MINORITY REPORT
CHAPTER 5
TECHNICAL ISSUES CONCERNING THE FORM OF THE LEGISLATION
Paragraphs (b), (c) and (d) of the terms of reference required the
Inquiry to consider some technical issues in relation to the form of
the legislation to be introduced to effect the Government's policy of
part privatisation of Telstra:
(b) whether the Telstra (Dilution of Public Ownership) Bill 1996
might need to be amended to fully accommodate the post-1997 regulation;
(c) whether the timing and the likely proceeds of a partial Telstra
float should be affected by the proposed post-1997 rules;
(d) whether the Telstra (Dilution of Public Ownership) Bill 1996
should be split into two or more pieces of legislation.
These issues are technical rather than substantive in nature, and were
included in the terms of reference simply as part of the attempt by
the Opposition Parties to raise every possible distraction and irrelevancy
in relation to the part privatisation process. We are satisfied that
the answer to each of these terms of reference is “no.”
5.1 No need to amend the Bill
We are satisfied that there are no inconsistencies between the Bill
and the form of the post 1997 legislation which require amendment of
the Bill at this time. While some unsubstantiated fears were raised,
no credible evidence was produced to support them. On the contrary,
it is clear from the evidence we received that the provisions of the
Bill operate independently of the post-1997 legislation. This was explained
in the submission from the Department of Communication and the Arts:
...the sale provisions of the Bill would operate independently
of the outcome of the post-1997 arrangements. There are, therefore,
no apparent reasons why the Telstra (Dilution of Public Ownership) Bill
might need to be amended to fully accommodate the post-1997 legislation.
[1]
| Finding: There is no need to amend the Bill to accommodate
the entirely separate post-1997 telecommunications regulatory regime
which will be unaffected by the level of Government ownership of
Telstra. |
5.2 The Bill's passage is unaffected by the post-1997 legislation
Although the fine detail of the post-1997 legislation is not yet finalised,
the structure and principles behind the legislation are certainly well
established. We are satisfied that the drafting of the Telstra (Dilution
of Public Ownership) Bill takes account of this structure and principles;
we are also satisfied that there is no basis for delaying the passing
of the Bill into law purely on account of the fact that the final details
of the post-1997 legislation are still being released into the public
domain.
The impact of the post-1997 regime on the float of Telstra - as opposed
to the legislation authorising the float - is a different matter. The
key issue is the need for the post-97 regime to be in place and well
understood before the point in time at which investors are required
to make a decision as to whether to invest in Telstra. As BZW notes:
The timing and likely proceeds of a partial Telstra float will
be affected by the post-1997 rules whatever the outcome of those rules.
[2]
Once the decision to part privatise has been made (ie once the Bill
has been passed into law), the exact timing of the float is then a matter
for the Government and in particular the Department of Finance which
will manage the process. In other words, the timing of the float is
an important issue, but it is not an issue which goes to the question
of when the Bill ought to be passed into law. We therefore do not see
that the need to co-ordinate the timing of the float with the timing
of the post-1997 legislation gives rise to any need to delay the Bill
being passed into law.
| Finding: The Department of Finance should carefully manage the
timing of the partial float of Telstra, to ensure that investors are
fully informed as to the post-1997 telecommunications regulatory regime
under which Telstra will operate. Because the post-1997 telecommunications
regulatory regime will be in place prior to the float, it is neither
necessary nor desirable for the passage of the Bill to be delayed
to take account of that regime. |
We note, and applaud the fact that, the Government has given a clear
statement of principle that the achievement of competitive and equitable
regulatory arrangements will take precedence over any consideration of
the sale price of Telstra. [3] We are
satisfied that this is the correct approach to take, and that it has the
consequence that preparations for the part privatisation can proceed in
practical terms before the fine detail of the post-97 regulatory regime
is passed into law.
We do, however, see a need to introduce the post-97 legislation into
Parliament as soon as possible, and we note that the Government intends
to introduce this legislation in the Spring session of Parliament. [4]
5.3 There is no case for splitting the Bill
Paragraph (d) of the terms of reference
is in our view an absolute non-issue, for two reasons. The first is that
the two sets of provisions in the Bill (those to part privatise Telstra,
and those to introduce a scheme of safeguards for telecommunications customers)
are integrally linked. The second is that even if it could be demonstrated
that there was no link between them, this would not imply that it made
good sense to split the Bill. There is no magic about which particular
piece of legislation particular provisions are contained in. The practical
benefits of splitting the Bill would be zero; and it would have significant
costs and delays. Of course, the Opposition included this term of reference
precisely to encourage such costs and delays.
On the second of the two issues, the Australian Consumers Association
makes the point that it really does not matter what Act a particular
provision is contained in:
We have a couple of comments on each of the important elements
of the universal service obligations. The first is the customer service
guarantee. For us it is in a sense academic that it happens to be at
the moment in the Telstra act and not in the 1997 act together with
additional 1997 pro-consumer reforms. [5]
Returning to the first issue, of whether there is a substantive link
between the two set of provisions, the Majority Report asserts that many
submissions which were non-committal on privatisation strongly supported
the consumer safeguard provisions. [6]
As the Department of Communications and the Arts made clear, however,
the two sets of provisions are integrally related and jointly implement
an election commitment.
In keeping with the Government's election commitment to link
consumer safeguards to the partial privatisation of Telstra, the Telstra
(Dilution of Public Ownership) Bill 1996 contains both sale provisions
and guarantees on maintenance of consumer service. These two elements
demonstrate in the one piece of legislation the Government's desire
to ensure that the increasingly commercial focus of Telstra will not
compromise the quality or price of telephone services available to consumers.
[7]
The view that the two sets of provisions are logically linked and ought
not to be split was also put in the submission made by the Australian
Telecommunications Users Group:
ATUG sees it as appropriate for these Carrier performance requirements
to be in the Telstra (Dilution of Public Ownership) Bill 1996 making
it clear that what is expected of Telstra at a service performance level
is also expected of other Carriers. [8]
We therefore do not believe it is appropriate for the two sets of provisions
to be separated.
| Finding: There is no merit in splitting the Bill
into two or more pieces of legislation. |
Footnotes
[1] Department of Communications and the Arts,
Submission No. 131, Vol. 4, p. 708
[2] BZW Australia, Submission No. 295, Vol.
9, p. 1851
[3] Department of Communications and the Arts,
Submission No. 131, Vol. 4, p. 708
[4] Department of Communications and the Arts,
Submission No. 131, Vol. 4, p. 709
[5] Official Hansard Report, 12 July
1996, p. 537
[6] Majority Report, para 2.9
[7] Department of Communications and the Arts,
Submission No. 131, Vol. 4, p. 709
[8] Australian Telecommunications Users Group,
Submission No. 202, Vol. 8, p 1487