Senator the Hon Helen Coonan

Minister for Communications,

Information Technology

and the Arts

Access for Everyone

Launch of LIMAC Report

Low Income Measures Assessment Committee

Sydney

Friday 20 May 2005

Thank you Major [Marina] Randall [Salvation Army LIMAC Member].

Introduction

Good morning everyone, it is a pleasure to be with you today to launch the second annual LIMAC Report.

The affordability and availability of telecommunications services in Australia is critical because a basic phone service can simply be a lifeline, particularly for people on low incomes and people living in rural and regional Australia.

Telecommunication services underpin what we do everyday – whether you are running a business or looking for work, connecting with vital Government services or paying bills and especially when you are keeping in touch with loved ones.

As anyone connected to the communications debate in Australia would know, the Government is committed to ensuring Australians, regardless of where they live, have access to affordable telecommunications services.

Earlier this week I was pleased to announce $3 million in Government funding for 200 robust community phones to be rolled out to Indigenous communities across Australia.

These communities are often some of the most remote and disadvantaged in Australia and having access to a reliable phone is vital for the people that live there. I acknowledge Telstra’s important commitment to this project as well.

So I am pleased today to be able to acknowledge again the work of Telstra, and of course the work of LIMAC, in helping to ensure that low income earners across Australia continue to have access to affordable phone services.

The birth of LIMAC

It was almost three years ago, in June 2002, that the Government required Telstra to formulate a package of products specifically targeted to low income consumers.

The aim of this move was to make phone services more affordable for people on low incomes and to promote access to telecommunications services for people who were previously not connected.

As part of the requirement the Government asked Telstra to create LIMAC – the Low Income Measures Assessment Committee – to oversee its activities in this area and report to Government annually on its progress.

These obligations on Telstra are part of a package of measures put in place by this Government to protect consumers. They include the Customer Service Guarantee, the Universal Service Obligation and price controls which include measures for low income earners.

We created these safeguards and are committed to retaining them.

This year’s report shows that Telstra’s package, Access for Everyone, is an effective model for ensuring affordable telecommunications for people on low incomes.

Access for Everyone is a positive and necessary step to help people on low incomes get connected and stay connected.

And it is a fantastic package. It provides:

• discounts to more than one million pensioners;
• Free message services for homeless and transient people;
• Bill assistance relief to people in financial difficulties, including farming families affected by drought; and
• Sponsored access services for hundreds of crisis and emergency accommodation centres so transient people can be reached via telephone.

The LIMAC Report provides strong evidence that this package has met Government objectives and is protecting low income consumers.

The report also shows an increased take-up of many of the programs in the package, and that these arrangements have helped low income consumers to access telecommunications services.

LIMAC report findings

In its second annual report LIMAC has expressed confidence in Telstra’s low income package.

The report concludes that Telstra has responded in a timely manner to recommendations to improve access to telecommunications services by remote Indigenous communities and the homeless.

The report also indicates that there have been significant gains in reported awareness and use of the package by these consumer groups.

However, there is room for improvement.

Awareness

As LIMAC has noted, one area where Telstra could focus its efforts is raising further awareness of the program among low-income consumers.

I appreciate that there are difficulties with raising awareness in this area and that good progress is already being made by targeting community agencies and welfare organisations.

But I agree with LIMAC that Telstra consider further ways of raising awareness within the general community.

It is important that we share the message and communicate the benefits of this package with as broad an audience as possible.

Industry more broadly

And it is not just the Access for Everyone package and Telstra’s initiatives that we should be promoting.

The industry as a whole has a role to play and I am pleased that industry is taking its obligations to low income consumers more seriously.

The industry is currently finalising an Australian Communications Industry Forum (ACIF) guideline on the handling of cases of financial hardship.

While I welcome this initiative, I would encourage the industry to consider whether the guideline could be incorporated into a code of practice.

This would mean that the relevant provisions could be enforced by the Australian Communications Authority, which is an important consideration when addressing consumer protection.

Price controls

And I acknowledge that Government will continue to have a role in consumer protection. I currently have under consideration the make-up of the price control arrangements that will apply to Telstra from 1 July this year.

Price controls ensure that, where competition is not yet effective, consumers still get the benefits of the productivity improvements that competition delivers.

The Government has clearly signalled that price controls will be retained and measures to protect low income consumers will remain in place.

But even with the protection afforded by consumer safeguards there are still instances where people, particularly the disadvantaged, have difficulty getting access to phone services.

This is why LIMAC is so important.

The Government has in the past accepted the broad proposition, supported by the ACCC and the Productivity Commission, that the cost of providing a phone line can be recovered from the line rental charge.

This has meant that, to date, the price controls have allowed Telstra, in a controlled way, to increase line rental charges. But at the same time the price controls have required Telstra to decrease call prices.

This has been successful. Under the current price controls, call prices are required on average to decrease by 4.5 percent annually.

The result of these arrangements has been an average reduction in telecommunications prices of more than 20 per cent since 1997.

What is encouraging about this year’s LIMAC Report is that it confirms that the arrangements put in place to protect low income consumers from line rental increases are working.

While no decisions have been made, the fact the current arrangements are improving access to phone services by disadvantaged consumers does suggest that the broad arrangements that are in place should be retained.

Conclusion

Before I officially launch the report, I would like to acknowledge the positive working relationship between Telstra and the members of LIMAC.

The progress being made with the low income package has a lot to do with their successful partnership.

I would also like to commend Chris Dodds for his leadership as the Chair of LIMAC, and thank all members for their time and commitment to social service.

You play a significant role in ensuring that low income consumers are able to access telecommunications services that meet their needs.

Launch report

It is now my pleasure to officially launch the second annual report of the Low Income Measures Assessment Committee.

This year’s LIMAC report is further evidence that this package is helping to provide Access for Everyone.

Thank you.