The announcement this morning of the formalisation of the separation of the wholesale and retail arms of Telstra is a momentious and very admirable micro-economic reform. After the government hands over the $12 billion in compensation to Telstra shareholders, we will have for the first time, all telcos in this country competing on a level playing field. This ranks with the tearing down of the tariff walls in the 1980’s, the deregulation of the banks, the reform of the labour and financial markets, as major economic reforms. Indeed, it may rank in the next 30 years as more important than any of them, but has been a government reform which has been unbelievably badly sold.
The fully connected NBN network has the potential to have as great an effect on the Australian economy and Australian society as the coming of the internet in the 1990’s. Once the society is fully connected to super-fast internet (only certain Scandinavian countries and South Korea has this now), it will produce a flowering of innovation not only in current enterprises but also will see totally new business models emerge. How about an Australia Google, Amazon or Ebay? They will not be the same – no-one knows what they will be – but we have the potential for this to happen because we will have the infrastructure which very few in the OECD will have (partly because they can not now afford it).
This is an historic opportunity. With Australia’s record as being one of the most technology savvy populations in the world, this is an unprecedented opportunity. The government needs to explain this, and get people excited about it. With our productivity performance going backwards over the last five years, this is an unparralled opportunity to reverse this.