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CRAIG COMMENTS |
Political expediency overrules Telstra’s three egos
Wednesday 30 August 2006
Telstra is back in the news with the Federal Government’s announcement that they would proceed with the full sale before the end of the year. Last week, Telstra announced that it is likely to dramatically increase telephone line rentals in country areas in the near future. This should come as no surprise to country people.
One issue that I have argued consistently through this column over the past six years is the disastrous consequences to rural Australia of National Competition Policy. Privatisation of services that were traditionally provided by governments means that country people have to carry the costs of providing services to widely scattered communities. If the Prime Minister knows his history, he would be aware that the Melbourne and Hobson's Bay Railway Co. ran the first railway in Australia. The privately owned railway ran between Sandridge (Port Melbourne) and Melbourne. Two steam trains operated on the half-hourly service. The colonial government soon realised that private enterprise would not provide services where they were needed to open up the country for settlement and, in 1883, established the Victorian Railways as a government instrumentality to provide rail services all over the State.
Education was also a "private enterprise' in the early years of the Colony and the government again realised that the only way that all Victorians would have the opportunity to become literate was under a state run system.
The same applied to postal and telephone services and broadcasting services. Private enterprise will not meet the needs of scattered communities because competition among providers of these services means that they go after the most lucrative customers and shed the most costly, inevitably country people. Electric power was provided partly by private enterprise and partly by local government. Only a government instrumentality could ensure that this essential service would become available to virtually every Victorian.
While the recent connection of natural gas to some homes in East Gippsland is welcome, there is little joy for the vast majority of people who live in this region who will never receive natural gas reticulation. Why are they denied the right to benefit from this natural resource that belongs to us all? The cost of reticulation is such that only larger communities are economic clients, but there are many ways which they could be compensated for this disadvantage. A scheme to assist them with the cost of LPG is an obvious way. Metropolitan Melbourne got a 40 year start over East Gippsland. This obviously contributed to the growth of the city, but still the government subsidises its public transport system
Telstra has a community service obligation to provide services to all Australians, but has to compete with private service providers who can pick the eyes out of the most profitable communities, but object to paying the price Telstra places on the use of its infrastructure. If each provider had to put in its own, there would be unnecessary duplication, adding even more to the cost of servicing country people. One of the solutions to this dilemma is for full operational separation of Telstra so that one business owns the cables and the infrastructure, and the other owns the retail section of the business.
Whilst the government is hell bent on its public asset fire sale, there does not appear to be any winners, but clearly there are three losers - the shareholders, the taxpayers and the country consumers. In the meantime, Australia falls further behind our international competitors in access, quality and the speed of broadband and other telecommunications services. Will this all be better under a fully privatised model, or is it simply because it will no longer be the government’s fault?
*Craig Ingram is a Telstra shareholder
