MARK PARTON: Let’s go to Liberal Senator for South Australia Simon Birmingham… where it’s going to be bloody hot today, in Adelaide. I reckon it’s going to be like 28 degrees. G’day, Simon.
SIMON BIRMINGHAM: Good morning, Mark. Good morning to your listeners. Indeed, a beautiful day… few days forecast here in Adelaide…
MARK PARTON: Crazy stuff.
SIMON BIRMINGHAM: [unclear] summer for us for a week.
MARK PARTON: Mate, I wanted to talk to you about – you know what I wanted to talk about – the Government’s spectrum auctions, because it’s yet another piece of this budgetary puzzle which they’ve absolutely and completely stuffed up. I know that you guys are looking at a formal investigation into these spectrum auctions after one-third of the airspace has not been sold and it’s left, dare I say it, another black hole worth a billion dollars.
SIMON BIRMINGHAM: Well, that’s right, Mark. This is a $1 billion black hole in the Government’s budget. It’s an area where a lot of trickery has been played in terms of budgeting because the Government had originally budgeted to get $3 billion of revenue into this financial year. That, of course, is when it was pretending it was going to get to surplus this financial year. They abandoned that and said the money would come next year and now that the sale process has been completed it’s actually fallen a billion dollars short, which is just… it’s in Stephen Conroy’s portfolio and it’s just another case of this minister, who is a serial offender when it comes to over-promising and under-delivering in a whole range of parts of his portfolio.
MARK PARTON: Simon, let’s get back to basics on this because I’m sure there’s a few who are listening and thinking ‘what the hell is it that they’re actually selling?’ This is the radio spectrum that’s been freed up as analogue television is switched off, so who do you sell it to? Who buys it?
SIMON BIRMINGHAM: So, Mark, that’s right. It’s called the digital dividend – it’s sort of the freed spectrum you get from our switchover to digital TV and the closure of analogue – and the main market for it are the big telco companies, who of course are forever expanding their products in that mobile communications space, and the problem with having failed to sell a third of the spectrum available is, of course firstly, you haven’t maximised your revenue potential, so that’s a problem for taxpayers, but the problem for Australian consumers is that unused spectrum, underutilised spectrum, is of course not providing any space for growth and innovation by those telcos. You would expect that if they had bought the whole package, that would provide maximum incentive for competition amongst those telco carriers, would provide maximum opportunity for them to innovate and of course this is very valuable property and the Minister himself has called it the waterfront property of the spectrum market. Well, unfortunately he’s gone to auction at his waterfront property and a third of it’s still sitting there on the shelf and that’s because he intervened himself in the process and set the reserve price just too high at his remarkable price by any world standards.
MARK PARTON: So, if and when you guys find yourselves in in the spring, will you be going down the path of, like, a… I don’t know… a quick sale of the spectrum at a discounted price to try to raise revenue?
SIMON BIRMINGHAM: Well, no, we won’t now, Mark, because that, of course, would be terribly unfair on the purchasers of the two-thirds of spectrum that has sold at the reserve price, so it now does have to basically sit and wait for a few years to be fair and reasonable to them and to sort of maintain some sense of market sensibility in what unfortunately is a very botched process. If the Minister had just accepted the advice of the independent authority, the Australian Communications and Media Authority, in the first place, gone with their recommendation of a reserve price instead of setting a far higher one himself presumably to impress Wayne Swan, then perhaps we would have got a markedly different outcome but we didn’t and we’ll just have to work with what we’ve got now.
MARK PARTON: Simon, thanks for spending some time talking about it this morning, appreciate it.
SIMON BIRMINGHAM: A pleasure, Mark.
MARK PARTON: Liberal Senator for South Australia Simon Birmingham.