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23 September 2005

$2 billion Communications Fund established

The Government today initiated the transfer of $2 billion to the newly created Communications Fund to future-proof telecommunications services in rural, regional and remote Australia.

The fund’s capital will be invested and the revenue generated will be spent on ensuring rural, regional and remote Australians can access affordable and reliable telecommunications services in the future.

The creation of the fund follows all five pieces of telecommunications legislation recently passed by Parliament receiving Royal Assent today. The Governor-General also authorised new regulations to establish the Communications Fund and constitute it with $2 billion cash.

The $2 billion will be invested in a term deposit with the Reserve Bank of Australia in the short term while a detailed investment framework is agreed by the Government. Once broader and longer-term investment details are decided the money will be invested accordingly.

The Australian Office of Financial Management will oversee, on behalf of the Commonwealth, the investment of the $2 billion with the Reserve Bank of Australia.

While invested with the RBA, the Communications Fund is likely to attract an investment return of around 5.5 per cent.

This is the realisation of the Government’s substantial commitment to future-proofing telecommunications services in Australia.

Spending from the fund will be tied to independent, regular reviews of telecommunications services in rural, regional and remote Australia. The first review will be conducted in 2008 with reviews to follow every three years after that.