SUBJECTS: Telstra job losses; Malcolm Turnbull’s second-rate NBN; Labor’s plan to reverse $83.7 million cut to the ABC.
GRAHAM RICHARDSON: In our Canberra studio is Michelle Rowland, the Shadow Minister for Communications. Welcome, Michelle.
MICHELLE ROWLAND, SHADOW MINISTER FOR COMMUNICATIONS: Good evening Graham.
RICHARDSON: I just got rid of all the anger so that I could be nice to you when you came on. Now, obviously Telstra today - 8,000 jobs. Is that the only way Telstra can sort itself out? Sacking 8,000 people? Surely it might be able to improve some of the things it does and do a bit better?
ROWLAND: It's a very sad day, Graham, for these 8,000 individuals. These are 8,000 real people with families, with bills, and it's something like one in four management positions that will be going. So it's a significant number of people who will be losing their jobs, and a very sad day for them. And clearly we need to ensure that they receive all of their entitlements. Telstra has made statements to that effect so certainly we in Labor will be holding them to account for that. But you raise the question about where this fits and where this possibly fits in with Telstra's future vision. It is indeed a very competitive environment that Telstra's dealing in now. It's one in which, as I think Andy Penn articulated, it's one that's constantly evolving, and they find themselves in a position where they need to cut costs, where we've seen the results of that unfortunately. But they also need to do a few other measures. Now, some of those measure could actually –
RICHARDSON: Just a sec, before you go on with that let's have a look at what the boss had to say:
"But if we're going to be competitive, if we're going to deliver the sort of products and services to our customers, if we're going to deliver for our shareholders, I have to be authentic and I have to be transparent that that's the scale of change that Telstra needs today. We are setting up funds and support for our people that are impacted and we will obviously communicate more about that over the next three years as we roll out the changes."
Yeah I understand that, but what else do they have to do Michelle? What do they have to do to make themselves competitive because we've had outages of late and there have been too many of them. As a Telstra customer I know about those. And so they're not delivering the service that people want of them and I can't imagine that service improves when you dump another 8,000 people.
ROWLAND: Well you've hit the nail on the head Graham, and these days because it's such a competitive market, not only for Telstra competing at a retail level – it was certainly a very different time when it had a vertically integrated wholesale and retail sector – but they're competing against everyone else and let's face it: you're competing not only on price, you’re competing on non-price terms as well. So herein lies the big challenge for Telstra. Whilst it is shedding staff, I question how that is going to fit into their ability to service their existing customers and attract new customers, because if that means frontline services are eventually going to take a hit, then certainly that doesn't bode well for its customer management.
RICHARDSON: And the other side of that coin, and this is why, you know, I objected to this simple solution to our worries is you sack 8,000 people, when you have a look at Telstra's share price, well that's halved over the last year or 18 months. I mean, it's just headed south consistently and there's nothing in today's announcement that I can see that would give it any sort of permanent uplift.
ROWLAND: Well I think what you've described is fact, Graham, and certainly some analysts have pointed to their expectation that there would be some longer term vision for Telstra, and that's one of the challenges that Andy Penn faces. On one hand, as I said, they've gone from being a vertically integrated operator in a very different space, they've then had to look at recreating Telstra essentially as a technology company, and we've got technologies such as 5G, we've got phenomena such as the Internet of Things on the horizon, but Telstra's at the moment stuck in this limbo where that hasn't quite happened yet. So it's trying to define itself within the sphere of all these events happening, all these technological changes, and at the same time it's facing fierce competition. They've got an entry of a new mobile operator in TPG, but I think it goes back exactly to your point. You need to put the customer first. And I'm sure that won't be lost on Telstra. That certainly had been a significant focus of David Thodey when he was in charge there and I know that set off a huge cultural change within a very big organisation. So they are really the challenges Andy Penn faces at the moment.
RICHARDSON: Yeah and it seems to me, the other thing we haven't mentioned but that you can't have a discussion about Telstra without referring to it is the NBN. Because out there in the real world, people associate the two of these entities as if they were one. Should they not be one? I mean, shouldn't the wholesale arm of Telstra just take over the NBN? Because, at the moment, if the NBN is going to cause continual disruption for Telstra, a continual downgrade of its share price, because I haven't met anyone who is happy with the NBN by the way. If there's such a person, please contact me! Because every time I hear people talk, Michelle, they tell me everything got worse the day they got connected.
ROWLAND: Well you're absolutely right, Graham, and some of the biggest complaints are from people who say ‘I had a perfectly working internet service before I was switched to the NBN and can you please switch me back’. We've seen a 204 per cent increase in complaints about the NBN to the Telecommunications Industry Ombudsman and we've got people who can't obtain the advertised speeds on copper that they are supposed to be receiving. So it's a sorry situation indeed when it comes to consumers on the NBN, but you mentioned Telstra's role in this and I think there's two things to mention. The first is, you are right, they did announce as part of this investor update that they were setting up a different business entity called InfraCo where they are going to put their fixed line assets. And this had been subject to speculation for some time, that this might be something Telstra does. And that's going to have a high value and, as Telstra has said, this is to preserve some optionality for what it might seek to do in future.
In one sense, Graham, the way in which Telstra chooses to structure its business, do its accounting and its financials and so forth, that's a matter for them. We should be more focused, as a government, on the customers and customer service delivery. But on the other side, as you very rightly described, there is an anticipation that this is a play for some time in future, potentially, for Telstra to make some play on the NBN. But I would caution against going too far too quickly actually, Graham. The reality is that certain parameters need to be met and they're set out in legislation before we can even go there and the first one is that the NBN is complete and it's operational. Now Malcolm Turnbull said this was going to be in 2016. I didn't see him standing up and declaring 'complete and operational'. But there also needs to be an inquiry by the Productivity Commission. That report of the Productivity Commission needs to considered by a Parliamentary Committee and the Minister for Finance, as a stakeholder, needs to make an assessment of whether or not the conditions are right for a sale. So I would caution against getting too far ahead of ourselves but it does point to a very important matter that you raised, and that is about the consumer experience. At the moment the real complaint, if I had to boil it down, that I receive from people right around Australia is the lack of accountability when it comes to the NBN. And the blame shifting that goes on between retailers and the NBN, and consumers are stuck in the middle with very little resolution.
RICHARDSON: Very little, I mean I get complaints about it all the time. That's what worries me. And you mentioned the Prime Minister, now of course, when he was Minister for Communications he had this bright idea of changing the original Conroy model. Now, you can argue about whether the Conroy model was blowing out on cost, which it was, but of course the Turnbull model has blown out on cost even more and yet it delivers less doesn't it? Because he just baulked at going all the way?
ROWLAND: It costs more and it does less. And let us never forget what the so-called inventor of the internet, Malcolm Turnbull, said about his NBN. He said he was going to deliver it faster and he had a 2016 date that he explicitly said going in to the 2013 election. That came and went. He said that is was going to be more affordable. It's blown out by $20 billion. And he also said that we were going to have such fantastic speeds on it and we've seen customer complaints, as I said, go up by over 200 per cent and this bloke who introduced this multi-technology mess – look at the HFC for example, which he said was going to be the big game changer. That was put on pause at the end of last year, which has had significant implications for consumers waiting to be connected to the NBN and their time frames have completely blown out.
RICHARDSON: Yeah, everything about the NBN has turned out to be a debacle. Can I just shift the conversation, because we only have a limited amount of time, onto the ABC. Now I notice Guthrie's performance and, you know, a stout defence of the ABC, which is what you'd expect the ABC boss to do. But she didn't address the thing that gets people really going, which is bias. And there is some bias in the place, I mean as you know, I will die voting Labor but I have to concede that the anti-Liberal bias in some of their shows has been appalling and I can understand why the government gets upset. Upset enough for the party to want to sell it. What does Labor think of the performance of the ABC? Are you happy with the ABC? Are there any kind of changes that you as a Minister, if Labor's elected, would like to make to it?
ROWLAND: I think from the outset I want to make it clear Labor supports the ABC as a properly funded independent broadcaster. And we are not going to agree with everything on the ABC and certainly Labor doesn't agree with every piece of reporting that the ABC does. But what I will always defend, and what Labor will always defend, is their right of independence. And we've seen Malcolm Turnbull, we've seen the Minister, lodge so many complaints with the ABC, going on a really fantastic rate of complaints in the last couple of months in particular. And it's just set up what is very clearly a vindictive campaign against the ABC. Now, if the Minister chooses to act in that way, if the Prime Minister chooses to act in that way, then so be it. But from Labor's perspective you need to have a public broadcaster, a trusted institution as you would well know, a trusted institution that is free from commercial interests, that actually responds not to shareholders but to the people of Australia. They, the public, the Australian citizens, are the shareholders of the ABC. So to firstly have a Liberal Party conference where, by a 2:1 ratio, decide that the ABC should be privatised, and then to have Malcolm Turnbull and the Communications Minister and everyone else come out and flatly deny that there's going to be privatisation, only to have members of his own government then say 'oh well look it’s a debate that's valid to have' I think just shows how much Malcolm Turnbull has lost control of his party.
RICHARDSON: Well certainly there was no ringing defence from Malcolm Turnbull. He could well have turned up, because he knew the resolution was coming up, and he didn't bother. Nonetheless, what you're saying is you make no change? As far as you’re concerned everything that's happening at the ABC now is okay?
ROWLAND: Well I think we need to do two things, Graham. Firstly, as I said, respect their independence. But also, they need to be properly funded in order to do their job and the ABC, despite the fact that Tony Abbott promised, the night before the election, no cuts to the ABC, we saw nearly a quarter of a billion dollars cut in his first budget in 2014. We saw successive cuts occur after that, and even this year something in the vicinity of an $84 million cut where the ABC has said 'well look, there's no more efficiencies to be made'. So I believe, and hence it is Labor policy, that we need to restore that funding, that we need to put the ABC on a funding path that enables it to do its job properly. I think that that would be the most optimal start.
RICHARDSON: Yeah, I've got some problems with that. It just seems to me, as I note I come here on Monday's and Wednesday's and I slap the make-up on myself. When I used to be able to go on Q&A which I always enjoyed but Sky won't let me these days, but when I used to go there there were three make-up women flooding make-up, doing hair and all the rest of it; none of that here. This is a bare as your bum outfit this one. Not the same at the ABC. I still think there's ways and means you can cut it but Michelle we've run out of time. I want to thank you very much because yours is a critical portfolio. Communication has become an enormous part of our lives these days and we didn't even get to discuss social media tonight. So I've got to have you back because there's so much more ground to cover but thanks for your time.
ROWLAND: My pleasure.