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1998
THE PARLIAMENT OF THE COMMONWEALTH OF
AUSTRALIA
HOUSE OF REPRESENTATIVES
TELSTRA (TRANSITION TO
FULL PRIVATE OWNERSHIP) BILL 1998
EXPLANATORY MEMORANDUM
(Circulated by authority of Senator the Hon. Richard Alston, Minister for Communications, Information Technology and the Arts)
TELSTRA (TRANSITION TO FULL PRIVATE OWNERSHIP) BILL
1998
OUTLINE
This Bill amends the Telstra Corporation Act 1991
to repeal the provisions which require the Commonwealth to retain two-thirds of
the equity in the company.
Schedule 2 to the Bill will enable the
Commonwealth to sell 49.9 per cent of its equity interest in Telstra but will
require the Commonwealth to retain the remaining 50.1 per
cent.
Amendments are made to the Natural Heritage Trust of
Australia Act 1997 to increase funding from the partial sale of Telstra
for the Natural Heritage Trust of Australia Reserve by a further $250 million.
Other elements of the social bonus (totalling $421 million) are set out in
proposed Part 9 of the Telstra Corporation Act and consist
of:
• rural transaction centres ($70
million over 5
years);
• extended access to untimed local calls
($150 million over 3 years); meeting
the telecommunications needs of people in remote island communities, isolated
island communities or the Australian Antarctic Territory ($20 million over 3
years);
• Internet access for people in rural or regional areas
($36 million over 3 years);
• mobile phone coverage along highways
($25 million over 3
years);
• a Television Fund to enable improved television
reception, to extend coverage of SBS television, and to support a New Media Unit
to be established within the SBS ($120
million over 5 years).
Schedule 3 to the Bill provides a
mechanism for the subsequent sale of the Commonwealth's remaining equity in
Telstra, with a commencement trigger in Part 1 of Schedule 3. If an independent
inquiry into Telstra's performance finds that Telstra has met prescribed
criteria for a designated period of at least 6 months, it must issue a written
certificate to that effect and give the certificate to the Minister for
Communications, Information Technology and the Arts. The Minister is required to
arrange for a copy of the certificate to be published in the Commonwealth
Gazette. The day on which the copy of the certificate is published in the
Gazette is referred to as the inquiry certificate day. With effect from this
day, the Commonwealth
will be able to sell its remaining equity interest in
Telstra.
The Bill provides for the performance criteria to be prescribed
by regulation. This will enable further consultation with interested parties on
the criteria.
Part 2 of Schedule 3 to the Bill makes amendments to the
Telstra Corporation Act which allow the Commonwealth to sell its remaining
equity interest in Telstra.
The current provisions of the Telstra
Corporation Act which provide a power for the Minister to give directions to
Telstra and place reporting obligations on Telstra will cease to apply on a date
to be proclaimed when the Minister is satisfied that the Commonwealth's equity
has fallen below 50 per cent (Part 4 of Schedule 3 to the Bill).
The
foreign ownership provisions will be amended to apply the 35% total and 5%
individual limits in such a way that as the Commonwealth sells its remaining
shares in separate tranches, the limits will apply to the proportion of
non-Commonwealth shares following the sale of each tranche.
In general,
the current provisions of the Telstra Corporation Act which provided a robust
basis for the sale of one-third of the equity in Telstra will be retained for
the purposes of the further sale. The provision requiring the Commonwealth to
conduct the sale in accordance with Chapter 7 of the Corporations Law will also
be retained.
Schedule 2 to the Bill will make amendments to the sale
provisions to:
• insert a power to make regulations to specify
exceptions to the general exemption from State and Territory stamp duty and
other taxes in relation to the sale;
• enable changes to be made by
disallowable instrument to Telstra's constitution to remove special privileges
enjoyed by the Commonwealth when it is no longer the majority
shareholder;
• clarify the Commonwealth's ability to use the special
appropriation mechanisms of the Act to pay any claims against indemnities issued
by the Commonwealth in the sale process;
• give the relevant Ministers
a power to direct Telstra in relation to the giving of assistance in connection
with a sale scheme;
• make it clear that no liability or remedy may
arise under stock exchange listing rules from giving such assistance or
providing
information to the Commonwealth in connection with a sale scheme;
and
• update the delegation provisions.
The provisions in
the Telstra Corporation Act relating to Telstra's base of operations,
headquarters and nationality of the Chairman and a majority of directors being
Australian are being retained. However, the requirement for Telstra to be
incorporated in the ACT will be widened to permit it to be incorporated in any
State or internal Territory of Australia to avoid discrimination in favour of
any particular State or Territory.
Schedule 1 to the Bill contains minor
technical amendments and contains an amendment which requires at least 2
directors of Telstra to have knowledge of, or experience in, the communications
needs of regional areas.
Part 3 of Schedule 3 to the Bill includes
transitional provisions which, notwithstanding Telstra ceasing to be
Commonwealth controlled, preserve the rights of Telstra employees who have long
service leave or maternity leave entitlements or certain retirement benefits
under Commonwealth legislation, while they remain Telstra
employees.
Transitional provisions will also:
• preserve the
operation, in respect of events occurring prior to Telstra ceasing to be
Commonwealth controlled, of the Crimes (Superannuation Benefits) Act 1989
and Director of Public Prosecutions Act 1983; and
• ensure
that from the cessation of Commonwealth control, Telstra's liability in respect
of injuries suffered by employees prior to 1 July 1989 continues under section
128A of the Safety, Rehabilitation and Compensation Act
1988;
• remove Telstra from the operation of the Occupational
Health and Safety (Commonwealth Employment) Act 1991 from the cessation of
Commonwealth control;
• make it clear that Telstra employees' access to
Public Service mobility rights ceases when the Commonwealth no longer has a
controlling interest;
• end Telstra's future liability under the
Commonwealth Borrowing Levy Act 1987.
The Bill makes other minor
consequential changes and removes certain spent provisions.
FINANCIAL IMPACT STATEMENT
Full financial costs and benefits from the sale are difficult to quantify
at this stage.
Revenue of around $14 billion was achieved from the sale
of the first third of Telstra. The remaining two-thirds of Telstra has a current
market value of about $55 billion. The amount raised on the sale would be
dependent on the sale processes and market circumstances at the time.
The
costs of organising a sale are expected to be in line with previous Commonwealth
experience, that is around 1.5 to 2 per cent of gross sale proceeds. The sale
process will be managed by OASITO in the Finance and Administration Portfolio.
The issues raised in the recent Australian National Audit Office report on the
one-third sale will be taken into account.
The 1998-99 Budget papers
indicated that the effect of a Telstra sale in the outyears would be for
positive net income effects to broadly offset initial sale costs. However, the
papers also noted that estimates were highly dependent on the assumptions
made.
Proceeds from sale of the Commonwealth's remaining shareholding in
Telstra will be used substantially to retire public debt, thereby reducing the
debt servicing burden both now and on future generations. While the Commonwealth
will forgo future dividends from Telstra it will continue to benefit from
taxation payments, including through taxation of capital gains realised by the
private shareholders.
Apart from the benefits to be derived from the
reduction of debt (and associated reductions in interest payments) the
Government has committed to funding a number of `social bonus' measures out of
the proceeds of the next partial sale (ie. retaining majority Commonwealth
shareholding). The first stage of a further sale could yield proceeds in the
order of $10-15 billion, although daily variations in Telstra share price of 5
to 10 cents imply variations in proceeds of around $100-200 million and the
actual proceeds will also depend on overall market movements prior to the
sale.
The legislation makes appropriations consistent with the
Government's announced commitments for a range of measures and programs which
would enhance access to telecommunications, broadcasting, electronic
transactions and postal services, reduce the costs of some telephony services
and provide substantial additional funding for the Natural Heritage Trust. These
measures would be of particular benefit to residents of regional and remote
areas of Australia, including isolated island communities.
These
appropriations total $671 million to be expended over periods up to 5
years.
REGULATION IMPACT STATEMENT
Issue
It is Government policy that it will seek approval of
the Parliament to sell the remaining two-thirds of the Commonwealth's equity in
Telstra Corporation Limited. Prior to the last Federal election the Government
committed to pursue the sale in two stages: first, to sell down to a bare
majority Commonwealth shareholding, subject only to the passage of the proposed
Telecommunications (Consumer Protection and Service Standards) Bill 1998;
and second, no further sale of equity would occur prior to certification by
an independent inquiry that Telstra's service levels met certain performance
criteria to be specified in legislation.
Objective
The
objective of the Government is to privatise Telstra and, in so doing, ensure the
protection of the public interest in the provision of competitive, innovative
and affordable communications services to all Australians. The legislative
package providing for Telstra's sale supports this objective. The
telecommunications regulatory framework established to operate from 1 July 1997
provides the necessary consumer and competition safeguards for an open
telecommunication market, without reliance on ownership of a telecommunications
carrier. This position is supported by overseas experience, both in markets
where privatisations have occurred (eg the United Kingdom) and those where
carriers have traditionally been privately owned (eg the United States of
America).
The current regulatory framework was designed to apply to all
carriers, regardless of ownership. The particular provisions relating to Telstra
reflect its position in the market and its role as the universal service
provider rather than its ownership (ie they will not be affected by any change
in ownership). There is no legislative or administrative mechanism in the
current ownership arrangements which requires Telstra to provide services to
anyone. Telstra's service obligations are all set out, in detail, in separate
legislation and associated legislative instruments (eg licence conditions).
Telstra will continue to be subject to legal requirements in relation to
universal service following any further change in ownership and the Government
will retain the ability (with the cooperation of Parliament) to enhance the
obligations or their enforcement through legislative change, where necessary. As
competition develops Australians (wherever they live) will become less and less
dependent on Telstra for the delivery of services and will have greater choice
in terms of services and providers. This is already evident in a range of
telecommunications markets (eg long-distance and mobile telephony, Internet
service provision).
The proposed legislative package comprises three
Bills.
The Telecommunications (Consumer Protection
and Service Standards) Bill 1998 ('the Consumer Bill') brings together all
consumer safeguards, including the Ministerial power of direction to Telstra in
relation to consumer issues and provisions to strengthen the Customer Service
Guarantee (CSG). The Consumer Bill is essentially a transparency measure drawing
together the full range of consumer safeguards and carrier service obligations
in a single Bill. The impact of this Bill is discussed in the explanatory
memorandum to that Bill.
The
Telecommunications Legislation Amendment Bill 1998 ('TLAB') makes a number of
amendments consequential upon the creation of the Consumer Bill; as well as
competition policy and monitoring and reporting amendments and amendments aimed
at providing consumers with more information about terms and conditions
governing supply of goods and services by carriage service providers, previously
agreed by the Government. The impact of TLAB is discussed in the explanatory
memorandum to that Bill.
As indicated in the
Outline above, other amendments will also be made to the sale provisions. The
impact of the Sale Bill is discussed in the Outline
above.
The package contains two further
Bills which provide for consequential amendments to the
Telecommunications (Universal Service Levy) Act 1997
and the NRS Levy Imposition Act 1998.
Neither makes any changes to the delivery or terms of
the Universal Service Obligation or the National Relay
Service.
Options
Section
8AB of the Telstra Corporation Act 1991
provides that neither the Commonwealth nor Telstra can
do anything which would cause the Commonwealth's stake (described in a number of
ways in the legislation) to fall below two-thirds. Accordingly, to implement the
Government's election commitment to sell Telstra there is no alternative than to
take legislative action.
The alternative is
retention of a mix of public and private ownership (either at the current
66.6667 per cent/33.3333 per cent or 50.1 per cent/49.9 per cent). The drawbacks
of this arrangement are that the Government would have to continue to balance
both regulatory and shareholder objectives in addressing telecommunications
policy. Telstra would continue to be governed by a regime which seeks to
emphasise competitive neutrality on the regulatory side, but also requires
specific additional governance and reporting requirements related to public
ownership.
Telstra would be constrained in
its ability to raise new capital through equity (no Government will want to pay
two-thirds of a call on shareholders). It may also be constrained in forming
strategic alliances and may find itself restrained from entering potentially
lucrative ventures.
The community, private
shareholders, business analysts, Parliamentarians and Telstra management would
continue to have difficulty in discerning the differences between the roles of
Government as majority owner of Telstra
and
regulator of the telecommunications industry. Members of the public, in
particular, would continue to have difficulty in accepting that majority
ownership does not equate to Ministerial control of the management of dayto-day
operations of Telstra.
In short it would
tend to maintain the impression that Commonwealth ownership directly influences
the price, quality and range of services provided. The phased approach to full
private ownership is intended to allay fears that privatisation will lead to
service decline by introducing change on a graduated basis, but the confusion of
roles will continue for so long as the Commonwealth is an
owner.
Impact
Analysis
It is intended that the further
privatisation of Telstra will enhance its competitiveness and performance. A
recently published report by the Productivity Commission on the Performance of
Government Trading Enterprises 1991-92 to 1996-97 concluded that Telstra had
performed very strongly over the period, noting increased profits and dividends,
real price declines for services, improved access to a wider range of services,
particularly in regional areas and reduced days lost through industrial
disputation etc. The Report noted some mixed results on service quality
measures.
The period examined by the
Productivity Commission pre-dated the one-third privatisation. The period could
be characterised by corporatisation/commercialisation of Telstra, gradual
opening of the telecommunications market and substantial growth in the market.
It is too early to draw substantive conclusions about performance since
privatisation other than to note that Telstra's strong financial performance has
continued, competition in the telecommunications market is increasing and the
trend for decline in prices continues.
The
consequences of the first stage of further sale (ie down to 50.1 per cent
Commonwealth ownership) are likely to be minor compared to the current position
- apart from the financial impacts which are discussed
below.
The proposed legislation will reduce
the administrative requirements placed on Telstra as a result of direct
Government ownership, when/if the Commonwealth ceases to be the majority
shareholder. These requirements relate to the governance of Telstra and include
the directions power for the Minister and reporting requirements on Telstra. It
is intended that these will cease to apply on a date to be proclaimed when the
Minister is satisfied that the Commonwealth's equity has declined below 50 per
cent. A provision will also be inserted to enable changes to be made by
disallowable instrument to Telstra's constitution to remove special privileges
enjoyed by the Commonwealth when the Commonwealth is no longer the majority
shareholder. The Government will continue to maintain requirements for carriers
to have approved industry development
plans.
The proposed legislation will,
however, in no way lessen the obligations placed on Telstra as a
telecommunications carrier and service provider under other related legislation.
The legislation re-affirms the commitment to key community and regulatory
safeguards such as universal service
obligations; continued
residential access to untimed local calls and continued business access to
untimed local voice calls; the customer service guarantee; special benefits for
rural and regional customers; the price-cap regime and the maintenance of a
flexible regulatory structure that is designed to stimulate competition in the
telecommunications market and thus deliver cheaper prices and improved services
to Australian residential and business telecommunications users.
It is
intended to retain a number of provisions in the existing legislation which
require Telstra to be Australian controlled. The foreign ownership provisions
will be amended to apply the announced 35% total and 5% individual limits, in
such a way that as the Commonwealth sells its remaining shares in more than one
tranche, the limits will apply to the proportion of non-Commonwealth shares
following the sale of each tranche. Consistent with the Government's
announcement, provisions relating to Telstra's base of operations, headquarters
and nationality of the Chairman and a majority of directors to be Australian are
being retained.
The requirement for Telstra to be incorporated in the
Australian Capital Territory will be amended to permit Telstra to be
incorporated in any State or internal Territory of Australia. This will remove
an existing provision which could be seen as discriminatory and an unnecessary
constraint.
The provision for stamp duty exemption for the sale
transaction will be retained in the legislation. However, a power will be
inserted to make regulations to specify exceptions to the general exemption from
State and Territory stamp duty and other taxes in relation to the sale. This
will provide a mechanism for the Commonwealth to consider the application of
stamp duty to the sale in the context of Commonwealth/State taxation
arrangements.
The proposed legislation will also retain (and clarify
where necessary) provisions relating to the conduct of the sale, including
providing for exemptions from Corporations Law, securities exchange listing
rules and common law/equity in relation to assistance provided under the
legislation for the sale scheme. The further sale process will be conducted
consistent with Chapter 7 of the Corporations Law.
The impact of the
above legislation on the operations of businesses other than Telstra would
largely be indirect. However, certain sectors of the business community will
benefit directly from the provision of opportunities to be involved in the sale
process. The extent of that benefit will be a matter for the Office of Asset
Sales and Information Technology Outsourcing (OASITO) to manage in the sale
process.
The business sector will benefit indirectly from the further
widening of share ownership in Australia. Telstra employees, current
shareholders and new shareholders will be given the opportunity to increase or
obtain a stake in the company. Employees and small shareholders will be given
incentives to acquire shares in any further sales.
Some business
interests have expressed concern that full privatisation of Telstra will somehow
release Telstra from constraints that prevent it from bringing the full weight
of its size and market power to bear. The
competition issues have been
addressed in the development of the telecommunications regulatory framework
established through the Telecommunications Act 1997 and the Trade
Practices Act 1974. The Government has the continuing ability to refine this
framework as indicated by the Consumer Bill and TLAB (discussed in the
explanatory memoranda to those Bills). In doing so the Government needs to
differentiate between claims which are genuinely seeking redress for an unfair
competitive disadvantage and those which are simply seeking an unfair
competitive advantage.
On the other hand the Government does not want to
put Telstra in a position where it is incapable of responding flexibly and
commercially to developments in the market. For these reasons the regulatory
framework is designed overwhelmingly to put Telstra on an equal footing with its
competitors (the principle of competitive neutrality). Where special provisions
apply to Telstra they relate to its role in the market (eg as the Universal
Service Provider) or its degree of market power (eg price caps, power of
direction on consumer safeguards).
The scale of the proposed equity
raising will be significant relative to the size of the Australian equity
markets. This may lead to some market liquidity effects and to some commercial
pressure on share prices generally and on contemporary capital raising by other
firms. These factors will be addressed further when planning a specific sale
scheme pursuant to the legislation, drawing on the experience gained in the
first sale. The staged approach will, in itself, mitigate these
effects.
None of the above impacts are easily quantifiable. However, it
is difficult to see that there would be any adverse impact on the business
sector by the proposed legislation.
Financial Impacts
The
financial impacts are discussed in the Financial Impact Statement
above.
Consultation
Privatisation of Telstra has been a
clearly expressed policy in two Federal elections.
There has been
extensive public discussion and Parliamentary debate on the privatisation of
Telstra since April 1996. There have been two Senate enquiries on legislative
proposals for the first third sale and the proposed full sale. There has been
extensive discussion with industry and consumer representatives on aspects of
the legislation (including on the approach to performance criteria - see below)
and reviews of various aspects of the regulatory framework.
Conclusion
and Recommended Option
The proposed package of legislation will, if
agreed by Parliament, meet the Government's commitment to privatise Telstra in
stages. The package contains a number of elements designed to provide assurance
to the
community that telecommunications services will not decline and will
improve through and following the process of privatisation of
Telstra.
Implementation and Review
The proposals to reduce
the governance requirements placed on Telstra as the Commonwealth interest
declines should reduce the administrative burden on Telstra and on the agencies
involved in collecting and evaluating the information required under the current
legislation.
The provisions for an inquiry and for Telstra to meet
certain performance criteria on quality of service need to set meaningful
thresholds for performance that will provide assurance that acceptable standards
of service will be achieved and sustained. Consultations have been held with a
range of stakeholders, based on a discussion paper issued by the Department but
views were wide and varied. Additionally the performance measures which have
historically been measured by AUSTEL/ACA vary from what is now being undertaken
through the CSG processes, so there is a lack of comparable data. Further, the
ACA is currently reviewing the CSG and it would be desirable to await the
outcome of that review before determining the performance criteria. There will
need to be further consultations with industry, consumer organisations and the
public before the specific criteria can be set. The Bill, therefore, provides
for these to be set later by regulation which will be subject to disallowance by
the Parliament.
Review
No review is envisaged for this
legislation.
NOTES ON CLAUSES
Clause 1 - Short title
Clause 1 provides that the Bill,
when enacted, may be cited as the Telstra (Transition to Full Private
Ownership) Act 1998.
Clause 2 - Commencement
Clause 2
provides for the Bill, when enacted, to commence upon Royal Assent (subject to
specific commencement provisions outlined in item 1 of Schedule 3 to the
Bill).
Inquiry certificate day
Part 2 of Schedule 3 to the
Bill contains provisions which repeal the provisions in Division 2 of Part 2 of
the Telstra Corporation Act 1991 (which require the Commonwealth to
retain a particular level of equity in Telstra) and make consequential
amendments.
Subitem 1(1) of Schedule 3 provides that Part 2 of Schedule 3
commences
on the 'inquiry certificate day'. (If an independent inquiry into
Telstra's performance finds that Telstra has met prescribed criteria for a
designated period of at least 6 months, it must issue a written certificate to
that effect and give the certificate to the Minister for Communications,
Information Technology and the Arts. The Minister is required to arrange for a
copy of the certificate to be published in the Commonwealth Gazette. The
day on which the copy of the certificate is published in the Gazette is
referred to as the inquiry certificate day. With effect from this day, the
Commonwealth will be able to sell its remaining 50.1 per cent equity interest in
Telstra.)
Designated day
Part 3 of Schedule 3 to the Bill
permits the Auditor-General to resign as auditor of Telstra and inserts a new
Part 3A in the Telstra Corporation Act which contains transitional provisions
relating to the sale by the Commonwealth of its remaining equity interest in
Telstra. Some of those transitional provisions relate to Commonwealth Acts which
cease to apply to Telstra when the Commonwealth ceases to hold a majority of the
voting shares in Telstra.
Accordingly, the day this occurs (the
designated day) has been chosen as the day on which various Commonwealth Acts
should cease to apply in relation to Telstra and transitional provisions should
operate to preserve employee entitlements and benefits.
Subitem 1(2) of
Schedule 3 provides for Part 3 of Schedule 3 to commence on the designated
day.
The designated day is declared by the Minister under item 4 of
Schedule 3 and is the day which, in the Minister's opinion, is the first day on
which a majority of the voting shares in Telstra are or were acquired by persons
other than the Commonwealth.
Proclaimed day
Part 4 of
Schedule 3 to the Bill includes provisions which repeal:
• the
reporting requirements on Telstra which are imposed by Division 3 of Part 2 of
the Telstra Corporation Act; and
• the Minister's power in Part 3 of
the Act to give directions to Telstra in the public interest.
The
reporting requirements and directions power should cease to apply after the
Commonwealth ceases to hold a majority equity interest in
Telstra.
Special commencement arrangements apply to Part 4 of Schedule 3
to provide for the repeal of the reporting requirements after the Commonwealth
ceases to hold a majority equity interest in Telstra.
Subitem 1(3) of
Schedule 3 provides that Part 4 of Schedule 3 commences on a day to be fixed by
Proclamation.
Subitem 1(4) of Schedule 3 prevents such a Proclamation
being made until the Minister has certified in writing that the
majority-interest sale time has occurred. The 'majority-interest sale time' is
defined in subitem 2(6) of Schedule 3 to mean the first time after the
commencement of Part 2 of Schedule 3 when the Commonwealth no longer meets
various tests of majority Commonwealth ownership or control. These tests are
based on the current tests found in subsection 8AB(2) of the Telstra Corporation
Act.
Clause 3 - Schedule(s)
Subclause 3(l) provides
(subject to item 1 of Schedule 3 discussed above) for the making of the
amendments and repeals to the Acts and regulations specified in the Schedules in
accordance with the items in the Schedules and for the other items in the
Schedules to have effect according to their terms.
Subclause 3(2) ensures
that the amendment of regulations in the Schedules does not prevent later
amendments or repeal of those regulations by the Governor-General.
Schedule 1-General amendments
Commonwealth
Borrowing Levy Act 1987
Item 1 - Amendment of item 22 of the Schedule to the Commonwealth
Borrowing Levy Act
Item 1 repeals the reference to 'Telstra
Corporation Limited' in the Schedule to the Commonwealth Borrowing Levy Act
1987 so that a levy cannot be imposed under that Act on any new Telstra
borrowings. The levy is currently set at a level of zero so the provision has no
practical operation.
Item 2 - Transitional
Item 2 is a
transitional provision which, when read with clause 2 of the Bill, provides that
Telstra is not liable, from Royal Assent, to pay any levy imposed under the
Commonwealth Borrowing Levy Act 1987 in respect of any borrowing
undertaken before that time, though it is still required to pay an amount that
became payable before Royal Assent.
Telstra Corporation Act 1991
Item 3 - Amendment of section 3 of the Telstra Corporation
Act
Section 3 of the Telstra Corporation Act contains definitions of
terms used in the Act. The Act uses the term 'Minister for Finance'.
Item
3 inserts a definition of 'Minister for Finance' to mean the Minister
administering the Financial Management and Accountability Act
1997.
This Minister is currently the Minister for Finance and
Administration.
Item 4 - Amendment of paragraph 8BC(b) of the Telstra
Corporation Act
Item 4 makes a minor technical amendment to update
certain terms reflecting revised terminology used in the Telecommunications Act
1997.
Item 5 - Insertion of new section 8BUA of the Telstra
Corporation Act
Item 5 inserts a new section 8BUA in the Telstra
Corporation Act. This new section will require Telstra to ensure that at least 2
of its directors have knowledge of, or experience in, the communications needs
of regional areas of Australia (proposed subsection 8BUA(1)).
A
contravention of this requirement will not be a criminal offence, nor will it
affect the validity of any transaction undertaken in contravention of the
requirement. The Minister for Communications, Information Technology and the
Arts will, however, be able to apply to the Federal Court under Division 1 of
Part 2B of the Telstra Corporation Act for an injunction requiring Telstra to
remedy the contravention (proposed subsections 8BUA (2) and (3)).
Item
6 - Amendment of paragraph 8CC(b) of the Telstra Corporation Act
Item
6 makes a minor technical amendment to update certain terms reflecting revised
terminology used in the Telecommunications Act 1997.
Schedule 2-Amendments relating to the sale by the Commonwealth of 49.9% of its original equity interest in Telstra
Natural Heritage Trust of Australia Act 1997
Item 1- Amendment of section 3 of the Natural Heritage Trust of
Australia Act
Section 3 of the Natural Heritage Trust of Australia
Act 1997 contains a simplified outline to that Act. That Act establishes the
Natural Heritage Trust of Australia Reserve, the main objective of which is to
conserve, repair and replenish Australia's natural capital infrastructure. The
main source of money for the Reserve was the $1.1 billion from the initial
partial sale of Telstra.
It is proposed that an additional $250 million
be provided to the Reserve from the next partial sale of shares in Telstra. This
will be achieved by proposed section 22A of the Natural Heritage Trust
of Australia Act 1997 to be inserted by item 3 of Schedule
2 to the Bill. Item 1 amends the simplified outline to reflect this proposed
amendment.
Item 2 - Amendment of section 22 of the Natural Heritage
Trust of
Australia Act
Section 22 of the Natural
Heritage Trust of
Australia Act 1997 provides
that for each $1 that is received by the Commonwealth in a particular month by
way of proceeds of the sale of shares in Telstra, $1 is to be transferred to the
Reserve from the Consolidated Revenue Fund before the end of the next following
month. The total amount transferred to the Reserve is not to exceed $1.1
billion.
This provision was intended to deal with the funding of the
Reserve from the initial partial sale of shares in Telstra. Item 2 amends
section 22 to make this clear in the light of the proposed subsequent partial
sale of Telstra shares. Item 3 deals with the funding of the Reserve from the
next partial sale of shares in Telstra.
Item 3 - Insertion of new
section 22A of the Natural Heritage Trust of Australia Act
Item 3
inserts a new section 22A which will ensure that the Natural Heritage Trust of
Australia Reserve will be credited with an additional $250 million from the next
partial sale of shares in Telstra.
Telstra Corporation Act 1991
Item 4 - Amendment of section 3 of the Telstra Corporation Act
(definition of rights)
Item 4 amends the definition of the term
'rights' in section 3 consequential upon the repeal of Part 2C of the Telstra
Corporation Act by item 45 of Schedule 2 to the Bill.
Item 5 -
Amendment of section 8AA of the Telstra Corporation Act
Section 8AA
of the Telstra Corporation Act contains a simplified outline of Part 2 of that
Act dealing with Commonwealth ownership of Telstra.
Item 5 amends the
simplified outline as a consequence of item 6 below to indicate that the
Commonwealth will be able, in an initial further sale, to sell 49.9% of its
equity in Telstra, but will be required to retain the remaining
50.1%.
Item 6 - Amendment of section 8AB of the Telstra Corporation
Act
Item 6 amends section 8AB of the Telstra Corporation Act to
ensure that the Commonwealth will be able to sell down its current two-thirds
equity in Telstra provided it maintains an interest of 50.1 % in
Telstra.
Item 7 - Amendment of section 8AK of the Telstra Corporation
Act
Section 8AK of the Telstra Corporation Act provides that stamp
duty or other tax is not payable under a law of a State or Territory in respect
of designated matters (ie. certain matters relating to entering into or
carrying
out a Telstra Sale Scheme).
It is proposed to include a
regulation making power to enable stamp duty or other taxes to apply in some
circumstances or for particular kinds of stamp duty to apply to some
transactions related to the sale. Accordingly, this item adds a new subsection
8AK(3) which ensures that the regulations can create exceptions to the general
prohibition on stamp duty or other taxes applying to the sale.
Item 8
- Amendment of subsection 8AL(2) of the Telstra Corporation
Act
Subsection 8AL(1) of the Telstra Corporation Act provides an
appropriation for the costs and expenses incurred by the Commonwealth in
connection with carrying out a Telstra Sale Scheme. Subsection 8AL(2) gives
examples of the costs and expenses which are covered by subsection 8AL
(1).
Item 8 adds calls on indemnities granted by the Commonwealth as a
further example of the costs and expenses covered by subsection
8AL(1).
Item 9 - Repeal of sections 8AM to 8AP (inclusive) of the
Telstra Corporation Act
Sections 8AM to 8AP relate to the
Commonwealth taking over obligations of Telstra or a Telstra subsidiary before
the first sale of voting shares in Telstra.
These provisions were never
used and are now spent. Item 9 provides for their repeal.
Item 10 -
Insertion of proposed subsections 8AQ(4A) and (4B) of the Telstra Corporation
Act
Section 8AQ of the Telstra Corporation Act provides that Telstra,
or a member of the Board, may on their own initiative assist the Commonwealth in
connection with carrying out a Telstra sale scheme.
These are standard
provisions which apply generally in legislation relating to the sale of
Commonwealth assets. However, section 8AQ does not include provisions which
enable the Minister or the Minister for Finance and Administration to give
directions about the giving of such assistance.
It is intended as part of
the sale process to indemnify the directors of Telstra in relation to the
assistance they give to the Commonwealth. The directions power provides a
mechanism to manage the accountability for the potential exposure under the
indemnity.
Item 10 inserts new subsections (4A) and (4B) which, when read
with item 3 of Schedule 1 to the Bill, allow the Minister for Communications,
Information Technology and the Arts or the Minister for Finance and
Administration to give directions to Telstra or a member of the Board
about
giving assistance to the Commonwealth.
Items 11 to 13 -
Amendments of subsection 8AQ(5) of the Telstra Corporation Act
Items
11 and 12 make minor technical amendments consequential on the amendment in item
10.
Section 8AQ of the Telstra Corporation Act provides that Telstra, or
a member of the Board, may on their own initiative assist the Commonwealth in
connection with carrying out a Telstra sale scheme.
Subsection 8AQ(5) of
the Telstra Corporation Act is included to avoid any doubt that actions taken
under section 8AQ do not contravene the Corporations Law or a rule of common law
or equity.
Item 13 inserts a new paragraph 8AQ(5)(ab) to avoid any doubt
that actions taken under section 8AQ do not contravene the listing rules of a
securities exchange. Because of the definition of 'securities exchange' added by
item 15 and related definitions in section 8AY and the Corporations Law, this
exemption only applies in relation to local Australian securities
exchanges.
Item 14 - Amendment of subsection 8AQ(6) of the Telstra
Corporation Act
Item 14 makes a minor technical amendment
consequential on the amendment in item 10.
Item 15 - Insertion of
proposed subsection 8AQ(7) of the Telstra Corporation Act
Item 15
inserts definitions of the terms 'listing rules' and 'securities exchange' in
section 8AQ consequential on the insertion of a new paragraph 8AQ(5)(ab) by item
13.
Item 16 - Repeal of paragraph 8AS(1)(b) of the Telstra Corporation
Act
Section 8AS of the Telstra Corporation Act enables the Minister
for Finance and Administration to authorise the payment to Telstra of an amount
the Minister considers reasonable in relation to expenses incurred by Telstra or
a member of the Board in giving assistance in connection with a Telstra sale
scheme.
Item 16 repeals paragraph 8AS(1)(b) which otherwise limits the
kinds of assistance in relation to which payment can be made under section
8AS.
Item 17 - Relettering of paragraph 8AS(1)(c) of the Telstra
Corporation Act
Item 17 makes a minor technical amendment
consequential on the repeal in the preceding item.
Item 18 - Insertion
of proposed subsection 8AS(4) of the Telstra Corporation Act
Item 18
adds a new subsection 8AS(4) which is included for the avoidance of doubt. The
new subsection makes it clear that section 8AS, by providing specifically for
the making of a payment to Telstra, does not limit the general executive power
of the Commonwealth to make a payment to Telstra or a member of the
Board.
Item 19 - Insertion of proposed section 8AUA of the Telstra
Corporation Act -
Alteration of Telstra's constitution after the
minority-interest sale time
Item 19 inserts a new section 8AUA in the
Telstra Corporation Act to provide a simple mechanism to remove special rights
and privileges of the Commonwealth that are included in Telstra's constitution,
once the Commonwealth no longer controls a majority of the voting shares in
Telstra.
In the absence of such a provision, the company may be put to
the expense of holding a general meeting to make the necessary changes to the
constitution.
Proposed subsection 8AUA(1) enables the Minister to alter
Telstra's constitution if
• the alteration relates to a Telstra
sale scheme;
• the effect is to remove, restrict or limit any rights,
privileges or immunities of the Commonwealth or remove any requirements for
Commonwealth or Ministerial consent or direction; and
• the instrument
is made before the repeal of Division 3 of Part 2 (which contains Telstra's
reporting obligations).
Proposed subsection 8AUA(2) requires the Minister
to consult the members of the Board of Telstra before making such an
instrument.
Proposed subsection 8AUA(3) makes the instrument a
disallowable instrument which must be notified in the Commonwealth Gazette
and tabled in the Parliament and which is subject to disallowance by either
House of the Parliament.
Proposed subsection 8AUA(4) makes it clear that
the making of such an instrument does not contravene the Corporations Law, a
listing rule or a rule of common law or equity.
Proposed subsection
8AUA(5) makes it clear that the Telstra Corporation
Act
does not prevent further alteration of Telstra's constitution if such an
instrument is made.
Proposed subsection
8AUA(6) contains definitions of the terms 'listing rules' and 'securities
exchange'. Because of section 8AY and related definitions in the Corporations
Law, the definition of 'securities exchange' only includes local Australian
securities exchanges.
Item 20 - Insertion
of proposed paragraph 8AW(5)(ab) of the Telstra Corporation
Act
Subsection 8AW(5) of the Telstra
Corporation Act is included to avoid any doubt that the use or disclosure of
information by the Commonwealth under section 8AW does not contravene the
Corporations Law or a rule of common law or
equity.
Item 20 inserts a new paragraph
8AW(5)(ab) to also avoid any doubt that such use or disclosure does not
contravene the listing rules of a securities exchange. Because of the definition
of 'securities exchange' added by item 22 and related definitions in section 8AY
and the Corporations Law, this exemption only applies in relation to local
Australian securities exchanges.
Items 21
and 22 - Amendments of subsection 8AW(6) of the Telstra Corporation
Act
Items 21 and 22 insert definitions
of the term 'listing rules' and 'securities exchange' in subsection 8AW(6)
consequential on the insertion of new paragraph 8AW(5)(ab) by item
20.
Items 23 to 26 - Amendments of
section 8BB of the Telstra Corporation
Act
Item 23 makes a minor technical
amendment consequential on the amendment in item
24.
Item 24 amends a delegation provision to
enable the Minister for Communications, Information Technology and the Arts to
delegate powers under the Part to the Chief Executive, Office of Asset Sales and
IT Outsourcing.
Item 25 makes a minor
technical amendment consequential on the amendment in item
26.
Item 26 amends a delegation provision to
enable the Minister for Finance and Administration to delegate powers under the
Part to the Chief Executive, Office of Asset Sales and IT
Outsourcing.
Item 27 - Insertion of note
after note 2 to section 8BE of the Telstra Corporation
Act
Item 27 inserts a Note 2A to section
8BE as a consequence of the amendment to clause 12 of the Schedule to the
Telstra Corporation Act
made by item 56 of Schedule 2 to the
Bill.
Items 28 to 31- Amendments of section 8BG of the Telstra
Corporation Act
Section 8BG of the Telstra Corporation Act sets out
the foreign ownership limits which apply in relation to
Telstra.
Paragraph 8BG(a) sets out the maximum aggregate foreign
ownership allowed in Telstra, which is currently 11.6667% or 35% of one-third of
the shares in Telstra.
Item 28 changes the maximum aggregate foreign
ownership allowed in Telstra to 35%. Due to the amendments of clause 12 of the
Schedule to the Telstra Corporation Act made by item 56, aggregate foreign
ownership is only measured in relation to shares held by persons other than the
Commonwealth. This ensures that as the further sale of shares occurs in more
than one tranche, the 35% limit automatically applies to the shares in
non-Commonwealth hands following the sale of each tranche.
Paragraph
8BG(b) sets out the maximum individual foreign ownership allowed in Telstra,
which is currently 1.6667% or 5% of one-third of the shares in
Telstra.
Item 29 changes the maximum individual foreign ownership allowed
in Telstra to 5%. Due to the amendment of clause 12 of the Schedule to the
Telstra Corporation Act made by item 56, individual foreign ownership is only
measured in relation to shares held by persons other than the Commonwealth. This
ensures that as the further sale of shares occurs in more than one tranche, the
5% limit automatically applies to the shares in non-Commonwealth hands following
the sale of each tranche.
Item 30 repeals notes 1, 2 and 3 at the end of
section 8BG as a consequence of the amendments in items 28 and 29 and the repeal
of Division 5 of Part 2A (see item 35).
A new note is substituted as a
consequence of the amendments to clause 12 of the Schedule to the Telstra
Corporation Act made by item 56 of Schedule 2 to the Bill.
Item 31 makes
a minor technical amendment consequential on the amendment in item
30.
Items 32 to 34 - Amendments of section 81111 of the Telstra
Corporation Act
Section 81311 creates an offence for persons who
acquire shares in a company with the result that an unacceptable foreign
ownership situation is created or exacerbated.
Item 32 amends
subparagraph 8BH(b)(ii) to reflect the change to the maximum aggregate foreign
ownership allowed in Telstra from 11.6667% to 35%.
Item 33 amends
subparagraph 8BH(b)(iii) to reflect the change to the maximum individual foreign
ownership allowed in Telstra from 1.6667% to 5%.
Item 34 repeals notes 1,
2 and 3 at the end of section 8BH as a consequence of the amendments in items 32
and 33 and the repeal of Division 5 of Part 2A (see item 35).
A new note
is substituted as a consequence of the amendment to clause 12 of the Schedule to
the Telstra Corporation Act made by item 56 of Schedule 2 to the
Bill.
Item 35 - Repeal of Division 5 of Part 2A of the Telstra
Corporation Act
Division 5 of Part 2A of the Telstra Corporation Act
provided a mechanism for regulations to reduce the ownership limit percentages
in the event that the Commonwealth's one-third equity interest in Telstra was
transferred in two or more tranches.
Item 35 repeals this Division as a
consequence of the amendment to clause 12 of the Schedule to the Telstra
Corporation Act made by item 56 of Schedule 2 to the Bill. Item 56 provides for
ownership to be measured only in relation to shares held by persons other than
the Commonwealth. This ensures that as the further sale of shares occurs in more
than one tranche, the foreign ownership limits automatically apply to the shares
in non-Commonwealth hands following the sale of each tranche.
Item 36
- Amendment of subsection 8BS(1) of the Telstra Corporation
Act
Subsection 8BS(1) of the Telstra Corporation Act requires Telstra
to ensure that it remains incorporated under the Corporations Law of the ACT.
There is no reason in principle why Telstra should not be able to be
incorporated anywhere in Australia.
Item 36 amends subsection 8BS(1) to
require Telstra to remain incorporated under the Corporations Law of a State or
an internal Territory.
'State' is defined in paragraph 17(o) of the
Acts Interpretation Act 1901 to
mean a State of the Commonwealth of Australia. 'Internal Territory' is defined
in paragraph 17(pe) of that Act to mean the Australian Capital Territory, the
Jervis Bay Territory or the Northern Territory.
Item 37 - Amendment of
section 8BV of the Telstra Corporation Act
Section 8BV of the Telstra
Corporation Act enables the Minister, by notice before the minority-interest
sale time (ie. the time when a person other than the Commonwealth first became
the legal owner of voting shares in Telstra) to require Telstra's constitution
to divide its ordinary shares into particular classes.
This provision has
not been used and is now spent. Item 37 accordingly provides for its
repeal.
Items 38 to 41- Amendments of section 8CB of the Telstra
Corporation Act
Item 38 makes a minor technical amendment
consequential on the amendment in item 39.
Item 39 amends a delegation
provision to enable the Minister for Communications, Information Technology and
the Arts to delegate powers under Part 2A of the Telstra Corporation Act
(dealing with restrictions on ownership of Telstra), the Schedule to the Act
(dealing with ownership definitions) or regulations made for the purposes of
section 8BN of the Act (dealing with record-keeping and giving of information)
to the Chief Executive, Office of Asset Sales and IT Outsourcing.
Item 40
makes a minor technical amendment consequential on the amendment in item
41.
Item 41 amends a delegation provision to enable the Minister for Finance
and Administration to delegate powers under Part 2A of the Telstra Corporation
Act (dealing with restrictions on ownership of Telstra) to the Chief Executive,
Office of Asset Sales and IT Outsourcing.
Item 42 - Insertion of new
Part 2AA (Anti-avoidance) of the Telstra Corporation Act
Item 42
inserts a new Part 2AA in the Telstra Corporation Act to prevent Telstra
entering into schemes to avoid the application of provisions of the Act, such as
the foreign ownership provisions and the requirements for its head office and
base of operations to be in Australia.
Part 2AA -
Anti-avoidance
Proposed section 8CCA -
Anti-avoidance
Proposed subsection 8CCA(1) provides that Telstra must
not, either alone or together with other persons, begin to carry out a scheme
for the sole or dominant purpose of avoiding the application of any provision of
the Act.
Proposed subsection 8CCA(2) makes a contravention of proposed
subsection (1) a ground for obtaining an injunction under Division 1 of Part 2B
of the Act.
Proposed subsection 8CCA(3) provides that a contravention of
proposed subsection (1) does not affect the validity of any
transaction.
Proposed subsection 8CCA(4) provides a definition of the
term 'scheme' for the purposes of the section.
Item 43 - Amendment of
Part 2B (heading) of the Telstra Corporation Act
Part 2B -
Remedial provisions relating to Telstra
Item 43 amends the heading to
Part 2B consequential on the amendment in item 44.
Item 44 amends section
8CD, the injunction provision in Part 2B of the Telstra Corporation Act, to
enable injunctions to be sought in relation to the anti-avoidance provision to
be inserted by item 42.
Item 44 - Amendment of subsection 8CD(1) of
the Telstra Corporation Act
Subsection 8CD(1) of the Telstra
Corporation Act enables the Federal Court to grant a restraining injunction in
relation to a contravention of Part 2 or 2A of the Act.
Item 44 amends
subsection 8CD(1) to enable the Federal Court also to grant a restraining
injunction for a contravention of new Part 2AA of the Act to be inserted by item
42.
Item 45 - Repeal of Part 2C of the Telstra Corporation
Act
Part 2C of the Telstra Corporation Act provides for the
reaffirmation of the universal service obligation.
The wording in Part 2C
reflected the provisions of Part 13 of the Telecommunications Act 1991,
which was current at the time Part 2C was enacted. That wording is now out
of date as the universal service obligation is now provided for in Part 7 of the
Telecommunications Act 1997 (which is proposed to be transferred to Part
2 of the proposed Telecommunications (Consumer Protection and Service
Standards) Act 1998).
It is proposed to repeal Part 2C given that it
is now out of date.
Item 46 - Amendment of section 32 of the Telstra
Corporation Act
Item 46 makes a minor technical amendment
consequential on the amendment to subsection 8BS(1) of the Telstra Corporation
Act made by item 36 of this Schedule.
Items 47 to 50 - Amendments of
section 36 of the Telstra Corporation Act
Item 47 makes a minor
technical amendment consequential on the amendment to subsection 8BS(1) of the
Telstra Corporation Act made by item 36 of this Schedule.
Section 36 of
the Telstra Corporation Act requires the Auditor-General to be the auditor of
Telstra. It is intended that Telstra be able to appoint a further auditor. This
will enable a handover period from the Auditor-
General to the new
auditor.
The Auditor-General will be able to resign as Telstra's auditor
by written notice given to the Telstra at any time on or after the designated
day (item 22 of Schedule 3 to the Bill). The designated day is declared by the
Minister under item 4 of Schedule 3 and is the day which, in the Minister's
opinion, is the first day on which a majority of the voting shares in Telstra
are or were acquired by persons other than the Commonwealth.
Item 48
permits the Telstra Board to appoint an additional auditor at any time after the
Bill receives Royal Assent provided that auditor's consent has been obtained and
the Auditor-General has been consulted about the appointment. If the
Auditor-General resigns, subsection 327(6) of the Corporations Law will permit
the surviving auditor to continue to act as Telstra's auditor. This will enable
there to be no disruption of any audit which is only partially completed at the
time the Commonwealth ceases to have a majority equity interest in Telstra. If
the surviving auditor were to resign, subsection 327(5) of the Corporations Law
would require the vacancy in the office of auditor to be filled within one
month.
Item 49 amends subsection 36(4) consequential on the amendment in
item 48.
Item 50 inserts a new subsection 36(6), a transitional provision
to provide for the continued application of references in section 36 in a
situation where provisions of the Corporations Law are replaced.
Item
51- Amendment of subsection 41(1) of the Telstra Corporation Act
Item
51 makes a minor technical amendment consequential on the repeal of Part 2C of
the Telstra Corporation Act made by item 45 of this Schedule.
Item 52
- Insertion of new Part 9 of the Telstra Corporation Act - Social bonus
resulting from the partial sale of Telstra
Item 52 inserts a new Part
9 of the Telstra Corporation Act. This Part gives effect to policy statements
issued by the Government during the recent election period. In these statements
the Government indicated that certain 'social bonus' elements would be funded
from the proceeds of the further 16% sale of Telstra.
$70 million is to
be made available over 5 years to establish Rural Transaction Centres in certain
towns in rural Australia to provide services, where necessary, such as personal
banking services, postal services, Medicare Easyclaim facilities and telephone
and facsimile facilities.
$150 million is to be allocated over 3 years
with the intention of abolishing Telstra's pastoral call rate and to provide
extended access to untimed local calls. Funds allocated are intended to upgrade
the telecommunications network in remote Australia to handle the expected
increase in traffic.
$81 million more is proposed to be allocated over 3
years to the Regional Telecommunications Infrastructure Fund. This allocation is
not to be subject to the State and Territory sub-caps which presently apply to
that Fund.
$20 million of this amount is to be allocated to
telecommunications needs of remote and isolated island communities such as the
Torres Strait; the Cocos (Keeling) group; Christmas, Norfolk, King, Flinders,
Kangaroo and other Islands; and in the Australian Antarctic
Territories.
The remaining $61 million is to be allocated to provide
Internet access for people in rural or regional areas of Australia ($36 million)
and mobile phone coverage along highways ($25 million). The $36 million is
intended to stimulate Internet service delivery in regional and rural Australia,
in a manner that would enhance the commercial, competitive roll-out of these
services. As a result, all Australians would have local call access to the
Internet. Funds would be allocated to establish community-owned Internet points
of presence.
$120 million is to be allocated over 5 years to establish a
Television Fund, with the intention being to extend SBS television to
transmission areas with more than 10,000 people and to eradicate up to 250
television reception black spots with $2 million of the Fund being used to
establish a New Media Unit within the SBS.
Reception black spots can be
overcome by installing new or better transmitters, leading to improved reception
of national and commercial broadcasters. Funding for black
spots is intended to be made by application and awarded on the basis of need. $2
million is proposed to be provided (funded from the Television Fund) to the SBS
over 3 years to assist it to establish a new media
unit.
Administrative guidelines will be developed to deal with
how the elements of the social bonus are to be administered.
An
additional $250 million is to be provided to the Natural Heritage Trust of
Australia Reserve (see items 1 to 3 of Schedule 2 to the Bill). The Natural
Heritage Trust of Australia Reserve is established by the Natural Heritage Trust
of Australia Act 1997.
Part
9-Social bonus resulting from the partial sale of Telstra
Division 1 - Introduction
Proposed section 43 of the Telstra Corporation Act - Simplified
outline
Proposed section 43 of the Telstra Corporation Act contains a
simplified outline of proposed Part 9 of the Act to assist
readers.
Proposed section 44 of the Telstra Corporation Act -
Definitions
Proposed section 44 of the Telstra Corporation Act
contains definitions of
key terms used in proposed Part
9.
Proposed section 45 of the Telstra Corporation Act - Social bonus
commencement day
Proposed section 45 of the Telstra Corporation Act
defines the 'social bonus commencement day' for the purposes of proposed Part 9.
Unless the Minister for Finance and Administration agrees to an earlier advance
in relation to particular programs, this is the first day on which payments
could be made under the social bonus programs.
Proposed subsection 45(1)
provides that if, in the opinion of the Minister for Communications, Information
Technology and the Arts, a particular day is the day on which the total amount
received by the Commonwealth, after the Bill receives Royal Assent, by way of
proceeds of the sale of shares in Telstra first reaches $671 million, the
Minister must, by written instrument, declare the day to be the social bonus
commencement day. The figure of $671 million represents $421 for the social
bonus elements in Part 9 of the Telstra Corporation Act and an additional $250
million to be provided to the Natural Heritage Trust of Australia
Reserve.
The term 'proceeds of the sale of shares in Telstra' is defined
in proposed section 44 to include:
• an amount received by the
Commonwealth directly or indirectly from the sale-scheme trustee (as defined in
section 8AJ of the Telstra Corporation Act) or an investor in Telstra under a
Telstra sale scheme (as defined in section 8AJ); and
• an amount
received by the Commonwealth by way of the redemption of redeemable preference
shares in Telstra held by the Commonwealth, where the redemption was in
accordance with a Telstra sale scheme.
Proposed subsection 45(2) provides
that the Minister's declaration has effect accordingly.
Proposed
subsection 45(3) provides that a copy of the Minister's declaration must be
published in the Commonwealth Gazette within 21 days after the social bonus
commencement day.
Division 2 - Rural Transaction Centres Reserve
Division 2 gives effect to the Government's commitment to establish Rural
Transaction Centres in certain towns in rural Australia to provide services,
where necessary, such as personal banking services, postal services, Medicare
Easyclaim facilities and telephone and facsimile facilities.
Proposed
section 46 of the Telstra Corporation Act - Rural Transaction Centres
Reserve
Proposed subsection 46(1) provides for the establishment of
the Rural Transaction Centres Reserve.
Proposed subsection 46(2) provides
that the Rural Transaction Centres Reserve is a component of the Reserved Money
Fund under the Financial Management and Accountability Act
1997.
Proposed subsection 46(3) provides that amounts equal to income
derived from the investment of money in the Rural Transaction Centres Reserve
are to be transferred to that Reserve from the Consolidated Revenue
Fund.
Proposed subsection 46(4) provides that the Rural Transaction
Centres Reserve is to be administered by the Department of Transport and
Regional Services.
Proposed section 47 of the Telstra Corporation Act
- Transfer of money to the Rural Transaction Centres Reserve
Proposed
section 47 provides that as soon as practicable after the social bonus
commencement day (as defined in proposed section 45), $70 million is to be
transferred to the Rural Transaction Centres Reserve from the Consolidated
Revenue Fund.
Proposed section 48 of the Telstra Corporation Act -
Purposes of the Rural Transaction Centres Reserve
Proposed subsection
48(1) provides that the purposes of the Rural Transaction Centres Reserve are as
follows:
• the purpose of enabling people in rural areas to have
access to services and technology that enables them to obtain information or
carry out transactions; or
• a purpose incidental or ancillary to the
above purposes eg. to cover running costs of the
rural transaction centres program; or
• the making of grants of
financial assistance for either of the above purposes.
Proposed
subsection 48(2) provides that money in the Rural Transaction Centres Reserve
must not be debited after 30 June 2004 or such later day (being earlier
than
1 July 2005) as the Minister for Transport and Regional Services
specifies by notice published in the Commonwealth Gazette.
The
Minister for Transport and Regional Services is given the power to specify a
later day for the program to end to provide some flexibility at the tail-end of
the program. For example, some projects may obtain approval close to 30 June
2004, but funds may not be paid until after that date.
Proposed
subsection 48(3) gives examples of the types of services intended to be covered
by proposed section 48. These include phone services, fax services, postal
services, data transmission services, Internet services and videoconferencing
services.
Proposed subsection 48(4) gives examples of the types of
transactions intended to be covered by proposed section 48. These include
commercial transactions, banking transactions, insurance transactions, dealings
about employment matters and dealings with governments and government
authorities.
Proposed section 49 of the Telstra Corporation Act -
Advances
Proposed subsection 49(1) empowers the Minister for Finance
and Administration, during the 'interim period', by notice published in the
Commonwealth Gazette, to determine that a specified amount is to be transferred
to the Rural Transaction Centres Reserve from the Consolidated Revenue Fund by
way of an advance on account of the amount that may become transferable to the
Reserve under proposed section 47. Such a determination will have effect
accordingly. The 'interim period' is defined in proposed section 44 as the
period commencing on Royal Assent and ending immediately before the social bonus
commencement day as defined in proposed section 45.
The Minister for
Finance and Administration is given the power to advance the beginning of the
program to enable early commencement of some funding before the sale proceeds
are in. That Minister also determines the amount of funding available during
this interim period under proposed subsection 49(1).
Proposed subsection
49(2) provides that for each $1 transferred under proposed subsection 49(1), the
amount transferred under proposed section 47 is to be reduced by
$1.
Proposed section 50 of the Telstra Corporation Act - Grant of
financial assistance to a State
Proposed section 50 deals with grants
of financial assistance from the Rural Transaction Centres Reserve to a State or
the Australian Capital Territory or the Northern Territory. (The term 'State' is
defined in proposed section 44 to include these Territories.)
The terms
and conditions on which that financial assistance is granted are to be set out
in a written agreement between the Commonwealth and the relevant State or
Territory (proposed subsection 50(2)).
An agreement under proposed
subsection 50(2) will be able to be entered into by the Minister for Transport
and Regional Services or his or her delegate (see proposed section 70) on behalf
of the Commonwealth (proposed subsection 50(3)).
Proposed section 51
of the Telstra Corporation Act - Grant of financial assistance to a person other
than a State
Proposed section 51 deals with grants of financial
assistance from the Rural Transaction Centres Reserve to persons other than a
State or the Australian Capital Territory or the Northern Territory. (The term
'State' is defined in proposed section 44 to include these
Territories.)
The term 'person' is defined in
paragraph 22(1)(a) of the Acts Interpretation Act 1901
to include a body politic and a body corporate (such
as a company or an incorporated association) as well as an
individual.
The terms and conditions on
which that financial assistance is granted are to be set out in a written
agreement between the Commonwealth and the relevant person (proposed subsection
51(2)).
An agreement under proposed
subsection 51(2) will be able to be entered into by the Minister for Transport
and Regional Services or his or her delegate (see proposed section 70) on behalf
of the Commonwealth (proposed subsection 51(3)).
Division 3 - Untimed Local Call Access Reserve
Division 3 gives effect to the Government's
commitment to provide extended access to untimed local calls. The intention is
that all telephone calls within an extended zone would become untimed local
calls.
In addition, it is proposed to
provide certain people in inner extended zones who currently have limited access
to untimed local calls with extended access to such calls. These people can make
untimed local calls to others in their standard zone but are surrounded by areas
where people cannot make untimed local calls to others in their
areas.
Funds allocated are intended to
upgrade the telecommunications network in remote Australia to handle the
expected increase in traffic.
Proposed
section 52 of the Telstra Corporation Act - Untimed Local Call Access
Reserve
Proposed subsection 52(1)
provides for the establishment of the Untimed Local Calls Access
Reserve.
Proposed subsection 52(2) provides
that the Untimed Local Calls Access Reserve is a component of the Reserved Money
Fund under the Financial Management and Accountability Act
1997.
Proposed subsection 52(3) provides that
amounts equal to income derived from the investment of money in the Untimed
Local Calls Access Reserve are to be transferred to that Reserve from the
Consolidated Revenue Fund.
Proposed
subsection 52(4) provides that the Untimed Local Calls Access Reserve is to be
administered by the Department of Communications, Information Technology and the
Arts.
Proposed section 53 of the Telstra
Corporation Act - Transfer of money to the Untimed Local Call Access
Reserve
Proposed section 53 provides
that as soon as practicable after the social bonus commencement day (as defined
in proposed section 45), $150 million is to be transferred to the Untimed Local
Calls Access Reserve from the
Consolidated Revenue
Fund.
Proposed section 54 of the Telstra Corporation Act - Purposes of
the Untimed Local Call Access Reserve
Proposed subsection 54(1)
provides that the purposes of the Untimed Local Call Access Reserve are as
follows:
• the purpose of enabling carriage service providers (as
defined in the Telecommunications Act 1997) to provide access to untimed
local calls to people who are outside standard zones (as defined by Part 4 of
the proposed Telecommunications (Consumer Protection and Service Standards)
Act 1998) and who do not currently have access to untimed local calls;
or
• the purpose of enabling carriage service providers to provide
extended access to untimed local calls to people in standard zones who currently
have only limited access to such calls and who are included in a class of
persons specified in the regulations;
• a purpose incidental or
ancillary to either of these purposes eg. to cover
running costs of this program; or
• the making of grants of financial
assistance for any of the above purposes.
Proposed subsection 54(2)
provides that money in the Untimed Local Call Access Reserve must not be debited
after 30 June 2002 or such later day (being earlier than
1 July 2003) as
the Minister for Communications, Information Technology and the Arts specifies
by notice published in the Commonwealth Gazette.
The Minister for
Communications, Information Technology and the Arts is given the power to
specify a later day for the program to end to provide some flexibility at the
tail-end of the program. For example, some projects may obtain approval close
to
30 June 2002, but funds may not be paid until after that
date.
Proposed subsection 54(3) provides that for the purposes of
proposed section 54, calls are untimed if, and only if, the charges for those
calls are worked out by reference to the number of such calls made during a
particular period, regardless of how long each call lasted.
Proposed
section 55 of the Telstra Corporation Act - Advances
Proposed
subsection 55(1) empowers the Minister for Finance and Administration, during
the 'interim period', by notice published in the Commonwealth Gazette, to
determine that a specified amount is to be transferred to the Untimed Local Call
Access Reserve from the Consolidated Revenue Fund by way of an advance on
account of the amount that may become transferable to the Reserve under proposed
section
53. Such a determination will have effect
accordingly. The 'interim period' is defined in proposed section 44 as the
period commencing on Royal Assent and ending immediately before the social bonus
commencement day as defined in proposed section
45.
The Minister for Finance and
Administration is given the power to advance the beginning of the program to
enable early commencement of some funding before the sale proceeds are in. That
Minister also determines the amount of funding available during this interim
period under proposed subsection
55(1).
Proposed subsection 55(2) provides
that for each $1 transferred under proposed subsection 55(1), the amount
transferred under proposed section 53 is to be reduced by
$1.
Proposed section 56 of the Telstra
Corporation Act - Grant of financial assistance to a
State
Proposed section 56 deals with
grants of financial assistance from the Untimed Local Call Access Reserve to a
State or the Australian Capital Territory or the Northern Territory. (The term
'State' is defined in proposed section 44 to include these
Territories.)
The terms and conditions on
which that financial assistance is granted are to be set out in a written
agreement between the Commonwealth and the relevant State or Territory (proposed
subsection 56(2)).
An agreement under
proposed subsection 56(2) will be able to be entered into by the Minister for
Communications, Information Technology and the Arts or his or her delegate (see
proposed section 69) on behalf of the Commonwealth (proposed subsection
56(3)).
Proposed section 57 of the
Telstra Corporation Act - Grant of financial assistance to a person other than a
State
Proposed section 57 deals with
grants of financial assistance from the Untimed Local Call Access Reserve to
persons other than a State or the Australian Capital Territory or the Northern
Territory. (The term 'State' is defined in proposed section 44 to include these
Territories.)
The term 'person' is defined
in paragraph 22(1)(a) of the Acts
Interpretation
Act 1901 to include a body politic and a body
corporate (such as a company or an incorporated association) as well as an
individual.
The terms and conditions on
which that financial assistance is granted are to be set out in a written
agreement between the Commonwealth and the relevant person (proposed subsection
57(2)).
An agreement under proposed
subsection 57(2) will be able to be entered into by the Minister for
Communications, Information Technology and the Arts or his or her delegate (see
proposed section 69) on behalf of the Commonwealth (proposed subsection
57(3)).
Division 4--Supplementation of the
Regional
Telecommunications Infrastructure Fund
Proposed section 58 of the Telstra Corporation Act - Meeting the
telecommunications needs of people in isolated or remote island communities or
the Australian Antarctic Territory
Proposed section 58 of the Telstra
Corporation Act gives effect to the Government's commitment to allocate
additional funds to the Regional Telecommunications Infrastructure Fund (RTIF)
(which is a component of the Reserved Money Fund under the Financial
Management and Accountability Act 1997). This allocation is intended to
assist in serving the telecommunications needs of remote and isolated island
communities such as islands in the Torres Strait; islands in the Cocos (Keeling)
group; Christmas, Norfolk, King, Flinders, Kangaroo and other Islands; and in
the Australian Antarctic Territories. The allocation is proposed not to be
subject to the State and Territory sub-caps which presently apply to
RTIF.
Proposed subsection 58(1) provides that as soon as practicable
after the social bonus commencement day (as defined in proposed section 45), $20
million is to be transferred to RTIF from the Consolidated Revenue
Fund.
Proposed subsection 58(2) provides that the $20 million allocation
may only be debited for the following purposes:
• the purpose of
assisting in meeting the telecommunications needs of people in remote island
communities, isolated island communities (examples of which are set out in
proposed subsection 58(8)) or the Australian Antarctic Territory;
• a
purpose incidental or ancillary to the above purpose (such as providing for the
running costs of the program);
• the making of grants of financial
assistance for either of the above purposes.
Proposed subsection 58(3)
makes it clear that the purposes of RTIF as presently constituted will be taken
to include each purpose set out in proposed subsection 58(2).
Proposed
subsection 58(4) provides that the proposed $20 million allocation to RTIF will
not be able to be debited after 30 June 2002 or such later day (being earlier
than
1 July 2003) as the Minister for Communications, Information
Technology and the Arts specifies by notice published in the Commonwealth
Gazette.
The Minister for Communications, Information Technology
and the Arts is given the power to specify a later day for the program to end to
provide some flexibility at the tail-end of the program. For example, some
projects may obtain approval close to
30 June 2002, but funds may not be
paid until after that date.
Proposed subsection 58(5) empowers the
Minister for Finance and
Administration, during the 'interim period', by
notice published in the Commonwealth Gazette, to determine that a
specified amount is to be transferred to RTIF from the Consolidated Revenue Fund
by way of an advance on account of the amount that may become transferable to
RTIF under proposed subsection 58(1). Such a determination will have effect
accordingly. The 'interim period' is defined in proposed section 44 as the
period commencing on Royal Assent and ending immediately before the social bonus
commencement day as defined in proposed section 45.
The Minister for
Finance and Administration is given the power to advance the beginning of the
program to enable early commencement of some funding before the sale proceeds
are in. That Minister also determines the amount of funding available during
this interim period under proposed subsection 58(5).
Advances made under
proposed subsection 58(5) may only be debited for the purposes specified in
proposed subsection 58(2) (proposed subsection 58(7)).
Proposed
subsection 58(6) provides that for each $1 transferred under proposed subsection
58(5), the amount transferred under proposed subsection 58(1) is to be reduced
by $l.
Proposed section 59 of the Telstra Corporation Act - Internet
access for people in rural and regional areas
Proposed section 59 of
the Telstra Corporation Act will give effect to the Government's commitment to
allocate funds to provide Internet access for people in rural or regional areas
of Australia. The funds are intended to stimulate Internet service delivery in
regional and rural Australia, in a manner that would enhance the commercial,
competitive roll-out of these services. As a result, it is intended that
virtually all Australians would have local call access to the Internet. The
funds are also to be allocated to establish community-owned Internet points of
presence.
Proposed subsection 59(1) provides that as soon as practicable
after the social bonus commencement day (as defined in proposed section 45), $36
million is to be transferred to the Regional Telecommunications Infrastructure
Fund (RTIF) from the Consolidated Revenue Fund. (RTIF is an existing component
of the Reserved Money Fund under the Financial Management and Accountability
Act 1997). This allocation is proposed not to be subject to the State and
Territory sub-caps which presently apply to RTIF.
Proposed subsection
59(2) provides that the $36 million allocation may only be debited for the
following purposes:
• the purpose of facilitating the provision of
Internet access for people in rural or regional areas, being access that is
reasonably priced and involving sufficient bandwidth to enable people in these
areas to make use of the Internet;
• a purpose incidental or ancillary
to the above purpose (such as providing the running costs for this
program);
• the making of grants of financial assistance for either of
the above
purposes.
An example of facilitating access to the Internet
is increasing the number of Internet points of presence in rural or regional
areas. An Internet point of presence is the location of an access point to the
Internet proper, and is typically operated by an Internet service provider. It
includes an array of information and telecommunications technologies necessary
for managing and maintaining Internet connections. It typically includes modems,
databases, switches and routers. A point of presence may actually reside in
rented space owned by the telecommunications carrier to which the Internet
service provider is connected and may be 'physical' (located within a particular
region) or 'virtual' (located outside such an area, perhaps in a capital city,
but providing services to a rural or regional area).
Proposed subsection
59(3) makes it clear that the purposes of RTIF as presently constituted will be
taken to include each purpose set out in proposed subsection
59(2).
Proposed subsection 59(4) provides that the proposed $36 million
allocation to RTIF will not be able to be debited after 30 June 2002 or such
later day (being earlier than
1 July 2003) as the Minister for
Communications, Information Technology and the Arts specifies by notice
published in the Commonwealth Gazette.
The Minister for
Communications, Information Technology and the Arts is given the power to
specify a later day for the program to end to provide some flexibility at the
tail-end of the program. For example, some projects may obtain approval close
to
30 June 2002, but funds may not be paid until after that
date.
Proposed subsection 59(5) empowers the Minister for Finance and
Administration, during the 'interim period', by notice published in the
Commonwealth Gazette, to determine that a specified amount is to be
transferred to RTIF from the Consolidated Revenue Fund by way of an advance on
account of the amount that may become transferable to RTIF under proposed
subsection 59(1). Such a determination will have effect accordingly. The
'interim period' is defined in proposed section 44 as the period commencing on
Royal Assent and ending immediately before the social bonus commencement day as
defined in proposed section 45.
Advances made under proposed subsection
59(5) may only be debited for the purposes specified in proposed subsection
59(2) (proposed subsection 59(7)).
Proposed subsection 59(6) provides
that for each $1 transferred under proposed subsection 59(5), the amount
transferred under proposed subsection 59(1) is to be reduced by
$1.
Proposed section 60 of the Telstra Corporation Act - Mobile phone
coverage along highways
Proposed section 60 of the Telstra
Corporation Act is intended to give effect to the Government's commitment to
provide mobile phone coverage along highways.
Proposed subsection 60(1)
provides that as soon as practicable after the social bonus commencement day (as
defined in proposed section 45), $25 million is to be transferred to the
Regional Telecommunications Infrastructure Fund (RTIF) from the Consolidated
Revenue Fund. (RTIF is an existing component of the Reserved Money Fund under
the Financial Management and Accountability Act 1997). This allocation is
proposed not to be subject to the State and Territory sub-caps which presently
apply to RTIF.
Proposed subsection 60(2) provides that the proposed $25
million allocation may only be debited for the following
purposes:
• the purpose of facilitating mobile phone coverage along
highways;
• a purpose incidental or ancillary to this purpose (eg.
providing running costs for this program);
• the making of grants of
financial assistance for either of the above purposes.
Proposed
subsection 60(3) makes it clear that the purposes of RTIF as presently
constituted will be taken to include each purpose set out in proposed subsection
60(2).
Proposed subsection 60(4) provides that the proposed $25 million
allocation to RTIF will not be able to be debited after 30 June 2002 or such
later day (being earlier than
1 July 2003) as the Minister for
Communications, Information Technology and the Arts specifies by notice
published in the Commonwealth Gazette.
The Minister for
Communications, Information Technology and the Arts is given the power to
specify a later day for the program to end to provide some flexibility at the
tail-end of the program. For example, some projects may obtain approval close
to
30 June 2002, but funds may not be paid until after that
date.
Proposed subsection 60(5) empowers the Minister for Finance and
Administration, during the 'interim period', by notice published in the
Commonwealth Gazette, to determine that a specified amount is to be
transferred to RTIF from the Consolidated Revenue Fund by way of an advance on
account of the amount the may become transferable to RTIF under proposed
subsection 60(1). Such a determination will have effect accordingly. The
'interim period' is defined in proposed section 44 as the period commencing on
Royal Assent and ending immediately before the social bonus commencement day as
defined in proposed section 45.
The Minister for Finance and
Administration is given the power to advance the beginning of the program to
enable early commencement of some
funding before the
sale proceeds are in. That Minister also determines the amount of funding
available during the interim period under proposed subsection
60(5).
Advances made under proposed
subsection 60(5) may only be debited for the purposes specified in proposed
subsection 60(2) (proposed subsection
60(7)).
Proposed subsection 60(6) provides
that for each $1 transferred under proposed subsection 60(5), the amount
transferred under proposed subsection 60(1) is to be reduced by
$1.
Proposed section 61 of the Telstra
Corporation Act - Grant of financial assistance to a
State
Proposed section 61 deals with
grants of financial assistance from RTIF relating
to:
• meeting the telecommunications
needs of people in isolated or remote island communities or the Australian
Antarctic Territory;
• providing Internet
access for people in rural and regional areas;
and
• providing mobile phone coverage
along highways;
to a State or the Australian
Capital Territory or the Northern Territory. (The term 'State' is defined in
proposed section 44 to include these
Territories.)
The terms and conditions on
which that financial assistance is granted are to be set out in a written
agreement between the Commonwealth and the relevant State or Territory (proposed
subsection 61(2)).
An agreement under
proposed subsection 61(2) will be able to be entered into by the Secretary to
the Department of Communications, Information Technology and the Arts or his or
her delegate (see proposed section 69) on behalf of the Commonwealth (proposed
subsection 61(3)).
Proposed section 62 of
the Telstra Corporation Act - Grant of financial assistance to a person other
than a State
Proposed section 62 deals
with grants of financial assistance from RTIF relating
to:
• meeting the telecommunications
needs of people in isolated or remote island communities or the Australian
Antarctic Territory;
• providing Internet
access for people in rural and regional areas;
and
• providing mobile phone coverage
along highways;
to persons other than a
State or the Australian Capital Territory or the Northern Territory. (The term
'State' is defined in proposed section 44 to include these
Territories.)
The term 'person' is defined
in paragraph 22(1)(a) of the Acts Interpretation Act 1901
to include a body politic and a body corporate (such
as a company or an incorporated association) as well as an
individual.
The terms and conditions on
which that financial assistance is granted are to be set out in a written
agreement between the Commonwealth and the relevant person (proposed subsection
62(2)).
An agreement under proposed
subsection 62(2) will be able to be entered into by the Secretary to the
Department of Communications, Information Technology and the Arts or his
or her delegate (see proposed section 71) on behalf of the Commonwealth
(proposed subsection 62(3)).
Division 5 - Television Fund Reserve
Proposed section 63 of the Telstra Corporation
Act - Television Fund Reserve
Proposed
section 63 of the Telstra Corporation Act gives effect to the Government's
commitment to establish a Television Fund and a New Media Unit within the SBS.
It is intended to extend SBS television to transmission areas with more than
10,000 people and to eradicate up to 250 television reception black
spots.
SBS television extensions to major
population centres will generally involve the installation of a high power
transmitter to provide the main coverage in each area and one or more low power
transmitters to provide infill coverage. Under the extension program, SBS
television will be made available to a further 1.5 million Australians in more
than 25 regions.
Reception black spots can
be overcome by installing new or better transmitters, leading to improved
reception of national and commercial broadcasters. Funding will be granted on
the basis of need. Guidelines covering criteria for grant applications and
funding will be developed by the Department of Communications, Information
Technology and the Arts.
Proposed subsection
63(1) establishes the Television Fund
Reserve.
Proposed subsection 63(2) provides
that the Television Fund Reserve is a component of the Reserved Money Fund under
the Financial Management and Accountability Act
1997.
Proposed subsection 63(3) provides that
amounts equal to income derived from the investment of money in the Television
Fund Reserve are to be transferred to the Television Fund Reserve from the
Consolidated Revenue Fund.
Proposed
subsection 63(4) provides that the Television Fund Reserve is to be administered
by the Department of Communications, Information Technology and the
Arts.
Proposed section 64 of the Telstra
Corporation Act - Transfer of
money to the Television Fund
Reserve
Proposed section 64 of the Telstra Corporation Act provides
that as soon as practicable after the social bonus commencement day (as defined
in proposed section 45), $120 million is to be transferred to the Television
Fund Reserve from the Consolidated Revenue Fund.
Proposed section 65
of the Telstra Corporation Act - Purposes of the Television Fund
Reserve
Proposed subsection 65(1) of the Telstra Corporation Act sets
out the purposes of the Television Fund Reserve. These
are:
• extending areas in which television services transmitted by
the SBS (otherwise than by means of direct satellite broadcast to a viewer's
home) are capable of being received;
• enabling people to obtain
reception, or improved reception, of television broadcasting services
transmitted by the national broadcasters (the ABC and the SBS) and by commercial
broadcasters;
• supporting the establishment of a New Media Unit within
the SBS;
• a purpose incidental or ancillary to any of the above
purposes eg. providing running costs for the above programs;
• the
making of grants of financial assistance for any of the above
purposes.
Proposed subsection 65(2) provides that money in the Television
Fund Reserve will not be able to be debited after 30 June 2004 or such later day
(being earlier than 1 July 2005) as the Minister specifies by notice published
in the Commonwealth Gazette.
The Minister is given the power to
specify a later day for the program to end to provide some flexibility at the
tail-end of the program. For example, some projects may obtain approval close to
30 June 2004, but funds may not be paid until after that
date.
Proposed section 66 of the Telstra Corporation Act -
Advances
Proposed subsection 66(1) empowers the Minister for Finance
and Administration, during the 'interim period', by notice published in the
Commonwealth Gazette, to determine that a specified amount is to be
transferred to the Television Fund Reserve from the Consolidated Revenue Fund by
way of an advance on account of the amount that may become transferable to the
Reserve under proposed section 64. Such a determination will have effect
accordingly. The 'interim period' is defined in proposed section 44 as the
period commencing on Royal Assent and ending immediately before the social bonus
commencement day as defined in proposed section 45.
The Minister for
Finance and Administration is given the power to advance the beginning of the
program to enable early commencement of some funding before the sale proceeds
are in. That Minister also determines the
amount of
funding available during this interim period under proposed subsection
66(1).
Proposed subsection 66(2) provides
that for each $1 transferred under proposed subsection 66(1), the amount
transferred under proposed section 56 is to be reduced by
$1.
Proposed section 67 of the Telstra
Corporation Act - Grant of financial assistance to a
State
Proposed section 67 deals with
grants of financial assistance in connection with the purposes set out in
proposed section 65 to a State or the Australian Capital Territory or the
Northern Territory. (The term 'State' is defined in proposed section 44 to
include these Territories.)
The terms and
conditions on which that financial assistance is granted are to be set out in a
written agreement between the Commonwealth and the relevant State or Territory
(proposed subsection 67(2)).
An agreement
under proposed subsection 67(2) will be able to be entered into by the Secretary
to the Department of Communications, Information Technology and the Arts or his
or her delegate (see proposed section 69) on behalf of the Commonwealth
(proposed subsection 67(3)).
Proposed
section 68 of the Telstra Corporation Act - Grant of financial assistance to a
person other than a State
Proposed
section 68 deals with grants of financial assistance in connection with the
purposes set out in proposed section 65 to persons other than a State or the
Australian Capital Territory or the Northern Territory. (The term 'State' is
defined in proposed section 44 to include these
Territories.)
The term 'person' is defined
in paragraph 22(1)(a) of the Acts Interpretation Act 1901 to include a
body politic and a body corporate (such as a company or an incorporated
association) as well as an individual.
The
terms and conditions on which that financial assistance is granted are to be set
out in a written agreement between the Commonwealth and the relevant person
(proposed subsection 68(2)).
An agreement
under proposed subsection 68(2) will be able to be entered into by the Secretary
to the Department of Communications, Information Technology and the Arts or his
or her delegate (see proposed section 71) on behalf of the Commonwealth
(proposed subsection 68(3)).
Division 6 - Delegation
Proposed section 69 of the Telstra Corporation
Act - Delegation by Minister
Proposed
subsection 69(1) of the Telstra Corporation Act empowers the Minister for
Communications, Information Technology and the Arts to delegate all or any of
his or her powers under proposed sections 45, 54, 56,
57, 58, 59, 60
and 65 to:
• the Secretary to the Department of Communications,
Information Technology and the Arts; or
• a person holding or
performing the duties of an SES office in that Department.
Proposed
subsection 69(2) provides that the delegate is, in the exercise of the power
delegated under subsection 69(1), subject to the directions of the Minister for
Communications, Information Technology and the Arts.
Proposed section
70 of the Telstra Corporation Act - Delegation by Minister for Transport and
Regional Services
Proposed section 70(1) of the Telstra Corporation
Act empowers the Minister for Transport and Regional Services to delegate all or
any of his or her powers under proposed sections 48, 50 and 51
to:
• the Secretary to the Department of Transport and Regional
Services; or
• a person holding or performing the duties of an SES
office in that Department.
Proposed subsection 70(2) provides that the
delegate is, in the exercise of the power delegated under subsection 70(1),
subject to the directions of the Minister for Transport and Regional
Services.
Proposed section 71 of the Telstra Corporation Act -
Delegation by Secretary to the Department of Communications, Information
Technology and the Arts
Proposed subsection 71(1) of the Telstra
Corporation Act empowers the Secretary to the Department of Communications,
Information Technology and the Arts to delegate all or any of his or her powers
under proposed sections 61, 62, 67 and 68 to a person holding or performing the
duties of an SES office in that Department.
Proposed subsection 71(2)
provides that the delegate is, in the exercise of the power delegated under
subsection 71(1), subject to the directions of the Secretary.
Items 53
and 54 - Amendments of clause 2 of the Schedule of the Telstra Corporation Act
(paragraph (b) of the definition of foreign person)
Item 53
makes a minor technical amendment to paragraph (b) of the definition of 'foreign
person' in clause 2 of the Schedule to the Telstra Corporation Act.
The
amendment deems a company incorporated outside Australia to be a foreign person
for the purposes of the ownership provisions of the Act where a foreigner holds
a stake in the company of '15% or more', rather than the current amount of 'more
than 15%'.
The amendment aligns the definition in the Telstra Corporation
Act more closely with the definition of a 'foreign person' in subsection 5(1) of
the Foreign Acquisitions and Takeovers Act 1975.
Item 54 makes a
similar minor technical amendment to paragraph (c) of the definition of 'foreign
person' in clause 2 of the Schedule to the Telstra Corporation Act.
The
amendment deems a company to be a foreign person for the purposes of the
ownership provisions of the Act where a group of foreign persons holds a total
stake in the company of '40% or more', rather than the current amount of 'more
than 40%'.
The amendment aligns the definition in the Telstra Corporation
Act more closely with the definition of a 'foreign person' in subsection 5(1) of
the Foreign Acquisitions and Takeovers Act 1975.
Item 55 -
Amendment of subparagraphs (b)(iii) and (iv) of clause 3 of the Schedule to the
Telstra Corporation Act
Item 55 makes a minor technical amendment to
subparagraphs (b)(iii) and (iv) of clause 3 of the Schedule to the Telstra
Corporation Act to remove unnecessary references to New Zealand
citizens.
Items 56 to 58 - Amendment of clause 12 of the Schedule to
the Telstra Corporation Act
Clause 12 of the Schedule to the Telstra
Corporation Act provides the mechanism for calculating a person's 'direct
control interests' in a company at a particular time. Under clause 11, in
determining a particular type of stake that a person holds in a company, the
person's direct control interests of that type are aggregated with the 'direct
control interests' of that type held by the person's associates.
Item 56
inserts a new subclause 12(4A) to provide that in determining the direct control
interest of a particular type that a person holds in Telstra, it is to be
assumed that the only shares in Telstra are shares held by persons other than
the Commonwealth.
New subclause 12(4B) provides that for the purposes of
new subclause 12 (4A), a 'share' does not include an interest in a share. Clause
8 of the Schedule to the Telstra Corporation Act contains a definition of the
term 'interest in a share' for the purposes of the ownership provisions. New
subclause 12(413) displaces this definition, so that new subclause 12(4A) would
have the ordinary meaning that shares held in legal ownership by persons other
than the Commonwealth are taken into account for the purposes of the foreign
ownership restrictions. Because the shares held by the Commonwealth are ignored,
it follows that any interests in and rights flowing from those shares must also
be ignored.
Accordingly, if a Telstra sale scheme for the sale of the
remaining Commonwealth equity involves the sale of shares in more than one
tranche, the number of shares that can be held by foreign persons will increase
progressively with each tranche, but will always be limited to 35% in aggregate,
and 5% individually, of the shares no longer held in legal ownership by the
Commonwealth.
Item 57 makes a minor technical amendment consequential on
the amendment made by item 58, discussed below.
Subclause 12(5) of the
Schedule to the Telstra Corporation Act provides a fractional tracing rule for
the purpose of identifying a person's interest in a company when that interest
may be held through interposed companies.
When calculating the interests
of a group of persons for the purposes of the 35% aggregate foreign ownership
limitations, it is arguable that the fractional tracing rule can result in the
anomalous situation that foreign interests held through an interposed foreign
company are counted in addition to the interests of the first foreign company (a
form of double counting).
Item 58 inserts new subclauses 12(6) and (7)
which have the effect of preventing this form of double counting.
Schedule 3 - Amendments relating to the sale by the Commonwealth of more than 50% of its original equity interest in Telstra
Part 1 - Commencement
Item 1 - Commencement
Item 1 of Schedule 3 to the Bill
contains commencement provisions relating to Parts 2 to 4 of Schedule
3.
Inquiry certificate day
Part 2 of Schedule 3 to the Bill
contains provisions which repeal the provisions in Division 2 of Part 2 of the
Telstra Corporation Act (which require the Commonwealth to retain two-thirds of
the equity in Telstra) and make consequential amendments.
Subitem 1(1) of
Schedule 3 provides that Part 2 of Schedule 3 commences on the 'inquiry
certificate day'. (If an inquiry into Telstra's performance finds that Telstra
has met prescribed criteria for a designated period of at least 6 months, it
must issue a written certificate to that effect and give the certificate to the
Minister for Communications, Information Technology and the Arts. The Minister
is required to arrange for a copy of the certificate to be published in the
Commonwealth Gazette. The day on which the copy of the certificate is
published in the Gazette is referred to as the inquiry certificate day.
With effect from this day, the Commonwealth will be able to sell its remaining
50.1 per cent equity interest in Telstra.)
Designated
day
Part 3 of Schedule 3 to the Bill permits the Auditor-General to
resign as Telstra's auditor and inserts a new Part 3A in the Telstra Corporation
Act which contains transitional provisions relating to the sale by the
Commonwealth of its remaining equity interest in Telstra. Some of those
transitional provisions relate to Commonwealth Acts which cease to apply to
Telstra when the Commonwealth ceases to hold a majority of the voting shares in
Telstra.
Accordingly, the day this occurs (the designated day) has been
chosen as the day on which various Commonwealth Acts should cease to apply in
relation to Telstra and transitional provisions should operate to preserve
employee entitlements and benefits.
Subitem 1(2) of Schedule 3 provides
for Part 3 of Schedule 3 to commence on the designated day.
The
designated day is declared by the Minister under item 4 of Schedule 3 and is the
day which, in the Minister's opinion, is the first day on which a majority of
the voting shares in Telstra are or were acquired by persons other than the
Commonwealth.
Proclaimed day
Part 4 of Schedule 3 to the
Bill includes provisions which repeal:
• the reporting requirements
on Telstra which are imposed by Division 3 of Part 2 of the Telstra Corporation
Act; and
• the Minister's power in Part 3 of the Act to give directions
to Telstra in the public interest.
The reporting requirements and
directions power should cease to apply after the Commonwealth ceases to hold a
majority equity interest in Telstra.
Special commencement arrangements
apply to Part 4 of Schedule 3 to provide for the repeal of the reporting
obligations after the Commonwealth ceases to hold a majority equity interest in
Telstra.
Subitem 1(3) of Schedule 3 provides that Part 4 of Schedule 3
commences on a day to be fixed by Proclamation.
Subitem 1(4) of Schedule
3 prevents such a Proclamation being made until the Minister has certified in
writing that the majority-interest sale time has occurred. The
'majority-interest sale time' is defined in subitem 2(6) of Schedule 3 to mean
the first time after the commencement of Part 2 of Schedule 3 when the
Commonwealth no longer meets various tests of majority Commonwealth ownership or
control. These tests are based on the current tests found in subsection 8AB(2)
of the Telstra Corporation Act.
Item 2 - Independent inquiry into
Telstra's performance
Subitem 2(1) empowers the Minister for
Communications, Information Technology and the Arts to arrange for an
independent inquiry to be established into whether Telstra has met certain
prescribed performance criteria for a particular designated period. The role of
the inquiry would be to assess Telstra's performance against criteria set out in
the regulations relating to service levels to customers in metropolitan, rural
and remote areas.
Subitem 2(9) provides that for the purposes of item 2,
a 'designated period' is each of one or more specified periods, or each period
in a specified series of periods, of at least 6 months specified in the
regulations. A designated period will be able to begin before or after Royal
Assent
The ability to specify a series of periods will ensure that
subsequent inquiries can be held if the first inquiry finds that Telstra has not
met the prescribed criteria for the particular designated period dealt with by
that inquiry. Subitem 2(12) provides that to avoid doubt, if a person or body
has conducted an inquiry in relation to a designated period, item 2 does not
prevent an inquiry being conducted under subitem 2(1) in relation to another
designated period.
Subitem 2(10) provides that for the purposes of item
2, the 'prescribed criteria' are the criteria specified in the
regulations.
Subitem 2(13) provides for the making of regulations for the
purposes of item 2. These regulations will be required to be made within 18
months of the commencement of item 2.
Subitem 2(2) provides that an
inquiry in relation to a designated period will be required to begin during, or
within 6 months after the end of, the designated period.
Subitem 2(3)
provides that if such an inquiry finds that Telstra has met the prescribed
criteria for a designated period, it will be required to issue a written
certificate to that effect and give the certificate to the Minister for
Communications, Information Technology and the Arts.
Subitem 2(4)
provides that the Minister must arrange for a copy of the certificate to be
published in the Commonwealth Gazette.
Subitem 2(5) provides that
the day on which the copy of the certificate is published in the Gazette
is referred to as the inquiry certificate day. With effect from this day,
the Commonwealth will be able to sell its remaining 50.1 per cent equity
interest in Telstra.)
Subitem 2(6) requires the Minister to table copies
of the certificate before each House of Parliament within 15 sitting days of
that House after receiving the certificate.
Subitem 2(7) enables the ACA
or the ACCC, or both, to assist the inquiry. That assistance may include (but is
not limited to) the provision of information, advice, and the making available
of resource and facilities such
as secretariat services and clerical
assistance.
Subitem 2(8) ensures that the ACA will be able to conduct an
investigation under Part 26 of the Telecommunications Act or exercise its
infonmationgathering powers under Part 27 of that Act in connection with
providing assistance to the inquiry under subitem 2(7).
Subitem 2(11)
ensures that the inquiry will be independent. It provides that the following
persons and bodies are not eligible to conduct the
inquiry:
• Telstra or an officer (such as a director or company
secretary) or employee of Telstra;
• a Telstra subsidiary - see the
definition of that term and the term 'subsidiary' in section 3 of the Telstra
Corporation Act - or an officer or employee of such a subsidiary;
• an
employee of the Commonwealth;
• a Commonwealth authority or an employee
of such an authority; or
• a person who holds a full-time office under
a law of the Commonwealth.
Item 3 - Automatic repeal of this
Schedule
Item 3 provides that if, at the end of 24 months after the
commencement of item 3, Part 2 of Schedule 3 has not commenced and no
regulations are in force for the purposes of subitem 2(10), Schedule 3 is
repealed on the first day after the end of that period. This provision is
included to ensure that unproclaimed legislation will not remain on the statute
books for an indefinite period in the event that the Parliament disallows the
regulations specifying the prescribed criteria.
Item 4 - Designated
day for Telstra
Item 4 provides a mechanism for public notification
of the day on which the Commonwealth ceases to have a controlling interest in
Telstra. Various provisions of the Bill will operate with effect from the
designated day. For example, the employee benefits saving provisions will apply
from that day.
Subitem 4(1) provides that the Minister must declare the
day on which a majority of the voting shares in Telstra are acquired by persons
other than the Commonwealth as the 'designated day' for Telstra.
Subitem
4(2) provides that the declaration has effect accordingly.
Subclause 4(3)
requires a copy of the declaration to be published in the Commonwealth
Gazette within 21 days after the designated day.
Part 2 - Amendments commencing on the inquiry certificate day
Item 5 - Amendment of section 8AA of the Telstra Corporation
Act
Section 8AA of the Telstra Corporation Act contains a simplified
outline of Part 2 of that Act dealing with Commonwealth ownership of
Telstra.
Item 5 amends the simplified outline as a consequence of the
repeal of Division 2 of Part 2 by item 6.
The simplified outline will be
amended to indicate that the Commonwealth will be able, with effect from the
inquiry certificate day, to sell its remaining 50.1 % equity interest in
Telstra.
Item 6 - Repeal of Division 2 of Part 2 of the Telstra
Corporation Act
Following the making of the amendments in Schedule 2
to the Bill, Division 2 of Part 2 of the Telstra Corporation Act will require
the Commonwealth to retain 50.1 % of the equity interest in Telstra.
Item
6 repeals that Division to enable the Commonwealth to sell its remaining equity
interest in Telstra.
Items 7 and 8 - Amendments of section 8AJ of the
Telstra Corporation Act
Subsection 8AJ(2) of the Telstra Corporation
Act defines the term 'Telstra sale scheme' for the purposes of the
Act.
Item 7 amends subsection 8AJ(2) to make a technical amendment
consequential on the repeal of Division 2 of Part 2 by item 6. The amendment
recognises that the object of a Telstra sale scheme may be to transfer the whole
or a part of the Commonwealth's equity in Telstra to other persons.
Item
8 repeals subsection 8AJ(3) consequential on the repeal of Division 2 of Part 2
by item 6 of Schedule 3 to the Bill.
Item 9 - Amendment of sections
8CI, 8CJ and 8CK of the Telstra Corporation Act
Item 9 makes minor
technical amendments consequential on the repeal of Division 2 of Part 2 by item
6 of Schedule 3 to the Bill.
Item 10 - Amendment of subsections 8CI(6)
and 8CJ(6) of the Telstra Corporation Act
Item 10 makes minor
technical amendments consequential on the repeal of Division 2 of Part 2 by item
6 of Schedule 3 to the Bill.
Item 11- Amendment of section 8CL of the
Telstra Corporation Act
Item 11 makes a minor technical amendment
consequential on the repeal of Division 2 of Part 2 by item 6 of Schedule 3 to
the Bill.
Part 3 - Amendments commencing on the designated
day
Long Service Leave (Commonwealth Employees) Regulations
Item 12 - Amendment of item 4 of Schedule 1A to the Long Service Leave
(Commonwealth Employees) Regulations
Item 12 repeals item 4 in
Schedule IA to the Long Service Leave (Commonwealth Employees) Regulations to
ensure that from the designated day Telstra employees will not continue to
accrue benefits under the Long Service Leave
(Commonwealth Employees) Act 1976.
Item 21 of Schedule 3 to
the Bill inserts a new Division 1 of Part 3A in the Telstra Corporation Act
which includes savings provisions for Telstra employee long service leave
entitlements accrued up to the designated day.
Maternity Leave (Commonwealth Employees) Regulations
Item 13 - Repeal of item 2 of Schedule 2A to the Maternity Leave
(Commonwealth Employees) Regulations
Item 13 repeals item 2 in
Schedule 2A to the Maternity Leave (Commonwealth Employees)
Regulations.
The amendment ensures that employees of Telstra do not, from
the designated day, continue to be eligible for maternity leave under the
Maternity Leave (Commonwealth Employees) Act
1973.
Item 21 of Schedule 3 to the Bill inserts a new Division
4 of Part 3A in the Telstra Corporation Act which includes savings provisions
for maternity leave entitlements of Telstra employees accrued up to the
designated day, including benefits for those employees entitled to begin their
maternity leave within the 12 months following the designated day.
Occupational Health and Safety (Commonwealth Employment) Act 1991
Item 14 - Amendment of the Schedule to the Occupational Heath and
Safety (Commonwealth Employment) Act
Item 14 omits a reference to
Telstra from the Schedule to the Occupational
Health and Safety (Commonwealth Employment) Act 1991 (the `OH&S
Act'), so that Telstra is not, from the designated day, deemed to be a
Government Business Enterprise for the purposes of that Act. After the
designated day, a Telstra body will also not be a Commonwealth authority for the
purposes of the Act.
Item 21 of Schedule 3 to the Bill inserts a new
section 9S in the Telstra Corporation Act which is a related transitional
provision.
Telstra Corporation Act 1991
Items 15 to 20 - Amendments of section 3 of the Telstra Corporation
Act
Item 4 of Schedule 3 to the Bill provides a mechanism for the
Minister to
declare a designated day for Telstra.
Item 15 inserts a
definition of the term 'designated day' for the purposes of the new Part 3A
inserted by item 21 of Schedule 3 to the Bill.
Item 16 inserts a
definition of the term 'employee' in section 3 consequential on the inclusion of
the new Part 3A which contains various employee benefit savings provisions (see
item 21 of Schedule 3).
Item 17 inserts a definition of the term 'Long
Service Leave Act' in section 3 consequential on the inclusion of the new Part
3A which contains employee benefit savings provisions relating to long service
leave.
Item 18 inserts a definition of the term 'Maternity Leave Act' in
section 3 consequential on the inclusion of the new Part 3A which contains
employee benefit savings provisions relating to maternity leave.
Item 19
inserts a definition of the term 'SRC Act' in section 3 consequential on the
inclusion of a transitional provision relating to safety, rehabilitation and
compensation by item 21 of Schedule 3 to the Bill (see proposed section 9H of
the Telstra Corporation Act).
Item 20 inserts a definition of the term
'Telstra body' in section 3.
'Telstra body' is defined to mean Telstra or
a Telstra subsidiary. For the purposes of the employee benefit savings
provisions, a reference to a Telstra body means a body corporate that was a
Telstra body immediately before the designated day. This will ensure the
effectiveness of the savings provisions if a Telstra subsidiary subsequently
ceases to be owned by Telstra after the designated day.
Item 21 -
Insertion of new Part 3A of the Telstra Corporation Act before Part 4 of that
Act
Item 21 inserts a new Part 3A in the Telstra Corporation Act
dealing with transitional provisions relating to the sale of the remaining
Commonwealth equity interest in Telstra.
Part 3A - Transitional provisions relating to the sale by the Commonwealth of its remaining equity interest in Telstra
The transitional provisions continue or modify certain obligations of
Telstra and its subsidiaries. They also provide for the continuation of certain
employee benefits arising from pre-sale service that otherwise would be foregone
due to the sale. The saving provisions also recognise post-sale service of
specific categories of employees as public employment for the purposes of
qualifying for certain deferred pension benefits.
Many of the
transitional and savings provisions operate in relation to the 'designated day'.
Item 4 of Schedule 3 to the Bill provides a mechanism for public notification of
the day on which the Commonwealth ceases to have a controlling interest in
Telstra. The 'designated day' is the day declared by the Minister for
Communications, Information Technology and the Arts by
written instrument
under that item.
Division 1 - Long service leave
Employees of Telstra currently accrue long service leave entitlements
under the Long Service Leave (Commonwealth Employees) Act 1976 (the `LSL
(CE) Act').
However, for most employees, pre-sale service of less than 10
years will not normally qualify for any long service leave entitlement under the
LSL(CE) Act. To ensure equity, these provisions provide that when those
employees either complete 10 years service with Telstra or cease to be employees
in circumstances under which the LSL(CE) Act entitlements would have applied had
a majority of voting shares in Telstra not been sold, long service leave
benefits at the LSL(CE) Act standard are provided in respect of service before
the designated day.
As a result of these provisions, a Telstra employee
with 9 years service as at the designated day could be granted long service
leave of 9/1 Oths of 3 months once the employee has served a further one year
with a Telstra body (making a combined service period of 10 years). The
employee's long service leave entitlements relating to service after the
designated day will accrue and be credited in accordance with the long service
leave regime in place after the designated day. The Division also saves
entitlements accrued under the LSL(CE) Act before the designated day (generally
by those employees with at least 10 years service before the designated
day).
Proposed section 9A of the Telstra Corporation Act -
Interpretation
Proposed section 9A provides for the definition of
terms used in this Division.
Proposed subsection 9A(1) provides that
expressions used in this Division have the same meaning as in the LSL(CE)
Act.
The 'combined service period' of an employee is defined in proposed
subsection 9A(2) as the total of the employee's service for the purposes of the
LSL(CE) Act before the designated day and the employee's service with a Telstra
body after the designated day.
Proposed section 9B of the Telstra
Corporation Act - Long service leave for employees with less than 10 years
service
This provision applies to a person who was an employee of
Telstra immediately before the designated day and whose period of service at the
designated day was less than 10 years. If the employee continues to be employed
by a Telstra body (as defined in item 20 of Schedule 3 to the Bill) until his or
her combined service period is at least 10 years, a Telstra body may grant the
employee long service leave.
Proposed subsection 9B(5) provides for
granting of long service leave at retirement or retrenchment as long as the
employee has a combined service period of at least one year. Leave granted under
this subsection is to be taken so as to expire immediately before the employee
retires or is
retrenched (proposed subsection 9B(7)).
Proposed
subsection 9B(6) allows for a Telstra body to grant long service leave on half
pay.
Proposed subsection 9B(8) provides for the application of section 20
of the LSL(CE) Act to calculate the rate of salary to be used in working out the
full salary of an employee for the purposes
of this provision.
In each case the period of long service leave is
calculated by reference to the period of service as at the sale day (proposed
section 9E).
Proposed section 9C of the Telstra Corporation Act -
Payments in lieu of long service leave for employees with less than 10 years
service
Proposed section 9C provides that a Telstra body (as defined
in item 20 of Schedule 3 to the Bill) must, in certain circumstances, pay an
amount to an employee in lieu of the employee taking long service leave
(proposed subsection 9C(1)). For proposed section 9C to apply, an employee must
have been an employee of Telstra immediately before the designated day and not
have accrued a period of service under the LSL(CE) Act of 10 or more years at
that time (proposed subsection 9C(2)).
Proposed section 9C applies to
persons who cease to be employees of Telstra after the sale day, but not to
those who cease to be employees because they die (proposed subsection 9C(3)). If
a person ceases to be an employee and has at that time a combined service period
of at least 10 years, the employing Telstra body must pay him or her an amount
in lieu of long service leave (proposed subsection 9C(4)). This includes a
person who voluntarily leaves employment prior to reaching the minimum
retirement age.
If a person does not have a combined service period of 10
years or more, but does have a combined service period of at least one year,
then he or she is entitled to be paid an amount in lieu of long service leave if
the reason that he or she ceases to be an employee is:
• that he or
she has reached minimum retirement age or because of retrenchment (proposed
subsection 9C(5)); or
• because of ill health (proposed subsection
9C(6)).
The amount that an employee is paid in lieu is equivalent to his
or her full salary in respect of his or her
long service leave credit under proposed subsection 9E(2).
Proposed
subsection 9C(9) provides for the application of section 21 of the LSL(CE) Act
to calculate the rate of salary to be used in working out the
full salary of an employee for the purposes
of this provision.
Proposed section 9D of the Telstra Corporation Act
- Payments on the death of an employee
Proposed section 9D requires
payment to a deceased employee's dependant (or dependants) of the amount that
would have been payable to the employee under proposed section 9C on the day of
the employee's death, as if the employee had at that time stopped being an
employee having reached the minimum retirement age. This provision applies if
immediately before the designated day the employee had less than 10 years
service and at the time of death had a combined service period of at least one
year.
Proposed section 9E of the Telstra Corporation Act - Employee's
long service leave credit for the purposes of sections 9B and
9C
Proposed section 9E defines the long service leave credit of a
Telstra employee as being equal to the employee's long service leave credit
under the LSL(CE) Act as at the designated day. In cases falling under proposed
section 9C, the long service leave credit is reduced by any amount of leave
already taken under proposed section 9B.
Proposed section 9F of the
Telstra Corporation Act - Division not to affect an employee's post-sale long
service leave rights
Proposed section 9F is included to avoid doubt
and declares that the provisions of the Division do not affect an employee's
post-sale long service leave rights.
Long service leave associated with
service after the designated day with Telstra will be a matter for Telstra and
its employees to agree in the context of relevant State and Territory
legislation.
Proposed section 9G of the Telstra Corporation Act -
Saving - Long Service Leave Act
Proposed section 9G ensures that
accrued long service leave credits (ie for those employees with 10 or more years
of service on the designated day) arising from previous service with Telstra
under the LSL(CE) Act are retained post-sale.
Division 2 - Operation of the Safety, Rehabilitation
and
Compensation Act 1988 ('SRC Act')
Proposed section 9H of the Telstra Corporation Act - Operation of
section 128A of the SRC Act
Proposed section 9H provides that a
Telstra body (as defined in item 20 of Schedule 3 to the Bill) that was, before
the designated day, liable as a prescribed Commonwealth authority to pay an
amount in respect of an injury, loss or damage suffered by one of its employees
prior to 1 July 1989, under section 128A of the SRC Act, continues to be so
liable after the sale day.
Division 3 - Retirement benefits
Proposed section 9J of the Telstra Corporation Act - Deferred benefits
under the Defence Force Retirement and Death Benefits Act
1973
Proposed section 9J relates to the Defence Force
Retirement and Death Benefits Act 1973 (the 'DFRDB Act'). Current employees
of a Telstra body who were formerly members of the Defence Force and who have
elected to take deferred benefits under the DFRDB Act are required to complete
an aggregate of 20 years (in most circumstances) in the Defence Force or in
subsequent public employment to enable benefits to be paid.
In the
absence of a specific provision, an employee who has not served the required
period prior to the Commonwealth ceasing to have a controlling interest in a
Telstra body would lose his or her entitlement to the benefits available under
the DFRDB Act.
Proposed section 9J is intended to enable former members
of the Defence Force who:
• are employed by a Telstra body on the
sale day;
• had deferred their benefits under the DFRDB Act;
and
• were accruing service in public employment with that
body;
to count employment with the Telstra body as public employment even
after the designated day.
Subject to relevant eligibility criteria, these
employees would be entitled to their deferred benefits if they remain with the
Telstra body (or in other public employment) until the qualifying period
(usually 20 years) is completed.
Proposed section 9K of the Telstra
Corporation Act - Period of eligible employment for the purposes of Division 3
of Part IX of the Defence Force Retirement and Death Benefits Act
1973
Proposed section 9K provides that any period of employment
with a Telstra body which would have been eligible employment for the purposes
of Division 3 of Part IX of the DFRDB Act (which allows for the preservation of
rights of contributing members who cease to be members of the Defence Force),
prior to the designated day will continue to be regarded as eligible employment
for the purposes of the person qualifying for deferred
benefits.
Proposed section 9L of the Telstra Corporation Act -
Application of the Superannuation Act 1976
Proposed section 9L
provides that if an employee of a Telstra body (as defined in item 20 of
Schedule 3) was an eligible employee for the purposes of the Superannuation
Act 1976 immediately before the designated day, the employee is taken to
have ceased to be an eligible employee for the purposes of that Act on the
designated day. Employees of a Telstra body will no longer be entitled to
contribute to the Commonwealth Superannuation Scheme established under that
Act.
Employees of Telstra who are members of the CSS will have various
options in relation to their superannuation benefits which are provided for in
the Superannuation Act 1976 and regulations made under that Act.
Division 4 - Other transitional and saving provisions
Proposed section 9M of the Telstra Corporation Act - Telstra employees
not on maternity leave immediately before the designated day
Certain
Telstra employees are currently entitled to benefits provided under the
Maternity Leave (Commonwealth Employees) Act 1973 (the 'ML(CE) Act')
including maternity leave of up to 12 months, of which 12 weeks may be on full
pay and the remainder without pay.
Proposed section 9M will preserve the
entitlements of women employed by Telstra on the designated day to apply for,
and be granted leave under, the ML(CE) Act provided that the woman would have
been entitled to begin such leave within 12 months of the designated
day.
Proposed section 9N of the Telstra Corporation Act - Telstra
employees on maternity leave on the designated day
Proposed section
9N preserves the existing rights of those employees who are on maternity leave
on the designated day.
Proposed section 9P of the Telstra Corporation
Act - Saving - Crimes (Superannuation Benefits)
Act 1989
The Crimes (Superannuation Benefits) Act 1989
will cease to apply to acts or omissions of employees of a Telstra body (as
defined in item 20 of Schedule 3 to the Bill) that would
or might constitute corruption offences, where those acts or omissions occur on
or after the designated day.
Proposed subsection 9P(1) allows the Act to
continue to apply in relation to a corruption offence committed by an employee
of a Telstra body before the designated day.
Proposed subsection 9P(2)
prevents a superannuation order made under the Act from affecting employer
superannuation contributions made by a Telstra body on or after the designated
day.
Proposed subsection 9P(3) provides that a superannuation scheme to
which a Telstra body contributes as an employer on or after the designated day
is not a superannuation scheme for the purposes of the Act in relation to a
corruption offence committed after the designated day, and
employer
contributions to that scheme may not therefore be the subject of a
superannuation order.
Proposed subsection 9P(4) provides that where a
superannuation order may be made affecting an employee's entitlements under the
Commonwealth Superannuation Scheme and employer contributions in relation to
that person's membership of the Scheme have been paid but no corresponding
benefits have been paid to the person, then the superannuation order can only
order that an amount be paid to the Commonwealth.
Proposed subsection
9P(5) provides that where an employee has received a superannuation payment from
the Consolidated Revenue Fund then the relevant superannuation order is that the
employer contributions and interest component are to be repaid to the
Commonwealth.
Proposed section 9Q of the Telstra Corporation Act -
Saving - Director of Public
Prosecutions Act 1983
Proposed section 9Q ensures that the
Director of Public Prosecutions Act
1983 continues to apply to acts or omissions that occurred prior to
the designated day and that civil remedies in relation to those matters can
continue to be pursued. This provision is required because the Director of
Public Prosecutions Act will no longer apply to a Telstra body as a
'Commonwealth authority' from the designated day.
Proposed section 9R
of the Telstra Corporation Act - Avoidance of doubt - cessation of mobility
rights
Proposed section 9R is included to avoid any doubt in relation
to the cessation of mobility rights after the designated day. On the cessation
of Commonwealth control of Telstra, the residual mobility rights (if any) of
employees of Telstra bodies under Part IV of
the Public Service Act 1922 and the
repealed Officers' Rights Declaration Act
1928 will be extinguished.
Proposed section 9S of the
Telstra Corporation Act - Refund of contribution paid under the
Occupational Health and Safety
(Commonwealth Employment) Act 1991
Item 14 of Schedule 3
to the Bill omits a reference to Telstra from the Schedule to the
Occupational Health and Safety (Commonwealth
Employment) Act 1991 (the `OH&S Act'), so that Telstra is not,
from the designated day, deemed to be a Government Business Enterprise for the
purposes of that Act. After the designated day, a Telstra body will also not be
a Commonwealth authority for the purposes of the Act.
Proposed section 9S
provides for a refund if the designated day falls part way through a financial
year and the Telstra body has paid a contribution under section 67H of the
OH&S Act in respect of the administration of that Act.
Item 22 -
Amendment of section 36 of the Telstra Corporation Act
Section 36 of
the Telstra Corporation Act requires the Auditor-General to be the auditor of
Telstra.
Proposed subsection 36(1) enables the Auditor-General to resign
as Telstra's auditor by written notice given to Telstra at any time on or after
the designated day. The designated day is declared by the Minister under item 4
of Schedule 3 and is the day which, in the Minister's opinion, is the first day
on which a majority of the voting shares in Telstra are or were acquired by
persons other than the Commonwealth.
Item 48 in Schedule 2 permits the
Telstra Board to appoint an additional auditor at any time after the Bill
receives Royal Assent provided that auditor's consent has been obtained and the
Auditor-General has been consulted about the appointment. If the Auditor-General
resigns, subsection 327(6) of the Corporations Law will permit the surviving
auditor to continue to act as Telstra's auditor. This will enable there to be no
disruption of any audit which is only partially completed at the time the
Commonwealth ceases to have a majority equity interest in Telstra. If the
surviving auditor were to resign, subsection 327(5) of the Corporations Law
would require the vacancy in the office of auditor to be filled within one
month.
Proposed subsection 36(2) provides for the repeal of existing
subsections 36 (3) and (4) and proposed subsection 36(3A) (to be inserted by
item 48 of Schedule 2) at the earlier of:
• the time when the
Auditor-General resigns;
• the end of the first annual general meeting
of Telstra held after the designated day.
Proposed subsection 36(2A)
provides that even if subsections 36(3), (3A) and (4) remain in effect until the
end of the first annual general meeting of Telstra held after the designated
day, a replacement auditor may be appointed at the meeting, in accordance with
the Corporations Law, as if a vacancy in the office of auditor had arisen at the
start of the meeting.
Part 4 - Amendments commencing on the proclaimed day
Telstra Corporation Act 1991
Item 23 - Amendment of section 8AA of the Telstra Corporation
Act
Item 23 makes a minor amendment to the simplified outline of Part
2 of the Telstra Corporation Act consequential on the amendment made by item
24.
Item 24 - Repeal of Division 3 of Part 2 of the Telstra
Corporation Act
Division 3 of Part 2 of the Telstra Corporation Act
sets out special reporting requirements for Telstra, including the giving of
financial statements, notification of significant events, keeping Ministers
informed and requirements for corporate plans.
It is inappropriate to
continue to have special reporting requirements that favour the Commonwealth in
a situation where the Commonwealth no longer holds a majority equity interest in
Telstra.
Accordingly, item 24 provides for the repeal of Division 3 of
Part 2.
Items 25 to 27 - Amendment of subsection 8AW(1), paragraph
8AX(1) (a) and subsection 8AY(1) of the Telstra Corporation Act
Items
25 to 27 make minor technical amendments to subsection 8AW(1), paragraph
8AX(1)(a) and subsection 8AY(1) of the Telstra Corporation Act consequential on
the repeal of Division 3 of Part 2 by item 24.
Item 28 - Repeal of
Part 3 of the Telstra Corporation Act
Part 3 of the Telstra
Corporation Act gives the Minister the power to give Telstra such directions as
appear to the Minister to be necessary in the public interest.
Item 28
provides for the repeal of that Part. It would be inappropriate to retain such a
power in a situation where the Commonwealth no longer holds a majority equity
interest in Telstra.
The public interest in telecommunications is
protected through the comprehensive community and regulatory safeguards set out
in the Telecommunications Act 1997, the proposed Telecommunications
(Consumer Protection and Service Standards) Act 1998, the Telstra
Corporation Act 1991 and Parts XIB and XIC of the Trade Practices Act
1974. Section 581 of the Telecommunications Act gives the Australian
Communications Authority a broad power of direction over carriers and carriage
service providers in relation to the performance of its telecommunications
functions and powers. Section 159 of the proposed Telecommunications
(Consumer Protection and Service Standards) Act 1998 will also empower the
Minister to direct Telstra to comply with that Act. An additional power of
Ministerial direction over Telstra in the Telstra Corporation Act is unnecessary
and furthermore conflicts with the rights of other shareholders in the
company.