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Audit finds failures in Labor’s USO contracts

Senator the Hon Mitch Fifield
Minister for Communications

Senator the Hon Fiona Nash
Minister for Regional Communications

The Turnbull Government today welcomes the tabling of an audit which found telecommunication Universal Service Obligation (USO) contracts signed by Labor failed to provide value for money and lacked transparency.

The USO is a longstanding consumer safeguard that ensures all Australians have access to voice-only standard telephone services and payphones. USO arrangements were put in place in an era before the widespread availability of mobile and broadband services.

The ANAO found key aspects of the contract entered into by Labor “do not reflect value for money principles”.

The ANAO also found that the USO contract “became the means through which the former Labor Government was able to deliver sufficient financial benefit to Telstra to ultimately secure its involvement in the rollout of the National Broadband Network.”

The ANAO's findings further validates the work of the Government commissioned Productivity Commission inquiry examining the USO, which found that the arrangements put in place by Labor lacked “transparency and accountability” which “makes the continuation of current arrangements difficult to justify.”

The Productivity Commission concluded that the USO is “anachronistic and costly” and should be “replaced by a new framework to reflect changing policy, market and technological realities”.

The Turnbull Government has established a taskforce to respond to the recommendations of the Productivity Commission, and will take into account the ANAO's findings in delivering reforms.

The Government's priority continues to be ensuring that all Australians have access to affordable and reliable phone services, wherever they live or work. The Government will not make changes to the current contract and USO arrangements until it has identified an acceptable alternative way to deliver voice services.

The Government's reforms will also take into account the significant investment made in the rollout of the NBN, which is on-track to make high-speed broadband services available to all Australian businesses and households by 2020.

The Government thanks the ANAO for its work.

Media  contacts:

Fifield: Geraldine Mitchell | 0407 280 476 | Geraldine.Mitchell [at] communications.gov.au
Nash: Les White | 0409 805 122 | Les.White [at] regional.gov.au