senator Hill had not noticed, the Victorian government continues to slice away at environment spending in Victoria to the point where there is almost no-one left in the Department of Natural Resources and Energy. I must say that it is just as well that we have a reasonably good landcare network in that state, because they are essentially the only ones left to do anything about fixing up the thousands of hectares in Victoria which have been destroyed by inappropriate farming practices.Millions of dollars have gone into work on private land. Again, I would not argue that none of this will have good environmental outcomes—I am sure it will—but you do have to wonder about a waste water reuse system for the Bright golf course. You have to ask yourself about the program for perennial pastures, the reclamation of eroding sand dunes for the purposes of cropping in the Mallee, the purchase of pneumatic pruning gear for the Dundas Tablelands and farm drainage at the Wandella catchment. I know that farmers are having a very hard time, but Natural Heritage Trust money was promised for the environment. I repeat the minister's words: `Australia's largest ever environmental rescue effort'. That was his claim.Leaving aside the questions of cost shifting or whether the money is actually being spent on projects which will have worthwhile, long-term benefits to the environment, I think we need to examine whether the money is additional because that was the key for the government's selling to Senator Harradine, Senator Colston, a lot of people in the conser vation movement and a lot of people out there in the bush the sale of one-third of our most important public asset.My office asked the Parliamentary Library to take a look at Commonwealth spending on the environment. I will start with 1995-96, Labor's last year of office. The Commonwealth budget for the environment—and this is the budget spending on environment strategies, the EPA, the Australian Heritage Commission, the Australian Nature Conservation Agency and the Great Barrier Reef Marine Park Authority—was $212 million. In 1996-97, the coalition's first year of government, the core spending dropped to $174 million and then that was topped up with $20 million from the Natural Heritage Trust Fund, making a total of $194 million. So that was a drop in overall funding of $18 million and a drop in core funding of $38 million.In the next year, Natural Heritage Trust funding stepped up to $96 million and core funding dropped back to $160 million. That was a $14 million slice off the previous year. This financial year, 1998-99, the core funding has dropped a further $18 million. So back in 1995-96, the spending was $212 million and this year it is just $143 million. Core spending, in other words, has come down nearly $70 million since the coalition came to government, and that is a drop of about one-third.The spending on the environment is not additional; it has been used to plug the hole created by cuts to existing spending. The question has to be asked: what happens at the end of 2001 when the money runs out? I simply do not know and I do not get any answers from the government to that question either. There is not much left of the family silver to sell and I do not see this government being prepared to raise taxes for what will be an ongoing and an increasingly serious need to address environment problems and to protect what we have left in this country.The figures that I quoted are preliminary because, as I said, it is quite a difficult job to find out where the money went and where it came from. These figures were prepared by the Parliamentary Library and I seek leave to table that advice.EU4O'CHEESenator O'Chee—We will not oppose the tabling of those figures, but I do note that the person who prepared the figures admits that they are simplistic.Leave granted.1M6Allison, Sen LynSenator ALLISON—I raise all of this because I want to point out to honourable senators that this government cannot be trusted to deliver on its promises. Whatever it says about spending on telephone services to the bush should be treated with the utmost caution. In fact, I suggest that it should not be believed.It is very interesting to hear the Prime Minister (Mr Howard) saying that part of the money from the sale of the rest of Telstra would be used to provide Australians with a package of socially desirable gifts which we will all feel good about. But the question I ask is: how do we know that this is not just another tall tale and that the package will simply fill a hole left by underspending in schools, hospitals, employment programs and the like? Whatever this package is, I think we can be sure it will be dressed up in all the tinsel in the world and sound like a great deal. Or will it? I think Australians are smart enough to know a core promise when they see one. If the Prime Minister is saying his bundle of goodies is a core promise to do some good out there—additional spending on who knows what at this stage—then I think they will be smart enough to see through the baubles.I was interested to hear the Deputy Prime Minister, Mr Fischer, last night talk about giving all Australians local telephone calls at the rates that we are accustomed to in the city. `Everyone will have local call rates,' he said. I would expect this to be small comfort to many people in isolated areas. The number of people who do not have local call rates is quite small and that is because their nearest neighbours are some distance away. These people will still need to call outside their immediate area and to regional centres and to cities much more than those people who live in large built-up areas.Nevertheless, giving these people local call rates is something the Democrats have been advocating for years. In fact, we have argued that there is absolutely no reason anymore why people in rural and isolated areas should have to pay long distance charges at all. It is completely unfair. We get cheap calls in the city, but they are subsidised by the bush. Here is yet another great by-product of competition. The cost goes down where the market is strongest. Advances in technology are reducing the cost of telecommunications to the city, particularly to businesses, but again people in the country will miss out.It costs Telstra no more to place a call from Mildura to Melbourne than from North Melbourne to South Melbourne. Distance is no longer a factor in cost. Gone are the days when we had telephone exchanges, which were mostly staffed by women who pushed plugs into holes. Technology has made distance completely irrelevant to the equation. The Democrats have been pointing this out for a long time—ever since I have been in the Senate, at least.So this offer is no big deal. People in the bush should not be swept away by the prospect of having dual analog and digital services either. We know that the coalition was complicit in getting rid of analog by the year 2000. Senator Macdonald earlier this morning shouted across the chamber, `Labor did that,' as if he had nothing to do it with. I want to point out today that the government has had lots of opportunities to reverse that decision. We have put up amendments time and time again, but the government prefers to sit back and blame Labor for this mistake and votes each of them down.Mr Fischer could use the revenue from the sale of Telstra to compensate Optus for reversing this decision of Labor which it supported to the hilt at the time, but we know that the Howard government will not do that. Whatever the bait is that comes with the sale of the rest of Telstra, I think we should be wary—Senator Harradine should be very wary. The government has not demonstrated that anyone in Australia will be better off. It is bad policy and Australians should not be hoodwinked by the promise of baubles and beads. Remember the Natural Heritage Trust. Remember the core promises. Remember that this government does not care to be a provider of public services.13:30:005484Sherry, Sen NickSenator SHERRYZW4TASALP00—I rise, as a Labor senator, to oppose the legislation that the Senate is considering, known as the Telstra (Transition to Full Private Ownership) Bill, and effectively the sell off by the Australian government of the remaining two-thirds of Telstra. I note today that there are considerably more people in the gallery than would normally be the case. I think that is, in part, because the House of Representatives is not sitting. I draw the attention of those people to the fact that the sell off of Telstra is a very important debate. I also draw the attention of those listening to this broadcast to the fact that it is an example of the contempt that members of the so-called coalition—the National Party and the Liberal Party—have to the sell off of Telstra, despite the vigorous grandstanding we have seen from a number of them over the last week in particular. They have suddenly discovered that it is an issue. They are making a very small contribution to this debate. In fact, there are only two government members in the chamber today. I remind people in the gallery and those who are listening to this broadcast that—EU4O'CHEESenator O'Chee—I raise a point of order, Mr Acting Deputy President. First of all, Senator Sherry cannot count and, secondly, he knows—as does everybody—that it is quite improper to make reflections upon the chamber. Senator Sherry should be reminded of that obligation under the standing orders and customs of this place.5K4FAULKNER Senator Faulkner—I rise on the point of order, Mr Acting Deputy President. That was a particularly pompous contribution from Senator O'Chee. With a box full of plums in his mouth he made a completely disorderly point of order. There is no point of order. It was just an attempt to interrupt what, I must say, I thought was an outstanding commencement to a very fine speech. Mr Acting Deputy President, I ask you not only to rule the point of order out of order but also to ensure that Senator O'Chee behaves in a more orderly way himself and does not take spurious points of order to try to interrupt the flow of debate.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—There is no point of order. The senator is entitled not to reflect on a decision but to criticise a decision of this chamber, as I understand it.ZW4Sherry, Sen NickSenator SHERRY—What we have just seen from Senator O'Chee—he is one of those National Party senators who have been engaging in some vigorous grandstanding and doorstops over the last week, threatening to oppose the sale of Telstra and trying to placate their rural support in the bush, which is rapidly dwindling—was a pathetic attempt by the National Party senator from Queensland to justify their sell-out of regional Australia, which is one of the implications of this piece of legislation.I wish to deal with two aspects of the legislation: firstly, the financial implications—matters relating to public debt and the budget—and, secondly, the regional impact of the sale with particular reference to my home state of Tasmania. If the bill is passed by the parliament and the Senate and proclaimed after the election, if the Liberal and National parties win that election, the government will lose the capacity to give direction to Telstra. There will be a significant restriction on our capacity as an Australian nation to exercise any significant degree of influence in the vital strategic direction of a national economy—namely, the telecommunications sector—and our ability to ensure that that strategic sector includes all of Australia, not just the major urban centres.Other speakers in this debate have outlined the importance of Telstra to the nation's economy. A great deal has been made about the effect of the sale of Telstra on the budget bottom line. In my view, it has not been a very accurate assessment of the issues and its implications. The basic argument runs something like this: there will be a benefit to the budget position of the Commonwealth government regarding debt and the bottom line of the budget. Financial commentators are saying that the Commonwealth government might make a further $40 billion on the sale. That in turn will enable it to make a public debt saving, reducing government debt, at a current cost of that debt to the Common wealth of about six per cent. That is a figure of about $2.4 billion per annum.This should also be judged against a background of Commonwealth government debt being at a reasonable level. One of the furphies in this debate is that Australian government debt levels are nowhere near unsustainable levels, unlike some other states in Australia—South Australia, Victoria and Tasmania. The simplest and totally incorrect assessment is that there is a $2.4 billion saving to the budget. That is obviously wrong because, whilst we will have a saving to the budget, at the same time we lose the dividend, or income stream, from the profits of our current two-thirds ownership of Telstra. In 1997-98, that was $1.2 billion.So we are not dealing with a static gain of $1.2 billion to the budget. We have to factor in the increasing dividend stream of Telstra over the next few years. If we look at the past increase in dividends from Telstra, we find there has been a steady increase in the dividend—that is, the money paid to the budget from Telstra profits—at the rate of 15 per cent per year. At some point in the future, there will be what is called a crossover, a point when the budget bottom line gets worse because of the loss of an increasing dividend. That will be greater than the gain from the public debt that is reduced as a result of a two-thirds sale of Telstra.This issue, unfortunately, has not been publicly reported widely or even debated in any significant way. I argue that it is reasonable to expect that Telstra's dividends will continue to increase at the rate that has occurred since corporatisation. In fact, independent analysts are predicting a more rapid increase in profit for Telstra, but let's be conservative and use that figure of 15 per cent that I referred to earlier. The crossover point when the government, that is, the people of Australia, begin to lose money from the revenue to budget—and it is not some far distant point—will occur in the year 2002 or 2003.We are looking at a point in time four or five years into the future from now when, as a result of the remaining two-thirds sale of Telstra, the Commonwealth government becomes a net loser. Sure, the people who have the money to buy shares in Telstra may make a net gain, depending on the purchase price and the sale price, but the Commonwealth government becomes a net loser in four or five years' time.When one-third of Telstra was sold enthusiastic privatisers argued—and they continue to argue this on the basis of selling the remaining two-thirds—that it would inject a new private sector approach into Telstra and make it more profitable. It will inject a new element of rigour. Shareholders demand a better return, so it should improve profits and return on investment.I have never believed that to be true, but if it is, the crossover point—in other words, the increased profitability that should be flowing back to the public purse because of the increase in profit that should come back to the Commonwealth government—is reached at an even earlier period, that is, in three or four years' time. Even if we assume a more modest 10 per cent improvement in profit, that makes a difference to the crossover point. It moves it out to the year 2004 or 2005, that is, six or seven years from now when the Commonwealth would start making a loss.I would also point out—and I have not gone into this in any detail—that I have not included the loss to government revenue of franking credits on private share ownership. Because, as the shares are sold to the private sector, there is a further loss to government revenue as a consequence of the issues relating to franking credits. It is estimated that will be a further loss to government revenue of $400 million to $500 million a year.Senator Cooney interjecting—ZW4Sherry, Sen NickSenator SHERRY—Four to five hundred million dollars a year, Senator Cooney. You can paint a range of different scenarios and different assumptions all based on independent market analysis of the likely profits, and you still get a loss to the bottom line of the budget inside 10 years. In other words, on conservative projections, the Commonwealth will have lost money in 10 years.If this government's intention is to build into long-term expenditure greater expenditure based on the sale of Telstra and/or tax cuts on the basis of an assumption that there is an improved bottom line to the budget, it will not be there in four, five, six or 10 years' time. What do you do after that period of time if you have no other assets to sell? You either have to cut your expenditure or increase your tax or sell some other form of asset. I suspect that the only one remaining will be Australia Post.I referred earlier to the ending of the government's ability to direct Telstra and that is obviously inevitable once it passes into private hands. This ability to direct Telstra has been vitally important towards ensuring a relatively equitable distribution of technology throughout all of Australia. This is a very important issue for rural and regional Australia.There are rapid developments in technology. If you are a private shareholder, you will rightly demand the highest return on your investment and you will demand that the investment is made where you will get that highest return from. That will be from the major urban centres. It is probably going to be great for everyone who lives in Melbourne, Sydney, Brisbane or Adelaide. But, if you do not live in those major urban centres, the demands of the private shareholders will be, `Don't invest in those areas outside the core, the major urban areas. Don't invest, because it is too costly. We don't get a decent return.'Inevitably, the core—the major urban centres—will do much better than the non-core or rural and regional areas of Australia in the next five, 10 or 15 years as Telstra invests in new technology. Those same private shareholders will rightly demand the highest possible return. That is not going to come from rural and regional Australia where the cost structures relating to the installation of new technology are much higher.People in rural and regional Australia, including my home state of Tasmania, understand the implications of this sale of the remaining two-thirds Telstra. There is certainly a growing centralisation of service and movement of jobs to the core, or major urban centres, and a retreat from the non-core centres.I do not like the terms `core' and `non-core'. That was the glib phrase used by the Prime Minister, Mr Howard, when he said he was going to implement certain promises and break others, that is, core promises and non-core promises. Of course, we all remember his commitment that he would not be privatising the rest of Telstra before the next election. Yet here we are today considering legislation to sell off two-thirds of Telstra. Another broken promise from Mr Howard.We should remind the Senate of the never, ever promise—never, ever a GST and, of course, a further assurance that it will never, ever go up. That is the record of this Prime Minister on Telstra and other related important issues.We have seen attempts made over the last week by National Party senators. There have been public demands all of a sudden from Senator O'Chee, who is in the chamber, Senator McGauran, Senator Sandy Macdonald, Senator Boswell, who is the leader of the National Party without portfolio in the Senate, and Senator Brownhill—although I do not think I have seen too much from him. We have had doorstops over the last week from senators sounding stern warnings to the Liberal Party that they are not going to cop the sale of Telstra unless rural and regional Australia is looked after.Of course, they are attempting to justify their position. The National Party has rolled over on this yet again. The doormat of the coalition has been trodden on yet again. The National Party has precious little influence in this government. They have been engaged in a form of grandstanding to justify at least partially their position to their rural and regional constituents.I think it was rather aptly described as `noise and static' from the National Party. They are not my words; that is the description by the Prime Minister, Mr Howard, of the National Party senators—`noise and static at doorstops as they walked in and out of the Senate'. Unfortunately, in this debate `noise and static' is a fairly apt description. That is about the level of technology we are going to have in rural and regional Australia—noise and static over the next 10 to 20 years.In conclusion, I do want to make some comments about my colleague Senator Harradine from Tasmania. I will pay him at least a partial compliment. I do know him as a fairly competent negotiator in the trade union context. He was always able to drive what I considered to be a fairly hard bargain. But I, as a Tasmanian colleague of Senator Harradine, have to say to him—I do not know whether he is listening to this debate in his room—that we do not know yet the details of the deal that we can only assume he has done with the government to sell the remaining two-thirds of Telstra. On the last occasion, when one-third of Telstra was privatised, it did not stop job losses in Tasmania, it did not guarantee the fundamental upgrading of technology in our telecommunications system that is needed—and not just needed in the next year or two.You can buy a little bit of time. This government has done the same thing to the National Party. You can buy a little bit of time with $100 million. It sounds like a lot of money, but, when you think about the tens of billions of dollars that are necessary for telecommunications investment, it is not a lot of money in that context. You can buy a little bit of time—a year here, a year there—and that is really all Senator Harradine is doing: buying a little bit of time for Tasmania. I certainly know that, from a regional perspective, from a Tasmanian perspective, in 10 or 20 years—and unfortunately not many politicians do look that far ahead—we will look at Tasmania and other rural and regional areas in this country, we will look back on this point in time on this sale of the remaining two-thirds of Telstra, and I am sure that the relative economic and financial position relating to the telecommunications industry will have gone backwards. Tasmania will have gone backwards.It is no good just looking at the next six months, the next year or the next two years. We have to look at and make a judgment about where rural and regional Australia will be over the next decade or two. The reality will be that the core areas, the major urban centres, may do well out of the privatisation of Telstra, but the non-core areas—like Tasmania, which Senator Harradine says he represents—will have gone backwards.Senator Harradine should remember this: it really is down to his vote. That is the reality. If he is going to vote for this government package in the next day or two he should know full well that, as a direct result, he is going to deliver to Tasmania—and to other areas of rural and regional Australia—a relative movement backwards in our financial, economic and employment circumstances for the next 10 to 20 years. I certainly hope that he thinks long and hard about that if he has, in fact, done a deal—as we believe he has—with this government in order to privatise the remaining two-thirds of Telstra.13:49:005487Cooney, Sen BarneySenator COONEYSF4VICALP00—I refer to the second reading speech on the Telstra (Transition to Full Private Ownership) Bill 1998 . As you know, Mr Acting Deputy President Hogg, the second reading speech is the speech made by the minister when the legislation is brought into the chamber. It is a speech that puts the case for the government and explains what the government is on about. It is an interesting second reading speech by the Minister for Social Security (Senator Newman). In the last paragraph of the first page, it says:We delivered on that promise—that is, the promise to float a third of Telstra—resulting in an outstandingly successful public share offer that has been universally applauded in the community, and which was overwhelmingly supported by the ordinary investors—the mums and dads of Australia.It then goes on to say that about 500,000 people invested in it. It is hardly fair to say that, because a large number of people bought shares, this was universally applauded by the community and the mums and dads of Australia who gathered parts of the shareholdings of this company. I want to concentrate on the next paragraph of the second reading speech, which begins on page 2, which says:We are again delivering on our promises. We promised that there would be no further sell-down of the Commonwealth interest without the Govern ment first getting a mandate from the people at a Federal Election.It goes on:Here is the proof of our words. We have faith in the good judgement of the Australian people. We are spelling out the legislative basis on which a further sale will take place so they can make fully-informed choices at the polls. This Bill clearly provides that, when enacted, the act can only be proclaimed to come into effect on a date after the next Federal Election.There are two uses of the words `a'—a very short word, but in this context a very significant word. `A' is the shortest word in the English language. The government is saying that they will not sell the rest of Telstra until after a federal election, not necessarily the next federal election.Following on from that is this: if this bill is passed and becomes an act, before coming into operation it must be proclaimed at some time in the future. It can be proclaimed next year, the year after, five years from now or 10 years from now. What that means is this: suppose the people of Australia say, `Well, look we don't want the sale of Telstra; we're going to vote a Labor government in'—and a very wise choice that would be, I think you would have to agree, Mr Acting Deputy President—`and we will give that Labor government a majority in the House of Representatives,' which means it then becomes the government, `but, in keeping with what has now become the usual situation in the Senate, we will not give it the majority in the Senate.' That means that, although a Labor government has been voted in, it cannot undo this legislation. That legislation remains there to be proclaimed when the next conservative government comes in, which might be 10 years from now.Mr Acting Deputy President, what is fair about that? This bill has been put forward on the basis that people will have a chance at the next election to say whether or not they want it. But the reality is that it will remain there unproclaimed until the next conservative government comes to office. If at the next election people want to reject this bill but at the same time also want to put a different arrangement of party strengths in the Senate from the arrangement in force in the House of Representatives, they can do nothing about it. Wouldn't it be better and fairer for people to be able to vote on this at the next election and then see what happens in the next parliament, rather than committing to a future parliament the difficulty of having to undo the legislation if it wants to carry out a mandate the people may have given it not to go on with this legislation?Mr Acting Deputy President, why has the government brought this bill forward now? Why doesn't it promise in the second reading speech that, if defeated in the House of Representatives at the next election, it will agree to undo this legislation? Why doesn't the government do that, instead of saying in the second reading speech:We promised that there would be no further sell-down of the Commonwealth interest without the Government first getting a mandate from the people at a Federal Election.I repeat: a federal election—not at the next federal election, but at `a federal election'. So I think there is much to be worried about in the attitude taken by the government in this matter.I want to comment a little on this: it has been said that the Labor government sold the Commonwealth Bank and the airline—and that is true. It has been said also, `Well, that's the same as this government selling Telstra.' But there is a big difference between selling an airline and a bank and selling Telstra. That point is brought out well in section 69 of the constitution, which states:On a date or dates to be proclaimed by the Governor-General after the establishment of the Commonwealth the following departments of the public service in each State shall become transferred to the Commonwealth:-Posts, telegraphs, and telephones:Naval and military defence:Lighthouses, lightships, beacons, and buoys:Quarantine.Our constitution specifies those four categories of matters as having been assigned to the Commonwealth. Looking at them, they are all matters essential to the good running of the community.Going from the bottom up, we have quarantine. Of course quarantine is something that should not be privatised. Quarantine guards what comes into the country, making sure that our health and safety are preserved and making sure that our country's stock and plants are not adversely affected. That sort of public service needs to be carried out by the Commonwealth. Lighthouses, lightships, beacons and buoys: again, a concept of a public nature. Naval and military defences: would we privatise naval or military defences? Of course we would not.Then the first on this list—going upwards of course, but saying them last: posts, telegraphs and telephones. The founding fathers chose to put posts, telegraphs and telephones—that is, the subject matter being dealt with by the Telstra act—together with naval and military defence; lighthouse, lightships, beacons and buoys; and quarantine. Along with customs and excise, which are dealt with in a different part of the constitution, those were very early matters that were taken up by the founding fathers.When the Australia bill, the forerunner to the constitution, was discussed in Sydney on 6 April 1891, which was a very long time ago, clause 10, right at the start, read as follows:The control of the following departments of the public service shall be at once assigned to and assumed and taken over by the executive government of the commonwealth, and the commonwealth shall assume the obligations of all or any state or states with respect to such matters, that is to say—Customs and excise,Posts and telegraphs,Military and naval defence,Ocean beacons and buoys, and ocean lighthouses and lightships,Quarantine.The great figure at that meeting was Sir Samuel Griffith, a great Queenslander, as you would know—a person who took on board the fact that posts and telegraphs, the forerunner of the powers that Telstra carries, should be given over to the Commonwealth and looked after by them. Apparently, that great tradition from that great Queenslander is to be ignored, thrown aside, and Telstra is to be privatised.N26ABETZSenator Abetz—Samuel Griffith preached nothing about privatisation and you know it!SF4Cooney, Sen BarneySenator COONEY—Senator Abetz says that Sir Samuel Griffith said nothing about privatisation. Of course he said nothing about privatisation—that is the whole point. Senator Abetz bears out exactly what I am saying. Of course Sir Samuel Griffith said nothing about privatisation. It did not occur to him to privatise posts and telegraphs. It occurred to him that that should be taken on by the Commonwealth, by this parliament, by this very executive. That is what he was saying. Senator Abetz is absolutely correct, it bears out the point that Sir Samuel Griffith said nothing about privatisation.The preamble to this bill is going to be a nightmare for a court which may have to look at it to interpret certain sections of the act. The preamble says, among other things:The high-growth and fast-moving telecommunications sector requires competing carriers to have:(a) full commercial flexibility, subject to necessary regulatory safeguards . . . How is a judge going to interpret that? What does it mean for a body to have `full commercial flexibility' and at the same time be `subject to necessary regulatory safeguards'? And the regulatory safeguards are going to be enormous. Can I just demonstrate: the Telecommunications Act 1997 was made necessary by the one-third privatisation of Telstra. This one-third privatisation required a lot more legislation than before. The legislation that attended to Telstra before that was the Telecommunications Act 1991—a much smaller volume than the Telecommunications Act 1997. The privatisation of Telstra will require a lot more legislation to make it work than would be the situation were it to be kept in public hands. I do not mind that, given my background, but it is going to be a very fertile field for lawyers. People are going to have to interpret, as I say, what is meant by:. . . full commercial flexibility, subject to necessary regulatory safeguards.The next point in the preamble says:(b) an ongoing ability to raise the capital needed to meet changing commercial and customer requirements . . . What does that mean? The preamble continues: without inhibitions imposed by government ownership.The next statement is:In today's highly competitive, global communications environment, it does not make commercial sense, nor is it good public policy, for telecommunications companies to be owned by government.What is a court to make of that statement? It is simply not a statement of law but a statement of philosophy. Another thing about the second reading speech is that it reads like Norman Lindsay's The Magic Pudding : it promises all sorts of generous portions to all sorts of people.FX5MURPHYSenator Murphy—Whose speech was that?SF4Cooney, Sen BarneySenator COONEY—This is the second reading speech, which I think Norman Lindsay's The Magic Pudding : it promises shareholders abundant riches and promises the users of the services to be provided by Telstra `the best services in the world'. It says government will be able to get out of this and leave it to market forces to make things go well, so market force philosophers are satisfied by that. But then it says it is going to have abundant regulation, so that satisfies the lawyers and those who say that business ought to be regulated.It is interesting that fines of up to $10 million can be imposed upon people who provide telecommunications services. But given the fact, as illustrated by the Patrick company, for example, that you can strip assets, what is to stop a service provider from arranging its affairs, and arranging the companies through which it is going to deliver its services, in such a way that it can fail to carry out the obligations provided by the act and not have the money to pay any fine that is imposed? The second reading speech said:What we—that is, the government—are saying is that the business of government is not to be in business. The business of government is to set the framework within which business operates.It continues:Whatever the rhetoric at the time, the incorporation of what is now Telstra under Corporations Law was an explicit recognition that Telstra was and is first and foremost a business. At that part of the second reading speech the government says, `This is just a business we are dealing with.' Then, when we go to a later part of the speech, we see that it is not simply a business; it is very much a strategic part of Australia's business future. It says:Telstra has a vital continuing strategic role in the national economy.On pages 4 and 5 of the speech it is just a business; on page 14 it becomes a body that has a vital continuing strategic role in the national economy, and one that must remain in Australian hands and be controlled by Australians. The government has to make up its mind: is it just a business, or is it the strategic body described later in the speech? The government just has not got this matter thought out, and it is a bad time to be passing legislation such as this.14:09:005490Murphy, Sen ShayneSenator MURPHYFX5TASALP00—I have to say that this debate on the Telstra (Transition to Full Private Ownership) Bill 1998 is as much about honesty and integrity as it is about the full sale of Telstra.GX5TROETHSenator Troeth—Sit down.FX5Murphy, Sen ShayneSenator MURPHY—The senator opposite who interjects says, `Sit down.' The reason they want me to sit down is that they know their honesty and integrity on this issue is shot.In commencing, I want to read, particularly for the people in the gallery, who are very interested in the honesty and integrity the Prime Minister (Mr Howard) has, a part of the speech he made on 26 March 1996 to the Business Council of Australia. He said:I am determined that the commitments we made to the Australian people before 2 March are honoured. I do not think any of us can greet with any equanimity the steady decline in respect for our political and parliamentary institutions which has occurred over the past few years.He went on:One of the reasons why the respect for our institutions has declined is the way in which promises are too freely made and even more freely repudiated after governments are elected to power.He went on further and said this:And, even more important than other benchmarks against which you are entitled to judge us, in three years time you will be entitled to judge us accord ing to the benchmark of whether or not we have honoured commitments made to the people and to the Australian nation before 2 March.What were those commitments? In respect of the further or full privatisation of Telstra, they were very clearly that it would not occur. You can find any number of references to support that. I suppose one of the very good ones is the following, especially as it is in response to a question from a backbencher. This is the Prime Minister, in response to Mr Andren, on 9 December 1996. The Prime Minister was asked:Can the Prime Minister clarify the government's position in relation to any further sell-off of Telstra, especially in light of the fact that the people of Australia voted at the last election on the understanding that only part of Telstra would be sold if the coalition formed government?The Prime Minister replied:There has been no change to that policy. There will be no change to that policy. No attempt will be made by us in the currency of this parliament to sell anything more of Telstra. If there were in the future—and this is repeating exactly what I said in the past—to be any desire on our part to sell another tranche then we would seek a specific mandate from the Australian people. Nothing could be more transparent, nothing could be more consistent and nothing could be more honest.I guess a lot of people in this place would have to be thinking to themselves, `Well, what did the Prime Minister really mean?' The Prime Minister was not the only one to make those sorts of commitments. The Leader of the Government in this place, Senator Hill, said on 9 December 1996:The government has said it will not be attempting to privatise more than one-third of Telstra. That was the policy we took to the last election. It is clear and unambiguous. It remains the case and has just been repeated clearly and unambiguously by the Prime Minister. So, yes, Senator, I can tell you that is the case.What was the case he was confirming? He was asked by Senator Faulkner:Can you guarantee, here and now, that the coalition government will not attempt to privatise more than one-third of Telstra?As I said, Senator Hill answered:I can tell you that is the case.If Senator Hill makes a contribution to this debate, which he probably won't, I hope he can actually clarify what he meant at that time. I go to the Minister for Finance and Administration, Mr Fahey, in response to a question from his own backbench, from a member of this coalition government. He was asked a question in relation to any further sale of Telstra, and he said this:. . . but I can assure all members of the House that the government will consult the Australian people before it considers any further selldown of Telstra.Those are pretty clear, pretty unambiguous and honest commitments at the time. What has changed? The good old minister for communications and the arts—UI4RAYSenator Robert Ray—The doormat.FX5Murphy, Sen ShayneSenator MURPHY—Yes, some call him doormat.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Patterson)—Order! I ask you to withdraw that.FX5Murphy, Sen ShayneSenator MURPHY—I withdraw. He actually read out Liberal Party or coalition government policy. He said:To give Australians a direct stake in one of Australia's major companies, the coalition will offer by way of a share float, if necessary in two tranches depending on market conditions, one third of the Commonwealth's equity in Telstra. There will be no sale beyond the one third . . . without an explicit mandate.That is fairly clear and forthright stuff. He went on further to say:. . . our position is crystal clear. I am telling you the truth now—The truth!I was telling the truth then. Our policy is that we will sell one-third and no more, unless the matter is put before the public at election.What has happened to the truth? What has happened to honesty? What has happened to integrity?That is something I know is very near and dear to the heart of one senator who is not in the chamber at the moment: Senator Harradine. I know he has been praised as a man of honesty and integrity and I guess, on the face of it, I would have to accept that. But I want to go to some words that he said on the full sale of Telstra. I hope, Senator Harradine, you listen to these words because the question will come to you, and you will have to address yourself to the Australian public on a commitment that you made. Senator Harradine, on 9 December 1996, said in relation to the first one-third sale:The simple position is that the government in fact did take the issue to the electorate. The electorate made its decision to support the government. I do not know how many would have voted on the basis of a sale of a third of Telstra for the redemption of debt and for the establishment of a natural heritage trust. But, nevertheless, there was a mandate. My view about mandates of popularly elected governments is that the Senate should not simply be obstructionist about them.He said further:. . . but the Senate should apply certain principles which if those principles and values conflict with the government's legislation in the discharge of its mandate then those principles should prevail. On this particular matter I would have voted very strenuously against the total sale of Telstra.I note that in another debate, with regard to the Wik legislation, Senator Harradine had a lot to say about double dissolutions. Back in December 1996 he said:One had to make a judgment as to what the government would have done had we blocked the third sale of Telstra. My judgment was that the government would have used it as a double dissolution trigger.Very interesting.And if that occurred, if they pulled that trigger, then in the current climate you would have a total sale of Telstra. The only other way that the government can get through a total sale of Telstra during this Senate is to gain the numbers in the Senate.I ask Senator Harradine: has he given the government the numbers? If he has not, why are we debating this piece of legislation? He went on to say:As I read the numbers they are not there for the total sale of Telstra. I would certainly vote against a total sale of Telstra.This was in December 1996, and I hope Senator Harradine remembers the statement that he made to the public of Australia at that time. With regard to this proposal for the total sale of Telstra, another interesting aspect of this goes to the question of foreign ownership. Senator Alston said in May 1996:The usual furphy about foreign ownership has been put to rest. There will be an absolute limit of less than 12 per cent of the company in foreign hands . . . I don't know. I think about 19 per cent of the one-third is in foreign hands already, so goodness knows what would happen if we got a full sale.UI4RAYSenator Robert Ray—There would be a lot more if Parer had not got so many.FX5Murphy, Sen ShayneSenator MURPHY—That is true, Senator Ray. If Senator Parer's family had not bought up so many shares, it would probably be about 20 per cent.I want to go to the process that was involved with the one-third sale of Telstra. Senator Harradine supported the government for the sale, as did Senator Colston, on the basis that there would be significant benefits to my state of Tasmania. We were supposed to get some $58 million that would deliver a whole host of things.N26ABETZSenator Abetz—And we have.FX5Murphy, Sen ShayneSenator MURPHY—I notice Senator Abetz, sitting over there interjecting, seems to think that this has been so marvellous. Let me say this to you, Senator Abetz: it has been a long way short of marvellous; in fact it has been a total flop. In fact it has probably been a disaster, and Senator Harradine knows that, because I know Senator Harradine has been harrying Senator Alston to try to get some things done. I want to have a look at what was promised and quote some words that Senator Alston said about Tasmania. He said:There is a world of difference between Tasmania and Victoria or New South Wales, where you are close to capital cities which have world-class telecommunications facilities, where there are enormous incentives by virtue of population size for the carriers to keep on providing world best services. Those states and their citizens are immeasurably better off than those in a place like Tasmania where you are lucky to even be able to make a phone call if you live in some parts of the west coast; even if you are in the capital city of that state you are very much a second-class telecommunications citizen.That was December 1996. What has changed since then? Let me tell you: not much at all. For $58 million—it was actually supposed to give us something additional—we got zip. We got nothing more than what Telstra had planned all the time. I think that for once in his life Brian Harradine had the pea and thimble trick pulled completely over him.Senator Sherry was saying that Brian Harradine has been a good negotiator in respect of the trade union movement. He probably has been; in fact, I would have to agree with that comment. Indeed, I would say that he has used that to some degree to benefit himself, because the only thing that was delivered out of the one-third privatisation sale for Telstra was a promotion for Brian Harradine. It has not been forthcoming in terms of benefits to the state.If we look at what has happened with employment, we were supposed to get more employment in Tasmania. In terms of promised upgrades, some have been brought forward but no additional money has been spent. We have had a bit of a bring forward in the provision of some services, but what has happened with a whole host of other services? We do not even have a business sales office in Tasmania any more. If you are in small business in Tasmania and you want to talk to Telstra about services, you have to ring Melbourne. Likewise, the general commercial consumer sales centre that currently employs around 120 people in Hobart is going to be transferred to Melbourne. The network and design construction unit is going to be sold. It employs eight people who are supposed to be paid for out of the Harradine money. What is the term of their contract? Six months. So what is the long-term benefit for Tasmania in that? Of course we will lose the 50 jobs, in effect, when it is sold because a mainland contract firm will win that business and it will be serviced from the mainland.The administrative work that was based in Tasmania for Telstra has gone. It has been transferred to Waverley, Melbourne. As I said, commercial sales have gone to Footscray. We got $58 million, but we paid for everything to be transferred to Melbourne.N26ABETZSenator Abetz—You are wrong.FX5Murphy, Sen ShayneSenator MURPHY—That is what we have done with the money, Senator Abetz, and you ought to do something about it as part of the government. With the relocation of the service activation services, another 10 jobs are going from Tasmania to Ballarat. You cannot blame me for drawing the conclusion that the $58 million could not have been used for anything else other than transport costs for all of the services we did have in Tasmania across to Victoria. Senator Ray might not be unhappy about that, but I am. I do not know what Brian Harradine proposes to do with regard to the full sale deal that he might be—N26ABETZSenator Abetz—Senator, to you.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Patterson)—Senator Murphy, you should refer correctly to Senator Harradine.FX5Murphy, Sen ShayneSenator MURPHY—On the question of the full sale, Senator Harradine said previously that he would have voted against it. Why are we debating the full sale? He must be seeking a deal. If he is seeking a deal, what is it? I hope it is better than the first one, if that is what he is going to do. But, if he really wants to act in the interests of Tasmania, he should vote against it.UI4RAYSenator Robert Ray—For all of us? That will be the day.FX5Murphy, Sen ShayneSenator MURPHY—You are right, Senator Ray, for all Australians he should vote against any further sale.5K4FAULKNER Senator Faulkner—But he won't. He has done a deal.FX5Murphy, Sen ShayneSenator MURPHY—If he has done a deal, then I hope that he has the honesty and integrity to come in here and tell us what it is so that we can make a judgment about that. Of course, the old Nationals think they have done a deal for the bush—5K4FAULKNER Senator Faulkner—They have done a deal, but they got well and truly short-changed.FX5Murphy, Sen ShayneSenator MURPHY—Yes, they have been short-changed all right. They think they have done a deal. I watched Senator Boswell yesterday. He had his head in his hands on the bench. He must have been watching the pea and thimble, with Richard `Tricky Dicky' Alston shifting the pea and thimble around and saying—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Please refer to the senator in the appropriate way.FX5Murphy, Sen ShayneSenator MURPHY—Senator Alston was shifting the pea and thimble around, and Senator Boswell, trying to watch it, had no hope. They did not even invite Tim Fischer along to the game; they knew he would have no hope. They gave him a mobile phone, which was a pretend one, at some announcement that he and the minister attended.5K4FAULKNER Senator Faulkner—Just a pretend one?FX5Murphy, Sen ShayneSenator MURPHY—That is right, a pretend phone. Much of this is covered in an article in the Financial Review today in Chanticleer. It talks about this deal that supposedly has been done and makes some very pertinent points about the announcement by the Deputy Prime Minister, Mr Fischer, and the Minister for Communications, the Information Economy and the Arts, Senator Alston. The article says:There is no doubt, however, that the minister has got a little over-enthusiastic on the total spend involved.Alston told reporters that Telstra would spend $426 million upgrading its mobile phone network for the bush. He said $176 million was being spent on the 800 megahertz spectrum and $250 million on the network upgrade. What was not said was that Telstra had already spent the $176 million and that was for both the 800 megahertz and the 1800 megahertz spectrum. What was also not made clear was that the spectrum for remote areas, those which the government was targeting with its announcement, was only a small portion of the total spend. Analysts estimate it to be $5 million to $6 million of the total $176 million.I say to the Nationals up in the corner there: by gee, you didn't get too much out of that. The poor old bush did not get serviced too well—it did not even get 10 per cent. The article goes on further:The $250 million spend on the bush analog network is also apparently a bit of a furphy. Telstra will spend around that amount on its total AMPS mobile network across Australia and, in fact, it will upgrade the metropolitan centres first so that the rural and remote customers can enjoy seamless transmission when they visit the cities after 2000 when the AMPS network is shut down.Goodness, gracious me, that sounds like a real good deal for the bush.RD4BROWNHILLSenator Brownhill—It is your legislation that is causing the problem in the first place.FX5Murphy, Sen ShayneSenator MURPHY—No wonder they did not invite old Tim Fizzer in the other place to the pea and thimble game; they knew he could not play. Let us go back to this pretend phone that Mr Fischer was given. I will quote again from the article:Alston yesterday told reporters that over time, he expected the CDMA handsets to come down to $350.It appears so. It continues:If you believe Telstra, the CDMA handsets will be comparably priced to digital handsets, which are now getting down to an average of $99 before connection charges.I think Mr Fischer got a $5 handset. You have to make a judgment about the deal he has done for the bush thus far. With this whole process, the weights of honesty and integrity are on Senator Harradine. He is the one that made the commitments back in 1996, and he has to stand up and be seen—(Time expired)14:29:005494Ray, Sen RobertSenator ROBERT RAYUI4VICALP00—It should always be remembered that this Telstra (Transition to Full Private Ownership) Bill 1998 is a consequence of the breaking of a categoric promise by the Prime Minister (Mr Howard). John Howard said that there would be no move to fully privatise Telstra in the first term of his government. In introducing this bill, he has broken his word, and he has dishonoured himself yet again. It is not possible to debate this legislation without considering the processes by which the government, and others conspiring with them, forced this upon the Senate—several of whom, I might add, could not have legally driven home last night.Last night, the government gagged all the procedural motions moved in association with this bill. It is true that the Labor Party often moved procedural motions when in government, but we always allowed them to be debated. In 13 years of government, Labor never moved the gag concurrently with the procedural motion. Contrast this with the current government—a government that does not even have the courage to allow its procedural motions to be debated. The opposition would have appreciated the opportunity to have made some comments on the appropriate way in which to manage the legislative agenda in the Senate. Our comments would not have reflected the hypocritical rantings that the current government made when it was in opposition. We would not have argued, as Senator Hill did on countless occasions, that corralling debate was always intrinsically wrong. We would have examined Senator Dr Herron's extensive comments from the opposition benches on the health effects of late sittings. He always prefaced those remarks by saying that he was speaking as a doctor, not as a politician. But last night, as on other occasions, he just sat mute—other than uttering last night the most disgraceful comment I have ever heard in this Senate and we will never forget that that comment was made across the chamber.We also would have brought Senator Ian Campbell to account for his previous comments when in opposition about the effect of late night sittings on the staff of this building. But, of course, we were never given the opportunity. At least we got one first last night. We saw Senator Harradine voting for the gag. In fact, we got the trifecta. He voted for the gag three times. One senator, representing 30,000 voters, was effectively able to gag 28 senators representing four million voters so that we could have no say at all.Finally, we had an `Independent' from Queensland voting to make us all sit long hours in the full knowledge that he was to return home this morning for what I am led to believe are legitimate reasons. If, of course, he was returning home to Brisbane for health reasons and is returning here later in the day, I would know he was serious about it because he would not have been travelling on parliamentary business and he would have paid the return business airfare himself.In the 30 minutes allocated for debate on the suspension of standing orders, the Labor Party was given one five-minute slot to express its views courtesy of an agreement between management and presiding bias. The fate of this legislation in all probability will not be determined by Senator Harradine. Here I must disagree with my colleague from Tasmania. Just as the Wik legislation was not determined by Senator Harradine—EP5FERGUSONSenator Ferguson—Madam Acting Deputy President, I raise a point of order. I heard Senator Ray use the words `presiding bias'. That is a reflection on the President, who was in the chair at the time.UI4Ray, Sen RobertSenator ROBERT RAY—On the point of order: Senator Ferguson might like to reflect on how the normal presiding officer, acting on the roster, was removed. The President was brought in. Only one person from our side, in spite of people jumping up, was chosen in that debate. There was constant conversation between the manager and the President right throughout that process.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Patterson)—If you did you say that, Senator Ray, it is a reflection on the President. I ask you to withdraw it.UI4Ray, Sen RobertSenator ROBERT RAY—I withdraw. I was saying to my colleague that this vote does not depend on Senator Harradine. It will be determined by that act of gross political treachery which occurred in August 1996. Given that the Labor Party, the Democrats and the Greens oppose the privatisation of Telstra, the will of the electorate, as properly delivered in the Senate, would have been 38 votes against the government proposal. Therefore, if the government is victorious on this proposal, it will be through the delivery of a Labor vote from Queensland. Hence, venality will triumph over principle and self-interest will triumph over loyalty. A career marked by time serving, place seeking and insatiable greed will reach its culmination in the vote on this legislation this week.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Ray, that is a reflection on another senator. I ask you to withdraw it.UI4Ray, Sen RobertSenator ROBERT RAY—In what respect?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—It is a reflection on a sitting senator. I ask you to withdraw.UI4Ray, Sen RobertSenator ROBERT RAY—What part of it was a reflection?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—The three comments you made. I think you should withdraw them.5K4FAULKNER Senator Faulkner—I rise on a point of order: I do not believe any of the descriptions that Senator Ray has used are unparliamentary, whether they relate to another member of the Senate or the other House or anyone else. They are quite clear.TH4KNOWLESSenator Knowles—Not for you are they unparliamentary, but for the Senate they are.5K4FAULKNER Senator Faulkner—They are not unparliamentary for me or anyone else. That is the point I am making, Madam Acting Deputy President. They are not unparliamentary. They have never been ruled unparliamentary before.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Do not debate this, Senator Faulkner.5K4FAULKNER Senator Faulkner—Before you make a courageous ruling to establish new ground in this regard, I ask you to check with the Clerk before you give some consideration to the ruling you made.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Ray, you were impugning a sitting senator. I ask you to withdraw.UI4Ray, Sen RobertSenator ROBERT RAY—That was absolutely my intention, so I withdraw. But I stand by everything I say in that regard.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—An unconditional withdrawal would be preferable, but I accept that.UI4Ray, Sen RobertSenator ROBERT RAY—I withdraw. I do feel sympathy for those coalition senators who are rostered on to ingratiate and cajole Senator Colston. It must be the lowest imaginable job there is in politics. But what I find passing strange is that Senator Colston's recent submission to the magistrates court asserted that he could not concentrate for more than 10 minutes at a time in instructing his defence counsel. Yet he seems to have no problem trading in Telstra shares following his previous enthusiastic support for the government's privatisation. For years, Senator Colston issued press releases and attended rallies defending the public ownership of Telstra. It took a mere $16,000 a year and a job conferring some degree of formal honour and prestige for the convictions of a lifetime to be abandoned. The government will exploit Senator Colston's defection while tacitly acknowledging his murky past by refusing, belatedly, to accept his vote because of the political embarrassment it would bring it. If this legislation passes, senators who listen carefully might hear a noise from Queensland. It will be Senator Colston's father turning in his grave knowing that his son has stabbed the Labor Party in the back, a Labor Party that his father loved. Like father, like son? Never! Having previously voted to privatise one-third of Telstra, one would have thought Senator Colston would leave well enough alone. But no. In spite of his claimed mental enfeeblement, we find that he has become, as I said earlier, an active share trader in Telstra shares.We know that Malcolm Arthur Colston and Dawn Patricia Colston sold one parcel of Telstra shares on 23 December 1997. Another parcel, also held in their joint names, was sold by the Janfern nominee company on 19 December 1997. Yet another parcel, held by the Janfern superannuation fund account and registered in both their names, was sold on 23 December 1997. Yet another parcel, in the sole name of Dr Malcolm Arthur Colston, was also sold on 23 December 1997. At present, Mrs Dawn Colston holds 2,000 shares and one son holds 600 Telstra shares. The profit from the sale of these Telstra shares is, of course, far in excess of the additional $16,000 that attaches to the salary of the Deputy President of the Senate.Before anyone accuses me of the politics of envy, let me make one thing perfectly clear: there is absolutely nothing about Senator Colston that I envy. Of course, we know that Senator Colston is not the only individual to acquire Telstra shares. The opposition has now learnt that a spouse of a senior coalition frontbencher managed to purchase 10,000 shares through an investment company in which she has a controlling interest. These were purchased at the time of the float in two separate parcels. In addition, this spouse purchased two parcels personally. Guess when these were disposed of and came off the register? It was on 6 July 1998, the very day the opposition raised questions about the purchase of Telstra shares by ministers and their families.The Senate has already heard of the existence and extraordinary share acquisitions of the Minister for Resources and Energy, Senator Parer. We know that Investment Management Pty Ltd, a holding company for the Warwick Parer family trust and a company in which Senator Parer held eight of the nine shares, acquired a parcel of 2,600 Telstra shares on 25 November 1997. This was despite a prohibition on ministers and their staff acquiring shares within 90 days of the Telstra float. This ban, provided in writing to all ministers last August, extends to trusts, nominees and other proxy style arrangements.But Senator Parer, running true to form, decided that the ban did not apply to him. What was he thinking when, as he now claims, he brought this issue to the attention of his staff at a meeting and then put it to his staff in writing? How ironic it is that, at the very time Senator Parer was warning his staff off acquiring Telstra shares, he and his wife acquired one parcel through IMPL of 2,600 units; one parcel in the name of Kathleen Parer of 2,200 units; one parcel in Gashbah Pty Ltd of 3,000 units; a parcel in Spanlex Pty Ltd via the Rutherglen superannuation trust of 5,000 units; and one parcel in the name of the Warwick Parer family trust No. 2 account of 2,200 units. That is right: 15,000 shares to the minister and his spouse were tied up in this purchase either through controlling companies or from being bought individually.That, of course, does not include the rest of the shares held by the rest of his immediate family either directly in their own names or through an investment vehicle called White Rhinos Pty Ltd, which is a new holding company for the Warwick Parer family trust. These arrangements now account for 8,900 units of Telstra shares and represent at least 18 different parcels of shares at the time of the float.We now know that, at the same time Senator Parer was helping himself to a large parcel of shares in defiance of the Prime Minister's directive, Mr Bob Baudino, his media adviser, was also investing in Telstra. Bob Baudino acquired 1,600 units on the day of the float. Two days later, these shares were transferred to the joint names of him and his wife, Olive, at their home address in a Brisbane suburb. Yet Mr Baudino now expects us to believe that he was unaware that these shares were purchased on behalf of him and his wife. No explanation, of course, was given as to why the spouse got an additional parcel of 5,200 shares. They probably did not know about it at all.Mr Baudino tells us that he instructed his broker not to purchase Telstra shares. He must have been surprised when he received in the mail at his home address the issuer sponsored statement advising him of his Telstra shareholding. He would have been stunned and outraged when in early April he received again at home a statement advising him of his Telstra dividend. What did Mr Baudino think when he received these statements? We will not know until Mr Whitrow's report is complete and Senator Parer explains to this chamber how these extraordinary events occurred.The contemptuous disregard of the Prime Minister's directive did not end with Mr Baudino. We now know that Mr Geoff Cousins, a consultant to the Prime Minister, also purchased Telstra shares. He sold his two parcels on 30 December 1997. The explanation from the Prime Minister's office is that Mr Cousins did not advise on telecommunications matters, had no access to price sensitive information and was only a part-time consultant anyway. However, like the Guide on the key elements of ministerial responsibility, it now appears that the Prime Minister's Telstra directive is headed for the scrap heap. The directive was categorical. It instructed ministers to inform all their staff not to purchase Telstra shares within 90 days. If you happened to be a part-time consultant earning $44,000 for one day's work a week, you were not suddenly exempted from it. But especially for ministers with an ongoing involvement with Telstra—the Treasurer, the Minister for Finance and Administration, the Minister for Communications, the Information Economy and the Arts and the Prime Minister—there was a total prohibition, not just a 90-day one. Nevertheless, they managed to buy these shares.We also know that Mr Howard's senior economic adviser holds Telstra shares, bought before he took the job—we have always said that—but there are clear guidelines in the handbook and in the employment handbook about how owning shares can involve a conflict of interest. Has he ever had anything to do with this particular piece of legislation or cabinet decisions that derive from it? However, this government will not answer that fundamental question. It will just go up to the gallery, put the line out and then disappear without proper questioning. What we need to do in these matters and what our job is in opposition—in spite of what those opposite might say—is to take the Prime Minister's standards as he says them and see if they are properly applied. And let me say, the search will go on; there are many more staffers whose records in terms of Telstra purchases are yet to be revealed.The final point I want to make here today, and returning to the point made earlier, is this legislation can pass only with the coalition voting for it—and thereby breaking the Prime Minister's word—with Senator Harradine voting for it—and basically breaching undertakings he has made in the past—and with Senator Colston's corrupted vote in this chamber. But there is one other group that really has a lot to answer for in this regard. I will give the Liberal Party this: they have some brownie points for consistency. They have considered the issue; they have evaluated it; they will take their electoral risks and they will make their decision. I accept that. But what we have seen from the National Party has been nothing short of pathetic.We have seen the big statements in the papers by Senator Boswell and Senator Sandy Macdonald that they do not really believe that Telstra should be privatised. We did not take any notice of that. We knew they would roll over. We knew they would sell out the bush. We knew they would not have the intestinal fortitude to stand up to the Prime Minister. We knew they would get rolled right out. The National Party of Australia today is full of intellectual dwarfs. It is nothing like the National Party of 25 or 30 years ago when the Jack McEwens, the Doug Anthonys, the Ian Sinclairs and the Nixons—hard men but effective men in politics, men of intellect, men of gravitas—ruled in the National Party. What have they been replaced with? Absolute flim-flam; they have been replaced by people who will not stand up for their own constituency.That is why, when you look at the results in the Queensland state election, you will find some booths where they got 85 per cent of the vote historically but they are down to 30 per cent of the vote. The National Party just do not know which way to jump. They suffer from all forms of conflict of disloyalty on these sorts of issues. Do they represent their bush interests or should they continue their subservience to their coalition masters who just tell them what to do?Nothing could have been clearer in this regard than the recent fracas over preferences. You have the Queensland state branch of the Nationals in which their most prominent federal member, Senator Ron Boswell, advocates taking the fight to One Nation on their ground and taking them on. What does he get from the rear echelon, the David Russells of this world? He gets, `We'll continue to send preferences to One Nation. By the way, let's get rid of our policy on guns. Let's get rid of our competition policy. Let's dump all those things off the sled so One Nation can feed on them and maybe, just maybe, our miserable hide can be saved.' It does not work like that. Basically, David Russell and the Queensland National Party are saying, `Senator Boswell, you're an irrelevancy. You don't matter. You can't have a say in policy formulation, strategy, tactics or any other matter. You are not going, in fact, to influence the policies of the National Party in Queensland.'The National Party elsewhere in Australia continues to decline in a much weakened state. Take my own state of Victoria, where they hold two lower house seats: one with a crippled ex-minister who has been absolutely marginalised and the other in the north of the state whose member has never been heard of in his life and never will be—maybe his two-day trip to the US for a prayer breakfast is the best he will ever do in terms of publicity. So they are basically finished there.What the bush was relying on was the New South Wales National Party—traditionally the strongest, traditionally the most decent—to put their hands up and defend their constituents' interests: missing in action—all of them, not to be sighted, gave in to the Liberal Party, gave in to the Prime Minister and sold out their own constituents. Basically, this legislation is the longest suicide note in Australian political history and it is from the National Party of Australia. (Time expired)14:50:005499Crossin, Sen TrishSenator CROSSIN7Y6NTALP00—A debate about the future of Telstra must encompass and give serious consideration to the needs of people in regional and remote Australia. Let me start by saying that I have heard last night and today the words `regional', `rural' and `bush' roll off the tongues of many senators here. Let us pause for a moment and really think about that. Let us think about outstations that are four hours drive from Gupuwiyak at the top of the Australian north coast. Let us think about people who live at Mutujullu or along the Borroloola Highway. If we really think about them for a moment, we might really get a sense of not just remote and bush people in this country but people who actually live in isolation.I am aware of the numerous articles on, and coverage of, this issue over the last week. It is important that, in standing here and representing Territorians, I ensure their concerns are known and that the impact of this bill is fully understood and appreciated. In the Australian on Monday, 6 July, Wendy Craik, the Executive Director of the National Farmers Federation, was quoted as saying:The ownership of Telstra is not the issue. . . Rather, it is the price and quality of telecommunications services for the bush that are the key issues.Her reference to the price and quality of services to the bush is important but I believe ownership, contrary to her view, is just as crucial because, when you are talking about isolated and remote communities in the Northern Territory, the two are linked.The needs of the bush and regional Australia cannot be ignored or disadvantaged com pared with urban areas. The National Party have known this and they should be concerned. They know that the bush will suffer if Telstra is fully privatised. The latest edition of the Telstra journal, Our Future, has a three-page spread titled `Unique People, Unique Challenges'. This article says:Meeting the needs of customers in the main cities is one thing. Providing customer service over Australia's vast distances and diverse landscape—from snowfields to the outback—has presented Telstra with challenges that few telecommunications companies face.These challenges are indeed unique; they are challenges for the people working in rural and remote areas, usually in the most difficult and extreme conditions. The same article goes on to describe the work of one Telstra employee at Tennant Creek. That person is responsible for 13 technicians and line staff and an area of 500 kilometres—and let us just try to picture that again when we are talking about regional and rural places—ranging from Tennant Creek to Alice Springs. These people are called upon to change DRSC batteries at places such as Epenarra, which is 350 kilometres south-east of Tennant Creek, or to work on data services, television and radio transmitters, optical fibre jointing and underground PABX systems.Telstra plays a crucial role in providing a quality and reliable service to the bush in the Northern Territory, especially to pastoral properties, schools, health clinics in remote communities and Aboriginal homelands. Under a fully privatised Telstra, the best guarantee that this government can give to rural and especially remote communities through the universal service obligations is that they will receive a standard telephone service. This standard telephone service is not going to deliver a broadband and on-line service to regional communities, and there is no guarantee that their services would keep up with the latest developments in telecommunications. That is, I might add, if you do have a standard on-line telephone service, and I will get to that in a moment. People in the Northern Territory understand and comprehend that if the service they obtain does not permit them to use the sorts of on-line services that people can use in the metropolitan area, then they are competitively at a massive disadvantage.Unlike the subjects of privatisation in the past, Telstra operates as a monopoly with extensive community service obligations. Telstra is the communications network for the nation. It is an essential service and a virtual public monopoly. Telstra is currently required to provide subsidised telephone connections to the bush, which would otherwise cost upwards of $10,000. For most customers, the standard new residential telephone connection fee is about $200, but in many parts of regional and rural Australia, the real cost of providing that service can be hundreds even thousands of dollars more.Under the current system of cross-subsidies, customers pay the same amount regardless of the real cost, and that means that all Australians have equal access to telephone services. Under the cross-subsidy arrangements that operate at the moment, loss making infrastructure in rural and regional Australia is supported by profits made in other parts of Telstra. That means that in the Northern Territory the cross-subsidy can be over $1,000 a line and, in the remote parts, the cross-subsidy can be as high as $4,000 to $6,000.At the Alice Springs show last weekend, I met a person employed by Telstra to install public payphones in remote Aborignal communities. There are many communities waiting for this commodity because very few families in these areas can afford to maintain a line into their homes. These payphones are installed at a cost of nearly $100,000 each, and the money on the installations is never really recovered. This is due to faults, vandalism and problems with general maintenance.Once Telstra is sold, it will be gone for good. It will be impossible to get it back. It will also be impossible for any government to force a privately owned Telstra to meet these needs—to meet the needs by putting payphones into the remote communities I was talking about, to meet its current service obligations, particularly in rural and regional Australia. A privately owned Telstra's first responsibility will be to maximise profits to its shareholders. It will be under intense pressure from shareholders to shed its non- profitable operations, and those services in the bush are untimed local calls, directory assistance and general services to remote areas. They will all be obvious targets.Let us have a look at the real issues for rural and regional Australia, particularly in the Northern Territory. Besides the cost of service and maintenance, there is also the standards of service, including the response times for installation and maintenance. The Telecommunications Performance Monitoring Bulletin: Issue 4—March 1998 Quarter, released by the Australian Communications Authority, shows that the national performance figures for faults cleared within rural areas—calculated within two full working days after being notified of a fault—declined by three percentage points to 81 per cent during the March quarter. For the urban areas in the Northern Territory, there was a decrease from 54 per cent for the December quarter to 45 per cent for the March quarter. Rural fault restoration in the Northern Territory improved though from 61 per cent to 68 per cent, because these figures included the unusually intense wet season that we had this year and the massive effort by Telstra to respond to the damage caused through floods in many parts of the Northern Territory, particularly in Katherine and the Daly River region.That is something in this debate that people have forgotten about—the intense flooding that we have been subjected to this year in Katherine and the Daly River region and the intense electrical storms that we get during the period of November to April right across the Top End that in one fell swoop have the capacity to wipe out your telephone or electrical systems. In fact we are warned many times that, when there is such an intense storm happening and hovering overhead, we should get off the telephone.Telstra addressed the situation in Katherine this year by mobilising aircraft and additional resources. Telstra made a number of arrangements to assist the people in Katherine during this flood period. The mobile net circuits were expanded to cater for the influx of volunteers and workers. Special billing extensions were provided as well as advice and consideration for people in the flood affected areas on a case by case basis for both mobile and fixed phone users.There was a temporary Telstra shop set up at the Telstra depot in Katherine, and the Telstra equipment was there for the use of removing and burying rubbish. So it is appropriate that the community service obligation that Telstra displayed during these times is recognised, but the impact on the Territory to date with the partial sale of Telstra has been detrimental.In the Territory, staff numbers have been slashed with no regard for customer demand, the seasonal factors I talked about such as the wet season or the population growth. Many Telstra operations have been stripped out of the Territory and relocated in southern capitals. Decision making has been taken out of the hands of local management. Permanent full-time jobs are increasingly being converted to part-time and casual positions up there. Workers are being made redundant and are leaving the Territory with their families. This is having an enormous impact on our regional economies.Since the partial privatisation of Telstra, the triple 0 emergency service has gone. I am personally aware, through my involvement in the Women's Advisory Council, of the enormous difficulty this has created. If I have a need for an emergency service and I live in a place such as Anula, which is a suburb of Darwin, and I dial triple 0, I get an operator in Adelaide. The time it takes for me to actually tell the person in Adelaide where exactly Anula is in a Darwin suburb is wasting precious seconds that could well be put towards saving a life.Previously, this service was operated out of a telephone exchange at Casuarina, only some half a kilometre from the suburb of Anula, which I have mentioned. We do not now have local people taking our triple 0 calls, people who understand where these places are. Therefore, we do not have the quick turnaround time that is needed.The cable assigning has gone from the Territory. Fault management has gone. The mobile phone centre has shut down. SOLAS, which is the Safety of Life at Sea, maritime safety centre has also shut down. The fault reporting function and the assigning of installation and maintenance are under threat and are likely to survive only another year. The training of staff has all but stopped, causing erosion of the skills base. I gave an example before of how someone working out of Tennant Creek not only needs to know one area of the communications industry but needs to be multiskilled.The Territory is rapidly becoming Telstra's poor relation, and nothing in this discussion about the full privatisation has convinced me that things will improve. The full privatisation of Telstra would see an escalation of the rationalisation process. The new owners of Telstra, non-Australian conglomerates, would demand ever increasing profits, which would result in the user pays principle becoming the norm. Such an outcome would be catastrophic for remote areas of the Territory, areas where telecommunications services are a matter of life and death and where most disadvantaged people are to be found.The Howard government's blithe assurances that the bush would be looked after are predicated on a short-term solution—that is, its rural infrastructure fund. Once that fund is exhausted, we can look forward to some taxpayer funded solution which would demand increased contributions from those who can least afford it, rural and remote subscribers—in Territory terms, that means everyone.Women and the telephone in Australia: a study prepared for Telecom Australia in 1989, provides an interesting insight into the views of Australian women, particularly those women in country and rural areas. The conclusion of this survey states:Evidence from the Australian survey, hence, opens up an arena of `private sphere' social organisation and activity that has, politically, been overlooked. The nature of this activity has altered importantly in the past two to three decades. Historically, women's telephone communication has moved a long way from its major instrumental uses of 40-50 years ago to its present concentration on protracted intrinsic calling.Both country men and women in Australia have benefited from the conquest of distance and the part played by telecommunications technology in bringing people closer and closer. Again, the survey states:Data retrieved indicated the enormous importance of the telephone to country women. "The telephone is top priority", said one woman from a . . . rural centre, "We'd be absolutely lost without it". Many farmers' wives were alone during the day, and "would be very vulnerable to dangers without the telephone". Much ordering was done by phone, the phone was vital for keeping in touch with family and, for rural women, "the phone is a substitute for contact face-to-face".That is another important aspect of the Territory that has been left unsaid here. There are very few extended families living in any of the parts of the Territory, particularly in the remote areas, or even in Alice Springs and Darwin. For us, the telephone is a vital link, almost weekly, to our families in the rest of this country.Some 66 per cent of the total remote area population comprises Aboriginal people. While an increasing number of communities and some outstations now have good telephone connections, there are still significant gaps and problems across the country. The lack of a telephone in many Northern Territory outstations, the want of adequate public phones, the vandalism and inoperation of many public phone boxes and the restricted access to the council and community phones in some centres and communities leave a large number of Aboriginal women among Australia's telephone poor.In the full privatisation of Telstra, there will be winners and losers. Who are these people? Who fits into each of these categories? The winners are the merchant bankers, the stockbrokers, the financial institutions and the Telstra executive and board members. The financial industry loves privatisations because there is plenty of money to be made. The merchant bankers and stockbrokers who worked on the sale of the first one-third of Telstra made over $200 million in management and coordination fees. But that was only part of their earnings.After the float, stockbrokers made further huge commissions. As people bought and sold Telstra instalments receipts, brokers did particularly well because most of the shares traded have been in small quantities, which attract high commission rates. Although Telstra now has 1.6 million shareholders, the top 20 investors already own 40 per cent of the shares that have been issued, and these investors are big financial institutions such as banks and insurance funds.The biggest single shareholder is Westpac Corporation, which owns 8.4 per cent of the partly paid shares issued last November. This pattern of ownership is similar to that in most privatised companies. Small shareholders are gradually squeezed out by the big players in the market. Members of the Telstra board also did nicely out of last year's one-third float. While most shareholders, ordinary Australians, received between 600 and 2,000 shares, the 11 member board received a total of 804,114 shares between them. That represents a profit of over $1 million to these Telstra insiders.But let us look at the losers—the small low spend customers. In a big telecommunications company such a Telstra, the top 20 per cent of customers provide 80 per cent of the profits. Privatisation increases the company's focus on those customers. Residential companies are already getting the rough end of the telecommunications deal when it comes to service quality. For instance, last year barely half of the metropolitan residential customers had faults fixed within 24 hours. The rate for business was 80 per cent.I have spoken at length about the effect of this bill on regional and rural Australia. Expert reports have shown that Telstra already underspends in the bush. Naturally a privatised company will want to concentrate even more on the profitable areas such as the cities along the eastern seaboard. But how will the government ensure that there is investment in regional areas once its influence over Telstra is gone? Full privatisation means that the government loses the power to direct Telstra to act in the public interest. The present government is trying to reassure country residents by putting part of the Telstra sale money into a special rural infrastructure fund, but where will the money come from in the future once this Telstra piggy bank is empty?Another loser in this scheme is the employees of Telstra. Telstra's commercial and consumer business unit, which looks after small business and residential customers, has shed 10,000 staff over the last two years as part of the privatisation process, and nearly 20,000 jobs have gone since 1996. While some of those employees have been transferred to other companies, the great majority have simply lost their jobs. These huge job losses affect everyone. In the Northern Territory work is scarce, and this inevitably leads to less money being put into the Territory economy.The sale of Telstra affects everyone. While it might add to the government's budget surplus, in the long run privatisation will leave the Australian community poorer. Although many Australians bought Telstra shares, these shareholders are still only a small minority of the whole community. Before any of Telstra was sold, all of Australia's 18 million people had `shares' in the company. Every year Telstra paid a dividend to the Australian government and that money could and should be spent on hospitals, schools and the environment. If Telstra is sold off, that money will all go into the pockets of private investors. A lot of it will not be re-invested or spent in Australia or in the Northern Territory, because it will go overseas to foreign shareholders. The biggest loser in all of this debate is the Australian community now and in the future.15:10:005503Hogg, Sen JohnSenator HOGG7L6QLDALP00—I rise in this debate today because the government have once again broken another promise. They have gone about this in a very sneaky way to try to get people to see that the sale of the other two-thirds of Telstra is but a fait accompli given that they have this belief that they will be re-elected at the next election, which is just around the corner. What they are doing, in my view, is very contemptuous of the electorate at the very best. What is at issue in this bill is a fundamental principle of the right of people to be able to communicate, because it is of such great importance.With the technological advances that are being made today, one sees that the services need to be delivered in the rural and regional areas in particular. If one were to look at the recent report by the Australian Communications Authority, one would see that there are headlines floating around such as `Telstra lets the bush down'. There was a whole spate of those around the time that the March quarter report for 1998 was released. It showed that Telstra, after one-third privatisation, has let the bush down.Fundamental under the one-third privatisation was the fact that there was a guarantee to the bush that there could be a ministerial power to direct Telstra in the national interest to save those areas. Under total privatisation, as my colleague Senator Crossin has just said, there is no such guarantee whatsoever. In other words, the safety net which was of great importance to the people in rural and regional areas is being removed. This measure will see those people living with the scepticism of the coalition forces that they showed and enunciated quite clearly at the most recent state election in Queensland, and I will come to that.We also see an attempt by the National Party to try to win back some of the massive vote that they lost in Queensland by stitching up a deal which, on the surface, they will say protects the interests of rural and regional Queensland, but all it does is provide a short-term bandaid approach to the issue—it gives people in the country no long-term confidence. Why should the people in the country be concerned? If one looks at appendix 8 of the report Telstra: to sell or not to sell?, one will see the effect of cross-subsidisation on rural and regional areas in Australia.The last figures that we have been able to get were those for 1994-95 based on a federal electorate basis. At that time a total of $225.965 million was used to cross-subsidise services to rural and regional Australia. In my state of Queensland, some $50.974 million or 22.55 per cent of the total cross-subsidisation occurred. It is in large states, such as Queensland, that we see a great need for subsidisation. The interests of the major telecommunications operators in the longer term, and particularly a privatised Telstra, will be to their shareholders.No matter what undertakings are given here now, those undertakings will in due course mean nought if the shareholders erupt in major disbelief that the company is not delivering them a profit. They will pressure Telstra or other telecom operators to somehow weasel out of their community service obligations. In the longer term, the ultimate effect will be on the service that can be delivered to rural and regional areas.If one looks at some of the seats in Queensland, one can understand why the National Party in Queensland have been so interested in the 13 June election in Queensland and its result. Let us look at the cross-subsidisation figures that I have for 1994-95. Out of the $50 million for Queensland, $4.1 million went to Capricornia, $2.76 million went to the federal seat of Dawson and $10.7 million—nearly $11 million—went to the seat of Kennedy. No wonder Mr Katter was upset! Nearly $5 million went to Leichhardt and $16.485 million went to the seat of Maranoa—the so-called heartland of the National Party in Queensland. The fact is that, after the 13 June election, the Liberal Party in Queensland was reduced to less than a cricket team—nine seats—and the National Party was decimated and reduced to 23 seats, whilst One Nation has proven to be the big winner.One can understand why there is a great deal of concern in the National Party, even though it is too little too late. They have deserted the country, deserted the rural and regional people, over a long period of time. In that state election the people of Queensland reacted. They will not be fooled in any way by the attempted pork-barrelling that we are now seeing under this privatisation deal which will come about with the further two-thirds sale of Telstra.If you look at the effect on the National Party you will start to understand why we are seeing what we are seeing in this chamber today: this bill that seeks to take the two-thirds privatisation and the pork-barrelling that goes with it. Just look at the safe seat of Barambah in Queensland, which in 1995 had a first preference vote for the National Party of 67.21 per cent. The best they could get on the last occasion was 30.96 per cent. Let us look, booth by booth, at some of their so-called safe polling booths—my colleague Senator Ray mentioned this before. You can see how their vote has been decimated and you can see why we have got this grubby deal on now. In Gomerri, for example, the National Party vote in 1995 was 76.18. It has gone down to 34.81—a massive cut. Who was the major winner? One Nation. The Tablelands seat of Barambah was 91.46 per cent but has gone down to 29.33. Tansey has gone from 90.06 down to 36.62. Wondai has gone from 66.38 down to 27.48. The vote has been decimated, so their style is to try to redress the situation, but it is too little too late.Look at the seat of Crows Nest, which has always been a very safe seat for the National Party in Queensland. In the Esk booth, for example, the vote went from 65.1 down to 29.28. In Highfields, it went from 67.77 down to 44.77. In Oakey, a regional centre in Queensland, it went from 71.83 down to 35.24. These are the sorts of results that are peppered throughout the electorates of Queensland. This is the sort of result that they did not want, but this is the sort of result that they got because of their neglect of Queensland as a state government. They are doing much the same here. Having seen the result, they are now trying to redress it, but it is too little too late.If the litany of problems for the National Party in Queensland was further elucidated, one would see that there have been massive swings because people do not believe in them. It is as simple as that—people do not believe what the National Party are telling them about the further two-thirds privatisation of Telstra. They have major problems indeed. If one looks briefly at the Courier-Mail of 7 July, this is clearly spelt out. The Queensland Farmers Federation President, Lex Buchanan is quoted as warning the Prime Minister, John Howard of the perils of ignoring bush fears over the sale of Telstra. Mr Buchanan said that the full sale of Telstra policy was a recipe for handing votes to One Nation at the election.That is Mr Buchanan's opinion. I do not know the gentleman personally, but obviously it is a warning that the National Party have not taken. They obviously have not gone through the results booth by booth and seen the decimation. If they think that they can, in effect, buy back people's votes, they have got something else coming to them—there is no doubt about that.On the same day an article appeared in the Age by Paul Pickering. I think his article is very relevant to the debate that we are having today on the privatisation of Telstra. His article is about the One Nation Party and its leader. He said:Surely it did not need Pauline Hanson to remind National Party backbenchers that it is the state that has provided and maintained infrastructure in the bush. They simply needed to look to their own past to understand that the only way to guarantee a continuing cross-subsidy for rural telephone services is through public ownership.They should heed those words very loudly and very clearly because the path they are heading down today is not only disaster for them but also further disaster for the bush and for Australians.At the end of the day the consumers out in the bush will not be fooled by the pork-barrelling that is being envisaged under this current privatisation deal between the National Party and the Liberal Party. Those who deserted the National Party are definitely astute enough to know that a temporary pork barrel does not have an infinite limit, as my colleague Senator Crossin pointed out. When it runs out, what will the country, the rural and the regional people have? Nothing; absolutely nothing at all. They will have no powers for the minister to intervene. They will have no safety net.In the longer term, a fully privatised Telstra will be concerned only about where the telecommunications operators see that they can make real profits. That area, of course, is in the golden triangle—the Sydney, Melbourne and Canberra area—and you can exclude other parts of Australia. Those operators will seek to water down and to weasel out of any commitments that they have had to give to date. They will use classic catchcrys such as, `When we gave that undertaking things were different.' How often do you hear that? How often does one hear that? `This is an unexpected contingency'—they will find any excuse, no doubt, to get out of their commitments, their community service guarantees. They will weasel out of them. So the losers will be the rural and regional people in the longer term. The diamonds might look sparkling from afar now but, once people get to test them, they will see that they are mere glass.In a world that is becoming more information technology dependent on a daily basis, the rural and regional areas of Australia and in particular my state need some guarantee, not the mealy-mouthed propositions that are coming out of the government at this stage. The government's pork-barrelling in this instance will be only a bandaid approach. It is interesting to look at the West Australian of 9 July. If the other warnings have not been enough for the National Party and the Liberal Party, then they should note the few words of Kevin McMenemy from the Western Australian Farmers Federation. The report says:Rural WA overwhelmingly opposes Government plans to sell the remaining two-thirds of Telstra and use some of the profits to fund bush infrastructure, says the WA Farmers Federation.WAFF general president Kevin McMenemy said yesterday that Liberal MPs with country seats would pay at the ballot box if they supported the sale. This could drive farmers into the arms of Pauline Hanson.Therein lies a lesson in Queensland as well for the Liberal Party. The Liberal Party should well and truly be aware that, where One Nation candidates stood against them, they found themselves in great difficulty—indeed, so much so that, as I have said earlier, they cannot even make up a cricket team in the Queensland parliament. So the warnings are there for the government. Yet, in spite of those warnings, they are not heeding them.I will look at a couple of other issues which concern me. There will be large job losses out of the privatisation of Telstra. We have already seen in the order of 25,000 jobs go, with another 2,000 more to go. There are spurious claims that these jobs are transferred to the private sector, and that cannot be substantiated in any way. This government should be about job creation, not about job destruction. There are two more issues that I wish to address.There is no need for this sale. It will generate an estimated $800 million in service fees to stockbrokers. This has already been addressed by some of my colleagues, but it is completely obscene and immoral that we are passing $800 million to stockbrokers and the like when this money could be otherwise used to great purpose and great intent out there in the community at large on a wide range of issues. There is no doubt in my mind that this is one of the real obscene parts of this proposed privatisation.Last but not least, I want to quote Hansard of 9 December 1996. In response to a question from Senator Mackay about the then one-third sale, Senator Alston said:Can I just get to this other major issue—that somehow selling one-third means you inevitably sell the lot? Just for your information, NTT, Nippon Telephone and Telegraph, sold 35 per cent in 1984. They have not gone further since that time. There is no inevitability about anything in this life or in this field.TW4BOURNESenator Bourne—Obviously not!7L6Hogg, Sen JohnSenator HOGG—No, but it gets better as we go on. The impression he was trying to create there was: whilst we are selling one-third, there is undoubtedly no inevitability that we will go beyond one-third. The response continues:The fact is that unless you somehow think this parliament is about to change beyond recognition, and I do not think it is, it would mean that the Democrats or the Labor Party would have to change their position in order to repeal a provision of this very bill that is before us because this bill does not allow the parliament to go beyond the sale of one-third of Telstra. That is a fact. You know our commitment.Senator Alston went on to say:If you are about to propose that, I would be very surprised. I have not seen any sign of it. You can run that argument as much as you like, but the fact is that there is no inevitability about it at all. It would require a conscious vote in favour by a majority of both houses of parliament. I do not see that in the Senate in the foreseeable future, and I do not think you do either.Then there was an interjection—and I think Senator Bourne will enjoy this—by Senator Kernot:What's the foreseeable future?Senator Alston replied:The foreseeable future for me would probably be six years—probably longer than you and I will be here . . . You have to give credit where credit is due. He got one out of two right. The rest he got wrong, and he was the minister. So what hope do Australians have in putting faith in these people?15:31:005506Bourne, Sen VickiSenator BOURNETW4NSWAD00—It is worth remembering that we are here today—and we will be here for quite a bit longer, I suspect—to debate a bill, which I am sure the government hopes to pass, which will put into effect something which was not mentioned at the last election and which will not be proclaimed until after the next election. Obviously there is no urgency in this whatsoever. Putting that aside, there are two fundamental problems with the government's current approach.Senator Kemp interjecting—Senator Hill interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Murphy)—Order! Senator Kemp, it would be more appropriate if you ceased interjecting. Senator Hill, it is inappropriate for you to interject and it is even more inappropriate to interject when you are not in your own seat.TW4Bourne, Sen VickiSenator BOURNE—Thank you, Mr Acting Deputy President. The first problem is that passing this legislation has nothing to do with a mandate. The government obviously never had a mandate to sell any of Telstra. We all know that our constituents vote for a myriad of reasons. People simply do not vote on one issue. How will the government know, for example, whether they have been voted in or out of office at the next election on the basis of their decision to sell Telstra, funding cuts to the ABC, funding cuts to education, funding cuts to health, the way they have handled nursing home funding, native title or a host of other reasons? Of course they will not.Secondly, the government says they have stuck to their promise not to sell all of Telstra because they intend not to proclaim this legislation until after the next election. Why are we debating it now and why is there an open-ended commencement clause in the bill? This kind of open-ended commencement hands a blanket cheque to the executive to determine whether legislation passed by the parliament will ever come into effect.Accordingly, the government should now abandon this bill and campaign on the sale of Telstra—the sale of Telstra alone—not on taxes or anything else. If they are re-elected, they can debate this bill in the session of parliament after the next election. This is a fairer and a more honest approach to the community and to parliamentary procedure. If they make their arguments well enough, they will get more than 50 per cent of the Senate and they can do absolutely anything they like.The other problem behind the government's decision to sell Telstra relates to the basic assumption with the privatisation agenda of successive Australian governments. Over the past decade and a half the privatisation agendas of both the ALP and the coalition have typically been undertaken with very little consideration given to the alternatives or any medium- to long-term consequences.The key question we have to ask in this debate is: who is going to gain from the sale of Telstra? Governments had neither the integrity nor the ingenuity to push for alternative ways of expanding their revenue base. They have not had the imagination to devise better ways of improving our national savings. And for largely ideological reasons they have not wanted to formally acknowledge the significant contribution that public investment makes to this country. Instead, it is far easier to sell off public assets and attempt to convince the Australian people that it is in their best interests to do so. The Democrats do not believe that selling Telstra is in this country's best interests. It is not very convincing to be told that just because other countries are privatising their national communication carriers Australia should do likewise.The government also seeks to convince us, without adequate evidence, that we will be better off with a privatised Telstra. If `we' are the taxpayers and the general public, I do not think we will be better off. If `we' are the big end of town—the stockbrokers and the lawyers who will sell Telstra, or the overseas investors who will buy it—certainly, we will be better off. But that is not an argument. That is just a pressure tactic and one which lacks any intellectual credibility. It is nothing more than appeal to fashion and one which seeks to deny Australians the right to make up their own minds whether partial or full privatisation of our national communications carrier is in our best interests.There is no intrinsic merit in blindly following what the UK or New Zealand have done, let alone—as Senator Alston was so fond of reminding me—what Cuba or Albania have done. Every country has its own unique geographical, historical, political, social and cultural circumstances. It is simply ridiculous to compare Australia with countries like Cuba and Albania in terms of privatisation issues.What we have with Telstra is a privatisation agenda which, like privatisation in general, is being largely driven by two key concerns. The first is that privatisation provides an immediate source of large amounts of revenue for the government. The government claims it will use the revenue it expects to generate from the sale to reduce net debt, thereby saving money on interest repayments. The government also says it will use a proportion of the sale to fund new social bonus packages. But, apart from rumours about spending on a major regional development package on roads and rural health initiatives, the government has not announced where, or on what, it actually intends to spend this money. The questions of whether the proposed expenditure and the regulation of the industry are desirable are independent of the sale of Telstra.Secondly, the sale is being driven by the belief that private enterprise is inherently more efficient and more accountable than the public sector. But, generally speaking, the history of privatisation in Australia and overseas has not got a good track record. Companies tend to be sold too cheaply and they do not deliver the goods after they are privatised to the extent that they have promised beforehand.Let us look very closely at these two concerns. I do not believe they provide sufficient justification for turning our most profitable public enterprise into Australia's second biggest private corporation. First of all, let us look at the financial implications. Not surprisingly, it has been proven to be very difficult to get a clear indication of the full financial implications of this sale. Of course, this may not be unrelated to the large number of players with a vested interest in not telling the Australian public just who the big winners and losers might be.This is one of the reasons why parliamentary scrutiny of the proposed sale was so necessary. What a pity the government insisted on such a short committee inquiry. The bill was referred to the Senate Environment, Recreation, Communications and the Arts References Committee on 1 April 1998—somewhat symbolic—and reported on 26 May 1998, after the Senate agreed to a two-week extension. So four weeks went out to six weeks and that was all the time the government permitted the Senate to investigate and report on these issues.It is not unreasonable for the federal parliament, on behalf of the Australian public, to take a close look into the sale of the government's most profitable business enterprise. However, the short time frame for the inquiry—something this government appears to be very keen on lately, although they were not when they were in opposition—has not allowed the federal parliament to do that adequately. But, even during that short time, the expert evidence presented to the inquiry indicated that the sale of Telstra would significantly reduce the net worth of the public sector as a result of the interest saving in public debt being less than the future profit stream forgone.John Quiggin, Professor of Economics at James Cook University, and Dr Allan Brown from the Economics Department of Griffith University have argued strongly that this is most likely to be the case. They believe the privatisation of Telstra will result in a substantial loss to the net worth of the public sector and will represent a bad deal for taxpayers. In his submission to the first Senate Telstra inquiry in 1996, Professor Quiggin estimated that the value of Telstra in public ownership was $54.4 billion. This estimate was based on Telstra's after tax profits compared with the net sale proceeds required to generate similar savings in public debt interest. Fifty-four billion dollars is more than twice the market price that analysts believe Telstra will realise if sold. One of the reasons for this, he argues, is that private equity holders demand a far greater rate of return on their investment than the real rate of return on government debt.According to Professor Quiggin, only under the most unrealistically pessimistic profit scenarios would the government's partial privatisation scenario appear attractive. In his opinion, the partial privatisation of Telstra has so far resulted in forgone earnings of $520 million, as against interest savings of $450 million. That gives us a net loss of $70 million—and that is just so far. The loss to the public sector is expected to increase over time because earnings are expected to grow while interest savings remain constant.But let us consider for a moment the situation where the interest saving in public debt from selling Telstra is equal to the future profit stream forgone. What then? For a start, the government would not be any better off; it would simply have realised the value in cash terms of an asset valued at that amount. The net worth of the public sector would remain totally unchanged.If the government uses the proceeds from Telstra's sale to retire public sector debt, the debt would fall and so would assets. Again, public sector net worth would remain unchanged. The government would simply have reduced the stream of future interest payments on the debt by the same amount as the income flow from the enterprise which would have been used to pay the interest on the debt. Where is the value to the nation in that? It can surely be argued just as legitimately that it is better to retain Telstra in full public ownership and use the cash flow generated to repay public debt and fund existing programs or new ventures from consolidated revenue than from promises of one-off grants.When assessing the impact of privatisation on the net worth of the public sector, we also have to look at the transaction costs involved. We have to look at the fees paid to the lawyers, to the accountants, to the bankers, to the stockbrokers, and to the marketing and the advertising agents. These costs are often conveniently overlooked in public discussion about this privatisation. The partial privatisation of Telstra cost $260 million—what sort of social bonus programs could that have funded?Moreover, underpricing of public assets is one of the hallmarks of privatisation in this country—it happened with the Commonwealth Bank, it happened with Qantas, it happened with the Commonwealth Serum Laboratories and it happened with the first third sale of Telstra. That means that a relatively small number of people—the new shareholders and those administering the transaction—make a gain at the expense of all the taxpayers of Australia. There are simply no guarantees that this will not happen again with the sale of the remaining two-thirds of Telstra.This all adds up to the sale of Telstra involving selling off our highest income earning public asset for no net economic gain. In fact, on John Quiggin's figures, Australian taxpayers could be paying for the sale for many years to come. That is just not good public policy.Let us have a look at the government's claim that the privatisation of Telstra will result in overall efficiency gains. If taxpayers are to be sufficiently compensated for the potential loss in public sector net worth, then spectacularly large efficiency gains or improvements in customer service need to occur as a direct consequence of a change in ownership. I see no reason to anticipate efficiency gains beyond those that would have occurred without a change in ownership.The most recent figures from the Australian Communications Authority indicate that Telstra's efficiency has fallen in the last two quarters since partial privatisation. Even Mr Frank Blount, before he became an advocate for the government's privatisation agenda, said that it was the marketplace, not who owns the company, that is the real reformer.A significant amount of research has been undertaken which indicates that efficiency and consumer responsiveness are not inherently dependent on ownership but, rather, on a combination of good management, effective competition, technological progress, regulation and consumer pressure. There is no direct or inevitable association between economic performance and the type of ownership. The fact is that the performance and efficiency of government owned enterprises can and have been extensively improved under public ownership—look at Australia Post.A 1995 study by the Industry Commission found that Telstra had reduced its prices since 1989-90 by 16 per cent in real terms while doubling labour productivity and increasing payments to government by over 60 per cent since 1990-91. Remember, that was in 1995. It is simply propaganda to claim that privatisation offers some magic recipe by which Telstra will automatically make significant efficiency gains. Efficiency is not about privatisation; it is about management; it is about a commitment to service provision. Australians should be seriously questioning the government's commitment and the capacity of Telstra's management to deliver the sort of service that we want, irrespective of whether or not Telstra is sold.Moreover, even if efficiency gains are made under private ownership, there is no reason to assume that they will be passed on to consumers in the form of lower prices, rather than being captured as profits by shareholders. In fact, if the partial privatisation is anything to go by, all that we are likely to see after full privatisation is a sharp rise in the salaries of Telstra's senior executives, efficiency measured in terms of the number of job losses, and no great increase in customer service outcomes.The ideological basis which claims that private enterprise is inherently more efficient than public enterprise fails to take into account the fact that government enterprises have more objectives than just maximising profits. Government enterprises are charged with social objectives, or community service obligations, which are equally as important as profit making but which successive governments have portrayed as sources of economic inefficiency. Their importance for promoting the national interest should never be underestimated.I acknowledge that the provision of the universal service obligation is not directly related to the issue of privatisation. The universal service obligation can be continued under legislative direction, irrespective of Telstra's ownership. I am concerned, though, that privatisation will inevitably place the provision of the USO under increasing pressure, along with other regulations, such as price capping, which are presently imposed on Telstra.There is also much debate about the optimal means for delivering the universal service obligation. This issue is not directly related to privatisation, but this should not mean that we avoid discussion on a very critical issue at this time. The importance of the USO is reflected by the number of submissions to the Senate Telstra inquiry which have commented on this issue from a range of perspectives.The Democrats will continue to advocate that the USO be funded from carriers themselves rather than from consolidated revenue. As soon as the payment for the USO is transferred from those who are responsible for delivering it, to the budget, it is far more vulnerable to elimination or reduction in effectiveness. As soon as governments start looking for an area in which to save a few extra dollars, you can be sure that the USO will come up for review. But, if the ownership of carriers is an important issue for delivering efficient service, carriers should also be responsible for funding the delivery of the USO, as that is, in effect, their contribution to the good governance of this industry.The community has a legitimate expectation that the government will pursue social objectives in the provision of telecommunication services. This inherent tension will only be exacerbated by privatisation. A privatised Telstra will be governed by a board of directors acting not in the national interest, not in the interests of remote communities whose services are largely subsidised, but in the interests of the company and its shareholders—a company which will be one of Australia's largest, wielding tremendous economic and political clout.A privatised Telstra means a high risk of losing our ability to set, maintain and deliver community service obligations in the national interest. If the government were serious about the USO, it would have ensured that the bill's preamble, at the very least, reflected all three tiers of the universal service obligation; at the moment it only has two.We also recommended that regular reviews of the USO be enshrined in legislation. That would enable it to be amended if it were seen to be ineffective and not dynamic enough. Even the government acknowledges that it cannot simply give a privatised Telstra free rein to do whatever it likes. The very existence of a customer service guarantee acknowledges that a liberalised, privatised telecommunications market will not, of itself, deliver adequate levels of service to all Australians.The customer service guarantee sets mandatory service levels in a number of areas. We note the minister's recent media release concerning increased penalties for failures to meet the customer service guarantee standards in non-metropolitan areas. Of course, customer service is important; no-one would deny that. But the only way to ensure that the service provider complies with the standard is through tougher regulation and enforcement—not merely increasing the scale of charges. The scale of charges should reflect the lack of service provided, not just a geographical area.The crunch will, of course, come when the government is called upon to impose customer service guarantees on Telstra. It claims that a lack of service can result in a carrier being fined $10 million—a drop in the huge telecommunications ocean in any case.The only other argument the government has put forward to justify the sale of Telstra is the one that is the most intellectually bankrupt and economically irresponsible of all: the attempt to link the sale with funding of so-called social bonus programs. Consider the precedent that this sets: government funding for programs which all parties and a vast majority of the electorate deem desirable being made conditional on Telstra's sale—a highly contentious policy still opposed by the majority of the electorate; that majority do not want Telstra sold.Social programs deserve to be funded in their own right from the federal budget. Imagine the outcry if the government stated that ongoing funding for schools, hospitals, nursing homes or employment programs were all dependent on the sale of Telstra. The simple fact is that the sale of assets has no bearing on the government's capacity to afford current expenditure programs. The Treasurer (Mr Costello) knows this, and I can remember many occasions when the coalition pointed this out to previous Labor governments, chastising them for attempting to use asset sales to conceal budget deficits. The importance of this point should not be lost, and Australians should not be misled into believing that the government will not be able to afford to meet its obligations if it does not sell Telstra.The government's inclusion of the proceeds from the sale of Telstra in the latest budget figures is arrogant and misleading. The Democrats are joined by the majority of Australians who oppose the sale of Telstra. Clever accounting will not detract from the fact that debt reduction through the sale of public assets is not in the national interest. The Democrats believe that the opponents of Telstra's sale have at least as compelling a case as those in favour of it. That is because the sale of such a vital public asset comes down to principles and values, not just to the government's economic imperatives. There are sound social, economic and political arguments for not selling Telstra—and I will be voting against its sale.15:49:005511McGauran, Sen JulianSenator McGAURANWH4VICNP10—Mr Acting Deputy President, I rise to speak—AW5CARRSenator Carr—He speaks! He speaks!WH4McGauran, Sen JulianSenator McGAURAN—I suppose, Senator Carr, you have come in especially to hear me speak this afternoon.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Murphy)—Senator McGauran, please direct your remarks through the chair.AW5CARRSenator Carr—Mr Acting Deputy President, I raise a point of order. Since the senator has invoked my name in his address, could I ask that he be given the opportunity to explain whether or not he will be standing down to allow Jeff Kennett to enter the Senate in his place.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Murphy)—There is no point of order. Senator Kemp, there is no point of order.WW4KEMPSenator Kemp—Mr Acting Deputy President, I wish to raise a point of order. We have heard many opposition speakers. No points of order were taken on those senators, thus allowing them to speak and complete their remarks.AW5CARRSenator Carr—Constant interruption!WW4KEMPSenator Kemp—Senator Carr seems to have forgotten that—and, Senator Carr, if this is the way you wish to run it, so be it, but we will remember it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Murphy)—Order! There is no point of order in either case.WH4McGauran, Sen JulianSenator McGAURAN—Mr Acting Deputy President, I can assure you that I will not be further provoked by Senator Carr during my speech, and I will get on with the matter at hand. The Telstra (Transition to Full Private Ownership) Bill 1998 provides legislation for the final two-thirds sale of Telstra, following the success of the initial one-third sale in October 1997.The first Telstra share offer opened on 15 October 1997 and, by the close of applications, over 1.8 million Australians had applied for shares. This resulted in the float being five times oversubscribed. Over 92 per cent of Telstra's employees took up the offer at the time. The one-third float of Telstra was the largest in the history of the Australian Stock Exchange, raising—well over budget estimates—$14.2 billion. At the close of the first day's trade—and since, may I add—the average investor who purchased over 900 shares was about $650 better off.I make that point to indicate the demand for and the popularity of—at least the popularity of it with the 1.8 million Australians who took up the share offer—the one-third sale of Telstra. Just as the mandate was sought by this government for the one-third sale of Telstra prior to the last election, the government is seeking a mandate now for the two-thirds sale of Telstra prior to the next election. If we are given that mandate at the next election, we will have the political authority and the legislative ability to trigger the final two-thirds sale of Telstra.It is fair to say that there are four main concerns raised with regard to the sale of Telstra, and privatisation as an issue as a whole: firstly, `Why sell the family silver?' is the most commonly asked question; secondly, the rural and regional areas will lose out; thirdly, and it is the most popular concern, the foreign corporations will buy up this key Australian asset; and, fourthly, there is the concern that the sale of Telstra will lead to job losses.Each concern can be answered. Firstly, with regard to the sale of the family silver: it is true that a full sale of Telstra does follow this government's strategy of selling major government utilities, like the Federal Airports Corporation, raising well over $4 billion; the Australian National rail network; and the Australian shipping service, ANL. It is also true to say that Telstra is the largest privatisation undertaken in Australia and ranks highly on the world scale.Privatisation is not unique to Australia. There has been a movement over the last decade for governments worldwide to sell government owned assets, and there are two primary reasons put forward to explain this economic strategy. The first is that governments should not be in the business of running a business, that private enterprise does it better. Inevitably, the government assets are a monopoly having the dual evils of monopoly pricing, which is always far too high, and monopoly customer service, which is always far too poor.Therefore, the sale of a government monopoly, along with allowing new entrants into the market, opens up the sector to competition and market forces, which in the long run brings improved customer service and improved pricing. Telstra is the perfect example of this. As a monopoly, it overcharged and underserviced. Ask anyone who tried to ring through to Telstra when it was a monopoly.Senator Carr interjecting—WH4McGauran, Sen JulianSenator McGAURAN—What a difference competition has made to Telstra. Today, competition, primarily from Optus, has given a choice to the consumer which has led to the fall in phone call prices and in particular a fall in the cost of an international call.The second reason advanced for the argument of privatisation is to reduce government debt. Throughout the 1980s and 1990s governments across the world have racked up high levels of debt, burdening their budgets with interest payment commitments. It is worth noting that the legacy this government was left in regard to debt was $100 billion. Incredibly, that figure jumped in the last four years of the previous government. From a manageable $32 billion in 1992, by 1996—coincidentally, the Keating years—the debt had jumped to $100 billion. Governments have a choice in meeting their debt commitments. Either they increase taxes or they sell their assets. Given that many countries have reached the zenith of their tax raising abilities, the sale of a government asset is the best choice. In the case of Telstra, it is estimated that some $40 billion will be raised, which will go towards reducing the government's debt legacy.The benefits of the debt legacy are obvious. Firstly, a government with a low debt ratio to GDP or with a debt reduction strategy of some sort in place gains the confidence of the market towards its currency and, moreover, it secures a high credit rating. Let me give the Victorian example, Senator Carr.AW5CARRSenator Carr—How many jobs have been lost in Victoria?WH4McGauran, Sen JulianSenator McGAURAN—By improving their credit rating back to a AAA rating, their borrowings are taken out at a lower interest rate, saving the Treasury billions of dollars.AW5CARRSenator Carr—Jeff Kennett was right!WH4McGauran, Sen JulianSenator McGAURAN—Secondly, it will free up government expenditure for other initiatives. While it is true that the government receives a dividend from Telstra each year, which also can be used towards budgetary purposes, it does not match the $1.5 billion saving on interest payments through the debt reduction program.An example of how some capital and interest savings can be directed as a social bonus can be seen in the funds resulting from the one-third sale of Telstra where they were directed. The highly successful $1.25 billion Natural Heritage Trust was a result of the one-third sale of Telstra. The Natural Heritage Trust is the largest environmental rescue effort ever undertaken by an Australian government. Furthermore, the Natural Heritage Trust allocated $163 million for one of Australia's most important agricultural regions, the Murray-Darling Basin.The second major question people ask in regard to the sale of Telstra is whether the selling of a government owned asset would be detrimental to the rural and regional areas of Australia, because privately owned companies will not undertake to uphold certain social responsibilities. The answer to this is as follows: the government is not only genuinely committed to the rural and regional areas of Australia but we have enshrined that commitment in legislation. The government has legislated in two areas: the universal service obligation, the community service obligation—Senator Carr interjecting—WH4McGauran, Sen JulianSenator McGAURAN—In fact, this government has strengthened these obligations prior to full privatisation.Opposition senators interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Murphy)—Order! Interjections, as we all know, are a contravention of the standing orders. Sustained interjections, Senator Carr, are unacceptable and I would ask that each senator be given the opportunity to be heard in reasonable silence.WH4McGauran, Sen JulianSenator McGAURAN—The USOs ensure that all Australians have access to a standard telephone service and pay phones, regardless of where they live. Where Telstra incurs a loss in complying with the USO, it is entitled to recoup that loss. The amount is recouped by imposing a levy on all the other carriers, like Optus, in proportion to their share of the market.The cost to install a new residential telephone connection is capped. This was done prior to privatisation. By law, the average residential connection cost must decrease in every year by one per cent in real terms. This means that the amount paid by regional customers to connect to Telstra's network is capped even when the real cost of connection is many times higher. Further to this, the coalition government has introduced a special scheme to ensure that local call prices in regional areas do not exceed the average local call price in major capital cities. This protection stays regardless of who owns Telstra.Perhaps the strongest response to concerns from the rural and regional areas that they may miss out as a result of privatisation is the enshrining and the strengthening of the community service guarantee. This CSG was introduced by the coalition government and took effect in January this year. Under the Telecommunications Act 1997, the guarantee means that telephone companies are legally required to meet service standards on things such as the time taken to connect a new phone service, the time taken to repair a faulty service and turning up for an appointment on time. If the service falls below the CSG performance standard, customers are eligible to compensation from the telecommunications company. An example of this is the $40 penalty that will be applied each day after five working days of delay in rectifying faults within a standard telephone service. What is more, that fine goes to the aggrieved customer.Furthermore, in support of the rural and regional areas, the coalition government last year introduced the $250 million innovation scheme named the regional telecommunications infrastructure fund. This fund ensures that rural and regional phone users have access to the latest technologies and infrastructure agreements. To date, 96 rural and regional projects worth over $57 million have been approved. Of late, the government has also announced a dramatic upgrading in relation to the regional mobile phone services and also in regard to untimed pastoral calls. Those two announcements have been made in the last two days.In relation to the third concern, that foreign companies will buy up this key asset, in short, this simply cannot happen. The rules of foreign ownership have been enshrined in legislation. Telstra will remain majority Australian owned with no more than 35 per cent foreign ownership, and no single foreign owner is allowed to have more than five per cent of Telstra. The chairman and the majority of the board will be Australian.The fourth concern relates to the impact privatisation will have on employment. However, the moving to full private ownership will not in itself impact on Telstra's employment levels. Telstra is two years into a downsizing program which has reduced total staff numbers from almost 77,000 in 1995 to 59,000 in early 1998. The announced target of around 51,000 will be reached by the year 2000.4J4SCHACHTSenator Schacht—Mr Acting Deputy President, I raise a point of order. Senators are not supposed to read their speeches verbatim, and I would have thought that Senator McGauran would make some effort to show that he could actually speak occasionally away from his copious notes and perhaps explain to us why 3,000 jobs in Victoria have gone from Telstra while he has been a National Party senator for Victoria.AW5CARRSenator Carr—Why have you remained silent?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Carr, as I said before, sustained interjections are unacceptable. With regard to the point of order raised by Senator Schacht, I understand that Senator McGauran does have a number of notes he may be referring to and I would at this time say that there is no point of order with respect to the point raised.WH4McGauran, Sen JulianSenator McGAURAN—I am trying to get my speech down pat without interruption, and it has really been hard work. I am convinced of the value of the privatisation of Telstra and I would like to be able to convince my electorate.4J4SCHACHTSenator Schacht—Why don't you quote from yesterday's Herald Sun ?WH4McGauran, Sen JulianSenator McGAURAN—I will be responding to the Herald Sun , Senator Schacht. I have a right of reply and I shall be responding. I made a commitment to Senator Murphy when he was in the chair not to be provoked by these people so I can just get my case argument down, but it has indeed been very hard work to plough through it. You think I am reading from a speech, but I am simply keeping my eyes down not to be distracted by the other side. There was a moment there when I could have been distracted to mention the AAA rating of the state of Victoria and how that has saved billions of dollars to the Victorian government and its Treasury and through them to the Victorian people. How did they come to that situation, Senator Carr? You should know, because you were in the previous government that racked up the debt that sent that state broke. I can read all about it from former Premier Cain, about how you went about that business of wrecking the state of Victoria for your own personal and absurd political reason. You have ruined my speech now, Senator Carr, so I might as well go off my notes and make my retort in the Herald Sun .AW5CARRSenator Carr—Jeff Kennett has got the measure of you!WH4McGauran, Sen JulianSenator McGAURAN—I am going to bring that book in and quote just what John Cain said. You often come back at me about what Jeff Kennett says about me, and we all know he has a lot to say about a lot of people. I do not know how he retains half of his comments against people; he must write them down. I am but one, Senator Carr. But I will tell you what: no-one despises another more than John Cain despises you, because you not only wrecked the government, you wrecked the state. Senator Cooney, you know this to be true. Do not slink away.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—Senator McGauran, direct your marks through the chair, if you don't mind.WH4McGauran, Sen JulianSenator McGAURAN—I will finish the point in regard to employment because it is an important point, if not the most important point, in regard to the privatisation of Telstra. The downsizing is driven not by the ownership—whether it is privatised—but by the combined effects of new technology, improved productivity and competitive pressures, as shown by the fact that it began while Telstra was still 100 per cent owned by the government. It was necessary to meet the new entrants to the market, like Optus, on a competitive footing. But it is worthy of note that the employees have been picked up, probably by Optus. It is an industry that is growing by greater than 14 per cent. That is the employment figure. Most have been picked up; some have even got better jobs.In conclusion, given the enormity of the full sale of Telstra and the importance of the industry it represents—an industry affecting every person in Australian society—it is little wonder that there is so much debate and interest in this issue. I have outlined the four main concerns, to which the government has responded in full, and I am confident that the answers given will ensure a mandate from the Australian people in the forthcoming election. To this end, I urge the Senate to support the legislation.16:08:005515Crowley, Sen RosemarySenator CROWLEYZF4SAALP00—I rise to speak on this Telstra (Transition to Full Private Ownership) Bill 1998 . As is known from the register of interests, I have Telstra shares.This bill proposes the full privatisation of the rest of Telstra. I am utterly opposed to this, and I am appalled that the details of the deal—the buy-off of the National Party—are not even known to this parliament. Why is there such unseemly haste? Why is there such a claimed urgency to push this bill through this place? We know why. It is because there is an election coming very soon indeed, so it is necessary to settle this package to buy off the necessary votes. A lot of people have been complaining about the way this government has not been listening to people, particularly in rural and regional Australia. We know about that because of an inquiry on regional unemployment that we are doing at the moment, and I will come back to that shortly.I do not believe that the majority of Australians will be fooled by this very cynical little exercise. Why would a package whose details are not known convince people that they should trust this government when it is clearly understood to be nothing more than a very cynical exercise to buy off the National Party votes? Those votes were very much threatened because the National Party knows two things: it knows that it is very seriously under threat in the forthcoming election because of the recent ballot in Queensland, and it knows more than many people just how important Telstra is to people in rural and regional Australia.It also knows that, despite its mistakes or insufficiencies, a public Telstra is better by far than a privatised one. In any polling, well over 60 per cent of Australians are totally opposed to the privatisation of the rest of Telstra. They are concerned about that because they know what will happen when Telstra is privatised. The services will fall off and the prices will rise. It is a very simple equation.The other interesting thing about the benefits that have been wrung out of the Prime Minister through this package of between $400 million and $800 million—paid for by the rest of the taxpayers of this country—is that the services that are provided now could be provided with a public Telstra if there were a directive from the government. There is absolutely no need to privatise Telstra to achieve what the government is proposing to achieve.This legislation and these decisions are not about policy, they are about politics. They are about the politics of cynicism and fear and it is something that will not be lost on the people of this country. They have made it very clear to us, particularly through the poll in Queensland, that they will not be taken for fools and they will not be taken to not understand the insufficiency of this government. They know about broken promises, they know about core promises and non-core promises, and they know that once Telstra is sold, it is sold forever. It is gone.I want to read a couple of quotes that I think are very important, from a transcript of today's interview with Lex Buchanan from the Queensland Farmers Federation, who was being interviewed on ABC Radio's AM program. The journalist asked:Do you think the Federal Government should hold off on its plans to sell off the rest of Telstra and implement new mobile phone technology and these other things that they've promised first?Mr Buchanan replied:That would probably be our preferred position. We have not been impressed, particularly by Senator Alston making the comment publicly that when certain politicians were coming to him to put the case that they were wasting their time. We would point out in return that these are the very things that have led to the change in the political structure here in Queensland.This is not a paid-up member of the Labor Party making this point. This is a member of the Queensland Farmers Federation saying that they have been very disappointed and very unimpressed by Senator Alston's publicly dismissing their attempt to persuade him about their point of view in terms of Telstra and the requirements of people in rural and regional Queensland. In another interview from the same ABC Radio AM program of today, the interviewer, Ms Kirk, is talking to De-Anne Kelly, a National Party member:Ms Kirk: Dee-Anne Kelly, the Government is promising untimed local calls for an extra 3,000 to 40,000 people—I would have to say a pretty imprecise figure—in isolated areas and much, much more, because Telstra is to be sold. How could you knock that back?Ms Kelly: I certainly wouldn't knock that back at all. It's a very welcome initiative. It's a pity that it had to be delivered under pressure from the bush over the sale of Telstra. I mean, that's one of the services that should be given as part of a fair go for all Australians. But very welcome. However, I would just point out that you don't need to sell Telstra, 100 per cent of Telstra to do that. Yesterday we had an announcement on CDMA upgrades for mobile phones in rural and regional areas, $250 million that Telstra could do for people in the bush and it is still in 66 per cent Government control. So, it can be done. You don't need to sell Telstra.That is a member of the National Party in this parliament. The interviewer went on:Ms Kirk: But your own National Party President pointed out the other day it's better to have privately owned Telstra with real benefits for rural customers that they'd not dreamed about 30 years ago . . .I think there must be an error in this type, so I will end the quote there. Mrs Kelly went on:Ms Kelly: Well, I respect my President but I'd have to say that the view amongst my constituency very much is that once Telstra is privatised and there's a one-off upgrade, such as untimed local calls, what happens next when there's another technological leap forward, bearing in mind that we don't even have in many areas, access to the Internet as yet. But next time there's a big technological leap forward who pays for the upgrade for rural and regional Australians? I mean, Frank Blount has said last week that Telstra would only upgrade regional and rural services in an affordable and efficient way.There is a great need for concern. The Labor Party has described, and will continue to describe, that concern. But it is very interesting when the concern could not be described better than it has been by a National Party member of Mr Howard's own government, the member for Dawson, Mrs De-Anne Kelly. It will be interesting to see whether she does hold to her threat to cross the floor when and if this bill is ever returned to the House of Representatives.9L6MACKAYSenator Mackay—It won't make any difference anyway, will it?ZF4Crowley, Sen RosemarySenator CROWLEY—Quite true. I want to talk about an area that I think is a very big concern, and it has not been particularly developed in this debate—that is, the impact of the privatisation of Telstra on women. It is interesting how women have very much dropped off the political agenda with the advent of a Howard government, despite the fact that, of course, he has a very significant number of women in his parliament. In fact, the Howard government boasted about the number of women. But time and time again we have seen those women vote for policies or programs that have disadvantaged women. They have voted for changes in Medicare, for increasing the costs of child care, for the need to sell your home before you can get into a nursing home, and for significant changes in industrial relations that have enormously disadvantaged women. Now they are going to vote for the privatisation of Telstra when they know, if they talked to just a very few women in the rural and regional areas of this country, that women will be principally disadvantaged by the telephone cut-off—the changes.Many years ago when I was not too long elected—I think it was after I became a senator, but certainly back then—the women of South Australia organised a `Labor Party women listen to people in rural South Australia' forum. We held that forum in Port Augusta. We asked many women to come along who were certainly anything but members of the Labor Party. We were concerned to know what were the principal issues for them.The first issue, and the answer certainly surprised everyone there, went to the question of what is the highest priority issue for women in rural and regional Australia. It was water. The second highest priority was communications—the telephone. The women were particularly interested in the telephone as a way of maintaining friendships and contact with family, when they lived so much of their lives in pretty isolated and distant areas. They were very concerned about simply being able to maintain a community of contact by the telephone.They particularly talked about the importance of the telephone for emergencies. It is one thing for us to be able to quickly get in contact with an ambulance for emergencies; it is another altogether when you are living in rural and regional Australia. They were concerned about the importance of the telephone in terms of dealing with emergencies or accidents but also for finding out about how to manage things safely.I know about this, too, because of the concern many rural families have about child care, to assist families when they are under pressure of work and to make sure that their children are safe from the hazards of living on a farm where, indeed, more children are killed by accident per year than anywhere else in this country. The telephone is critical for advice about safety and advice about what to do should an accident happen.We saw not too long ago the launch of a further package in the campaign against domestic violence in this country. While I certainly acknowledge the critical importance of that contribution by the current government to the domestic violence issue, I also point out that it builds on the considerable program and policies established under the previous Labor government.There is no doubt, though, that if you are a victim of domestic violence in rural and regional Australia, the need of the telephone, and indeed a specifically established tele phone hotline, to assist people who are dealing with the difficulties of domestic violence is just the sort of thing that is at risk. These women now may find that the costs of the telephone and their calls are significantly increased.There is another point that I was pleased to pick up on from the Hansard of evidence provided to the Senate Environment, Recreation, Communications and the Arts Legislation Committee by Mrs Smith giving evidence on behalf of the Country Women's Association. She said:I guess another of the reasons why the quality of the service is very important—not only, first of all, that there is a service, but that it is of reasonable quality—is that telemedicine is becoming so much more prominent in remote areas now, too. If you were having your ECG sent down the telephone, you would want the quality to be pretty good, wouldn't you?I cannot think of a better example, unless perhaps you are halfway through a telemedicine operation when the line jacks out or has some interference. These are points that I think are being brought to the government's attention by members of the Country Women's Association and that certainly were raised at the hearings of the ERCA committee.They are very important points. People are concerned, first of all, that they have a service, secondly, that that service is of good quality and, thirdly, and most importantly, that it is affordable.It is interesting to consider another factor that is not being told to people about the consequences of a privatised Telstra. I have mentioned that, on any evidence, once a major service of that sort is privatised, the service quality falls and the costs rise. But in this case, Mr Howard has a bonus issue for the people of Australia, particularly regional and rural Australia, and that is the GST. Every time your telephone is connected, the GST will be added to it. Every time your phone is reconnected, that service will enjoy a GST. Every time you have cable television connections made, that will enjoy the extra GST. YW4MACDONALDSenator Ian Macdonald—How do you know this?656FORSHAWSenator Forshaw—You haven't got a policy, then?YW4MACDONALDSenator Ian Macdonald—She doesn't know.ZF4Crowley, Sen RosemarySenator CROWLEY—Every time your tax bill comes, that will have a GST. Every time you buy a phone from a phone supply shop, that will also enjoy the benefit of an extra GST.Opposition senators interjecting—ZF4Crowley, Sen RosemarySenator CROWLEY—Senators opposite are shouting for the first time in my speech, which means that we must have suddenly landed a punch. We must have landed a bit of an injury to them. It is very concerning for those of us who have bothered to go out and listen to and talk with people in rural and regional Australia about their concerns, to learn that most people do not want Telstra privatised and to know that neither do so many on the coalition backbenches. Yet they have bowed to pressure from their Liberal coalition colleagues. They have been forced into this and then bought off at a considerable price to be paid by the taxpayers of Australia.It is very clear that Australians have never minded about assisting our colleagues and our families in rural and regional Australia. There has always been the cross-subsidy impact. In my own state, under the cross-subsidy arrangements that operate at the moment, loss making infrastructure in rural and regional areas is supported by profits made in other parts of Telstra. That means that, for instance, throughout northern Queensland the average cross-subsidy is up to $1,000 a line, and in regions like north-west New South Wales it can be up to $4,000 a line. Up through remote parts of Western Australia, the cross-subsidy can be over $5,000 a line. In far western areas of South Australia—my own state—like Ceduna, for example, lines can be worth more than $6,000. Most citizens understand that when we pay our telephone bill, we are also chipping in to make telephones affordable for people in rural and regional Australia, because we have a fairly large commitment to fairness in this country.But is it fair that, in the privatising of Telstra, one large chunk of the community will benefit enormously at a cost to the taxpayers of the rest of the Australia?YW4MACDONALDSenator Ian Macdonald—Have you heard today's announcement?656FORSHAWSenator Forshaw—It's called equity.ZF4Crowley, Sen RosemarySenator CROWLEY—We do not mind paying, if it is fair, but we object to paying for what is no more than a buy-off, a very big bribe.Senator Ian Macdonald interjecting—656FORSHAWSenator Forshaw—Stand up and say something. Stand up and make a speech.ZF4Crowley, Sen RosemarySenator CROWLEY—It is a very sad day if we see the total privatisation of Telstra. My colleagues opposite are carrying on somewhat, but I urge them, if they have any doubts about this, to read an excellent debate—I do not have time to go into it, but I wish I could. It is a perfectly splendid speech dated 27 March 1946 by the then Premier Tom Playford about the need to buy the private electricity company in South Australia back into public ownership because of the failure of a privatised service to deliver on behalf of the people of that state. That is what we have done in delivering Telstra and that is what some of us will fight to maintain. We know that privatised services do not care about community obligations. They care much more about profits.In the remaining minutes available to me I foreshadow that I will move a second reading amendment on behalf of the opposition. The government's amendments are about competition issues. They are not to do with the central issue of privatisation. The opposition believes that these amendments should be referred back to the ERCA committee for consideration and report back by 2 November. This will give the industry the opportunity to also put forward further amendments on competition issues. The opposition is not necessarily opposed to these amendments but wants to give them more careful consideration. The amendment has been circulated.In the last minute remaining, it is important to say once again that this decision—this privatising of the rest of Telstra—is a feeble effort at policy on the run. It is not about policy; it is about rescuing Senator Parer. It is about politics and nothing else but. It is a complete breaking of the promise given by Prime Minister Howard that this would not happen. This is yet another of Mr Howard's broken promises. It is against the wish of a huge majority of the Australian people who time and time again in polling have opposed any further privatisation of Telstra. They know that privatising means a drop in services and an increase in costs. When you add the GST to all those services, the Australian people will suffer terribly if this legislation is passed and at any stage proclaimed. (Time expired)16:29:005519Mackay, Sen SueSenator MACKAY9L6TASALP00—I rise today in complete and utter opposition to the sale of Telstra, obviously. Before I get into the debate, I think it might be salutary to look at how many government speakers there are on the speakers list.656FORSHAWSenator Forshaw—How many?9L6Mackay, Sen SueSenator MACKAY—There are three out of 17.656FORSHAWSenator Forshaw—That includes the minister.9L6Mackay, Sen SueSenator MACKAY—That includes the Minister for Communications, the Information Economy and the Arts (Senator Alston); that is absolutely correct. Two of the three are Nationals. Not one Tasmanian Liberal senator has uttered a word in relation to this debate other than Senator Abetz, who is not here, unfortunately. I am sure he will come racing down once he hears his name on the monitor; he has been continuously interjecting. Senator Abetz did not have the courage to come in here and make a contribution, which is very unusual for him because you usually cannot shut him up.This does not surprise the people on this side of the chamber. The Tasmanian Liberal Senate team has simply given up the fight for Tasmania, from our perspective, with a couple of exceptions. I will not name them, but, Mr Acting Deputy President Calvert, you are one. It does not include Senator Abetz and it does not include the senator who actually does not live in Tasmania any more and who is very rarely there, and we all know who that is.If this new deal is so stunning for Tasmania, where is it? We had an announcement yesterday and a small announcement today. The rest will be drip fed out as we move into the election. We do not have the deal until we even discuss whether the legislation is worth passing. Why are the Tasmanian government senators not prepared to get up, tell us what the deal is, laud it, explain why it is such a good deal for Tasmania, shout it from the rooftops and possibly enlighten us along the way? Where are they?I can tell you where they are. They are in the same place they were when their government slashed $50 million from Tasmania in labour market programs. They are in the same place they were when their government slashed the child-care subsidy for community based child-care centres. They are in the same place they were when their government slashed funding to health. They are in the same place they were when up-front fees were imposed for universities. They are in the same place they were when CESs were closed and the community based providers were thrown out of jobs. They are in the same place they were when cuts were instituted to legal aid and when education funding was slashed for Tasmania and so on. You could not do a better job if you sat down and strategically decided to wreck a state's economy in terms of what this federal government has done. Where were they all this time? They were missing in action, as usual.Let us turn to the two National Party senators who have had the gumption—I will give them that credit—to front in this debate.YW4MACDONALDSenator Ian Macdonald—Wait till Bozzie gets into you.RD4BROWNHILLSenator Brownhill—Tell us about it.9L6Mackay, Sen SueSenator MACKAY—The first one was Senator McGauran. Senator McGauran had more courage than other members of the coalition. He got up and defended the position. He was fifth last on the speakers list, allowing at least some scrutiny from opposition senators, which I will give him brownie points for. He may be fifth last on a very long speakers list, but he is right up there in the coalition speakers. In fact, he was the first coalition speaker to make a speech with regard to what is an incredibly important initiative and what this government is touting as a major win with regard to regional Australia. Where are the rest of them?656FORSHAWSenator Forshaw—Mr Acting Deputy President, I raise a point of order. I am very loath to interrupt my colleague in this eloquent and well reasoned debate, but Senator Macdonald and Senator Brownhill do not have the courage to get up and make speeches on this debate. It also appears that they do not have the intelligence to sit in their own seats when they interject.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—What is the point of order?656FORSHAWSenator Forshaw—The point of order is that they are interjecting continuously and they are out of their seats.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—I take your point. They were out of their seats. However, there have been continual interjections from both sides. I recall very well when Senator McGauran was on his feet that five people were interjecting at once on this side. So it happens on both sides. I take your point. Senator Brownhill, in future, when you wish to interject, would you do so from your own place.RD4BROWNHILLSenator Brownhill—Mr Acting Deputy President, on the point of order: I am now in my place.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—There is no point of order.9L6Mackay, Sen SueSenator MACKAY—As I was saying, Senator McGauran was the first coalition speaker. Where were the rest of them? Why are they not in here defending this deal and the sale of Telstra and explaining to the people of Australia, particularly those in Tasmania, why it is such a good thing? Because they do not have the gumption.Senator Bolkus interjecting—9L6Mackay, Sen SueSenator MACKAY—As Senator Bolkus says, they are embarrassed and ashamed. Where are they? Like the Tasmanian senators, they are missing in action.RD4BROWNHILLSenator Brownhill—We're in here now.9L6Mackay, Sen SueSenator MACKAY—You may be in here now, but you have not spoken and you obviously do not intend to speak.Senator Brownhill interjecting—9L6Mackay, Sen SueSenator MACKAY—In relation to the speech that Senator Faulkner made earlier, I understand that you have made 10 contributions since you have been here. Perhaps if you did get up on your feet and make a speech, it would illuminate the Senate. Let us turn to Senator Boswell.RD4BROWNHILLSenator Brownhill—Mr Acting Deputy President, I raise a point of order. This is absolutely and completely incorrect. I have spoken on all the legislation pertaining to my portfolio area.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—What is your point of order?RD4BROWNHILLSenator Brownhill—The fact that Senator Mackay is misleading the Senate.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—It is not a point of order. I ask senators on my right and on my left to cease interjecting because I want to hear my colleague from Tasmania.9L6Mackay, Sen SueSenator MACKAY—Let us turn to Senator Boswell. I am glad that he is here. One would think that, having brokered this so-called rescue package for rural and regional Australia, he would have been at least one of the first speakers leading from the front in supporting his constituents in rural and regional Australia. But where is he on the speakers list? I pay him the tribute of at least having the gumption to come in here and defend this deal. He is second last, leading from behind. The only remaining speaker on the speakers list is the minister, who has no choice. He has to come here and defend the deal.What outstanding political courage from the government! Three people from the government have the gumption to come in here and defend a major initiative that people in regional and rural Australia are concerned about.Senator Ian Macdonald interjecting—9L6Mackay, Sen SueSenator MACKAY—They obviously think this is terribly amusing. I can tell you that it is not. It is not terribly amusing if you come from Tasmania. It is utterly beyond belief that we are debating this bill—for three reasons. First, this is utter political suicide for the coalition. This is utterly crazy, utterly stupid and utterly beyond belief. I cannot believe that the coalition is doing it. From a straight, base political motivation, it is unbelievable. I cannot believe it. This government will lose swags and swags of seats over the sale of Telstra.YW4MACDONALDSenator Ian Macdonald—What are you worried about?9L6Mackay, Sen SueSenator MACKAY—In relation to base political motivation, it is unbelievable. Second, the Prime Minister (Mr Howard) gave his word.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Ian Macdonald, you have been continually interjecting. I ask you to come to order.9L6Mackay, Sen SueSenator MACKAY—The Prime Minister gave his word that this would not happen, so did Senator Hill. In fact the whole of the government—hand on heart—got up and said, `Trust us on the one-third sale. We will never, ever sell the remaining two-thirds.' The third reason why it is unbelievable that we are here debating this is that it is the wrong thing to do by Australia and it is the wrong thing to do by regional and rural Australia. In terms of principle and of actually serving the people that we are here to represent, it is the wrong thing to do.This government has no mandate to do this—no mandate at all—and the government said it would not do it. Again, hand on heart, they said, `If we were to do it, we'd wait until after the election until we had a mandate, so the people can actually have a say with regard to this initiative.' That is pretty novel from this government, but laudable. Fair enough—you go to the people, you have a policy, you wait until you get elected then you institute it because you have a mandate—but, no, this government does it the other way around.656FORSHAWSenator Forshaw—At least John Hewson was honest in 1993.9L6Mackay, Sen SueSenator MACKAY—That is correct. That would be fine but they have not done it. They have broken their promise. Obviously it is a non-core promise, something—interestingly—which has gone into the vernacular of Australians. If you walk into any pub or supermarket it is `non-core', `core' and so on in terms of almost everything you talk about. That is why we find ourselves here today. This is an utter travesty; we do not believe it should be happening.John Howard's only mandate for the term of this government was to sell one-third of Telstra. If he wants to sell the rest, he should—as he promised—firstly gain the support of the Australian people at the next election. It is for this reason that the opposition will be moving an amendment in the second reading debate which, if successful, will have the effect of deferring further debate on this bill until the first day of sittings next year. I foreshadow that Senator Faulkner will be moving the amendment, which I understand has been circulated in his name. This amendment will give all senators the opportunity to hold Mr Howard to his word.Let us briefly go through what happened for Tasmania with the one-third sale of Telstra. As Senator Murphy so eloquently pointed out, the $58 million that was parish-pumped into Tasmania was already in the Telstra business plan. All it was doing was bringing a number of those initiatives forward, and I think Senator Murphy made that case. As I said, Mr Howard vowed and declared, hand on heart—and we are not sure that he has got one, Senator Bolkus—that he would never, ever sell the remaining two-thirds of Telstra and at that point he gloated about making Australia the greatest nation of shareholders in the world.What an aspiration to have—making Australia the greatest shareholding nation in the world. Maybe he meant the greatest cabinet of shareholders in the world. Maybe that is what he meant because he is certainly on the way there. Irrespective of that, what an aspiration for a government to have: to make the greatest nation of shareholders in the world. It is absolutely outrageous.What about people? Forget shareholders; I know shareholders are people but we have to look after people first. This bill is actually going to adversely affect people in regional and rural Australia—and this government knows it. That is why none of those opposite—with three exceptions—have had the gumption to get up here and defend it. That is why, because you know it is the wrong thing to do. But you sit here in a cowardly way and continually interject as we get up and put ourselves on the line and indicate what our position is. You do not have the gumption to get up and defend your own position. I think that says a lot.Let us turn to Senator Harradine. Senator Harradine also said he would never, ever agree to the further sale of two-thirds of Telstra. He said that to the people of Australia. He said that to the people of Tasmania, and the people of Tasmania believed him. He was also saying, `I will never, ever support the further two-thirds sale of Telstra.' The people of Tasmania look like they were wrong and the people of Australia look like they were wrong. I must say I thought he would not do this. I genuinely thought that Senator Harradine would not support this. I was wrong.I have to say that in my dealings with Senator Harradine in the portfolios that I have responsibility for, which are industrial relations and employment, I have found him a very honourable person. I have found him to be a person of principle with regard to those two portfolios. I have found him to be a person who actually genuinely cares about the people of Tasmania. I thought that, when he made that commitment, he would keep his word. I thought he was genuine; I thought he was telling the truth, and so did the people of Tasmania. But I was wrong and the people of Tasmania were wrong.I was on talkback radio with Senator Gibson the other day and we had a number of calls. I think there was one caller who was equivocal about the sale of Telstra—this is in Tasmania—and everybody else was implacably opposed to it. A lot of the people who rang up were shareholders. They said, `We bought shares in Telstra on the premise that only one-third of it would be sold, but we don't want Telstra sold.' This government is denying the people the opportunity of having a say whilst seeking a mandate. They are doing it the wrong way around. It is absolutely lacking in intestinal fortitude.I notice today that Senator Harradine says he is `leaning' towards a further two-thirds sale of Telstra. Senator Harradine says:I've got a list . . . against and for . . . in actual words, the against is stronger but it gets down to the issue, can the government deliver a cheaper and more efficient telecommunications service than can a commercially-oriented or private organisation.The answer is no. He knows that. He was active in the labour movement for a long time. As I said, he has done nothing but the right thing with regard to industrial relations. He knows that it is wrong. He knows that it is the wrong thing to do.The people of Tasmania do not want Telstra sold. They have already had millions and millions ripped out of the state. They know that, once the telco is sold, it can never be bought back. This is not about quick fixes for grubby, short-term political gains—well, it is for the government—but for those of us who live in Tasmania, who are paid to come here and represent this state, it is about future generations. It is about state of the art technology for future generations of Tasmanians. That is what it is about, and we will be behind the eight ball. It is outrageous that one person can actually make a decision for future generations of Australians—and it looks like he is going to make the wrong decision.The government has already ratted on the deal with Senator Harradine because the 170 jobs that they committed themselves to have not been created. When Senator Alston, who has been repeatedly asked about this, was reminded about that commitment for the 170 jobs, he said, `Don't ask me. That was Telstra's commitment.'ZW4SHERRYSenator Sherry—Like the ABC funding commitment.9L6Mackay, Sen SueSenator MACKAY—That does not augur very well for the full privatisation of Telstra, does it? If we do not win government at the next election—which is unlikely I would have to say; after the passage of this bill, it is more likely that we will win government—we will be in here in opposition and the minister will again be saying, `Don't ask me. I'm only the minister.'XE4BOLKUSSenator Bolkus—`I'm only the doormat.'9L6Mackay, Sen SueSenator MACKAY—`I'm only the doormat. Don't ask me. I'm only the minister. Go and ask Telstra about this.' What about the future? How is the minister going to ensure that these commitments are given? Senator Harradine asked a question of the minister, and he stated:Minister, can you confirm that Telstra's message bank facility is available free of charge to all capital cities in Australia except Hobart? Is it a fact that all Tasmanian users, including Hobart users, have to pay at STD rates to Melbourne in order to leave a message or to retrieve a message? If the facility is available free of charge to those users in the other capital cities, why is it not available to users in Hobart? Why is it not available free of charge right throughout Australia?The answer from Senator Alston:It is obviously a commercial service that Telstra operates.He was then interrupted by an interjection, but continued:I see, so everything that Telstra does should be made available to everyone?This is his response to a question from Senator Harradine. He went on:Is that what you are arguing?That is what he asked Senator Harradine. He continued:This is the ultimate in socialisation, isn't it?The minister absolutely mocked Senator Harradine for a genuine question, a question which I thought was very illustrative of how this government perceives Telstra will be run in a full privatised model. The minister said all of this to Senator Harradine, and I am amazed that he has not got the message. Senator Alston went on:This is not only having the shares in the company but your approach would be that you have the capacity to go in and tell them everything you want them to do—you would tell them how to run the business and which services ought to be made available across the board.He continued:But that is a very different proposition to saying that they ought to be forced to provide it wherever you think it ought to be introduced.I think that response to a question from Senator Harradine says it all. There is absolutely no way this government is going to be able to honour its commitment. Senator Harradine knows it and I hope he reconsiders his position.In regard to Senator Harradine, as I said, we heard this morning that he is leaning towards the further two-thirds privatisation of Telstra. I must admit—and I have had a lot of calls into my office at home about this—that people are getting pretty sick of this tactic of Senator Harradine's. Now you see him, now you don't; maybe he will, maybe he won't; and so on. If Senator Harradine does make this decision—and I hope he does not—he will have made it without consulting the people of Tasmania, the people who pay his salary and who he purports to represent.We talk about the CSO that the government is lauding. This is the same government that were prepared to accept the recommendation from the National Competition Council for the abolition of the cross-subsidy on Australia Post. You cannot trust the government. You could not trust them on that. The Hanson phenomenon happened, so they reversed the decision on that. It was a knee-jerk reaction. The Hanson phenomenon happened, so they changed their minds on that. You cannot trust this government on the issue of the CSO.What I want to know from Senator Harradine—and I do not know whether he is coming in here or not; I certainly hope he does come in—is why on earth he is doing this. It is actually beyond me. I cannot understand why he is doing this. With regard to Wik, whilst I completely disagreed with what he did, I could see that there was some symmetry to it. I could see that there was some logic to it. I could see that he was genuinely concerned about a race based double dissolution election. I disagreed with what he did, but at least I could understand it. Here, for the life of me, I cannot understand it. Given that Senator Harradine was one of the people who said he would never ever vote for the full sale of Telstra, I do not think the people of Tasmania or Australia can trust him anymore either. Not only can we not trust the Prime Minister, Mr Howard; we cannot trust Senator Harradine anymore either.If this bill goes through, the only way the privatisation of Telstra will be stopped is by voting this government out. I think this government has got some kind of a death wish, because I think that is precisely what is going to happen. As I said before, it is politically loopy to do this. As far as this government is concerned and as far as Senator Harradine is concerned, the people of Australia and the people of Tasmania will judge them, and history will judge them, harshly. If Senator Harradine supports this, as far as I am concerned, he will not have a shred of principle left.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—Senator Mackay, you have to actually foreshadow the amendment.9L6Mackay, Sen SueSenator MACKAY—I have.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—No, you said `on behalf of Senator Faulkner'. You actually have to foreshadow it yourself. I thought I would remind you before you finished.9L6Mackay, Sen SueSenator MACKAY—Thank you, I appreciate that. Let me finish with the never ever which will never ever really happen. The people of Australia will never ever forgive this government if this bill goes through and, if Senator Harradine supports it, the people of Tasmania will never ever forgive him for what he is doing. I foreshadow that the opposition will be moving an amendment to the motion for the second reading in the following terms:Omit all words after "That", substitute:"further consideration of the bill be postponed and be an order of the day for the first day of sittings in 1999".16:50:005524Boswell, Sen RonaldSenator BOSWELLYE4QLDNP10—Since the sale of Telstra was first announced, I have been on the record as saying that I would not support the Telstra (Transition to Full Private Ownership) Bill 1998 unless it had absolute, ironclad guarantees for rural and regional Australia. My National Party colleagues in the Senate and I have been to see the Prime Minister (Mr Howard) on two or three occasions—some of us on three occasions, others on two occasions.4J4SCHACHTSenator Schacht—Which one did you roll over on?YE4Boswell, Sen RonaldSenator BOSWELL—In actual fact, I did not roll over, and I want to refer to your press release, which says:Why doesn't the National Party explain how it will guarantee a world-class telecommunications network to regional and rural Australia into the next century and beyond?I think that is a very, very good question, and the answer to that question is that you can only do it with the return of the sale of the network.4J4SCHACHTSenator Schacht—Turn it up!YE4Boswell, Sen RonaldSenator BOSWELL—That will give money, and we have guarantees from the Prime Minister that that money will guarantee everything that rural Australia wants.4J4SCHACHTSenator Schacht—What's next?Senator Mackay interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—Order! During the last speech, I asked the interjectors on my right to cease interjecting. I would now say to senators on my left that they should keep their interjections to a minimum. I call Senator Boswell.YE4Boswell, Sen RonaldSenator BOSWELL—Thank you. Senator Schacht has hit it right on the head. The only way you can get rural and regional Australia up to speed with a decent telecommunications system that is not steam driven, that is not 2.4 kilobits when everyone else has got 64 kilobits, is by using the money from the sale, and that is where we are coming from.Regional and remote Australia has always been the poor relation when it comes to telecommunications services. There has been a large section of Australia which has suffered and been denied all the benefits that access to modern telecommunications can deliver.The National Party, the NFF and the Isolated Children's Parents Association have all spoken out about the difficulties in their lives in conducting their day-to-day business, in carrying on their major export industries and in educating their children by correspondence because of these deficiencies. The National Party, the NFF and the ICPA have all been united in their call for better and equal telecommunications for the bush.A fax takes nearly two minutes to transmit an A4 page—that is, if you can get a fax to work or if you can get an Internet connection. You have to be very lucky to get that. Of course, if the day is not sunny and the towers are not working properly, you cannot even get a fax. It takes so long to get it through.Remote people have only 2.4 kilobits when the rest of Australia has 64 kilobits, and access to the Internet is impossible for some regional and remote Australians. The only way we are going to get this up is by the injection of that money. Many remote Australians cannot make one local call from their home because they do not have a local 25c call area. There are families out there without access to their nearest local town who do not have a local call rate to that small community centre, despite it being their lifeline. Today, we removed the pastoral rate from the zones so people can have a chat with each other. This is the first time ever.4J4SCHACHTSenator Schacht—They're still paying timed calls.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Calvert)—Senator Schacht, you will have plenty of time to make a contribution later, I suspect.4J4SCHACHTSenator Schacht—You fell for it hook, line and sinker on that one.YE4Boswell, Sen RonaldSenator BOSWELL—No, I did not fall for it hook, line and sinker. It is being raised from 25c for four minutes to 25c for 12 minutes—a 300 per cent increase. That is a huge breakthrough.I have had many people call me, but I can tell you of just one who cannot access their local town to transact business, to access their stock and station agent, to do normal day-to-day business—as normal as that can be with the few services and facilities in these small western towns—when their nearest local town is not a local call. This family, on a smaller than average station with about 7,000 sheep, doing their essential local business had a telephone bill last year of $3,200. That is a lot to ask country Australia.AW5CARRSenator Carr—It costs a lot more under a privatised company.YE4Boswell, Sen RonaldSenator BOSWELL—Country Australia is asked to continue to return the enormous export earnings that support the whole nation. Our rural industries are world leaders. They are efficient. They are internationally competitive. To continue on this path, they need up-to-date telecommunications to access world prices, to forward sell their products—gone are the days when you just sent your product down to the local abattoirs and hoped for the best—to deal with the futures market.AW5CARRSenator Carr—He doesn't believe a word of this.YE4Boswell, Sen RonaldSenator BOSWELL—They have to have faxes that work. They have to have Internet access and at affordable prices, not chugging away at 2.4 kilobits that takes an hour to get an Internet call whereas in the cities they can whiz it through in five minutes. That is why we have had to do this. We have to get those people up to speed on their telecommunications.AW5CARRSenator Carr—How pitiful.YE4Boswell, Sen RonaldSenator BOSWELL—They need high-speed digital access so they can have affordable education for their kids, the isolated children. Those are the things that are required out there. The National Party knows this. We know our rural industries. We know what people want. We continually talk to them all the time.4J4SCHACHTSenator Schacht—Are you into self-humiliation?Senator Carr interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Carr, I am getting sick and tired of your continual interjections. If you do not cease, I will get the President in here to deal with you.YE4Boswell, Sen RonaldSenator BOSWELL—Our people have to be internationally competitive. They have to have the latest telecommunications. This is the only chance—it is probably one chance in a million—that they can get there. We have to drive the bush forward. We cannot just go back to the 1960s. We are an exporting country. There is no solution in pretending we can live in the 1950s or 1960s again.The National Party has always kept advancing the agenda for rural Australia, and the new telecommunications package was hard won by our people. We were continually in the office of the Minister for Communications, the Information Economy and the Arts (Senator Alston). We were continually in the Prime Minister's office. We had Wendy Craik and her negotiator up in Alston's office. The benefits to rural Australia are vast and will never be known until they are announced, and then the people will appreciate them.We are an exporting nation. We need every means available to keep that edge on our trade competitors. You simply cannot ask rural Australians to be internationally competitive, to lead the way, and not give them the tools of the trade to do that. The National Party has listened to the people out there who need these services. We have a conference resolution nominating what we require. Our party has been guided by the NFF, by the Isolated Children's Parents Association—4J4SCHACHTSenator Schacht—What about the CWA?YE4Boswell, Sen RonaldSenator BOSWELL—By the CWA, and all those sorts of people who want these things, who want to be able to educate their kids in distant education.4J4SCHACHTSenator Schacht—And they don't want to sell.YE4Boswell, Sen RonaldSenator BOSWELL—The National Party and the Prime Minister have really got to know each other over the last couple of days. We have been in his office continually. My National Party senators have been rock solid in their determination for their constituents. We presented our case not only to the Prime Minister but also to Minister Alston. We have had Wendy Craik in the office as well as technical advisers. We have done our job. I believe that we have also delivered. We now have a three-pronged package that will move rural Australia into a new era of telecommunications services.4J4SCHACHTSenator Schacht—What are the three prongs, Ron?YE4Boswell, Sen RonaldSenator BOSWELL—Today the first plank of the National Party demands, as expressed by the ICPA and NFF, was the extension of untimed local calls and the abolition of pastoral calls.ZW4SHERRYSenator Sherry—You sound like a militant trade unionist.WP6LIGHTFOOTSenator Lightfoot—On a point of order: I hear Senator Schacht calling Senator Boswell by his first name, which is clearly against standing orders. I hear the castrato voice of Senator Carr defying your direction to keep quiet. I hear Senator Sherry interjecting when he is not in his seat. I find that absolutely deplorable. I ask you to bring those three to order.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—There is no point of order, but I make the point that during the 10 minutes that Senator Boswell has been speaking Senator Carr has interjected 24 times and Senator Schacht 19 times. I think it is about time you gave him a fair go.YE4Boswell, Sen RonaldSenator BOSWELL—I can handle them, but please do not take my time up because my time is running out. People in remote areas will now be placed on the same footing as city people with local calls in their local area—37,000 households in remote areas will get the same benefits as their city cousins. That is because we have fought for it. We fought for the 25c pastoral calls to be removed. We fought for the timed call to the community centres to increase from 4.5 minutes to 12 minutes—a 300 per cent increase. That is an achievement out in the west. You only have to ask these people who have had to pay timed local calls, not timed local calls to a neighbour 20 miles down the track but a call from their house to a worker in a cottage or to their son's house on the same property. They are the achievements that we have made.The federal government will spend $150 million upgrading infrastructure, so all local calls in an extended zone will receive untimed local calls. There is a new preferential call rate to a larger area, to cover the community service town, set at 25c for 12 minutes. That is three times what we had before. The current pastoral call rebate of $160 will be maintained. Many people living in isolated and remote Australia will for the first time be able to call their neighbours without watching the clock. The upgrade in capacity in these areas will commence as soon as this bill is passed. The new untimed services would be available next year.The National Party has always been determined that the opportunities from a fully privatised Telstra should flow back to the bush. It is the only way we are going to get them—$1 billion does not come from anywhere; you have to have something. We have made our demands clearly heard for untimed calls for remote areas and for the abolition of pastoral calls. This announcement today will meet this need. The federal government has delivered these strong National Party demands. It has delivered untimed local calls and the abolition of pastoral calls to the bush.Yesterday Tim Fischer and Richard Alston announced that the dilemma with the phasing out of analog mobile services created by the Labor government will be solved, and they will give remote and regional Australia a superior mobile phone service. That will not affect the people right out in the western areas that will get picked up by the removal of the pastoral calls. But anyone east of Roma will get great benefits from that. People in rural Australia will be able to cross between the old analog system and the new digital phone network.4J4SCHACHTSenator Schacht—They've got to buy a new phone for that, Ron.YE4Boswell, Sen RonaldSenator BOSWELL—Of course they have to buy a phone. The phones do not last forever. You have to replace them, you know. The new CDMA mobile phones will be able to use the analog network in country areas and the digital network in the cities. That is a huge benefit.Today's announcement on untimed calls is the first down payment of the great benefits for rural Australians from the Telstra sale. The National Party has always called for much more for country people, and the social bonus that will be delivered is going to be great. Country people must have improved customer service guarantees for repairs and installations: $40 a day is some incentive to go out and get your phone fixed if it comes off your bill. But if they cannot fix it immediately a satellite phone will be let, and that will be charged at normal rates.The most recent telecommunications performance monitoring bulletin shows a rapid decline in new service connections, in faults being cleared and payphone faults being cleared. In country areas from December 1996 to March 1998 new services meeting commitment dates fell by 11 per cent to 64 per cent. Fault clearance within one day fell by nine per cent to 59 per cent. Faults cleared within two days fell by nine per cent to 77 per cent. Payphone faults cleared within one day fell to 43 per cent.On these figures, important services are being denied to rural and remote Australians on an ever increasing basis. There is no consolation when you receive back a bit of your rental or the provider is fined. It offers no remedy to a loss of service. It is often said out there, `You couldn't get any worse service from Telstra than you get now.' Rural Australia asks that digital data be available to the outback and that satellite phones be available when repairs and service are delayed. The needs of rural Australia have been clearly spelt out.With an upgrade to ISDN, it could deliver services to the outback that would eliminate the tyranny of distance for remote and rural people. Services such as online banking, crop information and forward sales information and weather reports—all those things—are going to be available. The social bonus from the sale of Telstra will provide a tremendous boost for remote and rural areas. There is to be a further announcement from the government how this social bonus will be further spent on benefits for country people to bring essential and up-to-date telecommunication services and to give country people what city people now enjoy.The National Party has always been resolute that this must be the outcome from any sale of Telstra. We have stuck to our guns for rural Australia. We have taken our representa tion to the Prime Minister and we fought for this with the Minister for Communications, the Information Economy and the Arts. Yesterday and today the coalition government has delivered, and rural and remote Australia can look forward to much more with further announcements to come. Today's announcement on untimed local calls is a $150 million down payment on the package, with all telephone calls within an extended zone being untimed local calls.Senator Schacht hit the nail on the head when he asked, `Where is this going to come from?' I say to him again that that was a very perceptive question. It is coming from the sale of Telstra. It is the only way—4J4SCHACHTSenator Schacht—Tell us how much.YE4Boswell, Sen RonaldSenator BOSWELL—I know how much it is, but I am not going to breach a confidence.4J4SCHACHTSenator Schacht—You know, but the parliament doesn't and your voters don't. Tell us.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—Order! Senator Schacht!YE4Boswell, Sen RonaldSenator BOSWELL—It is a very, very strong package, and it is one that I would be very proud to be—4J4SCHACHTSenator Schacht—Tell us the truth.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Boswell, resume your seat.EU4O'CHEESenator O'Chee—Mr Acting Deputy Speaker, I rise on a point of order. You just called Senator Schacht to order. He completely ignored you. He flouted your ruling. He has continued to yell all the way through this speech. I know that Senator Schacht may not want his ignorance repaired, but he at least might show the decency to Senator Boswell to listen in silence, as honourable senators on this side have been forced to listen in silence—TH4KNOWLESSenator Knowles—All day.EU4O'CHEESenator O'Chee—All day to the sorts of comments that have been coming from the other side.4J4SCHACHTSenator Schacht—Mr Acting Deputy President, on the point of order: it is true that I interjected on a number of occasions to help Senator Boswell explain to the Senate what the deal was. He finally admitted there is a secret deal and an amount of money. I think that is a very useful public exposure.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Schacht, what is your point of order?4J4SCHACHTSenator Schacht—My point of order is that I have helped Senator Boswell in his presentation.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—No, there is no point of order. Senator Boswell, before you resume, on Senator O'Chee's point of order, there has been a fair bit of—AW5CARRSenator Carr—Provocation.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—No. There has been a fair bit of exchange between both sides. I remind both sides that order should be maintained during Senator Boswell's address. Senator Boswell has three minutes 35 seconds remaining and he should be heard in silence.YE4Boswell, Sen RonaldSenator BOSWELL—Thank you, Mr Acting Deputy President. Rural people have a choice. They can choose to wind the clock back or move forward. The National Party has taken the latter path and seized this opportunity to give to rural Australians the same share of world-class telecommunications as people in the city. No industry can work without world-class telecommunications. When you are a world leading export industry with world leading exporters, you have to be up to speed; you have to have these tools or you fall behind. The National Party is delivering these vastly improved services to rural Australia.17:10:005528Harradine, Sen BrianSenator HARRADINE6H4TASIND00—I thought I should make this intervention on the Telstra (Transition to Full Private Ownership) Bill 1998 . In between various negotiations today, I have been able to hear some of the speeches from the opposition. Some have been very worth while listening to, and indeed I note Senator Murray's observations this morning. Senator Murray's speech was of particular help and interest. But I felt that some of the contributions were simply personal attacks on me, blaming me for unemployment and the next tornado.I feel that I should briefly address those comments. Let us take the employment situation in Telstra. Why has that declined? The ignorant suggestion being made from some people on the Labor side is that it is the result of the one-third sale of Telstra. How ridiculous can you get? Everyone knows that the cause of the restructuring in Telstra, which started before the one-third sale, is the deregulation environment, which was promoted and supported by the Labor Party and the government. The cause of the restructuring and the consequence of job losses in Telstra has been that deregulated environment and the forthcoming competition. Also, much of it is the result of technological change not associated with the one-third sale. So let us get that right. That has been the refrain that has been going around the place for months and months and months. It is time you people were honest and accepted the blame—if it is blame—and accepted the situation that it was your doing that there would be deregulation in the telecommunications industry.The Labor Party has been flogging off a number of organisations and instrumentalities, including the Commonwealth Bank and Qantas and a number of others that I cannot think of offhand. The fact of the matter is that those who are `in the know' knew that you were preparing to sell off Telstra. You were preparing to sell off Telstra, and you know that. I have a good memory for some things, and I remember a number of the conversations at the time.656FORSHAWSenator Forshaw—But this is 1998, Brian; this is not 1993 or 1990. This is different altogether.6H4Harradine, Sen BrianSenator HARRADINE—Then one gets criticised all around Tasmania for trying to hold the line. Let us see what has happened to employment since the one-third sale. Employment in Tasmania in Telstra has declined by only eight per cent. By the end of June it will be—AW5CARRSenator Carr—That's not right.LD4ALSTONSenator Alston—As if you would know.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—Order! Senator Carr and Senator Alston!6H4Harradine, Sen BrianSenator HARRADINE—Compare that with the national average of over 20 per cent. And you sneak around Tasmania trying to blame me for that. If Telstra had been frozen in total public ownership, the loss in jobs caused by the restructuring, caused by your policy, would have still occurred to the same extent as on the mainland—over 20 per cent.Some members of the opposition have not even the courtesy to acknowledge some of the things that have gone Tasmania's way because of my intervention. I rarely comment about what I have done in certain areas. I rarely comment about the money I have been instrumental in getting flow to Tasmania, because I believe that if you do that, if you boast about it, then you are not likely to get the same deal next time. If you do not say anything about it, you are likely to get more next time for the interests of the state.There is no acknowledgment of even the publicly known flow of money to the Natural Heritage Trust and to the regional telecommunications infrastructure fund—in total $185 million or $190 million. There has been no reference to the formula for the regional telecommunications infrastructure fund which gives Tasmania the lion's share of it.QD4BROWNSenator Brown—What about the jobs lost?6H4Harradine, Sen BrianSenator HARRADINE—`What about the jobs lost?' There he is; he has not been listening. The cause of the jobs lost—and you know what it was—was deregulation and that was the Labor Party. I see Senator Mackay has been talking about message bank. She is pretty late on the scene for that. I am not going to tell her what is happening. It is about time she got her ear to the ground.The position is, as I have always said, that the government is elected to govern and the role of the Senate is to audit and control executive government actions and also to protect the rights of individuals and the rights of the state. I have attempted to do this for the 23 years that I have been in this place. I need to examine this matter on its merits, divorced from the nostalgia that I have for Telstra or, more particularly, for its predecessor the Engineering Division of the Postmaster-General's Department.Somebody from the opposition said, `Brian, we are living in the late 1990s.' Yes, we are. I mentioned previously that I was opposed to, and would not support, the full sale of Telstra. I said that, `The principle in this case is that, if Telstra is a natural monopoly, then it should not be sold.' That is the context in which I made that comment. Telstra, as you know, is no longer a natural monopoly. One could argue one way or the other about that, but that is the fact of the situation.One of the questions that must exercise our minds is: is the government able to deliver cheaper and more effective telecommunication services to customers than a part privatised or fully privatised Telstra? That is one of the questions we need to ask. What is in place to ensure that this is delivered effectively and efficiently in regional Australia? That is a matter that is exercising my mind and about which discussions have been taking place. Some people are concerned that, if Telstra is privatised, there would not be an ability of legislatures or government to ensure that the universal service obligations are adhered to. In fact, you do that through the legislation, through executive government decision and through audit by this parliament.The other thing, of course, which is a bit difficult for me to assess—and I have asked various economists about it—is what the ultimate benefit to Australia will be if substantial amounts of the proceeds are spent on redeeming debt. That is one of the things about which I have had various pieces of advice. There is, of course, as the government said, a social bonus and I am sure as the years go by that it will be recognised that the government is prepared to deliver the social bonus.This legislation does not mandate the full sale of Telstra. It allows the full sale of Telstra; it does not mandate the full sale of Telstra. A future government could sell another tranche of Telstra if, for example, the people of Australia expressed themselves accordingly. As the government has said, it is not going to have this measure proclaimed until after the next election.QD4BROWNSenator Brown—Why don't you leave it to the people?6H4Harradine, Sen BrianSenator HARRADINE—Leave it to the people! The people will have their opportunity. If this is a major question in their minds, they will have their opportunity to vote against the government. That is available to the people, if they feel that is a major question. There are a number of other matters that I would like to raise now, but I do not want to delay the consideration of this bill. There are, for me, a few more hurdles to jump, but I am prepared to support this legislation into committee.17:26:005530Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—I think this is a very unfortunate time in the history of this parliament because what we have witnessed—QD4BROWNSenator Brown—I do too!LD4Alston, Sen RichardSenator ALSTON—Ever since you came in, it took a new turn for the worse, I have to say. On this legislation, all we have had is not a tissue of lies, because that would be too generous, but the most blatant misrepresentations and distortions of a policy which you espoused with unbridled enthusiasm in government. There can be no doubt about that at all. In government, when Kim Beazley was finance minister and communications minister, he was the most enthusiastic advocate you could ever come across. That is why people like Kenneth Davidson and Tom Burton say he does not have a shred of credibility, because privatisation has been something that the Labor Party took to like a duck to water. They saw privatisation as the panacea. It solved all their budgetary problems—none of this concern that somehow it was a capital item and it ought to go to repaying debt or to rebuilding the capital infrastructure of the country. No, it was simply a bottomless pit that you were prepared to dip into on a regular basis in order to meet all the black holes that you had otherwise created.It is very disappointing that we have reached this stage in Australia. Having had 13 years of enthusiasm for privatisation, if you look around the world, what do you find? The Prime Minister of Estonia was out here about 10 days ago. One of the first things he said to me was, `Do you know what we are doing? We are privatising our telecommunications carrier.' He almost apologised for being late on the scene, because he knows that Cuba and Albania and the African National Congress and every man and his dog have gone down that path and the only crowd that is left is North Korea. And, of course, their great mate Kim Il Beazley. That, of course, makes the Labor Party an absolute laughing-stock on this issue.4J4SCHACHTSenator Schacht—That is unparliamentary, Mr Acting Deputy Speaker.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—Senator Alston, I think you should withdraw that and rephrase it. I think you are aware of the—LD4Alston, Sen RichardSenator ALSTON—I am prepared to withdraw that, Mr Acting Deputy President. Of course, the great tragedy is that this is not only naked opportunism but also disgraceful and dishonest politics. There is a huge cultural divide between this side of the chamber and the other, and this debate brings it all together. The opposition have gone from being the great privatisers in government—there is hardly anything left, I might say, and given the cast-iron guarantee that we have given not to privatise Australia Post, there is nothing left except Telstra—to the situation where less than six months ago they were out there wanting to sell another 16 per cent of Telstra; that is what they wanted.4J4SCHACHTSenator Schacht—That's a lie.LD4Alston, Sen RichardSenator ALSTON—No, it is not, and you know it. The draft document—the platform for Tasmania—made it abundantly plain that you are only in favour of majority public ownership. Of course, poor old Senator Schacht was at it again only a couple of weeks ago. There was none of this, `We will not sell any more of Telstra,' he was simply running the line that they were in favour of majority public ownership. So it is the height of hypocrisy to believe that somehow this Labor Party could have a shred of credibility on the issue. The debate has sunk to new depths today. I want to remind those opposite of what this great leader of theirs, Mr Sleazley, had to say on radio today.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Minister— LD4Alston, Sen RichardSenator ALSTON—I withdraw that. I will substitute Mr Beazley. It does not make any difference. This is what happened on radio—4J4SCHACHTSenator Schacht—Mr Acting Deputy President, I raise a point of order: I do not usually take objection to robust remarks and I do not really take points of order on what people say, you have to take it—there is give and take in this place—but you ruled on what he said about Mr Beazley as unparliamentary. The minister then said, `Well, it still means the same thing.' I think that is still unparliamentary on the basis of your first ruling, and he should withdraw.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Withdraw unconditionally, thank you.LD4Alston, Sen RichardSenator ALSTON—I withdraw unconditionally. What was said by Mr Beazley was this:They are directing Telstra to produce cross-subsidised services in the bush. Now why can they direct Telstra to produce cross-subsidised services in the bush? Because they own it. If they don't own it, they can't do it. So what you see now is the last thing you'll see.That is an absolutely outrageous and preposterously dishonest statement—and you know it, Senator Schacht, as well as I do. Senator Harradine referred to it once again in passing. The universal service obligation is a mechanism that delivers cross-subsidies to rural and remote areas.Senator Carr interjecting—Senator Schacht interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Carr and Senator Schacht! Order! The minister is entitled to be heard.LD4Alston, Sen RichardSenator ALSTON—The universal service obligation is enshrined in a separate and distinct piece of legislation, the Telecommunications Act. That is the basis on which services to the bush, which would otherwise be uneconomic, are cross-subsidised by a levy on the industry to which Telstra is a major contributor. That has been the case for very many years in this country.We are not proposing to change it. I do not imagine that you are either. So what possible basis can there be for Mr Beazley to get out there and say that the government can direct Telstra to produce cross-subsidised services to the bush. The fact is that no direction has ever been given to Telstra. The power of direction to Telstra came in at the very same time, the very year, that the minister for communications was requiring Telstra to operate commercially. Here it is—I am holding up the Beazley act—the Australian and Overseas Telecommunications Corporation Act 1991. Who was the minister between April 1990 and December 1991? Mr Beazley. Who was the minister that required Telstra to operate commercially? Mr Beazley. Who introduced competition into the telecommunications sector? Mr Beazley.Just to pick up on a point Senator Harradine made that, somehow, the Labor Party was responsible by deregulating the market, it is actually worse than that. The Labor Party were responsible for Telstra being substantially inefficient. If you look at what Mr Blount has had to say on many occasions, the fact is they were 30 per cent off world's best practice because of very substantial overmanning and very poor productivity levels. It was necessary for them to slim down the work force, contract out more services and generally become more competitive—all your own work. You introduced competition, you introduced deregulation, you required Telstra to operate commercially and you put the universal service obligation in place. Just to demonstrate once again the depths to which those who seek to smear and distort will stoop, the act makes it abundantly plain—this bill—that you cannot sell off more than one-third and you cannot sell more than five per cent to any one strategic shareholder. That is the basis on which there were no telecommunications carriers from offshore who bought a stake. They were not interested in being passive players, and the limits were such that it did not make it in any shape or form attractive for them to buy into Telstra.What do we find? We find this creature, Mr Beazley, going around and encouraging his other acolytes. I don't know that you have done it, Senator Schacht, but I have seen career backbenchers—I forget his name from somewhere down in the sticks in Victoria—getting out there and saying, `This is going to mean that Telstra will be sold off to foreign telecommunications carriers.' That is what Mr Beazley said.Do you want to know how weak and sneaky the operation is? Mr Beazley has been on radio today peddling these sorts of distortions, but he has not boxed any of the transcripts. No, this is a narrowcast message. Unfortunately, he has been caught red-handed saying these sorts of things which are absolutely and demonstrably untrue. You do not need to take my word for it. All you need to do is look at the legislation. The legislation enshrines universal service obligations, it enshrines price caps and it enshrines and builds on the customer service guarantee which we introduced—in other words, all of those social safeguards are in place in quite separate legislation than the legislation we are considering.We have never, ever contemplated changes, but you will not make commitment to support those protections. So you are the only party on the record—Senator Jacinta Collins interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Collins!LD4Alston, Sen RichardSenator ALSTON—There is only one party that is not prepared to give the guarantees that those consumer protections will remain in place, because the moment that you give that undertaking you are conceding that it is already enshrined in legislation and that it cannot be changed except by a vote of both houses of this parliament. We are not proposing to change it. So, if you are not, what basis does Mr Beazley therefore have for running around with these monumental, Hansonite scare campaigns? That is why you have such a cultural divide in this country.We are not prepared to go to the people and say, `We will not privatise,' but when we win government we change our minds. But you have no compunction about saying, `We will give you tax cuts. We will enshrine them in l-a-w, law,' but once you get to government you change your mind. You have no compunction about putting out a prospectus saying that you have no intention of any further sell-down of the Commonwealth Bank, and you are doing it as soon as you get the opportunity to do it later. You are the ones who get up at platform discussions—what do they call them, national conferences—and everyone strikes these pious platitudes when everyone knows full well, even the Left, that you will roll over.5K4FAULKNER Senator Faulkner—You're just signing the death warrant of the Liberal Party. You're a doormat. You're just John Howard's doormat.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order on my left!LD4Alston, Sen RichardSenator ALSTON—Look at the great defenders in the Labor Party of values in the public sector: was there ever a single squeal from the likes of Senator Faulkner when Mr Beazley was privatising his head off? Certainly not. He went along with it, up to his armpits in it and loved every moment of it, because it dug Labor out of that horrible budget hole that they seem to have on a recurring basis.What did they go to the last election saying? `Budget was in shape. Budget was in balance.' Once again, it is only after the election that we discover the enormity of the deception that is practised on the Australian electorate on a regular basis by the Australian Labor Party. To think that Mr Beazley, who professes to be interested in parliamentary standards, can be going around sneakily broadcasting narrowcast messages saying that all the cross-subsidies will go because they are only there as a result of a direction from the government, he knows that he put that power of direction in and that it has never been used in seven years.Mr Beazley was the one who introduced deregulation. He was the one who wanted competition. He was the one who privatised most other government business enterprises. It is a preposterous proposition. You will get your just deserts in due course because the electorate simply will not fall for it. They know what a track record you have. I just want to reflect on a few of the other contributions in this debate.Opposition senators interjecting—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order on my left!LD4Alston, Sen RichardSenator ALSTON—Those on the other side—who last night wasted another couple of hours on one of the most blatant filibusters that has ever been seen in this chamber, plus about two hours, before our being able to extend the sitting times of this parliament to enable vital legislation to be debated—are the ones who now maintain that this debate is not urgent, despite the fact that it has always been a very important issue because it does provide the basis for a social bonus, it does provide the basis for a retirement of debt and it does provide the basis for really getting Telstra into a—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Senator Alston, just resume your seat for a moment, please. It is impossible to hear Senator Alston because of exchanges that are taking place across the chamber. When you are called to order, you are expected to adhere to that so that the minister can be heard.LD4Alston, Sen RichardSenator ALSTON—Thank you, Mr Acting Deputy President. There are a number of very important reasons why this bill should go through, and should go through as soon as possible. As far as the government is concerned, it has always been a major piece of legislation, Yet from the other side I think—I do not know—Senator Cook might be about the only Labor senator who is currently in Australia who has not spoken in the second reading stage.GB6COLLINSSenator Jacinta Collins—He's sick.LD4Alston, Sen RichardSenator ALSTON—He is sick. Wonderful! In other words, everyone who is available has been wheeled out by the union movement to get up there and perform.Opposition senators interjecting—LD4Alston, Sen RichardSenator ALSTON—A couple have not. It is only about 24 or 25, is it? So what we have been watching—5K4FAULKNER Senator Faulkner—Why don't you deal with the substance of the bill?Senator Jacinta Collins interjecting—LD4Alston, Sen RichardSenator ALSTON—I saw, I think, 26 on the speakers list. If you have taken a few off, good luck to you and thank you very much.Opposition senators interjecting—LD4Alston, Sen RichardSenator ALSTON—I apologise profusely; thank you very much for speeding up the debate to the best of your ability and for wanting to really ensure that this bill is able to be processed in the most expeditious manner! Mr Acting Deputy President, the truth is quite to the contrary. They have done absolutely everything in their power to delay debate on vital legislation and to come into this chamber time and again—in between bucketing Senator Harradine in almost every speech and then, of course, kicking Senator Colston whenever you get half a chance—and pretend to claim that this is somehow not an urgent debate and it is not consistent with government commitments.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT (Senator Hogg)—Senator Alston, it may help if you address your remarks through the chair rather than using the word `you' all the time.LD4Alston, Sen RichardSenator ALSTON—Yes, I accept that admonition, Mr Acting Deputy President.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—That may well stop some of the interjections.LD4Alston, Sen RichardSenator ALSTON—Indeed, it may.5K4FAULKNER Senator Faulkner—You keep sliming up to them.LD4Alston, Sen RichardSenator ALSTON—Mr Acting Deputy President, it does not seem to be stopping them, but we will do our best.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—You continue.LD4Alston, Sen RichardSenator ALSTON—Senator Murray at least gave some thought to his contribution, and I am sure we will have more to say on the matters that he addressed in the committee stage. But certainly there were some aspects of corporate governance that I think are worthy of further consideration. Certainly, if we had had a few more contributions along those lines, we might have been able to shed a bit more light on some subjects. I think Senator Cooney, to his credit, also raised some concerns about open-ended proclamation. But, apart from those instances, this debate has simply been an unadulterated diatribe. It has been the most ideologically based and, of course, election motivated campaign of dishonesty and distortion that one could ever imagine.You look around the world and you find that the African National Congress thinks that privatisation is a good idea. So who is getting it wrong? This is ideological on our part, is it? Are you saying that we are to the left of the African National Congress? Why do you think Cuba and Albania do it? Why do you think every country in the Western world has gone down this path? Why do you think they all enshrine universal service obligations? Because it makes overwhelming sense, both in an economic and social context.You know that, because if there is one thing that Mr Beazley will be remembered for it is that he was the most enthusiastic exponent of privatisation in the 13 years of Labor government. Until he came along, there were still a few things left in public ownership. But what did he do? Basically, everything he could get his hands on—GB6COLLINSSenator Jacinta Collins—Like Telstra.LD4Alston, Sen RichardSenator ALSTON—Like Telstra?GB6COLLINSSenator Jacinta Collins—Yes.LD4Alston, Sen RichardSenator ALSTON—You know what Mr Beazley wanted to do, don't you.AW5CARRSenator Carr—Go outside and say that.LD4Alston, Sen RichardSenator ALSTON—I have said it, and I will say it again: Mr Beazley was prepared to make representations on the basis that—GB6COLLINSSenator Jacinta Collins—Now we are qualifying ourselves, are we?LD4Alston, Sen RichardSenator ALSTON—Do you want to know what happened?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! Through the chair.LD4Alston, Sen RichardSenator ALSTON—Mr Beazley promised Telstra that it would be privatised—GB6COLLINSSenator Jacinta Collins—Promised whom?LD4Alston, Sen RichardSenator ALSTON—He promised Frank Blount—right, okay?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Alston, it will help if you address the chair.LD4Alston, Sen RichardSenator ALSTON—He promised him because presumably he was acting on instructions from the Prime Minister of the day.GB6COLLINSSenator Jacinta Collins—You won't say that outside.LD4Alston, Sen RichardSenator ALSTON—And Mr Beazley has never ever been game enough to go into the chamber of the House of Representatives and deny the proposition—never, ever been game enough to do it. He has called press conferences, tried to change the subject—GB6COLLINSSenator Jacinta Collins—Prove it.LD4Alston, Sen RichardSenator ALSTON—It does not need to be proven. I am telling you that is the fact. If he wants to deny it, it is the simplest thing in the world to deny it in the place where it counts. You go in and you tell your story in the parliament, don't you? Because everyone knows that if you mislead the parliament then you are guilty of a political hanging offence—and that is, of course, why Mr Beazley simply will not do it. That does not mean that he would baulk for an instant at going on radio all around Australia, telling the most appalling lies about cross-subsidies and foreign ownership, and anything else you like.QD4BROWNSenator Brown—Mr Acting Deputy President, I raise a point of order. That was quite out of order, and Senator Alston should withdraw it.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Yes, it is out of order. You should withdraw it.LD4Alston, Sen RichardSenator ALSTON—All right. The most appalling untruths, Mr Acting Deputy President.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Will you withdraw?LD4Alston, Sen RichardSenator ALSTON—Mr Acting Deputy President, can I be clear on this? If Mr Beazley is saying something that does not have a scintilla of truth about it, how would you prefer that I describe it?10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Are you prepared to withdraw the statement you made?LD4Alston, Sen RichardSenator ALSTON—I always understood that an untruth was an acceptable expression in this chamber, but if you now decide that it is not, all I can say is that there must be plenty of—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—The issue is that you have not withdrawn the word `lies'.LD4Alston, Sen RichardSenator ALSTON—I thought I replaced it with `untruths'. I will replace it with `untruths'.656FORSHAWSenator Forshaw—But you didn't withdraw first.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Order! I will run this chamber. Senator Alston, it was not clear from what you said that it was withdrawn.LD4Alston, Sen RichardSenator ALSTON—Let us be clear. We do not need me to make a judgment on it. Let the words speak for themselves. This is Mr Beazley: `They are directing Telstra to produce cross-subsidised services in the bush.' Is that true? Of course it is not true, and you know it. No-one is directing Telstra to produce cross-subsidised services to the bush. You know it. There is an act of parliament that requires it. Telstra has always undertaken its statutory obligations, and so have others in this industry. And why wouldn't they, because otherwise they would be prosecuted.So what possible justification can there be for a politician to go out there and say that on radio? We know why he is saying it. He is saying it because he wants people in rural and remote areas to think that somehow the universal service obligation—the cross-subsidy—disappears if Telstra is privatised when, of course, that is a preposterous proposition. It does not. All of those obligations remain in separate legislation. You know that as well as I do. You cannot possibly be that thick, Senator Schacht. I know you do not pay a great deal of attention in this chamber. I must have said it so many times it is not funny. But you must on occasions have read the legislation. You must have asked for briefings. You must have attended estimates committees. You know the facts. But, tragically, even if you do not, a former communications minister does. A leader of the opposition also has an obligation to get out there and tell it as it is.Opposition senators interjecting—LD4Alston, Sen RichardSenator ALSTON—And I am. And to think—Opposition senators interjecting—LD4Alston, Sen RichardSenator ALSTON—To think that Mr Beazley can—5K4FAULKNER Senator Faulkner—Stop lying.LD4Alston, Sen RichardSenator ALSTON—Can stoop so low as to go out and say that they can direct Telstra to produce cross-subsidised services in the bush—10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—Senator Faulkner, that last comment should be withdrawn.5K4FAULKNER Senator Faulkner—I am happy to withdraw it, Mr Acting Deputy President, but I think that I said, `Stop lying'. I do not think that is unparliamentary. I did not call him a liar. I could have, but I did not.10000ACTING DEPUTY PRESIDENTThe ACTING DEPUTY PRESIDENT—It should be withdrawn.5K4FAULKNER Senator Faulkner—I will withdraw.LD4Alston, Sen RichardSenator ALSTON—We have just about reached the end of this debate. I think all Australians know that what the government is doing in this regard is honouring an election commitment but, more importantly, putting in place a structure that will result in overwhelming community benefits that will make Telstra a more efficient organisation, that will enable it to be much responsive to its shareholders and not leave it in no-man's-land, where it is at the moment. The legislation will enable it to get on with delivering quality telecommunications services to the bush and to the metropolitan areas.I think Mr Blount and Telstra have done a very good job. I think they could do even better. Mr Blount has performed a great national service in this country and it is a pity that those opposite could not bring themselves to acknowledge it.(Time expired) Question put: That the amendment (Senator Margetts's ) be agreed to.17:54:00The Senate divided. 0Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V.* Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Mackay, S. Margetts, D.Murphy, S. M. Murray, A.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.0Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferris, J.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. McGauran, J. J. J.Newman, J. M. O'Chee, W. G.*Parer, W. R. Patterson, K. C. L.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.Conroy, S. MacGibbon, D. J.Lundy, K. Ferguson, A. B.McKiernan, J. P. Minchin, N. H.Stott Despoja, N. Gibson, B. F.Woodley, J. Payne, M. A.* denotes tellerQuestion so resolved in the negative.Amendment (by Senator Murray) proposed:At the end of the motion, add:"but the Senate: (a) notes that the following information, requested of the Office of Asset Sales and IT Outsourcing at the hearing of the Finance and Public Administration Legislation Committee on 4 June 1998, has not been provided: (i) a comprehensive balance sheet, or assessment of net present worth, which compares the net Commonwealth financial position, under the two scenarios of selling Telstra and not selling Telstra, including all relevant financial flows, such as, but not necessarily limited to: (A) the value of Telstra dividends to government forgone; (B) the value of retained earnings by Telstra; (C) reduced government debt interest payments; (D) the costs of the sale of Telstra, such as stockbroker and agents fees, and the costs of government administration of the sale; (E) the effect of increased taxation foregone, due to the passing of franking credits from government to private ownership; (ii) separate analyses for the sale of the first third of Telstra and the sale of the remaining two thirds of Telstra; and (b) resolves that the information identified in paragraph (a) be laid on the table by no later than immediately after Questions Without Notice on the first day of the Spring sittings 1998, unless it is sooner provided to the Committee".A division having been called and the bells being rung—10000PRESIDENTThe PRESIDENT—The tradition is to cover your head if you wish to seek attention during a division, Senator.QD4BROWNSenator Brown—Madam President, I just wanted to draw your attention to your remarks last night that there should be, at the first opportunity on a vote, a declaration of pecuniary interest by any members. I know that that would have occurred on the last vote if every member was observing the rules, but I want to draw the Senate's attention to that requirement. Question put.18:00:00The Senate divided. (The President—Senator the Hon. Margaret Reid)32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V.* Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Mackay, S. Margetts, D.Murphy, S. M. Murray, A.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.32Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferris, J.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G.* Parer, W. R.Patterson, K. C. L. Reid, M. E.Synon, K. M. Tambling, G. E. J.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Conroy, S. MacGibbon, D. J.Lundy, K. Ferguson, A. B.McKiernan, J. P. Minchin, N. H.Stott Despoja, N. Gibson, B. F.Woodley, J. Payne, M. A.* denotes tellerQuestion so resolved in the negative.Amendment (by Senator Lees) proposed:Omit all words after "That", substitute:"further consideration of the Telstra (Transition to Full Private Ownership) Bill 1998 be postponed till the first sitting day after the Australian Communications Authority report on the current review of the Universal Service Obligation is completed and tabled in both Houses of the Parliament". Question put.18:04:00The Senate divided. (The President—Senator the Hon. Margaret Reid)32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V.* Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Mackay, S. Margetts, D.Murphy, S. M. Murray, A.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.33Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferris, J.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. McGauran, J. J. J.Newman, J. M. O'Chee, W. G.*Parer, W. R. Patterson, K. C. L.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.Conroy, S. MacGibbon, D. J.Lundy, K. Minchin, N. H.McKiernan, J. P. Gibson, B. F.Stott Despoja, N. Ferguson, A. B.Woodley, J. Payne, M. A.* denotes tellerQuestion so resolved in the negative.Amendment (by Senator Crowley) proposed:At the end of the motion, add: "and that the following matter be referred to the Environment, Recreation, Communications and the Arts References Committee for inquiry and report by the second sitting day in November 1998 in view of that committee's previous inquiry into the bill:The proposed Government amendments to the telecommunications competition regulation provisions of the Trade Practices Act 1974 and the Telecommunications Act 1997 (as recently circulated on sheet B98BA551.WB)".Question put.18:08:00The Senate divided. (The President—Senator the Hon. Margaret Reid)32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. *Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Mackay, S. Margetts, D.Murphy, S. M. Murray, A.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.33Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferris, J.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. McGauran, J. J. J.Newman, J. M. O'Chee, W. G. *Parer, W. R. Patterson, K. C. L.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.Conroy, S. MacGibbon, D. J.Lundy, K. Ferguson, A. B.McKiernan, J. P. Minchin, N. H.Stott Despoja, N. Gibson, B. F.Woodley, J. Payne, M. A.* denotes tellerQuestion so resolved in the negative.Amendment (by Senator Faulkner) proposed:Omit all words after "That", substitute:"further consideration of the bill be postponed and be an order of the day for the first day of sittings in 1999".Question put.18:12:00The Senate divided. (The President—Senator the Hon. Margaret Reid)32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. *Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Mackay, S. Margetts, D.Murphy, S. M. Murray, A.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.33Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferris, J.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. McGauran, J. J. J.Newman, J. M. O'Chee, W. G. *Parer, W. R. Patterson, K. C. L.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.Conroy, S. MacGibbon, D. J.Lundy, K. Ferguson, A. B.McKiernan, J. P. Minchin, N. H.Stott Despoja, N. Gibson, B. F.Woodley, J. Payne, M. A.* denotes tellerQuestion so resolved in the negative.Question put:That this bill be now read a second time.18:15:00The Senate divided. (The President—Senator the Hon. Margaret Reid)33Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferris, J.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. McGauran, J. J. J.Newman, J. M. O'Chee, W. G. *Parer, W. R. Patterson, K. C. L.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.32Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Denman, K. J.Evans, C. V. *Faulkner, J. P.Forshaw, M. G. Gibbs, B.Hogg, J. Lees, M. H.Mackay, S. Margetts, D.Murphy, S. M. Murray, A.Neal, B. J. O'Brien, K. W. K.Quirke, J. A. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.Ferguson, A. B. Lundy, K.Gibson, B. F. Stott Despoja, N.MacGibbon, D. J. Conroy, S.Minchin, N. H. McKiernan, J. P.Payne, M. A.Woodley, J.* denotes tellerQuestion so resolved in the affirmative.Bill read a second time.10000PRESIDENTThe PRESIDENT—It has been brought to my notice that the amendments which have been submitted have not yet been put onto a running sheet. I suggest to the Senate that it may be worth while to adjourn now until 7.30 p.m. to give some opportunity for that to be done. We will proceed to the committee stage at 7.30 p.m.Sitting suspended from 6.20 p.m. to 7.30 p.m.5540The bill.19:30:005540Lees, Sen MegSenator LEES8U4SAAD00—The Democrats oppose the preamble as follows:(1) Preamble, page 1 (line 12) to page 3 (line 10).I will explain this briefly. As we stand now at the beginning of the committee stage, I will also say that I will pursue, as briefly as possible, all the amendments that we have listed. Regardless of what some might say is the likelihood of any of them getting through, I want to make sure that I place on the record for the future my opposition, section by section, to what we are doing here tonight. I think that when we look back in five to 10 years time it will be one of the greatest acts of economic vandalism this country would have seen.To begin with, I do not believe that the preamble can be supported because it simply is not true. Let us begin by taking the second paragraph and the allegation that government ownership inhibits flexibility. Nonsense. There has been a series of extensive studies by the World Bank, by the OECD, by Monash University and so forth, and the key message from all of them is: it makes little difference who owns the company; the key is the quality of the management, competition and, of course, regulation. I do not believe that we should put patent untruths into a preamble. Indeed, why let the totally unproven assertion that public ownership is somehow second best actually be incorporated into law? It is simply a lie and should not be there.The next paragraph is just as fallacious. Plenty of countries around the world have publicly owned telecommunications companies. In fact, one of the most efficient in the world, one of the best telcos, is publicly owned—and that is the Swiss telco. Again, this paragraph is a nonsense.The fourth paragraph is the biggest lie of all. It says that Australia will receive a social bonus to the budget bottom line from the Telstra sale. This is absolutely and patently untrue. Within seven years the sale of the rest of Telstra will leave the budget a full $4 billion worse off than it would have been, even after taking into account the interest savings. That is certainly no social bonus in any terms that I would agree with.Let us remember that the sale of the first third of Telstra resulted in windfall gains of $11 billion to the wealthiest 10 per cent of Australians at the expense of the other 90 per cent. The sale of the rest of it will again deliver a windfall gain for the wealthy few. I do not believe that the rest of us should be facing increased taxes to make up that $4 billion black hole.The next paragraph reminds us that the legislation only takes effect after the next election. Why are we even considering the bill now? I think that point was made last night. Why is it only the cabinet of the day that decides what the people's mandate was? That is something that we will develop later as we come to other amendments.19:33:005540Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—We rise to support the Democrat amendment. I agree fully with the remarks of Senator Lees.LD4ALSTONSenator Alston—Really?4J4Schacht, Sen ChrisSenator SCHACHT—Of course we agree. To put the preamble into law—for economic assertions, and that is all they are, from some ideological bent out of a Liberal Party policy document to become the law of the land—is really absurd. Of course, if you asked any court to try to interpret those three or four clauses, if it got any challenge, any judge worth their salt would say that this has noth ing to do with the actual working clauses of the bill. It is just rhetoric that a parliamentary majority carried. It is put there as a political explanation. This Minister for Communications, the Information Economy and the Arts (Senator Alston) and the Prime Minister (Mr Howard) can wander around the country at any time saying, `It is in the law, it is in the bill, that all these wonderful advantages will come from the full privatisation of Telstra.'Senator Lees correctly pointed out that the preamble mentions that they will deliver a `social bonus' of an undeclared size, but there is no mention anywhere else in the bill of the detail of that social bonus. By asserting that government ownership is in no way appropriate in the `highly competitive, global communications environment', the minister, as usual, confuses competition issues with ownership. They are separate issues.The Labor Party has always separated those issues. That is why we supported the introduction of competition into the Australian telecommunications market in 1991-92. We believed that that would get a better outcome for Australian consumers. At the same time, we also recognised that then and for the foreseeable future Telstra would provide over 85 to 90 per cent and, in many areas of Australia, 100 per cent of the telecommunications services to ordinary Australians.At some time or other, most of those competitive companies that may come in—other carriers, other service providers—will have to use the Telstra network to make the connection between their customers. We have always recognised that, and that will be the case for the foreseeable future.The minister forgot to mention in his ludicrous wind-up speech, or second reading closure speech, that the evidence that was given to the Senate legislation committee of inquiry into this bill from even the great devotees of competition—those fully privatised companies like AAPT and many others—all said, `The worst thing you can do is privatise Telstra and let it loose against us. With its market dominance, it will wipe us out.' In this case, the representative of AAPT, who made it clear that his position was that he generally supports privatisation, said, `Even if you fully privatise Telstra, for goodness sake, leave the power of the minister to direct in the act. We know that, with the dominance of, as the minister once described it, "the 600 pound gorilla", only as a last resort will we get some protection by knowing that we can go to a minister, to the parliament, and raise political and broader social and economic issues.' It is a joke to put in this preamble. I had a look at the preamble earlier on and thought, `Should we move an amendment to delete the first three pages?'This leads me to the point of this whole committee stage. The Labor Party will be supporting many amendments—our own and other amendments of the Democrats and the Greens. The government will move some amendments on competition issues that at the moment we are agnostic about. We think they would be better dealt with as a separate bill, not tied into a privatisation bill. We take the view that, in the committee stage, our principal position is to oppose the privatisation of Telstra—full stop.It is true, as people say—Senator Harradine said it and Senator Alston has repeated it ad nauseam—that the Labor Party privatised a number of other instrumentalities. The difference with Qantas and the Commonwealth Bank was that they did not have 90 per cent of the Australian telecommunications market. The Commonwealth Bank had, at best, 20 per cent of the market. In the case of Qantas, less than 10 per cent of Australians fly regularly and half the airline market was provided by another carrier. No-one can remember the last time Qantas paid a dividend. It was always calling for more government guarantees to buy more equipment, et cetera. The Commonwealth Bank did pay a regular dividend, although it was not a brilliant dividend compared to what Telstra has been paying. There is a world of difference, and that is the distinction the Labor Party made when it made the decision. Qantas and the Commonwealth Bank were not near all-encompassing monopolies, even with competition. That is the difference.I know others in the political debate will keep throwing it up at us and saying, `In the end, you'll do the same to Telstra.' The Labor Party has never equivocated in its national platform. In our policy statements for each election we have always said: `We'll keep Telstra in full public ownership, and we'll keep Australia Post in full public ownership.' There is an important message that we want to give the people of Australia at the beginning of the committee stage, now that the second reading has been carried. After talking with our parliamentary leader, Kim Beazley, we give a commitment that if we win the next election—and I am sure the government's privatisation proposal will help us win the next election—one of the first pieces of legislation presented to the parliament in the first week of sitting of the new Beazley Labor government will be legislation to repeal this bill.The Labor Party will make a commitment in its election campaign that, on election, in the first week of the first sitting of the first Beazley Labor government, we will repeal this legislation if it has passed through its final stages in this place. That is a statement we will not walk away from. We will go around Australia making that very clear. We look forward to putting this proposition clearly and in stark terms all over Australia—not only in the cities, of course, but in the country areas, the regional areas.We look forward to seeing the National Party squirming, given what they outlined to us today. I have to say that I have, on many occasions, admired Senator Boswell because of the courageous speeches he has made in this place opposing mad right-wing lunatics, including infiltrators of One Nation. He has stood up in his own party against competition policy. He has stood up in his own party against a whole range of what he would call `economic rationalist statements'. But today's performance was the most pathetic performance that Senator Boswell has put in as he tried to explain how he sold out the bush for not billions of dollars, not even hundreds of millions of dollars and not even approaching $1 billion, but at best a couple of hundred dollars.I want to go to the issue of what has so far been announced and how already it is being exposed. If the National Party have bought this as a package, they have already been sold short. I will give an example. The minister yesterday announced that the new CDMA network would involve expenditure of some $400 million plus—$450 is, I think, the round figure. He said there would be $176 million for the spectrum and a further $200 million for the provision of the capital equipment to make it work. As was pointed out by Telstra today, the $176 million has already been spent. The National Party have bought a promise that they will get $176 million as part of the social bonus, but that was spent by Telstra several months ago when they bid for the spectrum. Finally, we find that Telstra has spent the grand sum of $6 million to $7 million to buy the spectrum that will be used to provide this system in rural areas. The minister said there would be $176 million to spend on the spectrum to get this network running, but it will be $6 million to $7 million. The National Party should scratch $170 million off their expected pot. They have been dudded $170 million already.The next thing that happened is that Telstra said this is a commercial decision of theirs; they were going to do it anyway. If they were going to do it anyway, why did the National Party claim it as a victory, as part of their pressure? Senator Boswell said today he and his members rolled into parliament, met with John Howard two or three times and that one of their great victories was the new mobile phone network when Telstra put out a statement saying: `This is a commercial decision.' Apparently, they were going to do it anyway. This Liberal-National Party government cannot have it both ways. They cannot say, `This is a special deal we got for the bush with $420 million,' when Telstra is saying, `It's a commercial decision we were going to make.'If it is not a commercial decision and it was part of the deal, it means that Telstra was lent on and, after discussions with the minister, had to make this decision. Why? Because the minister represented the two-thirds public ownership. The good old Country Party with `Black Jack' McEwen would not have fallen for this. He would have rattled the coalition to the very end. Did the minister either lean on or direct Telstra or is it a totally commercial decision to establish the CDMA? It cannot be both. Either he lent on them to get this deal for the National Party or it is a straight commercial decision. I think it shows the hypocrisy of this arrangement. There is a first series of questions we would like to get answers to about this CDMA proposal. I think Senator Boswell said that it was one of three prongs. He mentioned this one and he mentioned the new call charges for remote areas. He said that he is not at liberty to describe the third prong at the moment because it is a secret deal with the minister after his meeting with John Howard. I notice that Senator Harradine, in response to an interjection, said he is not at liberty to divulge the full deal.This is showing this place in contempt. A deal is being done to provide money for regional and rural telecommunications, yet this government and the National Party are not even willing to tell their own supporters what the deal is. Senator Harradine says, `There is a deal, but I cannot tell you either.' I am surprised that Senator Harradine takes that attitude, because he has always been such a stickler for Senate arrangements.6H4HARRADINESenator Harradine—Madam Chair, I raise a point of order. We are dealing with an amendment moved by Senator Lees to delete the preamble. I am just wondering how Senator Schacht's remarks apply to that. I indicate to the chamber that my current view is to support the amendment.10000CHAIRMANThe CHAIRMAN—Senator Schacht, I am sure that you will tie your discussion and arguments into the amendment before the committee.4J4Schacht, Sen ChrisSenator SCHACHT—I am pleased to hear that Senator Harradine is thinking of supporting the amendment. He knows that it does not mean anything either way. It does not change the thrust of the bill, which still gives the government the guts of what it wants.As the issues raised in the preamble seem to cover everything under the sun about telecommunications, I do not think there is any problem in my speaking on some of the issues that have come up. Until we get more detail of the deal, what justifies this bill being carried by this parliament, for the rest of the committee stage I am going to keep asking a whole range of questions for the sake of the people of Australia. I want to find out exactly what the government has given them and what has persuaded Senator Harradine to vote for the government's basic proposition. If we cannot get that in the parliament, what is the use of having a parliamentary debate or a committee stage? They are some of the questions I raise about the CDMA proposal. There are many more to come. During the rest of this committee stage debate, I will raise them and others. I hope the minister can provide some information. (Time expired)19:49:005543Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—I rise to indicate that the Greens (WA) will be supporting the Australian Democrats' amendment No. 1 on sheet 1124 to oppose the preamble. We had a debate just a couple of days ago about truth in advertising. This is probably a really good example of legislation staying on the table for as long as it is going to last and which basically says what it purports to do, yet in reality deals with ideological claptrap.During the second reading debate, the Minister for Communications, the Information Economy and the Arts (Senator Alston) said that a minister who comes into this chamber and says things that are untrue will be—I cannot remember the exact term; this is basically what he said—a goner. It seems to me that you might be able to put ideological claptrap in a bill and get away with it. However, the Senate is saying, `No. You can't and you shouldn't.' This isn't what should be happening in legislation. Quite a lot of the elements within the preamble can be proven to be patently untrue. Therefore, they ought not be in the legislation.19:50:005543Forshaw, Sen MichaelSenator FORSHAW656NSWALP00—At the outset, in commenting on this amendment and the matter before the Senate regarding the preamble, I want to go back to some of the closing remarks of the Minister for Communications, the Information Economy and the Arts (Senator Alston) in the second reading debate. During his speech the minister accused the opposition of being engaged in some extensive delaying tactic. The supposed evidence for this was all the members of the opposition, with the exception of one, having spoken in the debate in an attempt to drag it out.Firstly, in order to correct that, let me say that I was one who did not speak, even though I was on the list. I and a number of other opposition senators took ourselves off the list of speakers today in order to allow the process to at least be kept on track, as it were. I would dearly love to have had my 20 minutes worth in the second reading debate and been able to spend as much time as I could in the committee proceedings putting my points of view. But, in the interests of getting that second reading debate out of the way and getting into the committee stage, a number of opposition senators took themselves off the list. If I had had that opportunity, I would have said a lot of things. I want to make a couple of points, and they relate to the preamble. Firstly, I note that Senator Harradine has indicated that he is of a mind to support the preamble.6H4HARRADINESenator Harradine—No.656Forshaw, Sen MichaelSenator FORSHAW—Sorry, to support the amendment to delete the preamble. I appreciate that, but it is well known as a matter of statutory interpretation that a preamble to any law or act of parliament is really only ever an aid in the most extreme and very rare situations where some ambiguity arises within the main body of the legislation and the court has to turn to the preamble or the second reading speeches to ascertain what may have been parliament's real intention. Whether the preamble remains in or is taken out—and we clearly support it being taken out because it is largely a statement of ideological claptrap, adopting Senator Margetts's words—it clearly does not matter at the end of the day because a future conservative government, and I am confident there will not be one, could take steps to amend other important sections of the legislation as well as the preamble. If anybody thinks anything here is set in stone or is cast iron, as the minister is wont to say all the time, then they should have another think.Let me make a couple of other points, and I want to address this comment to Senator Harradine. I know Senator Harradine has been the target, if you like, of a lot of the speeches made today. He is a well-intended target, because what the opposition is clearly putting before the chamber and endeavouring to remind Senator Harradine of—as he is in this unique position of having almost the casting vote on this matter—is those commitments he has given in the past. It appears that there is no point reminding the government of the commitments they gave in the past because they long ago gave up any semblance of wanting to adhere to any of their commitments. This was a government which promised to make all Australians relaxed and comfortable, and then scared the living daylights out of the aged community with their attempts to force people to sell their homes to get decent aged accommodation. This is the government that told workers of this country that they would be no worse off, and then brought in draconian workplace relations legislation. Even in its watered-down form as a result of the agreement with the Democrats, they still nevertheless endeavoured to use that to beat-up on the maritime workers union.I remind Senator Harradine—although I am sure he does not need any reminding—that he supported the Labor opposition in opposing the workplace relations legislation. Senator Harradine's support for the opposition on that occasion did not help us because the Democrats had reached an agreement with the government. I remind the chamber and Senator Harradine that the government claimed a mandate for their workplace relations legislation and, on at least one theory—having won the election and achieved a majority in the House of Representatives—it could be argued that they had a mandate to bring in their workplace relations reforms. We do not believe they had the mandate to bring in the reforms they did; nevertheless, it is arguable that they had a mandate to bring them in. Notwithstanding what could clearly be said at least on that occasion was a government mandate for workplace relations reform, Senator Harradine did not vote to let the government govern on that issue. He voted with us.However, when it came to Telstra, there was a slight change, I would suggest, in the logic to the argument. After negotiating agreements with the government—which in his view were to be to the betterment of the state of Tasmania but which in our view have not been proven and have not been carried out—Senator Harradine voted with the government to support the sale of one-third of Telstra. Again, Senator Harradine and the government argued that they had a mandate to sell one-third of Telstra because they had gone to the people before the election indicating that they supported the sale of one-third of Telstra.I have produced some figures in this chamber before—although I do not have them with me tonight—that interestingly enough show that, in the last federal election when the issue of the sale was clearly on the table and the Labor Party, the Greens and the Democrats had all made it clear that they were opposed to it, those parties in the Senate actually received a majority of votes in the election. My argument is this, and I would ask Senator Harradine to consider it: this debate has already been had in this parliament.C16HEFFERNANSenator Heffernan—Let's go home.656Forshaw, Sen MichaelSenator FORSHAW—Yes, let's go home. Move the adjournment and let's go home, Senator Heffernan. This debate has been had because, when we debated the government's proposition to sell only one-third of Telstra and the Prime Minister gave his solemn promise that he would not seek to sell any more of Telstra, implicit in the decision of this parliament and this chamber to allow that bill to go through was the rejection of the sale of the other two-thirds of Telstra. It is not just an argument in terms of logic or semantics even; it is quite clearly the case that the reason Senator Harradine and indeed Senator Colston supported the sale of one-third of Telstra on that occasion was that guarantee and that commitment that no more was going to be sold, certainly within the life of this parliament, and that there would be no attempt by the government to introduce any further legislation to sell off the remaining two-thirds. So the debate has been had. The Senate has made the decision, in giving its approval to the sale of the first one-third of Telstra. Clearly, implicit in that decision was its rejection of the further sale of any more of Telstra. I make this final point, as has been argued and put by my colleagues throughout this debate: why the sudden urgency for this legislation? Why didn't the minister and the Prime Minister announce after the float of the first one-third of Telstra, which they said was so successful when all the mums and dads in Australia went out and bought Telstra shares, `We think this has been such a tremendous success. We're going to sell the rest of the two-thirds'? Why didn't they say it then?What has happened is they have got down to the 11th hour, they know they are in trouble electorally and they are trying to push this bill through this parliament now because they know that, whether they win or lose the next election—and it is becoming increasingly obvious that they will not win it—the composition of this Senate will change in June next year and there will be more senators in this chamber who are opposed to the sale of Telstra than there appear to be now.The government knows that, if it can get the vote of Senator Colston, the vote that rightly belongs to the Labor Party and rightly should be a vote against the sale of Telstra, and if it can get Senator Harradine's support, it can get this bill through now. But, if it were to leave this legislation, if it were to allow the people to have their say at the next election, it knows that the composition of this chamber will change and it will not get that legislation through the new Senate because a number of government senators who currently sit in this chamber will not be back here. There will be more of us, and I am sure we will be sitting over there.That is the reason for this haste. The government is, firstly, relying upon the vote that rightly belongs to the Labor Party and, secondly, relying upon the vote of Senator Harradine. I would just ask Senator Harradine to think of that. Whilst this parliament has dealt with the issue of the sale of the first one-third of Telstra—and there is certainly, as I said, an argument that can be advanced that the government had a right to bring that matter before the parliament to be debated—the government has no right to put this issue of the sale of the remaining two-thirds of Telstra before this parliament. It should put it to the people first and then let the next parliament decide.20:03:005546Harradine, Sen BrianSenator HARRADINE6H4TASIND00—I would not normally respond to that type of tedious repetition of falsehood. I do not normally say that, but it is a tedious repetition of falsehood. I am surprised that Senator Forshaw should so engage in that falsehood in relation to my state of Tasmania.In respect of my comment about the government being elected to govern, it is the right of this chamber to examine matters on their merit, not to use the occasion to filibuster and not to talk about the amendment that it is talking about now. It is the government's right to put before us legislation. It is our right, of course, to amend it as we so desire, and I happen to be desiring to amend this preamble by deleting it.Be that as it may, I wanted to make a point on the workplace relations legislation. Yes, they said they had a mandate for that but, because of my long years of experience in the trade union movement, I could see that the provisions of that legislation were inadequate to deal with the situation that the government desired to deal with. I voted accordingly, and I will do so on any similar occasion when that judgment is made, but the judgment has to be made at the particular stage.On this matter, if this legislation goes through this parliament, it will not be proclaimed until after the next election. If you say that you are going to be over on the government benches, it will not be proclaimed. I think the government is very brave—I do not know whether it is wise—to say, `This is the way we are going to go. We're not going to proclaim it until after the election.' Therefore, it will become an election issue.Those who feel so strongly about the matter know what they can do. One of the reasons why I am not supporting the preamble—I am supporting Senator Lees's motion to delete the preamble—is that it appears to me that some of the paragraphs are not what I consider to be, I will not say factual—FX5MURPHYSenator Murphy—You should, because they are not.6H4Harradine, Sen BrianSenator HARRADINE—Senator Murphy, I suggest you listen.FX5MURPHYSenator Murphy—I am listening, Brian. Don't worry.6H4Harradine, Sen BrianSenator HARRADINE—It says on page 2:The sale of the Commonwealth's remaining two-thirds equity interest in Telstra will benefit the Australian community with the majority of the proceeds of the sale applied to the retirement of government debt and the opportunity to use a portion of the proceeds to deliver a social bonus.I have a feeling that that may well tie the government into a sale of the remaining two-thirds of Telstra, whereas this bill does not say that the government has to sell the remaining two-thirds of Telstra. All this bill does is enable the government of the day to sell more of Telstra. It may choose to sell another tranche of Telstra, up to 49 per cent. In fact, you might want to do that. I do not know. The legislation is an enabling piece of legislation for a future government—after it has gone through an election with this issue well and truly on the agenda for consideration—to sell another tranche or the remaining two-thirds.I know what is being said and understood all round that the preamble would only be used in exceptional circumstances as an aid to the interpretation of the law where the words are uncertain. It does say at the end of the preamble:The above considerations are taken into account by the Parliament in enacting the law that follows.As far as I am concerned, I am not taking into account that particular question if it says, `the sale of the remaining two-thirds equity in Telstra'. Incidentally, I might mention to the committee that I do have an amendment of my own in respect of the proclamation provisions. At the present moment, as has been adverted to by Senator Margetts, Senator Lees and the advice by the Clerk Assistant (Procedure), this is a fault in the bill. It leaves open-ended when this legislation will be proclaimed in the next parliament.I am proposing that unless it is proclaimed within the two months of the new parliament then it is repealed. So, Senator Schacht, if you are in government you will not have to repeal it. That is the whole point of my amendment. If you had to repeal it, you might run into a difficult Senate or you may not. I am assisting you in that regard. I foreshadow that I will move an amendment which will ensure that if it is not proclaimed within two months of the new parliament then it is repealed. With those thoughts and statements, I indicate that I will be supporting the amendment moved by Senator Lees to delete the preamble.20:11:005547Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—The minister talked about the reason why this legislation was necessary and why it had to go through now. During the minister's contribution in the second reading debate, I recall hearing him say that the reason the Senate had to pass this legislation was to fulfil the government's election promise. The minister did say that ministers have to be careful that anything they say in this place is the truth. Which election promise was this? When was it made? Why does the Senate have to fulfil that promise?20:11:005547Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—I acknowledge Senator Harradine's contribution. I particularly acknowledge and understand his comments in relation to the second paragraph on page 2 of the bill, which in some ways may be limiting rather than enabling and in that sense may well have a constricting effect when taken in conjunction with the words towards the top of page 3. On that basis I will not be opposing Senator Lees's amendment to oppose the preamble.I will just make a few comments that are pertinent in the contributions made so far. The first point in relation to Senator Lees is that, unless I heard her incorrectly—and I must say I could not believe my ears—she quoted three particular surveys—one of them I think was a Monash University study. She said that their conclusion was that who owns it makes little difference; it depends on the quality of management. Game, set and match. Some people are prepared to die in a ditch over who owns Telstra and your first contribution is to say that who owns it makes little difference. I agree entirely, and I am delighted that Senator Schacht also said that he agreed fully with the remarks of Senator Lees.DX5MARGETTSSenator Margetts—He didn't talk about public interest. You are twisting it.LD4Alston, Sen RichardSenator ALSTON—Who owns it makes little difference. They were the words you quoted. If you meant to say something else perhaps you can elaborate. I am simply relying on the words that you put on the table at the start of this debate.Senator Schacht gave a phoney commitment about repealing the bill in the first week of sitting. Given the Labor Party's track record, one could not possibly accept even that at face value. Even if they did, what would possibly preclude them from coming back five minutes later with another bill to simply sell down a part of or retain one per cent in public ownership. It is preposterous nonsense.As we know, only a couple of weeks ago Senator Schacht put out a press release saying that he was in favour of retaining Telstra in majority public ownership. Senator Robert Ray actually squashed that very proposition—he has squashed a few things in his time, I know. He was at great pains to rebuke Mr Gareth Evans, the current shadow Treasurer, when he tried to float the proposition that they could sell down another 16 per cent. All this business of phoney defence of keeping it in two-thirds public ownership has to be regarded as one of the most flexible and open-ended commitments in history.I also thought it was very significant that Senator Schacht distinguished the Labor Party's approach on Telstra from its approach on other government business enterprises. The point of distinction was that they were not situations in which the government held a substantial majority or a dominant position. That is telling you that he does not really object to private ownership or to privatisation at all; he is simply saying that, whilst you have a dominant government position in terms of the market share, then he is in favour of public ownership. Quite clearly, that means that, if Telstra loses market share, then his objection would fall to the ground and he would then, presumably, no longer oppose the privatisation of the telecommunications carrier because it was just another player on the marketplace.Again, I thought it was a very significant concession on the part of Senator Schacht, who I presume knows not what he says when he tries to make that distinction. Senator Schacht, I will repeat it for your benefit. In the one breath you say you are opposed to privatising Telstra. You say the difference between Telstra, Qantas and the Commonwealth Bank is that Telstra has a much greater market share.4J4SCHACHTSenator Schacht—Absolutely.LD4Alston, Sen RichardSenator ALSTON—But what follows from that and what you do not even seem to appreciate is that, if Telstra lost a significant proportion of its market share, your objection would, therefore, disappear because that is the only defence you offer as to why you in government were prepared to privatise Qantas and the Commonwealth Bank—because they did not have a dominant position in the marketplace. It follows from that that, if Telstra does not have a dominant position in the marketplace, you would have no policy objection.Senator Forshaw's contribution to the effect that we should be grateful that he did not speak in the second reading debate and then went on to speak for longer in the committee stage than some other people spent in the second reading debate is hardly a basis for us being very grateful. To the extent that I acknowledge there may well have been some whose names were on the list and who did not speak in the second reading debate, I accept your correction if that is the case.656FORSHAWSenator Forshaw—But you still put the boot in, didn't you?LD4Alston, Sen RichardSenator ALSTON—All I am saying is you made up for it by getting up and rambling on on the preamble. You did not need to speak; you know Senator Harradine's attitude. I respond to Senator Margetts's question by saying that, in the last election campaign, we made it very clear that we would not proceed to sell any further portion of Telstra without seeking a mandate. That is what this legisla tion does, particularly with the proclamation date. It ensures that we cannot sell it without having sought a mandate at the next election. That we will do and, having gained it, that we will do again.20:17:005548Murphy, Sen ShayneSenator MURPHYFX5TASALP00—I want to go to the preamble of the Telstra (Transition to Full Private Ownership) Bill 1998 . I am pleased Senator Harradine is going to support Senator Lees in opposing the preamble to this bill because we should not have a preamble such as this to any legislation because it is, in the main, totally misleading. But more important is the question of the government's mandate to do any of this.Unfortunately, Senator Harradine has left the chamber because I would have liked him to comment on a statement he made during the debate which led to the one-third sale of Telstra. He made a number of comments, but I want to point out two in particular. One comment relates to governments achieving mandates. We know what every single member of the government who spoke in that debate said with regard to the one-third sale and any further sale. Not one of them said that they would seek to do anything other than achieve a one-third sale before going back to the people.We have legislation here now. Senator Harradine gives an indication in the first instance that, while he was not too sure about supporting the full privatisation, he is on the public record as saying that. Just now he has said that this is enabling legislation so it does not mean that the final two-thirds of Telstra will be sold; it could mean something different. But we know full well what this government means and we know full well why this government has brought this legislation—and I find, unfortunately, with the support of Senator Harradine—with a view to getting it through the parliament now. The government is very afraid that if, after an election, it does not have the numbers in this place—and that is quite likely—it would have no hope of getting this legislation through the Senate. That is the real reason why we have this legislation here now. The government is afraid that it will not be able to achieve it.Senator Harradine says, `My amendment goes to proclamation and it has to be proclaimed within two months.' But that has nothing to do with this Senate. If this legislation passes, it is not a question of us coming back after another election in this chamber, the states house, as I have heard Senator Harradine put it so many times, and arguing the case and defeating something that Senator Harradine seemed to have held dear to his heart back in December 1996, when he said:. . . the Senate should apply certain principles which if those principles and values conflict with the government's legislation in discharge of its mandate—and that is even with a mandate—then those principles should prevail. On this particular matter I would have voted very strenuously against the total sale of Telstra.I understood that to have a very clear meaning; now I am not so sure. I ask Senator Harradine if he might explain to me what he meant back then versus the position he is currently adopting, understanding that he has said that this is enabling legislation, understanding that he has said it does not necessarily mean that there will be full privatisation of Telstra, and understanding that he also said back then that he was opposed to the total sale.You have to wonder about this preamble. It makes all sorts of commitments about universal service obligations and continued access to untimed local calls, and it refers to various other pieces of legislation—one of which is the Telecommunications Act 1997. I would like to hear from the minister how they intended in the longer term to apply the Telecommunications Act 1997 with regard to commitments such as those mentioned when there is a fully privatised Telstra. That is why this preamble should be removed.I ask Senator Harradine, through you, Madam Chair: on what basis are we supporting this legislation? If, as the government said, they would not do anything prior to this point without a further mandate from the Australian public, why should they not go back to the Australian public and seek that mandate?LD4ALSTONSenator Alston—We are.FX5Murphy, Sen ShayneSenator MURPHY—The minister says that they are. Yes, they are, after they have passed legislation. If they happen to be lucky enough to come back after the next election and still be in government, and I do not think they will, all they have to do is get the Prime Minister to ring up the Governor-General and say, `Proclaim the bill.'Senator Harradine's amendment has no relevance in all of this, except to say to me that he is going to support the legislation. I will be very interested to hear, and I will listen very intently to what he says during the debate, what his reasons are. Will the reasons be that we are going to get some big deal, like we were supposed to get before? There were headlines in the local newspapers such as `$160m windfall—Harradine sells Telstra vote for a higher price'. That was the biggest dud in history.All I can say to the minister, through you, Madam Chairman, is this: you did a great job in conning somebody to get a vote that delivered absolutely zip to my home state. Thus far you have hoodwinked the Deputy Prime Minister, Tim Fischer, with a phoney phone and, of course, you did the pea and thimble trick on poor old Senator Boswell. You ran the old thimbles around that many times that he did not have a clue which one the pea was under. He just bought it as it was. There he was tonight saying that the Prime Minister and the Deputy Prime Minister had got to know each other. These blokes have been in parliament, in coalition, for years and, all of a sudden, they get to know one another! What a joke. It is no wonder the bush is upset with the National Party right now. It is no wonder it is going to desert them in droves at the next election.It is important that we remove this preamble. In fact, I think it is important to remove the lot. Nevertheless, we might get there at the end of the day. I urge senators to support that. Even the minister could not bring himself to argue in support of this preamble, and it is no wonder why. You only have to look through it to see what a load of nonsense it is. It has been denigrated by many reports. The minister said that even a one-third sale of Telstra would deliver all sorts of benefits, that it would bring telecommunications up to speed, with the injection of private funding, et cetera, and this would make Telstra a more commercial organisation. All the reports have said that that did not happen. That is why we should support the Democrat amendment. I urge senators to do so.20:26:005550Harradine, Sen BrianSenator HARRADINE6H4TASIND00—Senator Murphy obviously has not heard anything that I have said. He was right in suggesting that Tasmania did not get $163 million, I think he said—FX5MURPHYSenator Murphy—No, it was 160 in that headline.6H4Harradine, Sen BrianSenator HARRADINE—It was 160, was it? Tasmania actually received $183 million, so you are wrong.FX5MURPHYSenator Murphy—No, I'm right in so far as we got zip.6H4Harradine, Sen BrianSenator HARRADINE—From here on out, no-one should regard anything that Senator Murphy says as being credible. It was $183 million—not $160 million—plus other things. That was quite legitimate. If Senator Murphy wants to open his mouth and make false statements before this chamber—FX5MURPHYSenator Murphy—I read out what you said in this chamber.6H4Harradine, Sen BrianSenator HARRADINE—Oh, you are getting to those remarks that I made about the selling of the whole of Telstra. Yes, I made those remarks. If you look carefully at them, you will find that I made them quite deliberately. What I said then is not inconsistent with what I might do now. I might, in the end, vote against the third reading but, then again, I might not. In either case what I do now is not in conflict with what I said then. That was said at the time in respect of the issue then before us. What I said was deliberately couched regarding the principles which should govern this chamber.Furthermore, I elaborated in a press release on the principle that if Telstra is a natural monopoly then the whole of it should not be sold. So put it into context properly and you will know. But I do not know what we are arguing about, because I have said—TW4BOURNESenator Bourne—About an hour ago now.6H4Harradine, Sen BrianSenator HARRADINE—About an hour ago—that I am opposing the preamble. I am supporting Senator Lees's amendment to delete the preamble. I do not know whether you heard that, Senator Faulkner, but I think there is now a unanimous view that the preamble should be deleted. That is a good start, I would have thought. 20:30:005550Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Senator Harradine invites me to comment on this issue. I heard the comments he made. I also heard him say that he may or may not vote for the third reading. I found those comments quite extraordinary. We have had the spectacle all over television bulletins today, all over the media, that Senator Harradine is minded to support the government on this particular issue. As far as I am concerned, from all the evidence I have seen, I believe the deal is done.Senator Harradine invites me to comment, but that is the only reasonable conclusion I can come to. I happen to believe that the deal has been done. But I take a different view from Senator Harradine not only on the substance of the issue before the chair, not only on the importance of Telstra remaining in public ownership, but also on the key issue of Senator Harradine coming clean about what arrangements might have been made behind closed doors. I think we in this chamber have an entitlement to know what has been said between the government and Senator Harradine.Earlier on today during the second reading debate I can recall that, after I made some comments about Senator Colston, we had Senator Ian Macdonald take a point of order and suggest that these were most unfair comments because, apparently due to ill health, Senator Colston had left the building. I took those comments from Senator Macdonald at face value.AW5CARRSenator Carr—That was foolhardy.5K4Faulkner, Sen JohnSenator FAULKNER—It probably was foolhardy, Senator Carr, because it was not long ago on the 7.30 Report that we had the Deputy Prime Minister (Mr Tim Fischer), even though in a very tangled use of the English language, trying to get the point across, in relation to questions asked about Senator Colston, that Senator Colston had gone to Brisbane to have a meeting with the Prime Minister of Australia (Mr Howard) and to do a deal about Telstra. That was what was said by Tim Fischer, the Deputy Prime Minister.LD4ALSTONSenator Alston—That's not right.AW5CARRSenator Carr—That is what he said.5K4Faulkner, Sen JohnSenator FAULKNER—That is what he said. I do not know who is right. Is Tim Fischer right, is Senator Macdonald right or is Senator Alston right? The point is they are not coming clean. There have been sleazy deals, sleazy arrangements, come to, in my view, behind closed doors. Frankly, I think the chamber has an entitlement to know what those arrangements and understandings are.This would be an appropriate stage of the debate on this bill for Senator Harradine to come clean. It would also be an appropriate stage for Senator Colston to take the unusual step for him of coming in the chamber and have the intestinal fortitude for once in a blue Tuesday and actually make a contribution on the floor. Senator Colston is not well known for having a capacity to stand in his place in this Senate chamber and actually say anything in defence of his actions—4J4SCHACHTSenator Schacht—Except get his TA.5K4Faulkner, Sen JohnSenator FAULKNER—That might be true, Senator Schacht. That aspect might well be true. But I think the chamber has an entitlement to have those sorts of matters explained to it in more detail.I simply do not believe Senator Harradine when he says he has not made up his mind on the third reading. Other senators might, but I have come to the conclusion that that is not right. Surely all the evidence that we have seen both in the public arena and in this building can only lead senators to a conclusion that Senator Harradine has made up his mind. We are going through a debate that is a facade. We had Senator Harradine last night coming into this chamber and, for the first time in living memory—perhaps for the first time in his parliamentary career—voting for a gag motion.H15CAMPBELLSenator Ian Campbell—He voted for a motion you moved last year.5K4Faulkner, Sen JohnSenator FAULKNER—Not once, not twice but thrice.H15CAMPBELLSenator Ian Campbell—A procedural gag.5K4Faulkner, Sen JohnSenator FAULKNER—I did not move any gag motions last year. I can assure Senator Campbell of that. Sadly, I did not have a capacity to move such a motion last year. Even though you were not manager—maybe Senator Kemp had been sacked as Manager of Government Business by then, I do not know—I certainly was not. Unfortunately, the Labor Party by that stage had lost the election.H15CAMPBELLSenator Ian Campbell—You moved a gag on 27 August; you goddamned liar.10000CHAIRMANThe CHAIRMAN—Order!Senator Ian Campbell interjecting—10000Faulkner, Sen JohnSenator FAULKNER—What I have to say, Madam Chairman, in relation to that interjection from Senator Campbell is that the Labor Party always allowed debate on procedural motions. The Labor Party never once gagged such a motion and did not give senators from either side of the chamber—minor party, Independent senators, opposition or government senators—an opportunity to put a case. That is what Senator Harradine did last night. On three occasions he did not give anyone a capacity to put a case on, of all things, a procedural motion. I do not believe there is any precedent for that. I do not believe we have seen that sort of behaviour previously from Senator Harradine. So when he comes into the chamber—H15CAMPBELLSenator Ian Campbell—On 27 August 1997.5K4Faulkner, Sen JohnSenator FAULKNER—When he comes into the chamber and says to us—H15CAMPBELLSenator Ian Campbell—You bald faced liar.10000CHAIRMANThe CHAIRMAN—Excuse me, Senator Faulkner. Senator Campbell, I have tried to ignore your bad behaviour, but three times you have used unparliamentary language. If you would care to withdraw it unconditionally now please.H15CAMPBELLSenator Ian Campbell—I withdraw `bad behaviour'.10000CHAIRMANThe CHAIRMAN—Please, Senator Campbell, would you stand and unconditionally withdraw your unparliamentary language.H15CAMPBELLSenator Ian Campbell—Madam Chairman, this man opposite is the only man in politics in Australia who can look you in the face—10000CHAIRMANThe CHAIRMAN—Senator Campbell! Order!H15CAMPBELLSenator Ian Campbell—and lie directly at you and—10000CHAIRMANThe CHAIRMAN—Order! Senator Campbell!H15CAMPBELLSenator Ian Campbell—not even blink. On 27 August—10000CHAIRMANThe CHAIRMAN—Senator Campbell—H15CAMPBELLSenator Ian Campbell—the opposition moved a gag motion that Senator Harradine voted for. I withdraw the word `liar'.10000CHAIRMANThe CHAIRMAN—Senator Campbell, next time I ask you to come to order and to withdraw something, will you do so immediately and unconditionally. This sort of behaviour is not conducive to good behaviour in the chamber.4J4SCHACHTSenator Schacht—Spoilt brat.10000CHAIRMANThe CHAIRMAN—I would expect the Manager of Government Business to set an example.H15CAMPBELLSenator Ian Campbell—You should expect that from the Leader of the Opposition as well.10000CHAIRMANThe CHAIRMAN—Order, Senator! I expect it from both of you. The minister and the shadow minister will stop interjecting as well. As the Manager of Government Business, I would expect you to set an example—not challenging my ruling and disregarding my call. In future when I call you to order, you will come to order speedily.5K4Faulkner, Sen JohnSenator FAULKNER—Thank you, Madam Chair. I move:That the committee report progress.Question put.20:42:00The Committee divided. (The Chairman—Senator S. M. West)31Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A.Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Evans, C. V. *Faulkner, J. P. Forshaw, M. G.Hogg, J. Lees, M. H.Lundy, K. Mackay, S.Margetts, D. Murphy, S. M.Murray, A. Neal, B. J.O'Brien, K. W. K. Quirke, J. A.Ray, R. F. Reynolds, M.Schacht, C. C. Sherry, N.West, S. M. 32Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Campbell, I. G. Chapman, H. G. P.Coonan, H. Crane, W.Eggleston, A. Ellison, C.Ferris, J. Harradine, B.Heffernan, W. Herron, J.Hill, R. M. Kemp, R.Knowles, S. C. Lightfoot, P. R.Macdonald, I. Macdonald, S.McGauran, J. J. J. Newman, J. M.O'Chee, W. G.* Parer, W. R.Patterson, K. C. L. Reid, M. E.Synon, K. M. Tambling, G. E. J.Tierney, J. Troeth, J.Vanstone, A. E. Watson, J. O. W.Conroy, S. MacGibbon, D. J.Denman, K. J. Payne, M. A.Gibbs, B. Calvert, P. H.McKiernan, J. P. Minchin, N. H.Stott Despoja, N. Gibson, B. F.Woodley, J. Ferguson, A. B.* denotes tellerQuestion so resolved in the negative.20:46:005552Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—In my earlier contribution on the amendment to the preamble, I did take the opportunity to ask a number of questions about the government's policy on the introduction of the CDMA, being part of the so- called deal to get the National Party to vote for your bill. In particular, I asked questions of the minister about the spectrum that already has been purchased by Telstra. It was not purchased specifically to buy off the Country Party. In fact, according to one account today, only $6 million of the spectrum's $176 million will have to be used for this new CDMA network in the country. So you have diddled the Country Party. Congratulations on that. More woe to them and to Senator Boswell that they have already done $170 million out of the $426 million—LD4ALSTONSenator Alston—Madam Chair, I raise a point of order. I do not know whether it is through stupidity or ignorance, but either way it is out of order for Senator Schacht to continually refer to the National Party as the Country Party.5K4FAULKNER Senator Faulkner—Madam Chair, on the point of order: Senator Schacht can refer to the National Party any way he likes. In fact, I think it is a most temperate use of the English language to call them the Country Party, given the other descriptions I have heard used by people who live in rural and regional Australia.10000CHAIRMANThe CHAIRMAN—There is no point of order.4J4Schacht, Sen ChrisSenator SCHACHT—I apologise if the minister's sensibilities were upset. Of course I should say the National Party, because, as I said earlier, if it was the old-style Black Jack McEwen Country Party they would not have bought this deal at all. They would have brought the coalition down first to protect the interests of their voters out in the bush. Can you imagine Artie Fadden, can you imagine Dr Page—5K4FAULKNER Senator Faulkner—I prefer not to.4J4Schacht, Sen ChrisSenator SCHACHT—No, but on this issue they would have told even Bob Menzies to go jump. No, not the National Party this day—it is just another sub-branch of the Liberal Party completely sold out on this issue. We have found the first loophole, the first loss. In 24 hours the National Party has lost $170 million of the package. Not a bad effort in 24 hours, you would have thought. How much more is going to unravel as we get more detail? I ask the minister to confirm that about the spectrum allocation. I ask the minister to confirm that Telstra were apparently going to do this anyway as a commercial proposition without having it counted as a deal for the Country Party. If that is the case, the Country Party has lost one of the prongs already.My next technical question, Minister, relates to the CDMA telephone receivers. You said in the press conference yesterday that you thought they would be about $350 a piece. Do you have any prices from overseas? I understand that in Japan and America, where there is CDMA, the price of the hand-held receiver, of which Mr Fischer seems to have the only one in Australia at the moment—UI4RAYSenator Robert Ray—The line fell out.4J4Schacht, Sen ChrisSenator SCHACHT—He could not even get it to work talking to John Laws today. It fell out. I understand that they are in fact double that price, maybe $600, $700 or $800. There is some suggestion they may even be over $1,000. I know that when a bigger market grows they may actually come down somewhat in price, but is it not true that the price is more at the moment than the $350 that you suggested? Is it also not true that, despite all your presentation yesterday in that bizarre press conference where two-minute Tim Fischer, the Deputy Prime Minister, did it all and got you to hold the phone up with him—AW5CARRSenator Carr—Hold his bag for him.4J4Schacht, Sen ChrisSenator SCHACHT—Hold up the bag, hold up the diagram, pose whenever the Deputy Prime Minister said, `Oh, Richard, come and join me. Say this, do that.' It was like the Punch and Judy show of old, except this was the punch bag for the Deputy Prime Minister. It is extraordinary that this minister has not only been made the doormat by the Prime Minister over ABC policy and over media cross-ownership law, but he has even been made the doormat for the Deputy Prime Minister of Australia. We now have all these announcements of these deals not being made by the minister for communications but being made by Tim Fischer, the Deputy Prime Minister. The joint press conference is a special that will last in the memory of all of us for a long, long time.Then we find today that Tim Fischer is up in Queensland and trying to be on the radio with John Laws. He is doing all the announcement on radio, apparently, about the new deal for the reduced cost for remote telephone calls in outback Australia. Where is the minister for communications in all of this? He has been told to stand aside—`Tim Fischer is the one that can explain this to the people of Australia. Richard Alston can't.' We suspect that in some ways that is probably right. He has got such diminished credibility and so many broken promises, why would you believe him?But we do like to actually get some answers here in the Senate, Minister. I would like to get answers to a couple of those questions about CDMA. Another one I would like to ask is this: in the new competitive environment that is developing, will there be full number portability between a CDMA receiver and Optus's GSM? Will they be able to have full number portability from one receiver to their new receiver with the GSM? That is a pretty important question in the competitive market. If it is not portable, this may be good for Telstra, and it may be why they have decided to do this anyway as a commercial deal. They are establishing a new sort of monopoly in rural Australia in being the only one to be able to operate a CDM network because the others will not move into it.LD4ALSTONSenator Alston—You mean CDMA, do you?4J4Schacht, Sen ChrisSenator SCHACHT—CDMA—you finally got something right. This announcement today on local call charges for pastoral areas also said there were something like 60,000-odd families—FX5MURPHYSenator Murphy—Thirty-seven thousand.4J4Schacht, Sen ChrisSenator SCHACHT—Yes, 37,000 families would be eligible to get this new benefit, and at the top of the press release it said they would all get untimed calls within that zone. But, if you read on further down, it said that many of them, when they telephone their nearest community centre to get essential services, would still have to pay for a timed call—at a new rate that is somewhat cheaper, but they are still going to have to pay for a timed call.Mr Fischer said in his announcement that this would be worth $150 million. I want to ask: is the $150 million provided out of the social bonus for the one-off capital works to establish the arrangement for this to operate? And, when the new cheaper call rate comes in—even though some of it will still be timed—will that be a loss that Telstra has to bear, will you put it in the CSO or will you make a grant out of the budget each year to pay for this loss to Telstra for having the cost of those charges reduced?I have one final point to raise in these two areas. Even though we have got very vague information, I find it astonishing that so far there do not seem to be any amendments to this bill—for example, on these new community charge rates. There is nothing here.AW5CARRSenator Carr—Why not?4J4Schacht, Sen ChrisSenator SCHACHT—Why not? Where are the National Party? Why aren't they moving an amendment—Senator Faulkner interjecting—4J4Schacht, Sen ChrisSenator SCHACHT—It is astonishing.AW5CARRSenator Carr—They've missed another one.4J4Schacht, Sen ChrisSenator SCHACHT—They have missed another one. You would have thought these brave gentlemen—these tough negotiators for the bush—would have said, `Okay, the money's not bad,' even if they fell for that, `but we will insist that we put in the bill that this will be the new rate so that when we vote for it we can go back to regional Australia and say, "We've delivered. It is in the legislation."' No.AW5CARRSenator Carr—Missed opportunity.4J4Schacht, Sen ChrisSenator SCHACHT—It is a big opportunity missed. What the heck is going on with the National Party? We know the Deputy Prime Minister wants to join the Liberal Party. He is actually a sub-branch of the Liberal Party. As I said before, Senator Boswell has made a presentation here over the last few years of being a bit different—trying to be the last old style Country Party representative for bush people.5K4FAULKNER Senator Faulkner—Only when it suits him.4J4Schacht, Sen ChrisSenator SCHACHT—Only when it suits him, and now he has fallen over. He has rolled over, and he missed an enormous opportunity, apparently.5K4FAULKNER Senator Faulkner—It suits him now, but he doesn't know it.4J4Schacht, Sen ChrisSenator SCHACHT—I do not think he realised that he could have insisted that the amendment to guarantee these new rates be put in the legislation by amendment tonight. And he didn't.NB5CAMPBELLSenator George Campbell—And he could have moved it.4J4Schacht, Sen ChrisSenator SCHACHT—He could have moved it. He could have had flags flying.UI4RAYSenator Robert Ray—We could have got an amendment done in big print.4J4Schacht, Sen ChrisSenator SCHACHT—Yes, and even bigger print circulated out. And, even though it would not have gone out on the Internet—because he has given that away—he could have got it out on ABC radio, where it still operates before this minister's cuts destroy the program. He would have been able to claim a victory, but he missed it.This is a further spectacular example of why, unfortunately, One Nation is growing so popular in the bush on the backs of disappointed, disaffected, frustrated National Party voters. They suddenly realised that the National Party have sold them out. They cannot even get the technicality right of how to put it in a bill to protect their interests. This is astonishing.I grew up in a Country Party seat of Gippsland in the 1950s—the days of Black Jack McEwen. Goodness me, he would be turning over in his grave to see how far the party he helped create have fallen over, rolled over and become irrelevant to the people they represent. I say to the National Party: you have one last chance, on the third reading.AW5CARRSenator Carr—They'll vote against it.4J4Schacht, Sen ChrisSenator SCHACHT—I will be marginally generous. There is still the third reading. But I suspect the horse has bolted on them, because they do not have the wit even now to find out how to draft the amendment to put what they have negotiated in this bill. So they are going to sit here tonight and tomorrow and keep voting. They will vote on the third reading, they will vote for this package and they will vote with the Libs.After the bill goes through, I—the shadow minister for communications—am going to enjoy myself in the bush, going around saying in those rural areas, `Whatever you may think about the Labor Party, we ain't done. We know how to negotiate a deal and we know how to put it in a bill to protect the people we look after; unlike the National Party who, through sheer stupidity, let it all slip.' What do they get in substitution for a good bit of committed work to get the deal done and written in legislation? They think because Tim Fischer can run around holding up a mobile phone—AW5CARRSenator Carr—Which doesn't work.5K4FAULKNER Senator Faulkner—Stumble around.4J4Schacht, Sen ChrisSenator SCHACHT—which doesn't work, and stumble around and issue diagrams, that this is the basis of a deal. We know that this is the demise of the National Party, and I am amazed to see it in my lifetime. As one who grew up in the bush in Victoria in a National Party—then called the Country Party—stronghold and as a Labor supporter who put up with all the stuff we got from the National Party about how they were the only ones looking after the bush, I am going to enjoy the next couple of months. I will be going around rubbing it in that the National Party have sold the bush out. And here is a demonstration of it. There is no amendment to write into this legislation what Senator Boswell told us was a great deal, with three prongs. There ain't no prongs in this bill, Ron. There are none at all. You have missed the game. You have sold your people out—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—Senator Schacht, could you please address colleagues in their correct term.4J4Schacht, Sen ChrisSenator SCHACHT—I was using a term of endearment for Senator Boswell.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I would prefer you to address him properly.4J4Schacht, Sen ChrisSenator SCHACHT—I appreciate that. I will refer to him as Senator Boswell. I put a number of those questions to the minister. I also put the question to Senator Boswell: how did he miss the biggest opportunity he ever had to guarantee something if this deal is so good? In his speech tonight, Senator Boswell said there were two prongs in the deal. He said he could not tell us about the third prong. Senator Harradine has said the same.5K4FAULKNER Senator Faulkner—We know what the third prong is.4J4Schacht, Sen ChrisSenator SCHACHT—I suspect, as Senator Faulkner has said, we know what the third prong is—it is straight through the middle of his heart. He's gone. He's on the old hayfork, pitched right up in the air. Back in the old days in Gippsland we used to fork hay up onto the back of a trailer. You'll have two pitchforks in the backside, Ron, and you'll be up on the top of the trailer. That is where you are going with the National Party—a pitchfork in the back, hogged over the side and you are gone.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Senator Schacht, could you please refer to Senator Boswell by his correct title.4J4Schacht, Sen ChrisSenator SCHACHT—Senator Boswell will be pitchforked out of this because he has made a classic blue. I want to know how the minister is going to guarantee these arrangements in legislation.NB5CAMPBELLSenator George Campbell—He's not.4J4Schacht, Sen ChrisSenator SCHACHT—It is not in legislation—it is a promise. It does not mean anything. When are we going to get the legislation to guarantee the reduced call rates for these people? (Time expired) .21:01:005556Ray, Sen RobertSenator ROBERT RAYUI4VICALP00—I am going to intervene in this debate in the committee stage only once. First of all, I did hear Senator Harradine ask why we were discussing the preamble when he had committed to vote with us. As though that is the be-all and end-all. Thank you, Senator Harradine, we will not have anything more to say; we appreciate your support of Senator Lees's amendment. We will just decamp. Senator Alston, I thought, also gave some indication of impatience on this matter. After contentious legislation is carried at the second reading there will always be a small blow-out on the preamble and the first clause, then the committee as a whole will settle down to solid work considering what will mostly be government amendments but amendments coming from others also and it will proceed in an orderly and structured fashion. But the committee stage provides us with our one opportunity to at least ask for further information. And that really is in three broad areas.With regard to the first area, we have had the Deputy Prime Minister, Mr Timothy Fischer, proceeding around the country throwing money off the back of a truck as fast as he can. We are having difficulty keeping up with the promises he is making. We all saw him this morning ring John Laws and tell him what a wonderful reception it was. That is the last we ever heard of him. The line dropped out and we heard nothing more. So we do not know precisely what the government's intention is in regard to providing services in the rural areas.We know the other side of the coin. We know that it was an unequal negotiation field. We know that the slippery characters in the Liberal Party will always outdo their country cousins. I am a city boy; I can remember the good old days when two of my country cousins came down from Brewarrina. We fed them chocolates. The packet was actually labelled `Laxettes' but they thought they were chocolates. They just ate them up. And this is exactly the same. It is precisely the same thing.On one level we have knowledge that a deal has been done, that offers have been made, with no precision and with no negotiating skills from those who are supposed to receive the offer. It would be nice if the minister would at least try to outline at some stage this evening precisely what is on offer in terms of recompense to rural areas of Australia to overcome their fears of the full privatisation of Telstra. The minister would at least acknowledge that there is some uneasiness out there about this particular policy. I want to know what the package is.With regard to the second area, have there been any special arrangements made for particular states? When this tends to happen my state is the one that tends to get dealt out because it is regarded as a safe area for the coalition. They have only one National Party senator, who does not amount to anything—absolutely nothing, as you can see from his contribution today; he threw his speech away and sat down with four minutes to go. We do not know state by state whether there are going to be winners and losers. Some people would say, `If you come from a small state and you have a pivotal vote and you want to leverage money into your state, fair enough.' I do not say `fair enough'. That is not good governance. It is not good governance if 10 or 20 or 100 Telstra workers in my state get the bullet for no reason other than political expediency, simply to bring over a crucial vote in another state. That is not what we are about. This may be a states House, but we are all Australians and we should all be treated as equally as possible.The last area I raised earlier today. I raised the question: why was it that the vote in this Senate will be determined by a corrupted vote, by someone who had been lured from our side of politics? I indicated, with some complaint and some justification, I thought, that I thought it was a bit red hot that he would come into the chamber last night and three times vote for a gag and make us sit to 12 o'clock tonight and tomorrow night, then jump on the plane and go back to Queensland.But the coalition had an answer for us on that so we did not press it—`Oh, look, he had a longstanding medical appointment in Queensland.' We all understand that. It would have been nice if we could have debated the motion last night so that anyone on this side of the chamber—and right around it—who may have had urgent medical appointments could have at least put the argument. But we were not given that particular scope. I actually believed the situation. I thought, `That's fair enough.' Despite my particular concerns about this particular senator, no-one would begrudge the fact that he had to return to Queensland for some sort of medical consultation. None of us, in fact, would have objected to that. But what do we find tonight on the 7.30 Report? Oh, no, Senator Colston is having discussions with the Prime Minister.8O6O'BRIENSenator O'Brien—About what?UI4Ray, Sen RobertSenator ROBERT RAY—About what? And what was delivered? That is what we want to know before we continue to consider this particular piece of legislation. Through his normal source, the person he normally drip-feeds in the media, we learnt three things about his demands. We even saw—although we could not read it in full—what was purported to be a letter from Senator Colston to Mr Howard. The camera went on to about the first three paragraphs. I must say I did not bother on this occasion to freeze-frame it, blow it up and find out what it was about. But in the newspaper article written by a journalist very sympathetic to Senator Colston, he had three big demands. First, why wasn't he being consulted and why had no-one talked to him? That has obviously been solved today as he has flown to Queensland and seen the Prime Minister.His second great complaint was that the government would not accept his vote, and he was still angry about that. His third complaint, apparently, was that he could not put a long list of smears, vicious innuendo and outright lies into this particular chamber. One wonders: if he put those propositions to the Prime Minister, what was the Prime Minister's reaction? Clearly, his reaction is that he has met one of the demands. That is, Senator Colston has met the Prime Minister.But I do not think you could imagine that the Prime Minister of this country would have countenanced Senator Colston's other two demands. After all, it was the Prime Minister, having defended Colston all the way through until 8 April 1997, who called the Federal Police in and it was just eight days later that the same Prime Minister, against the opposition of certain senators in this place, said they would no longer count his vote. So I cannot imagine that the Prime Minister, having done that, would backslide on that at all. I would never accuse him of it. I would certainly never ever contemplate the Prime Minister of this country acceding to Senator Colston's demands to put those forms of slanders, innuendoes and intended attacks to pervert his own court case so that he could get off without going to trial. No Prime Minister of Australia would do that.However, after the Prime Minister having met him and having known that those were the demands, we are at least entitled to have some response to say—and I am sure it could be found in the next hour or so—that the Prime Minister of Australia rejected out of hand those two demands. Then all that remains to be said is this: were arrangements made—legitimate arrangements, even though we might not like them—so that special deals were cut with Senator Colston to get his support for this particular bill? Did that occur? If it did occur, what is the nature of them and has the minister been informed? He may not have been informed of those particular arrangements.When it comes to considering this particular committee stage of the bill, we are entitled to see some of the detail of the arrangements that are not contained within the bill—if you like, the offshore deals that have been made which will reflect back into the consideration of this bill. We really want to know what are the detailed arrangements that have been made with the National Party so we can assess whether they were sold a pup and whether there should be further amendments in the committee stage to reinforce those agreements. We need to know whether there have been any special deals made for any states and whether, when you run the ruler over it, that is fair amongst all of the states of Australia and it is not just a political ploy to drag over votes.The final thing we need to do is understand what the nature of the discussion was, in terms of the way it affects this bill—and only that part of the discussion between Senator Colston and the Prime Minister of Australia. If those questions can be somewhat answered, I am sure we can proceed to the more detailed consideration of the bill. But I do reiterate, in spite of what Senator Harradine and Senator Alston have said about the initial stages of the bill, that it is to be expected that there will be a few bombastic speeches and others made immediately after the second reading.5K4FAULKNER Senator Faulkner—Steady on!UI4Ray, Sen RobertSenator ROBERT RAY—I exclude your noble speech earlier in the piece, Senator Faulkner—and, if you believe that, you would believe anything. It is not unusual, following a second reading, to have a lot of general speeches, but I am sure it is not too far away before we will be able to get to the detailed consideration of this bill.21:12:005558Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Madam Temporary Chairman, it has taken me a little while to get the call. After I asked the Minister for Communications, the Information Economy and the Arts what particular promise we were being required to fulfil, I finally wrote down what I think he was saying. That is: the Senate has to pass this legislation now to fulfil the coalition's promise at the last election that they would not sell Telstra during this term of government.What is more, the government is going to require hundreds of thousands of dollars because, even despite the fact that we were coming back for the anti-Wik legislation, there is still the extra staffing and overtime—of course, you are looking at 7½ hours of overtime today and tomorrow—and getting the House of Representatives back. Minister, that is nearly a million dollars for us to allow you to break your election promise. I have never gone along with the idea of mandate but I think this is the craziest, crankiest idea of mandate that I have ever heard in this particular chamber.21:14:005558Lundy, Sen KateSenator LUNDY7G6ACTALP00—I, too, have some quite broad questions I would like to put to the Minister for Communications, the Information Economy and the Arts. They go to the government's direction in ensuring that Telstra is not able to, in fact, thwart the stated purpose of the government to enhance competition in the telecommunications area.Minister, I would like to draw your attention to the experience in the United States, following deregulation, where the consumer benefits allegedly arising from competition policy were delayed by several years because many of the incumbent carriers chose to initiate legal activities and legal action against new entrants for fear that they were encroach ing on their markets in a way that they did not think was fair.Minister, I ask you for a description on the management of that transition, particularly in the context of Telstra's apparent willingness to take on the rulings and guidance of the ACCC in these matters. We have seen already Telstra vehemently try to hold on to the market advantage it has in Internet service provision. I think there is still a structural issue with respect to Telstra having the advantage of being the provider of most of the wholesale bandwidth to many of Australia's ISPs.This is a particularly pertinent question for regional Australia because Telstra is one of the few providers of wholesale bandwidth to many regional Internet service providers. Whilst the way they subsequently sell their retail product has already been perused by the ACCC, there is a very clear case of price discrimination between metropolitan, rural and regional customers of Telstra's Big Pond home and business product. This creates quite a dilemma because, whilst Telstra continues to provide a wholesale product and a retail product for Internet services in the region, the ISPs that provide those services in the region are required to purchase the bandwidth from Telstra at a set price and then on-sell it. Telstra could obviously, within their structure, provide those ISP services at a much lower rate.Indeed, we have heard evidence in estimates committees that the Internet service that Telstra Big Pond provides has an arbitrary pricing regime. For example, we heard at the estimates committee that Telstra imposed an 85-kilometre radius measurement around a regional point of presence for those classified for their Big Pond business product. Minister, I know that you have dwelt on the issue of points of presence and what a glorious development they are for regional Australians who want access to the Internet, but to impose an arbitrary distance radius around those points of presence for the purposes of jacking up the price, or the cost, of that Internet service seems to be quite bizarre.It gets even more ridiculous when you consider the way that other Internet service providers actually have to charge for services out in the bush. It is my understanding that the ACCC was challenged and asked about comparisons between what Telstra charges for these service and what other ISPs charge. Although Telstra could provide these services for a lower price, they will not. Why? Because it would be an uncompetitive practice because they would undercut the services being provided by other ISPs. I am describing an absolutely ridiculous situation where the ACCC is maintaining, through their regulatory regime, an artificially high price for Telstra Internet customers in the regions.This whole issue of Internet pricing is highly pertinent, particularly when you look at some of the developments that are taking place with convergence. As the minister will know—and I have spoken on this issue many times in this place—the provision of Internet services has the capacity to actually overtake and become the new form of communications address in the same way as a telephone number is currently viewed. For many rural and regional Australians, their Internet IP address will possibly become their telecommunications address. Of course, the minister would only be too familiar with telephony across the Internet and the fact that the hardware and software necessary to support that technology is currently available and, certainly, will become more available as the satellite technology proceeds and PAS 8 is launched.This comes back to the inherent contradiction of what we are dealing with here. We have a telecommunications carrier that does have complete or large control over the local area networks in the regions. The only opportunity for other competitors to come in is via these new technologies. But, until that happens, this government has the responsibility to ensure that these people are not at a disadvantage.Minister, what is your view of Telstra's discriminatory pricing regime for rural Internet users who are utilising the Telstra Big Pond products? What is your view on the comparison between those products and other products offered by other rural and regionally based Internet service providers? How can you guarantee to rural and regional Austral ians, in the context of the package we know nothing about as yet, that they will in fact have a fair, reasonable and affordable access to the Internet at rates comparable to the flat rates now being offered by the major ISPs in metropolitan areas?21:21:005560Cooney, Sen BarneySenator COONEYSF4VICALP00—As I understand it, the preamble will be taken from the bill. I think Senator Harradine has indicated that he will be voting to have it removed, and that means it will be removed. It does contain much that can be properly discussed. Some of it is puff, sort of a philosophical war cry, but there is some good material in it which needs explanation.There is the statement that Telstra will be subject to a 35 per cent limit on total foreign ownership and a five per cent limit on individual foreign ownership. There is also the statement that Telstra's chair and the majority of Telstra's directors will be Australian citizens. I think people listening to this debate would say, `Yes, it should remain in Australia,' but there are a couple of questions that arise out of that. In his second reading speech, the minister said that the business run by Telstra is simply that—a business—and that it is not government's place to be in business.What comes across from that is that somehow it does not really matter who owns Telstra—in fact, that has been said—and that it is the quality of the services they deliver that counts. But if that is so why, in the government's view, is it important that the majority of the shareholding remains with Australians? If the majority should be with Australians, why isn't all of it with Australians? Why do we seize upon a 35 per cent limit? Is there a reason behind that or is it simply a matter that seems to be about right, to be about a third? Doesn't that part of the preamble indicate that there are very important considerations as to who should own Telstra? The bill itself and the second reading speech indicate that.It may be helpful, I suggest, if the minister could, as succinctly as possible, explain this: there is at one level a proposition that this is a business and that, as long as the business returns good service to the people who take those services and returns a profit to the shareholders, it does not really matter who owns it. How does that proposition live with the proposition that I think we would all agree with that it should be kept in Australian hands? If it should be kept in Australian hands, why should 35 per cent of it be allowed to go overseas? If it is best left in the hands of Australians, why shouldn't it be left where it is now?We obviously have moved beyond that point because it seems that this bill will go through and become an act, but I do think that at this point it is useful to use the preamble to tease out those issues.21:25:005560Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—Before we put this amendment to the vote—I do not know whether the minister is going to accept the reality; Senator Harradine's indication is that it will go through—I want to know whether there is any chance of getting some answers to the questions I asked about the detail of the introduction of CDMA and the new costing and pricing arrangements announced today for outback Australia. I want to know whether they will be in legislation and, if so, when. Are they part of the CSO? Are they a government subsidy or will Telstra have to pay for them? These are details of the questions that I genuinely want answered.21:26:005560Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—I notice that Senator Cooney has left the chamber, so I will give him a very succinct answer. You put foreign ownership limits on in this area for the same reason that you put them on in a whole range of other areas and for the same reason you have the Foreign Acquisitions and Takeovers Act and FIRB restrictions. In some areas you take the view that there is a significant distinction between ownership and control and you can accept certain levels of foreign ownership, but you might want to draw the line in terms of control.The Labor Party would not, of course, put any foreign ownership limits at all on the radio industry. That industry happens to be a part of the media industry in which there are other very significant foreign ownership restrictions built into legislation, as with pay television or simply with the discretion based on the FIRB legislation for other areas of the media.I am particularly indebted to Senator Ray for his contribution. I am sure Senator Boswell appreciated it as well. Senator Ray once again underlined the absolute disdain and contempt that the Labor Party has for rural Australians. He might think it is particularly amusing to tell his little stories about Laxettes, but he is revealing a great deal and we are very grateful to him. I promise to immediately be in touch with our advertising agency to ensure that he gets prominence in the campaign. It will be very enlightening, I think, for rural Australia to be told that the de facto leader of the Labor Party in this chamber takes that view of his country cousins.As far as Senator Schacht is concerned, first of all he suggested that it was only today that it was pointed out that Telstra had already spent $276 million on acquiring spectrum for the purposes of mobile technologies, and he referred to the announcement in relation to CDMA. He seems to have enjoyed himself watching the press conference, but he obviously missed my saying just that yesterday: that in fact Telstra had paid $176 million to purchase the spectrum for national coverage. That is what people in the bush are all about: they do not want a local segmented analog service that is incompatible with metropolitan based services. They want a national service.One of the great attributes of CDMA is that you can have a dual mode handset that allows seamless migration between AMPS, analog and CDMA as digital technology. They have undertaken to spend $250 million on the CDMA rollout. That is their money. It is a commercial decision they made, but it is against the background of the fact that in order to—4J4SCHACHTSenator Schacht—So they are going to do it anyway?LD4Alston, Sen RichardSenator ALSTON—Just a minute. Senator Schacht well knows—he should be squirming now in his seat for even mentioning the subject—who was responsible for the absolute fiasco that resulted from the phase-out of analog technology. It was Mr Beazley. All roads lead to Beazley. It is just extraordinary that this bloke's fingerprints are on every bodgie decision that you can think of in the technology area.FX5MURPHYSenator Murphy—Tell us about the timetable.LD4Alston, Sen RichardSenator ALSTON—Go fishing, son. You'll do a lot better when you are not borrowing cars without permission. Go fishing. CDMA is a superior technology to the existing analog network. Telstra well knew, and so did the other carriers, that they had 30 days in which to resolve their differences in the number of analog base stations that ought to be retained. If they did not reach a satisfactory decision on the basis of the ACA report, it would be important for them to decide on the extent of the digital roll-out. If they chose not to, they would have to, one way or another, face the consequences. On that basis, they decided that CDMA was a technology that they would prefer to adopt rather than simply upgrade the digital. That is not to say that they cannot do both. We very much welcome that decision, which is clearly one taken on the basis of their awareness of the situation which the government found itself in as a result of that earlier predicament.I notice that Senator Schacht seemed to have difficulty reading to the bottom of that press release. All he had to do was read down a little further and he would have seen the existing pastoral rate of 25c.4J4SCHACHTSenator Schacht—The CDMA was only going to cost $7 million if they had the spectrum.LD4Alston, Sen RichardSenator ALSTON—I heard you say that. You said that that is the rural component.Senator Schacht interjecting—LD4Alston, Sen RichardSenator ALSTON—I did not say that. I said that I heard you say that. If you think that is fine, that is fine by me. Everything is fine.Senator Schacht seemed to have difficulty reading today's release right through to the bottom. It states that the pastoral call rate will be replaced by a preferential rate of 25c for every 12 minutes. It will be a very significant benefit for those finding it necessary to make calls to the designated community service town. The big problem for many years, and about which the Labor Party did nothing, was that calls to neighbours, friends or workmates within those outer extended zones were timed local calls. There was a great deal of resentment about that fact. This decision means that they will be able to have the benefits of untimed local calls within the zone to those people.Senator Schacht asked whether this would be included in the CSO. The money will be spent essentially on a capital infrastructure upgrade, probably the installation of two megabyte links and other ancillary technology. Part and parcel of that will probably involve upgrading DCS connections. But it is a one-off, so it is a capital item. It therefore does not need to be included in the CSO. It is money that will be available from the social bonus and will, therefore, be clearly dependent upon this bill passing into law.Telstra has agreed to these arrangements. You do not need legislation to ensure that because you already have in legislation a capacity to impose price caps if any agreements are not honoured. As Senator Schacht well knows, you have licence conditions that can be varied at any time. So let there be no doubt that we regard Telstra as acting very much in good faith on this initiative. We think it is a very important breakthrough for people in rural and remote areas. They have long bemoaned the fact that they were completely and utterly ignored for those 13 long years. They always failed to understand why they should not be entitled to an untimed local call when phoning within the outer extended zones. As a result of that decision, they will have that capacity.Senator Schacht asked me about the price of handsets. Clearly, that will ultimately be a commercial decision. The indications we got are that we could expect $349 to be an early price of handsets. As you well know, it all depends on some of the arrangements made. You can have airtime reselling, for example, that might result in heavily subsidised or even give-away handsets. It is entirely a matter for the players and the competition that forces them to make differential price and quality of service offerings.4J4SCHACHTSenator Schacht—Number portability?LD4Alston, Sen RichardSenator ALSTON—As I am sure Senate Schacht again well remembers, we decided to require number portability for fixed line services by 1 May this year. It is a matter for the ACCC and the ACA to make further decisions in relation to mobiles. I have no doubt that they will do that in relation to CDMA in due course just as they will need to do it for the existing analog and GSM services.Senator Lundy's principal question concerned what we can do to ensure that Telstra acts competitively. She seems to think that it is engaging in price discrimination through the big pond Internet service provider. If that is the case, clearly the ACCC would have a role. It is a watchdog to ensure that people do not take advantage of a dominant or monopolistic market situation in order to price discriminate. I thought I heard her suggest that somehow if Telstra charges less it would be undercutting and that it would be anticompetitive. It is a bit hard to see that it can be acting anticompetitively if it overcharges or undercharges. At the end of the day, it is a decision by the regulator. We have every confidence that the ACCC will attend to those concerns.21:36:005562Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—I thank the minister for some of those answers. I am not surprised he chose to avoid some questions. It is embarrassing for a start that he did not deny the fact that the figure reported in the press today—it is not my figure; it was in the press—of Telstra's expenditure for spectrum for the CDMA in the bush is actually only $7 million, not $176 million. So that is $170 million off the package. He just chose to let that one go through. I think that is an indication that the point I raised and the point raised first of all in the press today is correct on that.LD4ALSTONSenator Alston—On a point of order, Madam Temporary Chairman: I simply indicated that I had heard what Senator Schacht said on a matter which I have no knowledge of. The proposition that that amounts to me confirming his figure is preposterous.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Reynolds)—What is your point of order?LD4ALSTONSenator Alston—You should not allow him to make such statements.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—There is no specific point of order. The minister can answer Senator Schacht when Senator Schacht is finished. I call Senator Schacht.4J4Schacht, Sen ChrisSenator SCHACHT—The minister indicated that the ACCC will look at the issue of number portability for mobiles later on—LD4ALSTONSenator Alston—The ACA. I said both, but it was the ACA.4J4Schacht, Sen ChrisSenator SCHACHT—Yes, it is the ACA for number portability. Is there any technical inhibition on switching the number? If someone switches from the Telstra CDMA carrier to the Optus GSM carrier where they have to take the new phone, they cannot actually switch the number from one to the other. In the competitive market, having full portability and being able to take your number with you when you change carriers is a very important aspect of developing a competitive market. That has already been dealt with in the fixed telephone market, with a local loop, et cetera. I just want to know whether there is any technical difference.If that means that CDMA subscribers cannot take their numbers with them when they go to a GSM network, they are going to be formally trapped into sticking with the CDMA and will not have the advantage of full competition. I do not know whether that is technically correct, I just want to get it on the record and find out. If it is not portable for technical reasons—even if the ACA chooses to say this is going to be full number portability and then it finds technically it cannot be imposed—Telstra has walked off with a major market advantage in that the alternative network for mobile phones which will be established as the CDMA right across Australia will be the only choice people have got, particularly rural people. They will not be able to negotiate a lower price by going to another carrier. That is a question I would certainly like answered, because I think it is very important in the competition issue.On the issue of untimed local call charges in pastoral areas, et cetera, which we have already asked some questions on, the minister said that it would not be necessary for legislation because the $150 million was a one-off capital injection provided out of the social bonus from the statement. If it was Telstra doing it, it would get the $150 million, but I notice in the statement that the government is going to allow anyone who can bid to provide the service. Then the minister said that a proportion of the actual phone calls will still be timed telephone calls, even though they will be at a new lower rate for consumers in those areas, but that lower rate is not going to be set in legislation. The minister said that it is only generally covered by price caps, but those price cap arrangements are rather flexible. As I understand it, you get some flexibility as a carrier to average out the price. You do not automatically say, `The price cap is X minus the CPI figure for a particular phone call and carriers can take into account their discount amounts, et cetera.' If it were X minus the CPI, I would have thought that over the last few years the price cap for local telephone calls at 25c would have come down a few cents in this time of low inflation.What I want to know is what would stop Telstra adjusting the price at some stage in the future? If it is not in legislation, if it is not a disallowable instrument and if it is only covered by a price cap, how do you control it? That was my point before. If I were a National Party senator, at the very least I would have insisted on writing this into the bill, full stop. No matter what they did elsewhere, I would have written this in the bill as an actual amount that could not be changed or increased in any way without referral back to parliament. That is the best protection I could imagine. As I said to Senator Boswell when he was here, I am very surprised they did not take that opportunity.Minister, do we have any indication of how much revenue Telstra will lose by the new untimed rates that are being set and also the new lower timed rate? Is Telstra going to put that into the CSO or is it going to take that as a reduction of its profit by having a lower call rate charge and more untimed calls available? They are a number of questions I would like answered. 21:44:005564Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—I think the first point was whether there were any technical inhibitions—I cannot read my own writing—in relation to number portability.4J4SCHACHTSenator Schacht—Between the two systems.LD4Alston, Sen RichardSenator ALSTON—Yes. I would have to get advice on that to be able to give you a definitive answer. Certainly, as you would probably be aware, there have been debates from time to time about the extent of any real technical difficulties in relation to fixed line services because one party says that there are very serious technical difficulties and others say it is a matter of flicking a switch. Ultimately, these matters have to be resolved, if not by agreement. That is why our advice in relation to fixed line was that there were no insuperable technical problems and we were prepared to mandate it, as we did.4J4SCHACHTSenator Schacht—So, in the balance, you think there is no technical problem? I am not saying there is.LD4Alston, Sen RichardSenator ALSTON—I will get further advice for you on that, but all I can say on first principles is that, to the extent it were not possible to move seamlessly between the two, if anything, that would be a barrier to people transferring to CDMA if they already have digital handsets. Therefore, your suggestion that somehow this constituted a great bottleneck service in the hands of—4J4SCHACHTSenator Schacht—Not in the bush. Sydney is the only one that works. Rural people are trapped.LD4Alston, Sen RichardSenator ALSTON—In principle, number portability is desirable, and I take your general point that, if you do not have interoperability, in a sense, you are diminishing both competing proprietary technologies. I would certainly expect the regulators to be exploring every possibility and to be ensuring that number portability was introduced as soon as it is technically possible. You will not get CDMA overnight. Obviously, it will involve a progressive build out. I would expect that, as soon as the ACA is in a position to do so, it will examine the issue and we can get some specialist technical advice.You were correct in saying that the $150 million capital outlay would be a maximum. In other words, we are not simply handing the money over to Telstra. We would put it out to tender. It may well be built by someone other than Telstra. It may even be that another carrier may be prepared to offer the service. All we are doing is ensuring that the capital upgrade occurs. But, assuming that it is still providing a service in remote areas that is offered only by Telstra, the arrangements that you have now in relation to pastoral calls will remain.As I understand it, they have probably been in place since the early 1980s. In fact, until that time, people in those outer zones, effectively, did have untimed local calls, and it was only with the progressive digitalisation and modernisation of the network when your government came to office that they were phased out. That is why these people have been so annoyed that, throughout that period, they have been deprived of untimed local calls which they had once upon a time.As I understand it, as for the community call rate, the pastoral call rate is not in legislation but, if there were any need to do it, you would simply be able to introduce modified price cap arrangements as disallowable instruments. You have a particularly jaundiced and, I must say, cynical view of Telstra's bona fides if you say that, even though Telstra agrees on a pastoral—4J4SCHACHTSenator Schacht—Come to a CoT case hearing for a while.LD4Alston, Sen RichardSenator ALSTON—You know my views on the CoT cases, but that has nothing to do with what Telstra offers the general public by way of a price rate. If they have had pastoral calls in place now for 15 or more years—there has never been the slightest suggestion that they welsh on that offer, similarly with community call rates—I cannot conceivably imagine why they would want to somehow renege on a solemn commitment to offer a more generous preferential rate than the previous pastoral call rate. So it is a complete furphy to suggest that somehow people should look askance at Telstra's agreement to offer a preferential rate.You asked me what difference that will make to Telstra's bottom line. Now is not the time to give you a lecture on the price elasticity of demand, but it clearly depends on the volume of traffic. There may or may not be more traffic as a result of its being effectively cheaper. If you asked me how many people in rural areas make calls of more than 12 minutes, I would have to say I do not know, and I do not suppose anyone can really guess. You just have to test these things in the marketplace, but I would not imagine that it would make any significant difference. Certainly, for a company with revenue of $23 billion, I do not think Telstra would for a moment come to us and suggest that somehow that ought to be included in the USO or the CSO arrangements.It is a very welcome initiative, as far as the government is concerned. I am sure it will be very much welcomed by those 37,000 families—probably 100,000 people—in those 111 outer zones. I am sure Telstra itself will find that it will be a very beneficial deal.21:50:005565Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—I want to speak on the same matter, but Senator Lundy may want to raise some other matters. Minister, was the new community rate, which is still a timed call, set as well as the untimed, and who is eligible for it? In your second reading speech you say `17,000 telephone customers in remote parts of Australia . . . have no access to untimed local calls', but in your statement you point out that it is 37,000. I presume then that 17,000 get no untimed calls at the moment and the other 20,000 have access to some. I am not arguing there is a discrepancy in the figure; it is just that the way it is described in the second reading speech is different from the press statement. The press statement is describing a wider range of local beneficiaries.Who determined who was eligible for the new untimed rate in the zone? Was it the negotiations you had with the National Party, or was that advised to you by Telstra? Secondly, in relation to those who get access to the new designated community centre for a lower rate timed call, was that new charge, which is a reduction, set by you in negotiation with the National Party, or was it set by Telstra? The reason I raise it is that I want to find out whether this is a commercial decision of Telstra or whether it is a political decision of the government.21:52:005565Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—As far as Telstra is concerned, it has never been a commercial proposition for them to offer untimed local calls within those outer extended zones or between the inner extended zones and the outer extended zones. In other words, the amount it would cost to upgrade the infrastructure in their view was not worth the amount of increased traffic that might flow, particularly because an untimed local call clearly brings in less revenue than even the pastoral call rate, let alone the preferential rate. It was not going to happen if it were left to Telstra.What we did, as a policy decision—and I think very much welcomed by those in these areas—was to provide the funding for the capital upgrade, which would not otherwise have occurred, and thereby give Telstra a platform on which it would well and truly be able to afford to offer untimed local calls within the outer extended zones and between the outer extended zone and the inner extended zone. Those in the inner extended zones already got untimed local calls. Again, that was another source of friction for people living in remote areas.The price difference in terms of the usage was quite insignificant by comparison with the cost of the infrastructure upgrade. On that basis, once we took the policy decision, Telstra was more than happy to agree to offer an untimed local call which by definition does not need a price gap. We know what it costs. It costs 25c. The preferential rate was one that we determined would be of particular assistance when you are ringing into a commercial service town, many of which are within the outer extended zones but a number of which are outside the outer extended zones.21:55:005565Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—Minister, I think you just proved my point. You did not need to have legislation to get an agreement with Telstra. You achieved it by political negotiation with Telstra because you owned two-thirds of the company. You have said here before that things such as CSOs and universal service obligations—a whole range of requirements—are written in legislation and that is the way you protect everybody. Here you reached a political arrangement for the country to meet the concerns of the National Party, apparently.In your discussions with Telstra, you offered $150 million for the capital program as the sweetener and then got them to agree to what the subsequent charge would be, extending the untimed local call and a reduced rate for the community call charge as a timed rate at a lower rate. You clearly interfered and had discussions with Telstra to change the rate, and you used your position as a government, representing the two-thirds majority ownership of Telstra.We say, `Good on you.' That is why we want to keep Telstra in majority ownership, so that from time to time when public issues are raised those matters can be sorted out. You sorted it out. You said that you do not need to go to the CSO. You do not need to carry legislation to achieve this. You did it by negotiation with Telstra. There is no doubt that as soon as Telstra is 100 per cent privately owned, the opportunity for you to do anything similar again comes to an end, because they will say to you, `Go and change the legislation for the CSO. Put it in there or put it in particular legislation that applies to all carriers.'Again, this is why it is necessary to keep Telstra in majority public ownership. We wanted it to be 100 per cent in public ownership; it is now two-thirds. We want to keep it in two-thirds so that these sorts of arrangements can be achieved. I am just surprised, as I said earlier, that the National Party did not have the wit to demand that this be written in legislation so that politically out there in the bush when they are being cooked alive by One Nation—and we are going to go after them very heavily too on this issue—they would have been able to say that this is what they got in legislation. What you are saying is: `We did a deal with Telstra management because we own two-thirds of it, but in another 12 months time, if we get our way, those arrangements will not be able to be achieved.'AW5CARRSenator Carr—Will they be honoured?LD4ALSTONSenator Alston—Will they be honoured?4J4Schacht, Sen ChrisSenator SCHACHT—We do not know. Again, you may have to come back for a disallowable instrument if you are still in government and still with Telstra. I have no doubt that Telstra has said, `In view of the politics at the moment, we want to be nice to the government.' Senior management are in favour of the full privatisation of Telstra. They are on share bonuses and probably have promises for big increases in salaries or whatever. Telstra has said, `We believe in the full privatisation of Telstra. This is a political decision management will make to help the government, so we are not going to argue about it. It may only be a few million dollars once we have the $150 million—if they choose to bid for it—to put the infrastructure in.' It is a game.We have not got from Telstra yet whether this was a commercial decision to introduce new untimed local calls and timed calls at lower rates or whether they just gave a wink, nudge and nod to the government to try to negotiate with the National Party. The more we see of it, as Senator Faulkner said, it is another part of the sleazy deal.LD4ALSTONSenator Alston—Government and Telstra, eh? A sleazy deal with Telstra.4J4Schacht, Sen ChrisSenator SCHACHT—Telstra senior management and the board, who are on record as being in favour of privatisation—they put their submission in to say that they favour full privatisation—realise that it would have been politically stupid of them to have said in the last two days, `No, we are not going to cop this new rate in the bush. Leave it as it is.' They knew that you might have lost the National Party on the vote in this place, and they would not have got their privatisation. They knew when to roll over. The only problem is that the poor old National Party fell for the pea and thimble trick and did not get it written into the legislation. It is now much clearer to me, Minister, how the deal was done, and it just proves that you have used your two-thirds ownership of Telstra to get a political outcome, ironically, to get rid of your ability to do that in the future.I want to raise one other question with the minister. Minister, in your second reading speech you mentioned a local call price parity measure taking effect from 31 December 1997. I asked questions at estimates a few months ago and at that stage the average, the price parity, had not been determined. I may have missed an announcement that it had been set recently. If it has been set, what has it been set at? If it has not been set, what is holding up the works? Half the year has gone. When do the consumers get the benefit? We would like to know this. When I moved my amendment, which was a more bold one, back in March 1997, you refused it—LD4ALSTONSenator Alston—The roof would have fallen in, if I remember rightly.4J4Schacht, Sen ChrisSenator SCHACHT—No doubt the consumers would have done very well. You put up what Telstra wanted. I want to find out what the rate is and how it is going to apply. It is supposed to apply all of this year. Are you going to give rebates or something to people if there is a lower price?22:01:005567Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—The price parity arrangements are still to be determined. It is a matter for the ACCC. They need to compile the necessary information, which presumably they are in the process of acquiring from Telstra. Can I simply refute the absurd proposition that we were able to achieve an untimed local call rate in the outer extended zones only because we own two-thirds of Telstra.4J4SCHACHTSenator Schacht—You would have had to use legislation to achieve it if you did not own Telstra.LD4Alston, Sen RichardSenator ALSTON—You seem to think that people cannot have negotiations with privately owned companies. Of course you can.4J4SCHACHTSenator Schacht—What? Private companies giving up money, giving up profit? No-one believes that, Richard.LD4Alston, Sen RichardSenator ALSTON—Who says they are giving up profit? Their problem was that they were not prepared to spend up to $150 million. So, once that hurdle is overcome, it is all downhill. There is not a problem in terms of pricing because, as far as they were concerned, all that was stopping them from providing untimed local calls was the cost of the capital upgrade. We found that; we solved the problem. We did not need to put any pressure on them, twist their arm or anything else.You have such contempt for Telstra. Even the most hated man in the Victorian ALP cannot contain his bile. Time and again he is asking, `Will the deal be honoured?' and making all sorts of reflections on Telstra's propriety and credibility. Keep it up. As far as we are concerned, you hate them with a passion because somehow they have been prepared to go down the sensible track and move towards privatisation.Senator Schacht was in estimates a few weeks ago saying that senior management would be honour bound to resign en masse if Labor won the next election. That was the proposition. I read the transcript and I could not believe my eyes. There he was saying, `You are hopelessly compromised because you favour privatisation.' If that were a hanging offence, three-quarters of the people who run telcos around the world—all senior management around the world—would have to resign en masse because they think it is a good idea.To suggest that somehow the senior management of Telstra should resign because they are in favour of privatisation is just about the most preposterous proposition one can put. It is simply another example of the way in which you cannot abide Telstra making commercial decisions.4J4SCHACHTSenator Schacht—When are we going to get a determination of what the local call price parity measure is?LD4Alston, Sen RichardSenator ALSTON—I suppose as soon as the ACCC is able to provide it.22:04:005567Lundy, Sen KateSenator LUNDY7G6ACTALP00—It is obvious by the minister's response to my earlier question about price discrimination for Internet services in rural and regional Australia that this government is going to do absolutely nothing to resolve that problem. In fact, the minister stated he would leave it up to the ACCC. He said that they have made a decision and they are not doing anything about it.The issue that has been canvassed by Senator Schacht and Senator Alston subsequently I think is one of great interest—that is, the distinction between commercial decisions by Telstra and policy decisions by this government. I made reference in my speech in the second reading debate on this bill to the fact that the minister's vision and scope do not go too far beyond the boardrooms of the commercial organisations.Honourable senators interjecting—10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Reynolds)—Would Senator Schacht, Senator Alston and Senator Carr please allow Senator Lundy to continue her remarks and we will progress much more smoothly.7G6Lundy, Sen KateSenator LUNDY—This question of government policy versus commercial decision by Telstra is worthy of great exploration. As I just mentioned—although you probably would not have heard it, Minister, because you were talking across the chamber—I am of the view that many of the decisions that you have claimed are your policy in response to the needs of the bush are, in fact, inherently linked to commercial decisions of Telstra. As you have just stated yourself, a capital injection on behalf of the government has been what has determined a further expansion of Telstra's network to improve their market share in these areas. This is despite the fact that previously one of the great issues in the bush of all the competitors is that Telstra already has a structural advantage.So I am saying yes, we need to enhance services in the bush and Telstra is the unique mechanism to do that while it is in public hands. The minute you privatise it, Minister, it does changes hands and then you start to impact and play a role within the varying competitive pressures within the open market. That contradiction cannot be resolved.I want to go to another example where this contradiction is quite inherent. It is worth canvassing, and I did so in previous debate in this place. That is the current arrangements with respect to Telstra in partnership with a number of groups, including those advocates of the technology called Direct PC, Hughes and Ericsson, providing a satellite service to 1,000 rural and regional customers for Internet access via a company established by the National Farmers Federation called Farmwide.I want to say a few words about Farmwide in the first instance. First of all, it is achieving its goals. It is getting rural and regional people on-line at less cost than it would otherwise have been. Farmwide is also doing a great service to rural and regional people in exploring their needs and establishing the type of content and the access regime that suits these people.I preface my comments with respect to Farmwide in that way because I do not want my comments now to be interpreted in any way as suggesting that the aims and goals of the Farmwide project are anything but of the best intention and of very practical and meaningful support to their customers. But listen to this: the rural and telecommunications infrastructure fund—remember that this was the bribe that was paid out: a $250 million bribe to secure the passage of the one-third sale of Telstra bill—is funding the Farmwide project. It is a project that is handled under the auspices of the National Farmers Federation, which is very reasonably placed to provide services to rural and regional customers, but it is certainly not the only organisation capable of doing so.The partnerships in association with the Farmwide project are Telstra-Hughes-Ericsson in the direct PC technology. This is an Internet technology which uses the capability of both the copper network and satellite technology, allowing a high bandwidth download with only a low bandwidth return. This partnership has the greatest strategic value to Telstra, because it gives Telstra access to a potential new market that is currently sought after by the new satellite technology's Internet access.There is a fantastic commercial opportunity here for Telstra to participate in that project. Indeed, wasn't it handy for them to be able to get access to RTIF funding through the sale of the first tranche? In fact, it is quite ironic that Telstra had the opportunity to develop this particular technology—direct PC—from a government grant as a result of the payout, the bribe, to allow the one-third sale of Telstra through. I think people can see the irony that I am outlining. The point goes a little further with Farmwide and what is happening with that project. Telstra's Internet product, Big Pond, is the basis of the ISP, if you like, that Farmwide utilises to connect its project clients to the Internet.In terms of strategic commercial decisions and partnerships, Telstra and its Big Pond product have recently entered into a partnership with 9MSN. Of course, 9MSN is a partnership between Kerry Packer's PBL and Microsoft Australia. Interestingly, Big Pond-Telstra and 9MSN have reciprocal arrangements in place which mean that everybody who dials up Big Pond—and there are 180,000 subscribers to Big Pond around Australia, and that number is growing—get immediate access to 9MSN. They are not required to subscribe to 9MSN. It is a reciprocal arrangement. In return, Telstra is providing some billing services to 9MSN and there are various other elements of the arrangement.Inadvertently, through all these strategic corporate partnerships, there is a wonderful, fantastic commercial opportunity for Telstra lying in the heart of what, on the surface, is sold by this government as government policy on improving access for rural and regional Internet customers. Because of these arrangements, I believe that everyone in the bush who is accessing the Internet in this way is now doing so on a testbed of a commercial venture of the production of Internet-based content through 9MSN. Rather than our seeing publicly funded Internet content, either through the ABC or other national broadcasters, that has cutting edge digital content production, we see a commercial arrangement, such as 9MSN, utilising the backbone provided by our national telecommunications carrier to develop a cutting edge technology and delivery of satellite Internet services to the bush.When the minister stands up and says that this social bonus is such a win for the bush and that it has occurred through his efforts to negotiate these outcomes with Telstra, I wonder how captive he is of their boardroom considerations and how long it takes him to convince himself that it is not Telstra's corporate plan and what is going to advantage them commercially. Indeed, it is how you can dress up those strategies and present them to the public in a way that they believe is some form of altruistic government policy.This is quite an untenable decision. Unless the public are aware of all the strategic partnerships and alliances that Telstra is currently engaged in, we can never know what is government policy being put in place for the purposes of enhancing the lot of consumers and what is, in fact, a commercial strategy on behalf of Telstra itself.I have asked these questions on notice at estimates but, not surprisingly—like most of the questions I have asked that go to the heart of the matter—I do not get a response, or I get a highly inadequate response. Minister: can you provide to this committee some detail about the level of knowledge you have of the commercial considerations of Telstra? I know you are in a position to say what you like, but I think this is a matter of great principle.As I have said, Telstra as a corporation have leaned on the fact that they have commercial considerations taken in confidence for their own competitive reasons. That may well mean the public never have the opportunity to assess where they are going with their commercial plans. This conflict is not going to go away without some quite confronting demands being made by the government. I do not believe this government is going to make those demands. They certainly have not indicated that they will to date. I certainly do not think the public will ever know the extent of Telstra's commercial strategic plans as compared with government policy whilst ever we have this coalition government in place and whilst ever Telstra is deadset committed to operating in the private sphere and not in the public sphere.My warning goes out to rural and regional Australians and to the members of the National Party who are thinking that they have really extracted a commitment from Telstra. I have to say that relying on a commitment to Telstra in the way that you are over this commitment to untimed calls tells me one thing and one thing only—if you are not legislating along those lines then there is no commercial disadvantage. In fact, it will probably enhance Telstra's position with respect to providing those services in some way or another because, Minister, as you know, that is what competition is all about. They have to position themselves in the most effective way possible. Quite frankly, to do so just because you think it is a good idea does not wash with me or anyone else on this side of the chamber. I am sure that in due course the National Party members will wake up to themselves and realise how they have been duped.On the other hand, legislating to provide these services gives a guarantee to Telstra that the government is putting in concrete the required service levels, and then they are able to structure their commercial decisions around it. There is no avenue for recourse other than legislative change. This might prove to be a bit of a shock to Telstra because, to date, they have been able to walk into the minister's office and mould him like clay. They allow him to espouse their views and construct them in such a way that it sounds as though Senator Alston has come up with a great idea for telecommunications policy. As I mentioned in my speech on the second reading, this minister's great strength is how to make a Telstra commercial strategy or a Telstra corporate plan look like government policy. It is a very lazy way to run a portfolio.One of the most telling moments about the nature of the relationship between this minister and Telstra will come when there is a change of government, because all those bets will be off. No longer will Telstra be able to work with a compliant minister who is prepared to provide such a grand service to the national carrier as providing the political impetus and political excuses and taking the political heat for any commercial direction that Telstra may choose to go in.22:19:005570Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—Minister, you gave an answer that the ACCC is still considering the local call price parity measure. I find it extraordinary that, seven months into the year when it has to first operate, they still have not given you a determination. As I understand it, the consumer is supposed to get the benefit of it operating this year—that is, for calendar year 1998. Your second reading speech states that your ministerial determination:. . . came into effect on 31 December 1997 to enable lower prices for untimed local calls in markets with competition to also be shared by consumers in markets without competition.So that means this year. When they finally make the determination, whenever it is, and there is a reduction which might be only ½c or 1c in some markets, how is it going to be passed on to the consumer when they have already paid half their phone bill for the year? They have paid on either a quarterly or a monthly basis. How are they going to get the benefit of it? Is it going to be a rebate system? And so on.This is extremely lax for a promise that you fought so vigorously for in the debate on the telecommunications deregulatory bills of March 1997. Yet here we are seven months on from the date the determination came into effect and you have not delivered the consumers one benefit from it. Whether Professor Fels is more interested in chasing wharfies or something, I do not know, but why isn't this being fixed and an averaged figure determined? It should not be waiting on the wit of a mathematician down at the ACCC. Even a reasonable accountant could work out the figuring to see whether something applies. That is one matter I would like to be given more detail on, in view of the fact that you went to such great lengths to convince us—against my amendment—that yours was such a wonderful outcome.I also want to ask the minister about the first amendment moved to delete the preamble and in particular where it mentions the `social bonus' in the second paragraph on page 2. Even though you do not know what the figure is, if you are successful with the full privatisation of Telstra, with the sale of the remaining two-thirds, there are suggestions that it may be worth $40 billion over one tranche, two tranches—or it might be more; it might be closer to $45 billion. Has the cabinet determined yet, and thereby the government determined, what percentage of the total proceeds will be allocated to the so-called `social bonus'?So far, on my figuring of two of the prongs of Senator Boswell's three-pronged deal that has got the National Party on side, I get that you have spent only $150 million. Telstra is spending all of the $256 million for the mobile phone; that does not have to be paid out of the social bonus. Thus, so far you have bought off the National Party for $150 million. We still have the pitchfork's third prong to come. But I would like to know whether there has been a determination on what percentage of the asset sale would go to the social bonus? I would appreciate those two questions being answered.22:23:005571Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—The ACCC is still considering the precise mechanism. I would expect that, in due course, it will ensure that any entitlement is factored into future pricing arrangements.But as for the proposition that somehow I fought so hard for it, I can assure you that I fought even harder against your idea, which would have meant no price reductions anywhere. Your idea was that, because there is ferocious competition in Sydney and you reduce the price by a couple of cents, you immediately have to apply that to the rest of Australia. In other words, you would have Telstra presumably providing a subsidy, a CSO, to the rest of Australia. That is what you would have said. By definition, there was no competition in that marketplace to justify reducing prices. That was an absurd proposition; fortunately, we were able to resist it. I agree with you that it would have had the attractions of simplicity. It is just that it would have frozen competition for all time.4J4SCHACHTSenator Schacht—Yours is not working. It's not turned up, Minister.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Reynolds)—Order, Senator Schacht.LD4Alston, Sen RichardSenator ALSTON—I have explained to you that the ACCC makes its own decisions on these matters. We have put legislation in place that requires the ACCC to go down that path, and I have no doubt that it will. If you somehow think that I should be out there giving directions to the ACCC, irrespective of what is—4J4SCHACHTSenator Schacht—I would have thought, as it's in the legislation, you would have given it a bit of a kick along.LD4Alston, Sen RichardSenator ALSTON—That might be the way you run your business. I am content to rely on Professor—4J4SCHACHTSenator Schacht—You do nothing at all to help the consumers.LD4Alston, Sen RichardSenator ALSTON—Why do you get so excited if I am not doing anything?4J4SCHACHTSenator Schacht—I would have thought it would be nice for the consumers to get something occasionally.LD4Alston, Sen RichardSenator ALSTON—It will be very nice in due course. As far as the social bonus is concerned, I am not about to pre-empt any announcements that we might want to make in that regard.As far as Senator Lundy is concerned, I hope she does not mind me communicating to those at Telstra that she understands they can mould me like clay. I do not think they share that view. Indeed, I think they would take quite a different view, and I am sure they will be greatly amused by the suggestion. So I will have no hesitation in passing it on. If she is happy for me to tell them that they have a compliant minister, I am sure they will enjoy that one as well.As to Senator Lundy's first proposition that somehow we have allowed Telstra to increase market share in rural areas, the fact is that Telstra is the only game in town. So you really cannot—AW5CARRSenator Carr—It's a monopoly.LD4Alston, Sen RichardSenator ALSTON—That is very good, very good indeed. If you are the sole provider in an area, you are the monopoly provider. That is right. I hope you understand the difference between a legal and a de facto monopoly. But the fact is that there are a lot of areas—Senator Schacht interjecting—LD4Alston, Sen RichardSenator ALSTON—You would not have allowed competition anywhere. The fact is that there are a number of parts of rural Australia where it is uneconomic to provide services, even for Telstra. That is why you have a universal service obligation to fund—7G6LUNDYSenator Lundy—Hello! Didn't you hear what they responded with at the estimates hearing? Telstra got up and said that they did not have a monopoly on ISP services at all.LD4Alston, Sen RichardSenator ALSTON—I am not talking about ISP services. I am talking about your starting proposition that our decision announced yesterday will allow Telstra to increase its market share in rural areas. That is preposterous nonsense, because it already has 100 per cent. You seem to think that direct PC is a technology; direct PC is simply a proprietary name for a service which is offered in a number of places these days. You also seem to be under the misapprehension that we funded the first 1,000 trial.The fact is that we provided $5.5 million through the RTIF, which I think has been remarkably successful—as even Senator Lundy is prepared to concede. You are getting quite good at conspiracy propositions. If you develop them to a fine point, you will probably be able to qualify for being assistant deputy parliamentary secretary to the shadow minister for communications in the next term of opposition. But at this point in time, the idea that somehow we are in the business of providing funds to Telstra, even though it would otherwise have engaged in commercial activities, demonstrates a very poor understanding of the marketplace.All I can suggest to you is: do what I did and do what a lot of other people do; that is, use your time in this place productively and go off and do a bit of economics on the side, and you will have a much better idea of what is going on. But if you think that somehow any decision we take to provide assistance through a regional fund or otherwise is somehow subsidising activities that would already have been undertaken commercially, then you do not understand what a commercial decision is.If it is a commercial decision, it would be undertaken. If Telstra is not doing it, by definition, it is not attractive for Telstra to do it commercially. That is why you provide assistance, either through a fund, through the CSO or through a range of other mechanisms. In this case, Telstra was not about to provide those services. Farmwide has had a trial which was successful. The RTIF, which is an arms-length decision making process—in other words, not the government at all; not us writing out cheques—Senator Schacht interjecting—Senator Lundy interjecting—LD4Alston, Sen RichardSenator ALSTON—You copped it; you got up and said in this place that you did not want this to be another Ros Kelly.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Reynolds)—Senator Alston, would you please address your remarks through the chair.LD4Alston, Sen RichardSenator ALSTON—I am sorry, Madam Chair. Senator Schacht was very keen to avoid another whiteboard fiasco and, accordingly, we spelt out in very clear terms that this would be an arms-length arrangement. Whether or not we liked it, whether or not we supported it, the RTIF—Senator Schacht interjecting—LD4Alston, Sen RichardSenator ALSTON—What do you say? Doug is patchy now, is he? You were saying he is a great man and he would not have copped what the National Party cop these days. You cannot have it have both ways. You cannot say that he is a strong man in one breath, and in another breath say that he rolled over.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order! Senator Alston, would you please resume your seat. We are not making very much progress here this evening because a lot of the comments are not being made through the chair. We have a long way to go, and I suggest it will be helpful if honourable senators listen to the minister and then respond as they see fit.LD4Alston, Sen RichardSenator ALSTON—I simply wanted to defend the good name of Doug Anthony and to make it clear to Senator Lundy that the RTIF makes its own decisions. It clearly took the view that, without this funding being available, it was not going to be provided commercially. I think if you asked the National Farmers Federation you will understand that was the basis of their submission. Why else would they want good money spent on something that Telstra was about to do anyway?You asked me to provide my knowledge of Telstra's commercial considerations. I have only been to one board meeting. I am not really in a position to tell you how they go about making those sorts of decisions, but all I know is that they would much rather go on making them than have your approach, which is to basically second-guess them; in other words, you tell them what to do. You do not like the idea of their operating commercially, so you would be in there telling them how to run the business. I tell you what: anyone who owns shares in Telstra would be selling off right now if they thought you were about to get into government, because the idea of having shareholder value halve overnight would terrify them.Senator Margetts interjecting—LD4Alston, Sen RichardSenator ALSTON—You have sold yours already, have you? I cannot blame you because you are quite right. You would absolutely decimate this company if you allowed the Labor Party to get in there and give them all these powers of direction to undertake what are otherwise uncommercial activities. That is what I understood the proposition to be. Senator Lundy says, `Just because we think it is a good idea.' If you think proper policy making depends upon you having a good idea and imposing it on a commercial operator, I doubt you would get much support out there in the marketplace.22:31:005573Carr, Sen KimSenator CARRAW5VICALP00—In view of the minister's provocative remarks, I move:That the committee report progress.Question put.22:36:00The committee divided. (The Chairman—Senator S. M. West)30Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Evans, C. V. *Faulkner, J. P. Forshaw, M. G.Hogg, J. Lees, M. H.Lundy, K. Mackay, S.Margetts, D. Murphy, S. M.Murray, A. Neal, B. J.O'Brien, K. W. K. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.31Abetz, E. Alston, R. K. R.Boswell, R. L. D. Brownhill, D. G. C.Calvert, P. H. *Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferris, J.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.McGauran, J. J. J. Newman, J. M.O'Chee, W. G. Parer, W. R.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.Conroy, S. MacGibbon, D. J.Denman, K. J. Payne, M. A.Gibbs, B. Patterson, K. C. L.McKiernan, J. P. Minchin, N. H.Quirke, J. A. Macdonald, S.Stott Despoja, N. Ferguson, A. B.Woodley, J. Gibson, B. F.* denotes tellerQuestion so resolved in the negative.22:39:005573Lundy, Sen KateSenator LUNDY7G6ACTALP00—I want to refer immediately to the minister's previous answers. I have to say that it is easy to know when Senator Alston does not quite get the point on a question because he immediately reverts to his mantras, rhetoric and condescending comments about the issue. He knows very well that my questions were in the context of Internet service provided in rural and regional areas. In fact, I believe the reason he chose to answer them out of context is that he does not know the answers and I do not believe he understood the question.The minister knows very well that I have chosen to focus on Internet access and Internet pricing equity in rural and regional areas as part of my contribution to this bill. I would appreciate it if he could at least give an indication as to the expansion of the Farmwide project and if there is going to be an extra $400 million as part of the social bonus. Minister, can you indicate whether it is perceived that the government will expand upon the project initiated through Farmwide as a result of RTIF funding and whether you have contemplated the issues to that degree of detail at this point in time?22:40:005574Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—As I recall it, I think the RTIF board has expended something of the order of $57 million on about 93 projects. It is a $250 million fund to be spent over five years, so there is clearly plenty more money available if the board, in its wisdom, decides to go further down that path. It is not a matter for us; it is a matter for the board.22:41:005574Lundy, Sen KateSenator LUNDY7G6ACTALP00—I am not sure if you get the point. I am talking about the new money that is available now.22:41:005574Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—Perhaps I should apologise for being persistently obtuse. You are quite correct in saying that on many occasions I do not have the vaguest idea what you are talking about.DX5MARGETTSSenator Margetts—Madam Temporary Chairman, I rise on a point of order. I have a query: is it in order for the minister to jump up whilst another senator is still speaking, without having the call, and speak over them?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—No, it is not in order.7G6LUNDYSenator Lundy—Then why did you allow it?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Because you actually sat down. Senator Lundy, if you want the call, just stand up.WW4KEMPSenator Kemp—Senator Lundy actually sat down. The chair is right.22:42:005574Lundy, Sen KateSenator LUNDY7G6ACTALP00—The tone of your interjections is getting lower and lower. Minister, I have asked a question about the government's intent to look at further supporting lower priced Internet access through the social bonus that has been articulated to a very limited degree. If you cannot answer the question, then don't, but don't get up and say things which reflect on my ability to canvass issues relating to the Internet and Internet pricing.22:43:005574Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—The earlier question was: will the government expand on the RTIF? I simply said to you that the RTIF is not a body over which we have control. We provide the funds and it makes the decisions. If you are asking me to what extent we might be able to assist in bringing about cheaper Internet access in rural and remote areas, in many respects that is a function of competition.If you believe that Big Pond is acting anti-competitively by overcharging, exercising monopoly power or underpricing because it has got monopoly power, then that is an issue for the ACCC. If you are suggesting that you ought to throw a bucket of money at particular consumers, service providers or whoever else, I would be interested in hearing your policy on it and we could have a sensible discussion. Beyond that, I am not clear on what more you have in mind in asking whether I support lower Internet access prices. We all support the lowest possible prices, we all support the highest possible quality of service and we all support the greatest diversity of products. 22:44:005575Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—I think this is the best place to raise this point because you mention it in your second reading speech. There is a review presently under way on the universal service obligation and what it could cover. Minister, when will the report by the ACA on the definition of the standard telephone and extending it under the universal service obligation be available? When do you expect to receive that report? It was due by 15 August. That was a review taken on board as a result of an amendment or discussion when the bill for the deregulation regime was debated in March of last year. When did the review start its work?22:45:005575Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—Shortly thereafter—March or April this year.22:46:005575Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—Why did it take a year from the legislation going through for the review to get under way?22:47:005575Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—As I recall, we were principally concerned in that legislation to ensure that we were in a position to properly assess digital data capability by 1999. On that basis there was not a dramatic sense of urgency. It was more important to see how market conditions would shake out. We commissioned that review on advice. There has been no particular difficulty about that. The process has been following a normal course. It is not something that you would want to rush into because it clearly has very significant cost implications. I am sure you recall that, when we had the standard telephone service review chaired by Jock Given, we had a dissenting report from Professor Henry Ergas suggesting that it might cost $8 billion for higher levels. As you and I have discussed before, Telstra has made it plain that you could be spending up to $26 billion if you were to espouse the 64 kilobit level as a mandatory requirement. It clearly has very significant cost implications. It is a matter that we want to get right. We believe we are still well on track for the statutory commitment.22:47:005575Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—The statutory commitment is for 15 August, is it?22:48:005575Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—No, it is not. I am going from memory, but I thought there was something in the bill to the effect that there had to be a review by 1999. The basic proposition was to decide, by the year 2000, on the extent of any upgrade in the standard telephone service. Just what the parameters were for commissioning that review, I do not recall. To start in March this year and to have a report by 15 August puts us well on track for delivering on that commitment. If you had had the report six months earlier it probably would not have made much difference if you still had the same approximate starting date in mind.22:49:005575Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Minister, is this the same 64 kilobytes about which Senator O'Chee was abusing witnesses to the first inquiry into the partial sale of Telstra—witnesses who suggested that there would not be this capacity? Was this the 64 kilobytes that Senator O'Chee, amongst others, declared was definitely going to be part of the package after the partial sale of Telstra?22:49:005575Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—Without wanting to insult Senator O'Chee, I do not have any recollection of what he might have been debating or what your understanding might have been. Sixty-four kilobytes is the standard that applies for ISDN and that capability is now available to something like 96 per cent of the population. The real issue is the extent to which you mandate it. There is a very great difference between providing capability and simply requiring it as a matter of course. Whether it is the same 64 kilobytes or not you will have to ask Senator O'Chee.22:50:005575Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—A week or so ago you mentioned in an interjection or by way of a comment in question time or some other public forum, although I think it was in this chamber, that if 64 kilobytes was the new definition in the universal service obligation it would cost $26 billion to provide. You also implied that this was the figure provided to you by Telstra. Is that figure in the Telstra submission to the review? Is that their estimate? If you are able to quote the figure of $26 billion, is there any chance at all that the rest of us can have a look at the submission from Telstra tomorrow?22:51:005576Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—I am not sure whether it is in the Telstra submission. The cost will obviously vary depending on the parameters. I am simply telling you as a matter of record that the advice I have had from Telstra is that it could cost up to $26 billion.7G6LUNDYSenator Lundy—Up to, now?LD4Alston, Sen RichardSenator ALSTON—If you do not know the difference between `up to' and `precisely'—7G6LUNDYSenator Lundy—We do.DX5MARGETTSSenator Margetts—We do.LD4Alston, Sen RichardSenator ALSTON—If you are talking in figures of that magnitude no-one would be able to give you a precise figure. All I know is that if you gave someone $26 billion I am sure they would be able to spend it for you. But if you ask them to calculate an estimate you will inevitably get a range when you are talking about a project of that magnitude which would involve individual wall sockets being installed in every household. You can set lower standards if you want to and the cost will accordingly be reduced. Twenty-six billion dollars is simply the outer bound of an estimate. It is not something that anyone would lay their life down for. I am only reporting it as an estimate provided to me by Telstra. I am not vouching for it. Indeed, I would probably want independent advice on it. I am simply giving you the order of magnitude of the proposition.22:52:005576Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—This is quite a change in attitude, Minister, from when you first used the phrase here in the debate as an aside across the chamber directed mainly at me. I was the first person to raise the point, in March last year, that the universal service obligation should start looking at the capacity it provides for online broadband services, not just access to a standard telephone receiver. You put it across the chamber in a way that indicated I was off my cotton-picking head because this was going to cost $26 billion—this was the Telstra figure—and therefore that was impossible. Now you are telling us, `You would be a mug to accept Telstra's figures on this.' You said you cannot confirm whether you perceive this figure as part of the submission to the ACA review on digital capacity, which reports by mid-August. Is it actually in a letter to you separately that they provided this figure?22:53:005576Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—I recall being given a briefing which contained the usual slides—4J4SCHACHTSenator Schacht—And the usual suspects too.LD4Alston, Sen RichardSenator ALSTON—I suppose they were in that regard. But I regard them as honourable men, in marked contra-distinction to the view you presumably have of most of them. I do not know whether Senator Lundy wants to associate herself with those remarks, but the people I have dealt with at Telstra strike me as doing their best with very difficult policy propositions.4J4SCHACHTSenator Schacht—I have met hundreds and hundreds of Telstra workers and they are all decent people.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—Order! Senator Schacht!LD4Alston, Sen RichardSenator ALSTON—The real issue is: if it is not $26 billion, it is clearly a very substantial sum of money. Let us say it was only a mere $15 billion—right? As I recall it, $16 million was the minimum bound. Let us say it was only $16 billion. Do you know what the CSO currently is? How much is it? Do you know, Senator Lundy?10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Minister, it would be very helpful if you did not provoke interjections.LD4Alston, Sen RichardSenator ALSTON—I was wanting an answer. 10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—No, I am sorry, Minister, it would be very helpful if you did not.4J4SCHACHTSenator Schacht—Two hundred and sixty million dollars.LD4Alston, Sen RichardSenator ALSTON—Senator Schacht wins. That was a very good guess—$260 million.4J4SCHACHTSenator Schacht—It is not a guess.LD4Alston, Sen RichardSenator ALSTON—It is about $253 million, isn't it? Anyway it is of that order. So, if you were to go from $250 million in round figures to $15 million or $16 billion in round figures, you can just imagine what that would do for the carrier and for all other carriers who had to contribute to the universal service obligation. In other words, in one fell swoop, you would bankrupt the entire telecommunications industry in this country—a great policy approach, but not one that commends itself to the government.22:55:005577Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—This leads me to the next point, Minister. In your own statement recently, you said that by the end of this year—or maybe next year—96 per cent of Australian households will have access to 64 kilobits. Now Telstra is trying to tell the minister to get that last four per cent of Australians—LD4ALSTONSenator Alston—No, no, no; wrong!4J4Schacht, Sen ChrisSenator SCHACHT—To get the last four per cent of Australians—LD4ALSTONSenator Alston—The penny has not dropped.4J4Schacht, Sen ChrisSenator SCHACHT—Hang on—the last four per cent of Australians is going to cost $26 billion. That means the last 600,000, half a million, 300,000 or something is going to cost $26 billion.LD4ALSTONSenator Alston—Sit yourself down before you embarrass yourself further.4J4Schacht, Sen ChrisSenator SCHACHT—Well, Minister, why don't you provide the information, rather than just throw it across the chamber—`Ah, hah, it's $26 billion; you don't know what you're talking about'—which is what you were doing two weeks ago. You talk about when the penny dropped. I will tell you when the penny dropped: it was when some National Party person and other people in the bush—the NFF and so on—said, `Actually, we want 64 kilobits for everybody in the bush,' and you went, `Bingo, my god; I've got to get Ronnie Boswell's vote.'DX5MARGETTSSenator Margetts—That is what they have promised Ronnie's party.4J4Schacht, Sen ChrisSenator SCHACHT—That is right. That is when the penny dropped. That happened suddenly. There was the abuse of me and other Labor Party people—`This is a ridiculous figure at $26 billion. You can't have that if nothing can be afforded.'—and then the penny dropped: the politics of getting this bill through meant, `Goodness me, I'm going to have to redraft the figure.' We have seen it drop $10 billion in 40 seconds here tonight, from about $26 million to $15 billion. I suspect that when the third prong—C16HEFFERNANSenator Heffernan—Madam Temporary Chairman, on a point of order: could Senator Schacht refer to Senator Boswell by his correct title.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—In fact, I have repeatedly requested that all senators be referred to by their correct titles. I would appreciate it if all participants in this debate could direct their comments through the chair and not directly at each other across the chamber.4J4Schacht, Sen ChrisSenator SCHACHT—Through you, Madam Temporary Chairman: I apologise to Senator Boswell for using his first name. I still want to make the point—through you, Madam Temporary Chairman—that the minister's rhetoric has dramatically changed in the last couple of weeks.When the government was bagging the opposition that this was a ludicrous idea, that was fine until the National Farmers Federation and other individual members of the National Party—including, I think, Senator O'Chee—raised it. But Senator O'Chee is not a great one for credibility at the moment: I think he promised to walk backwards to the Gold Coast if the One Nation Party won a seat in the Queensland election, and we are still waiting for him to walk backwards to the Gold Coast.So it is now true and it is now clear that this government is rewriting its rhetoric on this issue because it has been cooked on this issue. A lot of ordinary rural organisations and average Australian farmers are saying, `If you want us to be internationally competitive, to compete in the global market with free trade and all of those things, we have got to have access to the best infrastructure so that we can compete in the marketplace, and the way to have it is access to broadband online services such as the Internet.' That is why the minister is now backing down.What I find interesting is that this report from the ACA—on a possible redefinition of what is in the universal service obligation and on this issue of how many kilobits could be offered—is now, of course, coming out in August after this bill is carried. I wonder about that. I hope the National Party have not been conned again in that they are going to vote for this bill to go through and then be told in August, `Sorry, Senator Boswell, Senator O'Chee and the National Party; we looked at it but the report says we can't do it.'Once the bill has gone through, they have got no bargaining position. Again, it might well be that they have accidentally sold out their own bush constituents. We cannot get from this government tonight what the third prong of the deal is. We have got two of them, and it only works out to—VW4HERRONSenator Herron—Don't be too smart; they have been made public.4J4Schacht, Sen ChrisSenator SCHACHT—I know. But we have found out here tonight—Minister, thank you for your comment—that, instead of it being worth several hundred million, two of them have only cost $150 million. Telstra was going to do one of them anyway for commercial reasons. They are not spending a cent, but they convinced the National Party that it was a special deal. The only one they have got is the $150 million in capital works for cheaper phone calls for the outer zones in rural areas.The third prong is supposed to be coming. I suspect it is going to have something to do with online digital capacity. The minister abused us two weeks ago for suggesting it could be $26 billion. The $26 billion is to connect the last four per cent. I suspect his next argument is going to be about how they get the $26 billion.Telstra has told him that figure is based on everybody—whether the cable goes past, comes through microwave, comes off satellite or whatever—who has got a modem all choosing together to use full online capacity. The telephone exchanges of Australia would explode or collapse. I have no doubt that this is Telstra's view. To scare the minister initially, they are saying, `We have got to rework every telephone exchange in Australia—every piece of switching equipment, every little switching pillar at the end of the street—to give it the capacity just in case every Australian household switches on the Internet at the same time and goes for full capacity at 64 kilobits.'We know that is ridiculous. It will not happen that everybody will switch it on together. But, even if they did, there is the capacity for 96 per cent of Australians to do it now. What would it cost Telstra to meet the demand of 96 per cent of Australians, who have the digital capacity available to them, if they all went out tomorrow and bought a modem and connected themselves to the Internet? We know that Telstra knows that is not going to happen. The entire marketplace is not going to stream out and buy a modem just like that to access the Internet at the same time. It is ridiculous to suggest it is going to cost $26 billion to get the last four per cent onto the Internet.DX5MARGETTSSenator Margetts—$260,000 each, isn't it?4J4Schacht, Sen ChrisSenator SCHACHT—Yes, something like that. Extraordinary figures. Telstra would love everybody to switch on, get a modem and get onto the Internet with 64 kilobits. Why? Because they will make an enormous quid out of it. It would boost the growth of Telstra's revenues enormously. That is where the biggest growth of all would be. They would say, `Even if it does cost billions of dollars, we will put the infrastructure in because, at a rapid rate, at 15 to 25 per cent return per year, we will get the money back. It will be a magnificent investment.' Telstra would not even blink at the idea if it meant that more and more people were switching on the Internet at a very rapid rate and paying for the capacity to use Telstra's system.We suspect that the last deal of Senator Boswell's three prongs has something to do with Internet or online capacity. We know that the minister has had to reshape himself, be a real chameleon on this—from abuse to us, only a matter of two or three weeks ago, he is now trying to readapt on the line that Telstra fed him to scare everybody.I hope that the National Party, in their one last chance, did not have the hell scared out of them when Senator Alston and the Prime Minister said to them, probably in the last couple of days, `You can't have all of that. You can't have 64 kilobits. It is going to cost too much for Telstra.' I hope they did not fall for that. I hope that, whatever deal they have done, they actually had the wit to say that it is going to be in legislation and not on some two bob promise.Unfortunately, they will be giving their vote away tonight and tomorrow without getting the deal consummated on which online services are going to be available to people in the bush. Another terrible decision by the National Party, and another reason why they are going to be devastated at the next federal election—all brought onto themselves.Minister, I would like an answer as to how you got the figure of $26 billion. You interjected, `I don't understand.' I think I do understand what your answer is going to be, and it is still not sufficient. Since you are quoting from the Telstra submission to that review, why don't you table it by the time the debate rolls on through tomorrow? Table it in the Senate, either tonight or early tomorrow, so people can judge for themselves whether Telstra are either pulling your leg, trying to scare you, or trying to scare everybody else.23:06:005579Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—I did not say that I was quoting from their submission; I said that I have not seen their submission.DX5MARGETTSSenator Margetts—What are you quoting from?LD4Alston, Sen RichardSenator ALSTON—I do not know when you arrived, but about five minutes ago I said that I got a briefing from Telstra on the matter. As I recall—DX5MARGETTSSenator Margetts—No, your $26 billion—where are you getting it from?LD4Alston, Sen RichardSenator ALSTON—If you do not think a slide show from Telstra with specific information about likely costs constitutes information on which I can rely, then I will convey your view to Telstra. But I suspect it will not really affect their attitude. I simply say to Senator Schacht that it has always been made clear to me that, if you were to treat it as a mandated service, which is the essence of the standard telephone service, it would cost in that order.4J4SCHACHTSenator Schacht—A mandated service?LD4Alston, Sen RichardSenator ALSTON—Yes. That is a very different proposition to simply digital data capability.4J4SCHACHTSenator Schacht—Here we go again.LD4Alston, Sen RichardSenator ALSTON—I know it might be difficult, but it is essentially the difference between capability, which means you have an option to take it—4J4SCHACHTSenator Schacht—That is dead right.LD4Alston, Sen RichardSenator ALSTON—and a mandated service in which you have no choice because it is provided as a matter of course.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Knowles)—Senator Schacht, you have just spoken on this matter for 15 minutes.4J4SCHACHTSenator Schacht—I will speak for another 15 minutes, in a moment.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Please do not interrupt the answer. The decorum in this place at the moment is just appalling.LD4Alston, Sen RichardSenator ALSTON—Digital data capability is the basis for the ISDN arrangement that has been in place now for more than 12 months and towards which Telstra have been working assiduously. As I have said many times, they have now reached a point of 96 per cent capability. That tells you nothing about the proportion of households that actually have the service; that is simply those who could have the service if they chose to exercise that capability. That is a fundamentally different proposition from the standard telephone service which is required to be provided by Telstra to every Australian, within reason. Currently, something like 97 per cent of households have the standard telephone service. If you were to treat a 65-kilobyte digital data capability as a mandated service—in other words, a minimum mandatory requirement—you would be talking about costs of that order.23:08:005580Margetts, Sen DeeSenator MARGETTSDX5WAG(WA)00—Considering that figure has been used several times in debates, in question time and so on, considering the minister has indicated how very important it is that ministers check their facts and get them right because they know that they will, to quote him, be sent to the cleaners if they do not get them right, and considering this is such an important and pivotal information piece which has been used in the argument, surely the minister would have asked for some basis to prove what these figures are all about. Surely he would have asked for some structure to that argument. Surely he would not just have relied on a sound and light show in a briefing. This has been used as a factor by the minister in arguments in debates and in question time. Surely the minister would have asked for the background to that figure. Surely there is some data, some basis, some argument, some paper, to back up that figure which has been given out as a fact by this minister.23:09:005580Lundy, Sen KateSenator LUNDY7G6ACTALP00—I would like to seek some clarification from the minister. My understanding is that the $26 billion figure that you saw on the slide show—which is apparently the upper estimate; you mentioned the figure of $16 billion in relation to the lower estimate—applies to the mandated service of 64 kilobits per second to people's homes as opposed to the current capability program which is taking ISDN to the exchanges. Therefore, people have the capability, if they so choose, to subsequently connect themselves via ISDN to the exchange.The point I want to make is that to connect a 64-kilobit line or an ISDN line from your home to the exchange is, in fact, quite a costly exercise in itself. I might be wrong here, but it is my understanding that, because of the nature of that connection and the physical infrastructure, Telstra charges it on a per kilometre or distance based regime. In fact, the further you are away from the exchange the more the ISDN line will cost. This has great implications for rural and regional telecommunications users who wish to have a 64-kilobit connection with their local exchange. Presuming, in the first instance, that you live near one of the 96 per cent of exchanges that have that capability, you also need to connect yourself up. The further away from that exchange you live the greater the disadvantage you have because it will cost you more.My question goes to this: to what degree of detail were the National Party—and, through them, their constituents—misled when you talked about a 64-kilobit capability? Was it clear to those people that we were not at the time talking about a mandated standard telecommunications service of this nature to their homes? Was it made explicit to those people that in fact we were not talking about a 64-kilobit service to their homes; we were only talking about upgrading the capability of the exchange to subsequently provide that service to those homes if, indeed, the person had the capacity to pay the connection cost?I think these are pertinent questions, particularly in the context of the way the $26 billion figure has been used by Telstra, and certainly by the minister, in providing what they described as a `preposterous' notion to mandate a 64-kilobit service throughout the country. To actually mandate that level of service, apart from the costing analysis that Senator Schacht outlined, the discrepancies between rural and metropolitan areas are absolutely vast. Minister, it would be interesting if, while you are pursuing the answers to Senator Margetts's questions about more detail, you could provide us with a level of detail that would show those costings across metropolitan and rural Australia so that we can see what the split is in that regard. That way, those rural and regional members will actually have an idea of the sort of structural disadvantage they have in seeking equitable telecommunications services.23:14:005580Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—The contributions by my colleagues Senator Margetts and Senator Lundy made a point that I agree with strongly. I cannot recollect that, when the opposition raised this issue in the bill in March last year, we talked about mandating 64 kilobits. I cannot recollect ever making comments on the public record or even in private conversation about mandating. I always thought I was very careful—and I am sure I have been—to use the word `capability'. I have never argued that you should make it compulsory for someone to be connected to 64 kilobytes. You make sure the capacity is available and, if the consumer—whether they are domestic consumers, business people or farmers—want to connect, they know that at a reasonable time the capacity is there.Senator Lundy has pointed out that if you are more than about seven kilometres from the telephone exchange in the bush you cannot get ISDN. You have a problem and you need some sort of arrangement booster or whatever, and that is costly. I do not know how many farmers are more than seven kilometres from a telephone exchange and would have that problem. I understand that there are about 100,000 farmers in Australia. I might be wrong; Senator Boswell might tell me.YE4BOSWELLSenator Boswell—There are 125,000.4J4Schacht, Sen ChrisSenator SCHACHT—There are 125,000 farmers.LD4ALSTONSenator Alston—Farms, not farmers.4J4Schacht, Sen ChrisSenator SCHACHT—Farms. Of those farms, a fair proportion—it may not be the majority—will be within the seven kilometres, but the majority, I suspect, will be beyond the seven kilometres. You only have to drive through any traditional wheat or cereal belt of Australia to see that most of those farms are more than seven kilometres from the telephone exchange.I am not arguing that each of those farmers has mandated that they have to be connected to 64 kilobits. We want them to say that they understand the advantages for them in running their farming business and that they want access to the minimum of 64 kilobits. How do they go about getting it without Telstra saying, `Sorry, sport. You're more than seven kilometres from the telephone exchange. You can't have it'? This is basically what they are being told now, and that is not good enough.All I want in the universal service obligation and the review that is going on is a definition that says that you have the right to the capability. I do not even want it written down what exactly the price would be. I think there will be different prices. If you choose to be on a farm that is a bit further out from the telephone exchange than another and you buy the farm at a cheaper price, you might have to make a bit more of a contribution to the infrastructure. But what is happening now in the bush is that they just do not get it full stop. Telstra says no. They are the last four per cent.No-one can convince me that it costs $26 billion to give those last four per cent—80,000 farms—that capability. That is why we think it is important that this review should have been available for this debate. It is around the wrong way. We are voting on the basis that this is a good deal for the bush. Some secret arrangement has been done. If when the report comes out it says, `Bad luck. We're not making any recommendation to even provide the capability,' the bill will have gone through and we will all be dead ducks. I suspect that the biggest dead duck of all will be the National Party for selling out.DX5MARGETTSSenator Margetts—The Country Women's Association weren't very pleased either.4J4Schacht, Sen ChrisSenator SCHACHT—I am very glad that Senator Margetts mentions the Country Women's Association. In the Telstra inquiry on this bill, they turned up at the hearing in Sydney and gave us a brief submission. They indicated in their brief letter that they were very gravely concerned about privatisation and what it would do to the continued reduction in services. I normally get on very well with Senator Patterson, the chair of the committee. However, she asked them whether they had read the bill. One woman had to say, `No. We actually haven't read the bill.' Senator Patterson said, `How can you criticise it if you haven't read the bill?' The problem was that, in the time scale this government gave us to deal with it, no-one had read the bill by that stage. No-one would have got hold of it, be it the Country Women's Association or anybody else.In their own very sincere way, the CWA gave overwhelming evidence of why they did not want Telstra sold. They wanted the services. They have seen the services decline. Even though some other people might say that the Country Women's Association is a traditional rural organisation of middle-aged and older women and so on who might not understand the Internet, they made it very clear that they wanted online broadband services in the bush for everybody and the capability to use it. Even today or yesterday they were on AM or PM radio indicating their still grave concerns about this bill. That is a classic rural organisation. I say in passing to Senator Boswell in particular that my mother was an office holder in the Country Women's Association.YE4BOSWELLSenator Boswell—Where did you go wrong?4J4Schacht, Sen ChrisSenator SCHACHT—Where did all the rest of you go wrong? I certainly have a respect for the role that country women have played for several decades. These women understand absolutely the need to have broadband online services in the bush.YE4BOSWELLSenator Boswell—That is right.4J4Schacht, Sen ChrisSenator SCHACHT—Senator Boswell says that that is right, yet he cannot give us the detail of the third prong of his deal. I suspect that it is about broadband services. We do not know what it is, yet we are expected to vote in this Senate on a wish, a promise and a prayer that an undisclosed deal will give all the members of the Country Women's Association and everybody else in the bush decent capability for 64 kilobits per second. From the way the minister has handled this, I am still pretty suspicious that the pea and thimble trick will be pulled and, in the end, it will not be there.23:21:005582Murphy, Sen ShayneSenator MURPHYFX5TASALP00—I want to ask a couple of questions about the customer service guarantee in respect of what was promised last time. As part of the debate for the sale of one-third of Telstra, Senator Alston, the Minister for Communications, the Information Economy and the Arts, made some very pertinent points in his contribution at that time. I raise these matters in respect of my state in particular, but I think they probably apply all around the country. The minister used Tasmania as a classic example. I will quote him:Let me give you a classic example. Every capital city except Hobart—has various things. He went on to say:There is a world of difference between Tasmania and Victoria or New South Wales, where you are close to capital cities which have world-class telecommunications facilities, where there are enormous incentives by virtue of the population size for the carriers to keep on providing world best services. Those states and their citizens are immeasurably better off than those in a place like Tasmania where you are very lucky to even be able to make a phone call if you live in some parts of the west coast; even if you are in the capital city of that state you are very much a second-class telecommunications citizen.It is that last part that I really want to go to because later in his contribution, which I will come to in a moment, he commented on the declining quality of service in remote parts of Australia for rural consumers, in particular. That paragraph concluded:. . . even if you are in the capital city of that state you are very much a second-class telecommunications citizen.That was reported ad infinitum following the deal that Senator Harradine did to give his vote to the government to support the one-third sale of Telstra. The Hobart Mercury of 7 December 1996 stated:A spokesman for the Communications and the Arts Minister, Senator Richard Alston, said the $58 million from the Regional Telecommunications Infrastructure Fund was for projects in addition to Telstra's corporate plan.Fair enough, but if we were second-class citizens then, the government is asking us now to accept that their proposal for the sale of the remaining two-thirds will mean that these things will change.I go to the report entitled Telstra: to sell or not to sell? Commitments were put forward by the government with regard to the customer service guarantee, but what has happened since? In the Senate Environment, Recreation, Communications and the Arts Legislation Committee's 1998 report on the transition to full private ownership, we find the same thing. On the one hand, $3,000 penalties were going to be applied for the non-provision of services, et cetera. However, the report did go on to mention that, ultimately, such penalties could only be applied through the courts. As I understand it, we are talking about $40 per day fines that will get paid to the customer, et cetera.I would like to tell the minister for his benefit about a case in Launceston in Tasmania. This has just happened today, after we were supposed to have had some benefit from the $58 million RTIF. A small business set themselves up as an Internet service provider. I know that the minister is aware of this, or at least his office is, because this person contacted the minister's office. The small business wanted to put in place 100 lines and become an Internet service provider. Initially, they ordered 26 lines. They got a call from a Telstra officer who seemed to take great interest in the fact that they had ordered 26 lines. The events that followed went something along these lines.The small business explained that they wanted to become an Internet service provider. They were told by this Telstra person that ISPs were now like video shops when they first opened—that is, they were everywhere, but soon the time would come when they would all be out of business and only the big players would be left. The small business went on to order 100 lines so they could provide the service. They were told that that was not possible but they could get 50. When the technician came out to put in the 50 lines—and he actually said he put 50 in—they only ended up with 30. The difference for their business amounts to some $600 per week. There has been no application of a $3,000 fine to them and no real step has been taken by Telstra. Being a small business, they probably do not have the revenue to chase the thing through the courts, so Telstra is not too worried about that, and we will get to their attitude again shortly.That was only the start of their problem. Their microlink then mysteriously went off line. They phoned Telstra support in Melbourne—because that is where it now is; it has been transferred out of Tasmania. Telstra support said, `It's got to be your equipment.' They said, `That's not possible because we've checked it all.' They had had it checked by Access One, which was evidently their carrier, and all was fine at their end. Their customers could dial locally and surf the local web pages, which showed that their equipment was fine. The next morning, the microlink suddenly started working again. After a short time, the same thing happened again. They contacted Telstra, which promised to get back to them before 5 p.m. Telstra did not ring back until after 9 p.m., when a technician said that he would come out to do the service but his hours were only between 8 a.m. and 9 p.m and there were huge after-hours fees. They were unwilling to pay those additional fees so they said no. But, mysteriously, the next morning the microlink came back on-line. That is without even getting a technician out there.In December 1997, they made a decision to move from Access One to Telstra Internet and applied to become part of Big Pond, though they never signed the agreement. They then found themselves in the situation that Big Pond services were more expensive than another service called Vision Internet, so they phoned Big Pond and said, `We don't want to use you at all,' and they went back to using Vision as a carrier. That is, of course, when their real problems started to occur.The current microlink number belonged to Access One, and Telstra needed to change it. Before they did that, however, they installed the new microlink and put things online, but nothing worked. After hours of frustration, they asked the technician to install the new number. Again, nothing worked. This is after they had had some months of successful work from their Internet service, albeit at less than 50 per cent of what they initially wanted.They went on to check all of these problems out, and then they contacted Telstra again. The Telstra officer said that they could not be held liable because they have this law that covers them. This law allows them to reach a minimum set of standards, regardless of whether your network has failed due to their error. They are covered by a minimum set of standards. That is what they said. No wonder people doubt, and no wonder we stand here and doubt, the commitment that you say you are going to give, that you are going to install through legislative means. Of course, this is all on the basis that Tasmania was supposed to get an extra $58 million. They were supposed to deliver services over and above what we had ever had before, but it does not seem to be working too well.They did contact the minister's office, and something actually happened. I must say that, in part, the minister's office probably needs some congratulations for something happening. But I would ask the minister: on the basis of that example, and that is but one, how can we accept the guarantees with regard to the customer service obligations he says will exist, and this is with regard to only a partially privatised Telstra? How can we possibly even begin to accept that those things are not going to get worse under a fully privatised Telstra?23:33:005584Schacht, Sen ChrisSenator SCHACHT4J4SAALP00—I thank the department for sending me today at my request the terms of reference of the review. I wanted to point out, Minister, quite clearly, as I understand it, that the review is actually talking about capability in its form rather than a mandated form. I stand to be corrected on this but the terms of reference, which are dated 30 April 1998, an instrument under your name, say in (1)(a):. . . whether a carriage service that provides a digital data capability broadly comparable to that provided by a data channel with a data transmission speed of 64 kilobits per second supplied to end-users as part of the designated basic rate ISDN service should be specified, on and after 31 December 1998, in regulations made for the purposes of subsection 141(1) of the Act.Subsection 141(1) of the act states:(1) For the purposes of this Part, a prescribed carriage service is a carriage service specified in the regulations.On page 128, the second dot point says:The main object of the universal service regime is to ensure that all people in Australia, wherever they reside or carry on business, should have reasonable access, on an equitable basis, to:(a) standard telephone services; and(b) payphones; and (c) prescribed carriage services.Maybe your legal advisers will tell me I have got that wrong, but it seems to me that the phrase in the act `should have reasonable access' is not actually mandating 64 kilobits per second. If it is, I stand to be corrected on it.It seems to me that, even if that was the way you could read it, the way your terms of reference lay out, I think the review does have the opportunity to look at the full range of whether it is access, whether it is mandated and so on. That is why I think it is even more important that this review should have been available before this legislation was finally voted on.23:36:005584Murphy, Sen ShayneSenator MURPHYFX5TASALP00—I asked the Minister for Communications, the Information Economy and the Arts some questions before with regard to customer service obligations. I raised the matters of the reports that were done and, of course, the government's comments, both of the minister and of the Prime Minister. On many occasions, the minister has said with regard to customer service obligations that they were tantamount to the initial one-third privatisation of Telstra, and yet we do not seem to be getting any answers with regard to but one example.He has had plenty of other examples in more recent reports with regard to how Telstra has failed to deliver in terms of its customer service obligations. There have been reports that have said the customer service provisions of Telstra and telecommunications in this country have declined and are declining, not increasing. I would like to go back to some statements the minister made back in 1996 with regard to declining services. He said on 9 December 1996:. . . I am not happy with consistent reports of declining quality of service.WP6LIGHTFOOTSenator Lightfoot—Madam Temporary Chairman, I rise on a point of order. You have a motion before the chair. You have asked for an indication from the house of its intention on that. We went as far as to decide that it was at the point where we should proceed to the vote. I think the senator is out of order to continue to debate the motion.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Reynolds)—There is no point of order. I was trying to put the question, but the senator wanted to make a contribution. Please continue, Senator.FX5Murphy, Sen ShayneSenator MURPHY—If Senator Leadfoot—I mean, Lightfoot—had been listening, he would know that we come into the committee stage with a view to ask questions of the government about the legislation they intend passing. I was going to wait for the minister to get up and answer the questions that I had asked, and he did not. Therefore, I have got up again to remind him of the questions and also make some points with regard to what he said in 1996. He said:. . . I am not happy with consistent reports of declining quality of service. Austel reports declining quality of service in rural areas. No-one seems to appreciate this. I heard a number of contributions to the effect that somehow things are not all that bad in the bush. Let me tell you what Austel said:In general, the more remote parts of Australia have benefited last from the introduction of all types of new technology, and telecommunications has been no exception. Rural consumers in several parts of Australia have expressed concern that their services will not keep pace with improvements.It is on that basis that I ask the minister again how we are expected to accept what you said then and what you have said now with regard to the customer service obligation—the obligation that you said would improve with the one-third sale, the obligation that you maintain will improve with a full sale, despite the fact that there have been even more recent reports that say that telecommunication services and the provision of them is declining. You have said nothing here tonight that would ease the concern of Australians with regard to the problems that confront them from time to time. You have said absolutely nothing.I gave you an example in the city of Launceston in the `telecommunications backwater', as you referred to my state as being—the state that has the highest unemployment in the country—where people are trying to set themselves up in business under this service provider and cannot get service. I think the minister ought to at least have the decency to get to his feet and explain in plain English exactly how he will enforce the sorts of criteria he says are in this legislation as an obligation to meet the customer service obligations. That is what you have to do, and I need to know that so I can determine how I will vote on this bill at the end of the day. These are the sorts of explanations, Minister, you have to give. It is my role to come in here and ask the questions; it is your role to answer them, so I hope you will get up and do that.23:41:005585Alston, Sen RichardSenator ALSTONLD4VICLPCommunications, the Information Economy and the Arts10—I must say that I was intending to answer Senator Murphy, but I thought Senator Schacht was seeking the call first.5K4FAULKNER Senator Faulkner—I was seeking the call.LD4Alston, Sen RichardSenator ALSTON—You are a Johnny-come-lately. We are talking about what happened five to 10 minutes ago before you walked into the chamber.5K4FAULKNER Senator Faulkner—I was listening, though.LD4Alston, Sen RichardSenator ALSTON—Well, you may have been, but you were not seeking the call; Senator Schacht was.5K4FAULKNER Senator Faulkner—I was seeking the call then.LD4Alston, Sen RichardSenator ALSTON—But we are talking about five to 10 minutes ago. Senator Murphy's point was that I had not responded to his question, and my answer was that before you were in the chamber Senator Schacht was on his feet seeking the call, and I was deferring to him. That is why I have not responded, but I now propose to.The answer to Senator Murphy's question is this: long before 1996 I have on many occasions complained about Telstra's quality of service as found in Austel's quarterly reports. It has never been a source of joy to me to find in areas outside the metropolitan areas that quality of service in terms of installation times and fault repair times had not only been declining but, in many instances, was well below what one would regard as a satisfactory performance level. I note that Senator Murphy has an open mind on this, and he is agonising about whether or not to support the bill before the chamber. I am delighted to hear that at least one person on the other side is seriously prepared to consider his vote.FX5MURPHYSenator Murphy—You will have to be a lot more convincing than you are at the moment to persuade me.LD4Alston, Sen RichardSenator ALSTON—If he would like a special briefing at any time I am more than happy to provide it.AW5CARRSenator Carr—How can you account for the decline?LD4Alston, Sen RichardSenator ALSTON—I have always regarded you as a lost cause, Senator Carr, but principally on the basis that you could not understand it even if I did explain it, whereas Senator Murphy at least seems to be interested in the subject.The fact is that the customer service guarantee was something that we promised prior to the last election. It was a direct response to those concerns about declining quality of service. In other words, they pre-dated any privatisation of Telstra. The quality of service had been declining over a period of years completely prior to the privatisation of Telstra.FX5MURPHYSenator Murphy—I am talking about after the one-third.LD4Alston, Sen RichardSenator ALSTON—I am just telling you that this has been an endemic problem, totally unrelated to privatisation.4J4SCHACHTSenator Schacht—You've got to be joking.LD4Alston, Sen RichardSenator ALSTON—You do not have to be too smart to work it out. If we were promising a customer service guarantee prior to the last election on the basis of declining levels of service, by definition that was before there was any privatisation.AW5CARRSenator Carr—You sacked one-third of the company.LD4Alston, Sen RichardSenator ALSTON—Do you know when one-third of the company was sold? After the last election.AW5CARRSenator Carr—You sacked a third of the company.LD4Alston, Sen RichardSenator ALSTON—I don't know how you could ever round up your own vote, Senator Carr, let alone persuade anyone else.AW5CARRSenator Carr—I do it a lot better than you.LD4Alston, Sen RichardSenator ALSTON—I am delighted to see that the Centre Left faction is here tonight to lend Senator Schacht some support.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Minister, will you please resume the subject matter? Senators on my left, will you cease interjecting?LD4Alston, Sen RichardSenator ALSTON—I was in the process of explaining that the customer service guarantee is in relation to the standard telephone service. So it does not relate to microlink or macrolink. It relates to the standard telephone service. It requires penalties to be paid when installations are not put in place on time or pursuant to agreements and when repairs are not carried out within specified time limits. I do not think the 3,000 figure that was mentioned ever found its way into law. If it did, it would have been by way of a proposition that was subsequently amended because the current maximum level of penalty that can be paid is $25,000. The rebate to which you are entitled for breach of the customer service guarantee is $11.65 for residential customers and $20 for businesses. We have recently announced that we propose to increase that to $40 per day for every day beyond five working days. What we have in mind is a system that will be increased to the point where Telstra are able to meet the performance levels that are determined.4J4SCHACHTSenator Schacht—How much would that cost in a year? Is it $3 million a year or $5 million a year?LD4Alston, Sen RichardSenator ALSTON—I do not want them paying any fines, to be quite frank. I just want them to upgrade their service.AW5CARRSenator Carr—It is much cheaper to pay the fine than employ people. That is the truth of it.4J4SCHACHTSenator Schacht—You should be promoting employing people.LD4Alston, Sen RichardSenator ALSTON—That is precisely why we announced three months ago that they would be susceptible to a $10 million fine.4J4SCHACHTSenator Schacht—Give us an example of a $10 million fine. No-one can give me one.LD4Alston, Sen RichardSenator ALSTON—Give you an example of one? No-one has been fined. We have only just announced it.4J4SCHACHTSenator Schacht—Give us an example of systemic breaches.LD4Alston, Sen RichardSenator ALSTON—I will give you an example of one.If you set a 90 per cent performance level and they consistently failed to meet that over a period, the scheme would be determined by the ACA. But let us say, for example, that you said for two consecutive quarters they failed to meet that standard—4J4SCHACHTSenator Schacht—The ACA said so?LD4Alston, Sen RichardSenator ALSTON—They will give us the parameters of the scheme. They will tell us what is a reasonable performance level to set.4J4SCHACHTSenator Schacht—Pigs will be flying before the ACA states the rate.LD4Alston, Sen RichardSenator ALSTON—There you are, bagging the ACA. You bag the ACA and ACCC. You hate Telstra with a passion. You will be criticising me next.5K4FAULKNER Senator Faulkner—Don't look around for support. They think you are a joke—a doormat.LD4Alston, Sen RichardSenator ALSTON—I am such a doormat that I seem to have rolled the National Party single-handedly, Senator O'Chee will be pleased to know. You cannot have it both ways. This is a killer doormat on the way you interpret it. What you have had me doing is walking roughshod over Telstra, pulling the wool over the National Party's eyes and blinding Tim Fischer with science. You cannot have it both ways.4J4SCHACHTSenator Schacht—You are boasting about it now.5K4FAULKNER Senator Faulkner—You didn't ride roughshod over Telstra.LD4Alston, Sen RichardSenator ALSTON—They rolled me? Ha! Have a word with Frank Blount and see whether he agrees with that assessment. I suspect he will not. I think he will have a quite different view of the subject. Great man that he is—and he has made a great contribution to Australia—I do not think he shares your view on that subject.4J4SCHACHTSenator Schacht—Tell him to come before the estimates and tell us that that is the case.LD4Alston, Sen RichardSenator ALSTON—He has better things to do with his time. Did you know that the board once had a look at a video of your performance in estimates? They were appalled. I had to tell them not to let anyone know when they went on the road show around the world, because if people had seen the performance of Senator Schacht at estimates the value of that company would have taken a big nosedive. I struck a deal with them. I said, `For God's sake, don't tell the rest of the world. We know here what a shocker he is, but keep it to yourselves.' And they did. That is about the only time I have been able to get Telstra to see it my way.4J4SCHACHTSenator Schacht—You always say these things but you can never verify them.LD4Alston, Sen RichardSenator ALSTON—You will have to take my word for that. You can give Frank a ring if you do not believe me.I will now answer Senator Murphy's question. He has picked out one sad little case history. I have great sympathy—FX5MURPHYSenator Murphy—No, not one sad little case. There are many. That is but one.LD4Alston, Sen RichardSenator ALSTON—There may be. There may be a million stories in the Naked City , I do not know, but you have trotted out one tonight. That situation may well lend itself to common law damages claims. Senator Schacht will give you chapter and verse about COT cases and how easy it is to recover damages for damage to business operations.4J4SCHACHTSenator Schacht—Especially when you are dealing with a 600 pound gorilla.LD4Alston, Sen RichardSenator ALSTON—I will tell them that too.4J4SCHACHTSenator Schacht—You started the phrase.LD4Alston, Sen RichardSenator ALSTON—Keep on abusing them. They love it.4J4SCHACHTSenator Schacht—You started the phrase, Richard.LD4Alston, Sen RichardSenator ALSTON—It is actually an Americanism. I borrowed it from AT and T.4J4SCHACHTSenator Schacht—A 600 pound gorilla. That is your phrase, not mine.LD4Alston, Sen RichardSenator ALSTON—It is a translation from America of a description of AT and T.4J4SCHACHTSenator Schacht—But you applied it to Telstra.LD4Alston, Sen RichardSenator ALSTON—You are quite right; I did.AW5CARRSenator Carr—Are you going to apologise?LD4Alston, Sen RichardSenator ALSTON—I thought it was quite graphic, but never mind. Why will things not get worse? I think I have explained to Senator Murphy that not only have they been bad for a period of years, well predating any proposal for privatisation, but also the way to remedy the situation is to impose performance standards to institute a customer service guarantee and to make sure that not just Telstra but all carriers measure up to their social responsibility. It is utterly unrelated to ownership. It is an obligation that the community requires, through the parliament, to be imposed on carriers. We are prepared to upgrade it as many times as is necessary to have them meet that standard, which they have told us they can meet. I have said in this chamber before, in reference to a press release of 31 March last—FX5MURPHYSenator Murphy—They might be telling you that but they are not meaning it.LD4Alston, Sen RichardSenator ALSTON—It is not a matter of telling me or taking my word for it. I am saying to you that our government is prepared to keep tightening the screws until those standards are met. It has nothing to do with who owns the place. It is a question of all carriers—not just Telstra—meeting minimum performance standards. In a competitive environment, at the end of the day you have a choice to go elsewhere. I suspect people will go elsewhere.FX5MURPHYSenator Murphy—But they have not. You said that in 1996 and they have not.LD4Alston, Sen RichardSenator ALSTON—That is why we introduced the customer service guarantee. It took effect from 1 January.FX5MURPHYSenator Murphy—Nothing has changed. It is actually getting worse.LD4Alston, Sen RichardSenator ALSTON—What do you propose? You would renationalise Telstra. You would buy it back. I know that is Senator Carr's favourite proposition. You would put a lazy 14 bill on the table and buy it back. You would then get in there and run the business. You would make sure that the boys performed on time and you would have a well-run telecommunications carrier. That is dreamland. It has nothing to do with ownership. It has everything to do with putting standards in place. I very much hope that you will support us in our endeavours.23:52:005588Faulkner, Sen JohnSenator FAULKNER5K4NSWALP00—Madam Chair, thank you for this opportunity to speak on the preamble to this legislation. I think that Senator Alston has really misled the committee on a number of the matters that he has been canvassing tonight. I would just remind the committee of a situation which occurred earlier today, with Mr Fischer, the Deputy Prime Minister, being called in to 2UE. After a very embarrassing problem with the telephone link into the studio, which probably I would put on the Richter scale—LD4ALSTONSenator Alston—Madam Chair, I raise a point of order. I can understand Senator Faulkner wanting to wander into the chamber with five minutes to go. But it cannot conceivably be relevant to any aspect of this bill, including the preamble, for Senator Faulkner to have a bit of a chat about Mr Fischer appearing on the John Laws program. It cannot have anything to do with what is before the chair.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN (Senator Reynolds)—There is no point of order.LD4ALSTONSenator Alston—It is a point of order on relevance. How can you possibly say that talking about Mr Fischer on the John Laws show has anything to do with the preamble to this bill?4J4SCHACHTSenator Schacht—Madam Chair, on the point of order: it has everything to do with it. In the last two days, the Deputy Prime Minister of Australia, Mr Fischer, has taken over the job of the minister for communications; he has been making all the announcements on why Telstra should be fully privatised. This minister has been despatched to the outhouse. Mr Fischer has been let loose to try to explain how the new mobile telephone system—which is part of the deal—is going to work, and how all the new cheaper phone calls in the outback for the bush are going to work. That is what I say on the point of order. It is completely relevant to talk about Mr Fischer because he has taken over the job of this hopeless minister and is explaining the policy.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—Order! There is no point of order.5K4Faulkner, Sen JohnSenator FAULKNER—Thank you, Madam Chair. I know that Senator Alston finds these issues very embarrassing. But eventually, after the phone link had been re-established, I think Mr Fischer was trying to give further publicity to the announcement of a $150 million package to extend untimed local calls to some people in the bush. That is what it was. As I understand it, it is called `extended zones in remote Australia'.The issue is—and this is something that Senator Alston has not been honest about—that Telstra, of course, can afford to do that anyway, without being sold, without being fully privatised. Why did not the National Party, as part of the coalition, as part of the Howard government for the past two years, insist to Senator Alston that it be done before now? We know that there is a promise, as I understand it, of a new analog-digital combination system, costing some $400 million. We have already had admissions from senior ministers in the government that that particular initiative, again, was not predicated on the Telstra sale. That is the information we know. It has been a hard grind getting it out of the government because you, Senator Alston, appear—EU4O'CHEESenator O'Chee—Madam Temporary Chairman, I raise a point of order. I am trying to work out how this is predicated on the preamble. There has been no mention of the preamble in any of the 10 minutes to which we have been treated by Senator Faulkner. Maybe it might be appropriate that he try just once to address the preamble.10000TEMPORARY CHAIRMANThe TEMPORARY CHAIRMAN—I am aware that the debate this evening has been wide ranging, and I am sure that Senator Faulkner is addressing the preamble.UI4RAYSenator Robert Ray—You are being irrelevant.5K4Faulkner, Sen JohnSenator FAULKNER—I do not accept Senator Ray's interjection in relation to irrelevance. I did make the point, Madam Chair, earlier in the night that the National Party will not stand up on these issues. It will not stand up for the bush. It will not stand up for regional and rural Australia. But the Labor Party will. This will be a very stark contrast in the election campaign.The only way the Australian people will be able to keep Telstra in full public ownership is to vote Labor in the next election campaign. I have made that point on a number of occasions. I move:That the committee report progress.Question put.00:02:00The Committee divided. (The Chairman—Senator S. M. West)30Allison, L. Bartlett, A. J. J.Bishop, M. Bolkus, N.Bourne, V. Brown, B.Campbell, G. Carr, K.Collins, J. M. A. Cook, P. F. S.Cooney, B. Crossin, P. M.Crowley, R. A. Evans, C. V. *Faulkner, J. P. Forshaw, M. G.Hogg, J. Lees, M. H.Lundy, K. Mackay, S.Margetts, D. Murphy, S. M.Murray, A. Neal, B. J.O'Brien, K. W. K. Ray, R. F.Reynolds, M. Schacht, C. C.Sherry, N. West, S. M.31Abetz, E. Alston, R. K. R.Brownhill, D. G. C. Campbell, I. G.Chapman, H. G. P. Coonan, H.Crane, W. Eggleston, A.Ellison, C. Ferris, J.Harradine, B. Heffernan, W.Herron, J. Hill, R. M.Kemp, R. Knowles, S. C.Lightfoot, P. R. Macdonald, I.Macdonald, S. McGauran, J. J. J.Newman, J. M. O'Chee, W. G. *Parer, W. R. Patterson, K. C. L.Reid, M. E. Synon, K. M.Tambling, G. E. J. Tierney, J.Troeth, J. Vanstone, A. E.Watson, J. O. W.Conroy, S. MacGibbon, D. J.Denman, K. J. Calvert, P. H.Gibbs, B. Payne, M. A.McKiernan, J. P. Minchin, N. H.Quirke, J. A. Boswell, R. L. D.Stott Despoja, N. Gibson, B. F.Woodley, J. Ferguson, A. B.* denotes tellerQuestion so resolved in the negative.Sitting suspended from 12.04 a.m. to 9.30 a.m. (Saturday, 11 July 1998)