Telstra; Mobile Phone Coverage; Rural Transaction Centre; Debt Reduction

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Treasurer’s Birthday; Year of the Outback; Qantas; Telstra; Drought; Zone Allowances
August 14, 2002
Year of the Outback tour; Rural and Regional Services; Drought; Telstra
August 16, 2002
Treasurer’s Birthday; Year of the Outback; Qantas; Telstra; Drought; Zone Allowances
August 14, 2002
Year of the Outback tour; Rural and Regional Services; Drought; Telstra
August 16, 2002

Telstra; Mobile Phone Coverage; Rural Transaction Centre; Debt Reduction


Rural Transaction Centre
Thursday, 15 August 2002
1.30 pm


SUBJECTS: Telstra; Mobile Phone Coverage; Rural Transaction Centre; Debt



Yesterday Ziggy Switkowski nominated the middle of next year as the time by

which he thought Telstra services would meet the Besley benchmark. Does that

sound like a reasonable timetable for proceeding with the full sale?


Well obviously we want to bring the services up to the required standard as

soon as possible. Now I have announced today the final in seventeen tenders,

another $20 million contract to improve mobile phone coverage on 34 highways

around Australia including here in Morven, in Queensland. And we are working

as fast as we can to improve those services. You saw today the opening of a

Rural Transaction Centre which also has internet access which has come about

as part of the Networking the Nation Program. What the privatisation of Telstra

has delivered is services that would not have been there otherwise, like Networking

the Nation, like improving mobile phone coverage. We want to continue to do

that but whether that can be done in the next year or two is a matter I think

that we would need technical advice on. Certainly I think it is time for a new

inquiry to actually go out and benchmark the improvements that have been made

since Mr Besley last reported. Once that hurdle has been met then the question

becomes the legislation in the Senate. I do not control timing of legislation

going through the Senate. All I would say to the Senate is, is the Government

has put in place as a result of Telstra 1 and Telstra 2, services which would

not have been done otherwise and it has improved services which are still being

rolled out in rural and regional areas.


Treasurer, that the, a successful new inquiry is the last hurdle before the

Government preparing legislation for the full privatisation of Telstra?


Well, a successful outcome from the inquiry would be the last hurdle. If you

are setting up an inquiry to actually look at whether or not the services have

improved. And if the inquiry, and it is an independent inquiry, says that they

have, that the services in rural and regional Australia are now up to the standard

which we want to see in rural and regional Australia, then the legislation can

go before the Senate. And I guess the final hurdle is the Senate.


Who would do the inquiry and how soon?


I do not know who would be doing the inquiry. It is a matter for Senator Alston

to announce. I think I said earlier on in the week that we are going back to

Canberra next Monday and I would hope sometime in the next week or so an announcement

could be made.


You have been travelling around the bush looking at Telstra services. What

have you gleaned? Is it your opinion that perhaps they have improved but not

improved enough?


I think the CDMA rollout here in western Queensland has been a pretty good

rollout. And if you have access to CDMA as people do in this area, you can actually

get very extensive coverage, particularly down the highways. Now, I have announced

today another $20 million project to improve that access along 34 highways around

Australia. I think that will improve it further. So now you have got a mobile

phone coverage of the dimension that you never had when Telstra was 100 per

cent Government owned. You now have internet access which has come about through

the Networking the Nation and services are improving. And I think the right

thing to do now is to have an inquiry and to benchmark those improvements.


Is this the last of the Besley spending, this package?


The spending actually comes out of the proceeds of T2 and the programs were

Networking the Nation and also programs for improving internet access…


But this mobile phone spending, is that the last of the spending advocated

under the Besley Report?


It is the last of the contracts for improving mobile phone coverage. We have

allocated all of the money but we are still progressively rolling it out into

new programs. The Rural Transaction Centres, and we have allocated all of the

money but we have not opened every Rural Transaction Centre that we want to

open. We opened one here today in Morven but we still need to roll out more

of those services on the ground.


Could people in this sort of, in this region expect more spending on telecommunications

as part of T3?


Well, I think T3 is only going to go ahead once services in rural and regional

Australia have met the required benchmark. I think that as communications develops

we would want to have in place universal service obligations and other obligations

to ensure that the new developments as they come are rolled out in rural and

regional Australia as well as in the cities.


Could that involve a subsidy directly from the Government?


Oh well, I am not going to be talking about additional allocations of money.

I think the important thing is to put in place mechanisms especially through

universal service obligations which will ensure that as new technologies become

available that they are rolled out.


But you can’t ask a fully privatised Telstra to behave in an uncommercial fashion,

so surely what you are saying…?


Oh yes you can. You can ask a fully privatised Telstra to meet a universal

service obligation and any other terms and conditions which are set by law.

Now this is a very important point. Whoever has the equity in Telstra, what

governs the standard is the standard set by law and by the universal service

obligation. You could have the most inefficient telecommunications system which

was wholly Government owned if you did not have requirements to actually provide

universal service obligations. This is a point that I think we have been making

over and over again. That the legal conditions and the obligations and the framework

is in fact much more important than the ultimate ownership of the equity. That

is where you get the services from. That is where you get the standard fees

from. That is where you get the universal service obligation from. That does

not flow through from who happens to own the shares.


But isn’t that what the Opposition said? That means there is no reason to sell

the rest of Telstra?


What it means is there is no reason to keep the rest of Telstra in Government

ownership. That is what it means.




And as for what the Opposition says, it varies from day to day. You would have

to, you would have to ask me what their policy for the particular day is before

I could comment on it. The last one I heard was they were going to renationalise

the 49 per cent of Telstra which was already in private hands.


Treasurer are you happy for some of the proceeds for T3 to be spent on infrastructure

be that telecommunications or otherwise?


Well the important thing to remember about proceeds of privatisation, and we

have always made this point, is once you sell equity if you spend the proceeds,

at the end of the day you have got no equity and you have lost the proceeds.

That was the Labor Privatisation Model – privatise Qantas, spend the money,

at the end of the transaction the money is gone and the equity is gone as well.

That is why I have always said, we ought to invest it for future generations

by repaying debt, taking the debt burden off their back, and that is the focus

of our Telstra privatisation which has occurred to date. And that is the way

we look at it.


(inaudible) whatsoever?


Can I just say, before everybody starts arguing about the proceeds, the point

I have always made from an economic point of view is if you are going to put

Government corporation in to private hands the people should have an ongoing

benefit. And the ongoing benefit that we have delivered is a reduction in debt

which saves them in taxes year after year after year.


So does that mean that all of the proceeds from T3 should be used to retire



Well, the way in which we have always approached privatisations in relation

to Telstra and in relation to other corporations is that the proceeds should

give an ongoing benefit for future generations of Australians. And that ongoing

benefit is to take the debt monkey off their back.


And that could happen with less than the full…?


That is the way we approach these things.


Treasurer, as the senior Victorian Liberal do you have a message for your State

colleagues today as they grapple with issues of failure to pledge loyalty to

the Leader?


Well, obviously I am a long way away from the action in western Queensland.

And I am not following it on a blow by blow basis. It is something that the

Victorian colleagues will have to work out and I would urge them to work it

out and to make sure that they put their best foot forward for a State election

because I think there are many, many Victorians who want an alternative Government.

That is the Liberal Party’s obligation to deliver them an alternative and to

deliver them an alternative Government and that is what the focus ought to be

on. It ought to be on defeating the Labor Party in the forthcoming election.

Thank you.