'Connecting You Now'
Communicating in a Brave New World
Address to the Melbourne Press Club
Melbourne
September 3, 2004
Good afternoon and thank you for inviting me here today to talk about my (still relatively new) portfolio of Communications, Information Technology and the Arts.
I doubt I'll get to the Arts part of my portfolio today but only because it deserves more time than today's forum allows me.
Obviously everything has cranked up a notch since I agreed to speak to the Melbourne Press Club.
Circumstances being as they are you might forgive me for dwelling briefly on the impending election.
It is inevitable that in an election year people's minds turn to whether the grass will be greener on the other side.
The Australian people will face a stark choice when they go to the polls on October 9.
It is a choice between experience and a proven economic track record of managing an $800 billion economy on the one hand and a leap into the dark with an Opposition leader whose credentials to lead this country are untested and unknown.
For the last nine months we have seen the Opposition Leader bogged down in second order issues, failing to show his hand on the things that matter-tax and spending policies and indeed-communications and IT.
To quote The Age earlier this week -
Labor has two main priorities for communications: to oppose any further sale of Telstra and to prevent Kerry Packer or Rupert Murdoch from increasing their ownership of Australian media assets.
However there is much more to this portfolio than obsessing about Telstra and sitting opposite media moguls.
Today I will outline some of the Coalition's achievements in the communications portfolio and, without giving too much away about the policy launches and announcements that will be made during the election, outline the Coalition's direction and plans for a fourth term.
Making a difference
Communications and IT has the capacity to change our lives,
- to transform the way we do business,
- to revolutionise the way we deliver essential services such as health and education.
For example, earlier this week I was in Darwin to make two announcements that will dramatically improve the lives of people living in rural, regional and remote communities.
It is astonishing that there are now around 16 million mobile phones in Australia-that figure is even more remarkable when you remember that we only have a population of around 20 million.
I announced $15.6 million funding to improve mobile phone reception for 30,000 people living in 62 regional, rural and remote towns across Australia.
I also announced an initiative to provide two-way satellite broadband internet access and computer equipment to some of the remotest communities in Australia.
The Government will also invest $3 million to counter low telephone take-up rates in remote Indigenous communities.
Basic public telephone facilities will be provided with a pre-paid service to help connect communities previously existing without telephone services.
These are the tangible outcomes of targeted Government funding. This is technology making a difference to the lives of ordinary Australians so that access does not depend on where you live.
And this is an example of how Government action can address the barriers to telephone and IT connection.
It is the Government's commitment to continue to deliver real outcomes for the people of Australia.
Challenges
The Coalition will continue to promote diversity and competition in the telecommunications, IT and media industries in Australia. It is the underpinning of Howard Government policy in the area of communications.
It is vital as we see the landscape changing around us at an alarming speed.
The traditional telephone service is on the way out, digital television is taking off and, increasingly, the business world is shrinking as Australia competes on the global stage.
In this is the inherent challenge.
Regulation by its very nature is a stable rule-an authoritative legal direction for industry and the broader community.
But how to regulate a medium which enables its user to send video messages and television programs over an internet phone link-all done from a screen on your fridge?
Emerging technologies and converging technologies are the driving factors behind the continuing evolution of the industries involved in my portfolio.
Whatever challenges emerging technologies present, the Coalition will maintain an appropriate regulatory and access framework both on current and future infrastructure.
A continuing challenge will be to ensure that as technologies emerge people are not left on the fringes and that we take a strategic approach to communications and IT that produces tangible outcomes for both our productivity and connectivity.
While emerging and converging technologies present us with challenges they also throw up solutions.
For instance, broadband technology is revolutionising long-distance communications.
Virtual surgery, medical and defence force training, disaster recovery planning, even film post-production over broadband are now practical and effective day-to-day options.
A short while ago, the level of real-time interaction needed for these kinds of activities was often technically and financially out of reach.
The exciting thing is to know that this is just the tip of the iceberg and new innovations and applications are just around the corner-new innovations this Government will continue to encourage and support.
Technology as an enabler
Australia has a proud record of innovation and the smart application of new technology.
But the lines everywhere are blurring.
Regulators try to decide whether the latest family sedan, with computer chips running everything from its air conditioning to its brakes, should be classified as a computer or a car, or both.
Networks designed 100 years ago to carry brief conversations now channel more data than voice.
And programming once limited to broadcast television is pumped into homes around the world through twisted copper, glass fibres, satellite beams and radio waves.
But the technology, as fascinating as it is, is not an end in itself.
What matters is how our community can pick it up, adapt it, and use it to improve their lives.
A high speed data network is an impressive piece of technology, but when that network is used to beam an ultrasound from a pregnant woman in rural Queensland to her specialist in Brisbane, then that is an outcome we can all value.
As we see more and more examples of technology playing a critical role in the area of health you can see how helps overcome issues such as regional hospitals attracting key specialist surgeons.
Some tell us the future of broadband is a case of modern day alchemy, with the existing copper access network being turned into gold by DSL technology.
Others see the broadband web all around us, with completely mobile, wireless internet.
Some say the bandwidth will stream to us from towers while others envision high-altitude blimps hovering over our cities, the equivalent of earthbound satellites.
As Minister, I am not concerned by how our communities are connected. What concerns me is that they are connected.
What matters is how this new technology fits into business applications and produces real productivity gains and reduces operating costs.
The Australian Government will continue to support this nation's information and communications technology industry, building on ICT infrastructure and creating jobs.
We have invested $5.3 billion in innovation, developing ICT skills with more university places, attracting global ICT investment and assisting our ICT exporters.
The technology our researchers, our universities and our industry are developing can and will transform our economy and transform our lives.
The Coalition's vision is for an industry which grasps the opportunities thrown up by the global ICT revolution, drawing on a secure business environment, strong economy and skilled workforce to produce and sell high quality ICT products and services to the world.
Since 1996, the Howard Government has made Australia a world-leading information economy.
We have spent more than $1 billion on improving telecommunications and information technology services, including broadband access, for rural and regional Australians.
But with the world of IT moving so quickly, the challenge for governments is to get the settings right, to regulate with a light touch and to support rather than hinder our IT community.
This is an area where there is a clear ideological difference between the Government and the Oppostition.
IT is not a field where a company or an economy succeeds by digging in and defending. You do not win competitive battles by throwing up barriers and setting arbitrary benchmarks or quotas.
On the hot topic of global outsourcing, or offshoring, I recently read the ALP's IT spokeswoman Kate Lundy say if Labor were in Government they would only allow Government departments to go to overseas IT service suppliers if they had better skills or could do the job for a lower price.
I wondered to myself who she thought was going to go overseas to pay more for less skilled staff?
And then I wondered how many layers of bureaucracy would be created to set the rules to enforce the commonsense approach which is already being taken.
Governments should enable, support and promote the IT industry, not try and pick technologies or systems, dictate suppliers or tie the industry up in red tape.
I take the potential for Australian IT jobs to move offshore very seriously. But offshoring is not a one-way street.
There are great opportunities for Australia to win jobs in the offshore outsourcing market, as shown by a recent KMPG 2004 Competitive Alternatives Study, which has ranked Australia as the best place out of 11 developed countries to base software development operations.
Over the past year alone at least 27offshore companies have invested more than $580million in ICT operations in Australia that are forecast to generate approximately 1750jobs for Australian workers.
According to Gartner analysts, Indian services companies are developing long term strategies for using Australian expertise in the provision of their global services.
Trying to somehow freeze Australia in time, locking out the rest of the world will not promote Australia's IT sector and it will not save Australian jobs.
Much of this investment being generated in the Australian industry has come through the work of Invest Australia, which since its creation in 1997, has helped a wide rangeof internationalcompanies, including ICT companies,invest in Australia.
Over the past two years, Invest Australia has attracted 105 new projects, valued at $14.8 billion, which are expected to create or safeguard around 9500 jobs and generate in excess of $1.2 billion in export earnings.
Invest Australia is currently working with companies on projects with potential investmentin Australia of more than $84 billion.
But for all of its good work Labor has promised to abolish Invest Australia to save $11 million. This is both incomprehensible and indefensible.
If Australia is to remain at the forefront in IT and telecommunications then Governments must take a sensible and flexible approach to promoting competition to help deliver necessary services to every corner of our vast continent.
Government must take on the role of enabler instead of standing in the way of progress.
Competition is the key
As with IT, an open and competitive marketplace is the cornerstone of the Coalition's approach to telecommunications in this country.
The benefits of competition in this industry are impressive. Since 1997:
- we have gone from three carriers to over 100;
- Average phone call prices have decreased by over 20 per cent; Just this week Optus announced that international phone calls to China will now only be nine cents a minute. Phoning overseas via the Internet for the cost of a local call has the potential to revolutionise telephony.
- Australia 's economy is $12 billion larger than it would have been without the opening up of the market.
- An additional 54,000 jobs have been created as a result of the introduction of competition.
- Broadband subscribers have grown from 423,000 in March 2003 to more than one million and there is no sign that this growth is abating.
And none of this has happened by accident. The Government has played a critical role in helping the market to develop as it has.
Getting the regulatory framework right - to allow new entrants into the market and to allow them to prosper - was critical.
The regulatory challenge
There was a need to set appropriate consumer safeguards while still allowing competition to flourish.
And, in some instances there was a need for direct Government intervention such as:
- Providing funding to expand the coverage of mobile phone networks to 98 per cent of the population.
- Providing people in the Extended Zones (which cover 80 per cent of the landmass with a population of only 40,000) with untimed local calls for the first time ever, and
- Implementing the important consumer safeguards enshrined in legislation and as part of Telstra's licence conditions to guarantee untimed local calls,
- price caps and
- subsidies and support for low income earners.
The Coalition Government built these important consumer safeguards in the face of strident opposition from Labor and we will maintain them.
The great thing about telecommunications is that it never stops evolving.
Three years ago the challenge was to expand mobile phone coverage. The challenge now is to upgrade mobile phone networks to deliver high speed data services.
Three years ago the challenge was to try and provide equitable access to dial-up internet services. Now the challenge is to provide access to broadband services.
It is becoming apparent that we might be at, or fast approaching a real turning point in this industry.
In terms of fixed line services, to date much of the attention has been on getting access to the existing copper telephone network.
Now the attention is beginning to turn to the possibility of fibre to the home.
High speed data services over mobile networks and wireless networks are becoming a reality.
In terms of fixed line services, to date the focus has been on delivering a bundle of services-voice telephony, fax, and internet access.
Now it is possible to use a broadband access service to deliver any or all of voice, high speed data, and potentially even pay TV.
Voice over IP is a reality-a new way of doing telephone calls.
The Government's primary objectives will continue to be providing consumers with equitable access to high quality services and
- to make sure that businesses have access to new technologies and services that will improve productivity.
With new services come a lot of questions.
For instance: what will the network of the future look like? Will it be fibre, will it be a combination of fibre and copper, what role will wireless play?
Is VoIP a revolution or an evolution? What sort of regulations ought to apply to Voice over IP and will new types of business models and new types of service providers emerge offering Voice Over IP services?
I have tasked my department, along with the ACCC and the Australian Communications Authority, to examine with industry this very issue over the coming months and their advice will feed into future Government thinking.
Telstra
And then of course there is always the question of Telstra.
I will acknowledge now that this is a difficult area of policy to talk about without Labor driving mass hysteria.
Despite Government policy being very clear-that we want to sell the remainder of Telstra-I have always been unequivocal about the qualifications that go along with that statement.
There must be value for shareholders and taxpayers and we must be satisfied that adequate services can be delivered to all Australians including those who live in the bush.
The Government is committed to the sale of Telstra because it believes it is in the best interests of the company itself, its 1.8 million shareholders, the wider telecommunications industry and, most importantly, all Australians.
T3 will enable Telstra to realise its full potential as one of Australia's most important companies in the information age and give it the flexibility to develop, innovate and keep pace with a rapidly changing global industry.
Most importantly, selling Telstra will remove the conflict of interest inherent in the Government's position of setting the rules (both competition and consumer safeguards) for around 100 phone companies while it has a direct financial interest in Telstra.
While the Government's position is clear, Labor opposes the sale without a word as to how it will allow Telstra to grow and yet manage a level playing field.
Labor will control and constrain Telstra as Lindsay Tanner attested to in The Australian today about what investments Telstra can and can't make and Labor will promote huge spending on technologies that are rapidly becoming redundant.
Labor has no alternative vision when it comes to promoting the rollout of new and emerging services-instead Labor wants Telstra to waste $5 billion in upgrading the copper network to provide yesterday's technology-40 kilobits per second.
Labor is obsessively Telstra-focussed. It has virtually ignored the rest of industry and is certainly providing little guidance or leadership to the other 90-plus carriers.
This should cause the industry a great deal of concern.
Broadcasting and media
Australia 's world class broadcasting sector is another area where old-fashioned protectionism will not deliver outcomes and benefits for Australian consumers.
In the rapidly changing communications environment it is critical to have policies that enable all sectors of the broadcasting industry to evolve and compete.
New technologies are also changing the face of broadcasting and we need to be in a position to make the most of what they have to offer.
However we also need to be alive to the challenges they pose, from a regulatory, industry and consumer point of view.
The Coalition's media policy will help drive efficiency and innovation in our economy and better services for our community.
The Government will continue to support and facilitate the take-up of digital television and the transition to digital radio.
We will also continue to support our national broadcasters and ensure that broadcasting content standards continue to reflect community standards and expectations.
A number of reviews initiated by my predecessor will also enable the Government to consider a range of issues relating to the digital television regime in Australia.
I won't pre-empt the outcome of these reviews but I have said previously, in relation to a fourth free-to-air television licence, that I don't see a compelling case for one in the current mix.
Labor on the other hand initially committed to a issuing a fourth television licence but since then has made ambiguous statements.
In relation to media ownership the Government's goal is to enable media companies to grow, expand and invest in new technologies while still ensuring that Australian consumers have access to high quality media products and the diversity of opinion and information is protected.
This is not to benefit particular businesses, or individuals or families. This part of the portfolio is far more complex than sitting opposite media moguls.
The Government will continue to press for reform of the foreign ownership and cross media ownership laws to enable Australian media companies to compete more effectively for the capital they need to grow and diversify in an increasingly global market.
Convergence and a new regulator
The Government has already recognised the changing features of the telecommunications and broadcasting markets and the challenges faced by the current regulators, the ABA and the ACA.
Convergence is about playing movies on the computer, getting data on the radio, sending photographs or watching a video on your mobile phone and making telephone and video conference calls via the internet.
Advancements such as the 3G mobile phone were clearly a factor in the Government's decision to create to a new combined regulatory agency, ACMA, the Australian Communications and Media Authority.
Being able to receive sophisticated content such as adult services over 3G phones required a new look at regulation.
ACMA will combine the strengths and skills of both agencies and will be able to provide a more seamless regulatory environment in the world of convergence.
Conclusion:
By October 9 I will have been in the portfolio for a bit over 12 weeks-half of which I will have spent on the campaign trail.
But even in my brief time in this portfolio it is clear that we are living in an exciting time for telecommunications, media and IT.
For Australia to remain in the game and at the forefront of emerging technologies then we must have Government leadership that fosters a flexible regulatory environment and a competitive market.
We must be fast on our feet.
It might sound trite to call this a brave new world but the potential for real benefits in vital areas such as health and education, the very real potential for technology to help us overcome the tyranny of distance in this country and the opportunities for Australian businesses are just some of the challenges I look forward to in this immense portfolio.
Over the next few weeks I will take opportunities to further outline the Government's vision for communications in Australia.
Thank you for inviting me today.