SPEECH TO THE HOUSE OF REPRESENTATIVES
WEDNESDAY, 26 MARCH 2013
**Check against delivery**
About half the pages in the Omnibus Repeal Day (Autumn 2014) Bill 2014 repeals legislation in the communications sector. Most of it is pretty straightforward. As the Minister for Communications has said, it gets rid of redundant regulation, and it removes regulation that mandates the production of information that no-one uses. In other words it is a cleaning up exercise.
It is a good thing that it is being done, but its value should not be overstated. You do not put out a press release when you vacuum the lounge room. That is effectively what the government are doing here. They are making a very big deal about something which is straightforward, a rudimentary cleaning-up exercise.
To demonstrate how rudimentary this is, the Liberal Party claim that all up this will save business about $700 million a year and, of this, the changes to the communications sector, we are told, will save about $35 million a year. In other words, the communication sector reforms are about half the pages in this bill but they represent only about five per cent of the savings, not what you would call big reform.
Interestingly, a number of the laws being repealed here were put in place by the Liberal Party themselves.
A good example of this is schedule 2 part 8. It repeals parts of the universal services regime that requires Telstra to provide an approved universal services marketing plan. It was put in place by the Howard government. It was actually put in place when the member for Bradfield, who is the parliamentary secretary responsible for putting these reforms in place, was an adviser to the former Minister for Communications, former Senator Alston. So he put it in place and now he is getting rid of it.
Another example is schedule 2 part 14. That changes the way changes in control of broadcasting licences are reported to ACMA. They were put in place by Senator Coonan when she was the Minister for Communications, Information Technology and Arts. So there is a delicious irony in all of this. The Liberal Party put many of these regulations in place and now they are making a virtue of getting rid of them. I guess you could say what the Liberal Party giveth, the Liberal Party now taketh away.
The repeal of the Telstra accounting separation requirements is something also worth mentioning here. This is being done not in this bill but by repealing a legislative instrument. It highlights one of the great telecommunications policy failures of the last two decades. In introducing competition in the early nineties, Labor did not structurally separate Telstra. I think that was a mistake. It was a mistake that was compounded by the Howard government when they privatised Telstra as an integrated whole. This was a conscious decision by the Howard government. They resorted instead to a series of measures to try to compensate for this—first, accounting separation and then, later, operational separation. Instead of dealing with the fundamental issue of Telstra’s vertical integration, the Liberal Party’s response at that time was more regulation. Ultimately, it was the Labor Party that had to cut this Gordian knot.
As part of the National Broadband Network project, we required the structural separation of Telstra, one of the more important microeconomic reforms of the last decade. What did the Liberal Party do when we did this? They opposed it and they accused us of holding a gun to Telstra’s head. It is interesting how things change over time.
Last week, Telstra’s submission to the Vertigan review was released and it said:
“Telstra supports the core principles of the National Broadband Network policy, including a wholesale-only NBN and the progressive structural separation of Telstra.”
That is what real reform looks like, not the piecemeal regulation of the Howard government or this rudimentary cleaning-up exercise that we are debating here.
That said, let me congratulate the Telco industry for the way in which they have engaged in this process. I particularly want to congratulate the Communications Alliance for the role that they have played in coordinating the views of different members of the sector and importantly consulting with the Australian Communications Consumer Action Network (ACCAN). The way they have done this is the right approach—consulting with industry in all its parts and consulting with consumer representatives. The work that they have done has helped to produce this outcome, a package of straightforward measures that are supported both by members of the industry and by consumers. Doing this is not that hard. This will get harder. It will get harder as the government embark on more serious reforms.
This bill is rudimentary. The next stage has been described by the Minister for Communications as ‘real reform’. The minister said that this will involve further consultation with industry and I welcome that. That is the right approach. It is the approach that I took as a minister in the reforms that I presented to this parliament over the course of the last three years. I took the approach of engaging directly with industry, getting their best ideas and bringing them forward to this parliament.
Because the next stage of reform will invariably get more difficult, more contentious and more complex, it is important that the government thinks carefully and consults widely with industry and with the general public. The opposition will do the same and we will judge any of the reforms presented to the House on their merits.
The Minister for Communications has foreshadowed reform in a number of areas, including changes to the taxation arrangements for employee share schemes and changes to facilitate crowd sourced equity funding.
I said recently at the Tech Leaders conference in Queensland that there is a strong case for reform of employee share scheme arrangements, particularly in the case of start-ups. The same is true of crowdfunding. A number of countries have enacted legislation dealing with crowd funding, including the United States, New Zealand and Italy. It is particularly useful for the start-up industry. A number of start-ups and innovation accelerators have made the point to me that it helps fill a gap in the market for capital between $50,000 and about $750,000. A lot of prospective businesses can get access to seed capital but find it hard to get access to capital to make the next step. Crowd funding will help.
Obviously, a balance needs to be struck between access to capital and investor protection. It is important that investors know the risks that come with effectively becoming a venture capitalist and how that is different to investing in a firm that is listed on the ASX. The Corporations and Markets Advisory Committee is looking at this and we look forward to seeing their report and the reforms that are brought forward to the parliament by the minister.
Over the Christmas break both the Minister for Communications and I were in the United States and spoke to a number of tech companies in Silicon Valley. The Minister wrote about this when he got back. He made the point on his blog that the sector was looking for government to remove obstacles to innovation and gave two good examples, the examples I have just cited—employee share schemes and crowd funding.
But the same could also be said of copyright reform. The same companies that are seeking reform to share schemes and to crowd funding are also asking the government to overhaul our copyright laws. In February, the Attorney-General released the Australian Law Reform Commission’s report Copyright and the digital economy. The Commission argued in this report that this reform would:
“… Make Australia a more attractive market for technology investment and innovation.”
The Attorney-General has in releasing this report indicated that he is unlikely to support this reform. But, given the Minister for Communications’s desire to remove obstacles to innovation, I suspect that he may have a different view. He has to make that clear. He is following me in this debate, and this might provide an opportunity for the minister to give us his views on the importance of copyright reform. This is an important debate. It is one that will invariably happen in the Cabinet room and also happen in this Parliament, but it should also happen in our community.
It is important that the government consults widely on this and keeps an open mind, because there is potential here for real reform that will boost investment and innovation in the tech sector in Australia. These sorts of reforms—employee share scheme reform, crowd funding and copyright reform—are all what you might call relatively easy: they involve consulting, making decisions, legislating and ensuring they are properly implemented. What is a bit harder is building the skills that we need in this important sector of our economy. We are not doing that sufficiently at the moment. This is where real reform is needed.
Seventy five per cent of the fastest growing occupations in Australia require STEM skills and knowledge. But the number of students taking up STEM courses has not kept up with demand. In February, The Financial Review did an analysis of this. They looked at take-up by domestic undergraduate students. They found a 36 per cent decline in students taking up IT degrees since 2001. They also said that the changes that the last government made, around uncapping university places, have seen a boost in numbers in the last few years, but not by much—not by enough. In the last 10 years, there have been 100,000 new jobs created in the tech sector. But, in the same time, only 49,500 students have graduated with technology degrees. This is hard—turning around these sorts of numbers is a big task. We need to do a number of things if we are going to be successful here.
Here are a few suggestions. We need to embed technology in the curriculum from primary school up. Alan Noble, the head engineer for Google in Australia and New Zealand, talked about this at a start-up event in Canberra last week. He said we need to teach young people how to think like a computer scientist—they do not need to code, but they need to know how code works. Unfortunately, the Minister for Education has stalled the rollout of the new digital technology curriculum in primary schools. The Australian reported this week:
“States and territories had signed off on the digital technology aspect but the new national curriculum hasn’t received a final tick of approval because of a review at the behest of Mr Pyne.”
I am not sure what the motivations of Christopher Pyne, the Minister for Education, are, but I would say that that review needs to be done as quickly as possible and the new digital technology curriculum needs to be rolled out as soon as possible. It is the sort of real reform that is needed in this area. The Minister might be able to inform the House as to where that is at.
I also have made the point recently that I think we need to change the way STEM subjects are taught. We need to increase the digital literacy of our teachers and the way that we provide career advice in this area and in others. We also need to get universities to take a more proactive role in encouraging students to take up STEM degrees and get universities to collaborate more with business on research projects. If this government is interested in real reform and removing obstacles to innovation, then it has to tackle this issue, as well as the others that are currently being proposed.
Of course, they also have to build the NBN—not wreck it, which this government is currently doing. The NBN is the biggest and most important infrastructure project in Australia, and the legislation we are debating here is supposed to be about helping business. That is what the NBN does; it is the engine that will help to create jobs, build companies, drive productivity and increase trade. To do that, we need to build infrastructure not just for the next five years or the next 10 years but for the decades to come—not the second-rate version of the NBN that this government is building.
Before the election, the Liberal Party promised that every Australian would have access to the NBN by the end of 2016. After the election, they broke that promise. Actually, on election night The Herald Sun published a letter from Tony Abbott to the Australian people in which he said:
“I want our NBN rolled out within three years and Malcolm Turnbull is the right person to make this happen.”
Well, it is not happening. That has gone. The promise has been broken. The promise that everyone would have access to 25 megabits per second by the end of 2016 is now gone. It is a broken promise and the people of Australia were deceived. They were also promised that nine million homes and businesses would get fibre to the node. That is not going to happen, either, now. That promise has been broken. As a result, businesses will suffer. They will not get what they were promised.
If the government is to live up to its purported aim of helping Australian business, it has to do a lot more than what we see in this legislation. This is, as I said, a rudimentary cleaning up exercise—no more, no less. It gets rid of old laws that people do not use. As the Manager of Opposition Business said at the beginning of this debate, it is a bit like vacuuming a room in a house that nobody uses anymore.
The government has said that this legislation will save business about $700 million a year. But it will save the communications sector only about five per cent of that. And all of that is pretty tiny, pretty small, when you compare it to the new cost that the government wants to impose on Australian businesses—the new tax that it wants to put on business to pay for the Prime Minister’s paid parental leave scheme. That will cost business about $5½ billion a year. So business saves, on the one hand, about $700 million a year from this legislation, but, on the other hand, it will have to pay an extra $5½ billion a year. It is not a great deal.
The real test is what comes next.
MEDIA CONTACT: RYAN HAMILTON 02 9790 2466