Australian Telecommunications Corporation Act 1989
RepealedCTH
This Act has been repealed and is no longer in force. It is retained for historical reference.
Jurisdiction
Commonwealth
Act Number
54 of 1989
Collection
act
Plain English Summary
7/10 complexity
What this law does (mechanically)
Keeps the Australian Telecommunications Corporation ("Telecom") in existence as a corporate entity with a seal and the capacity to sue and be sued (s.12–13).
Sets Telecom’s main job as supplying telecommunications services inside Australia (s.14) and allows it to carry on related telecommunications business outside Australia (s.15–16). It gives Telecom broad commercial powers to do what’s necessary to perform those functions, including forming companies, borrowing, buying and selling property, fixing charges, and conducting research and manufacturing (s.17–19).
Establishes corporate governance: a Board of Directors including a Chairperson, Deputy Chairperson, the Managing Director and up to six other directors (s.20–24, 22). The Board decides Telecom’s objectives, strategies and policies and ensures Telecom operates properly, efficiently and economically (s.23). The Managing Director runs Telecom under the Board (s.24).
Requires Telecom to prepare multi‑year corporate plans (3–5 years) that set objectives, strategies, community service policies, performance targets and financial targets and forecasts (s.31–35, 32–33). The Minister may direct certain variations to community service statements and financial targets within 30 days after receiving a plan (s.36).
Imposes three main obligations on Telecom: to act consistently with sound commercial practice as far as practicable (commercial obligation) (s.26); to supply a standard telephone service (the public switched telephone service) to places within Australia and to make it reasonably accessible and meet performance standards (community service obligations) (s.27); and to act consistently with notified general Commonwealth policies, directions from the Minister and Australia’s international obligations (s.28).
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Sets reporting, audit and transparency rules: annual reports and audited financial statements to the Minister and Parliament, with Auditor‑General review and powers of inspection (s.38–41, 55). The Board must notify the Minister of events that significantly affect plan objectives or financial targets (s.37) and must give advance notice of major business proposals (s.42).
Establishes financial architecture: the Minister determines Telecom’s initial capital and may direct conversion of liabilities or reserves into capital; capital is repayable to the Commonwealth at the Minister’s direction (s.47–48). Telecom must revalue assets at least every five years (s.49). The Board recommends dividends to the Commonwealth; the Minister approves or can direct a dividend (s.50). The Minister may require interim dividend recommendations (s.51). Telecom may borrow from the Commonwealth or third parties and provide security (s.56–58).
Provides a mechanism for reimbursement if Telecom suffers financial detriment as a result of complying with Ministerial directions (s.52).
Grants Telecom statutory powers over land to inspect, survey, enter, construct, maintain and alter facilities, to lop or require the lopping of trees that obstruct facilities, and to require subdividers to pay for necessary alterations; it also prescribes notice and compensation procedures and recovery of costs (s.87–93, 89–92, 91). Compensation for damage or loss caused by Telecom’s exercise of these powers is payable (s.92).
Protects Telecom’s property by making persons who damage Telecom property liable to compensate Telecom, and makes people who work near Telecom property liable for costs Telecom incurs to protect its property (s.94–95).
Limits Telecom employees’ disclosure of communications, services and customer information subject to statutory exceptions (s.97).
Provides for delegation of Telecom’s and the Board’s powers, and sets rules about the corporate seal, contracts and document execution (s.98–101).
Temporarily (to 31 December 1990) exempts Telecom from requirements under State and Territory laws to which the Commonwealth is not subject, subject to regulations (s.96).
Makes certain administrative Acts not apply to Telecom (e.g. Lands Acquisition Act and Public Works Committee Act) in specified ways (s.103–104).
Who pays, who decides, and what behaviour changes
Who pays: Telecom bears the operational and compliance costs of meeting community service obligations and other statutory duties; those costs are to be estimated and fed into corporate plans and financial targets (s.33(d), s.34(g)). Consumers pay charges set under Board determinations or agreed terms (s.29). The Commonwealth may provide capital or loans (s.47, 56) and receives dividends and capital repayments (s.48–50). If Ministerial directions impose extra costs on Telecom, the Commonwealth may reimburse Telecom for financial detriment (s.52).
Who decides: the Board sets objectives, policies, terms and charges within the Act’s limits (s.23, s.29). The Managing Director manages Telecom day‑to‑day (s.24). The Minister can notify general government policies (s.44) and, after consultation, give written directions considered necessary in the public interest except about rates or amounts to be charged (s.45(1)–(2)). The Governor‑General appoints directors (s.69) and the Minister appoints the Managing Director on a Board recommendation (s.79).
Behaviour changes required: Telecom must prepare and follow corporate plans, meet community service accessibility and performance targets, keep detailed financial records and undergo audits, give advance notices when exercising land powers, and follow Ministerial policies/directions when notified. Directors and the Managing Director must disclose conflicts of interest and observe governance procedures (s.31–38, s.87–93, s.67, s.83).
Why the Act is presented as necessary (stated purposes) and how those stated purposes map to costs, incentives and trade‑offs
Stated purpose claims and mechanics: the Act continues Telecom as a corporatised body with commercial powers to operate telecommunications services and related businesses, while preserving public obligations (principal function s.14; community service s.27; commercial practice s.26). To implement that hybrid public‑commercial role the Act sets governance, planning, financial discipline and Ministerial oversight rules (Parts 2–6, 31–36, 47–52).
Costs and who bears them: Telecom is required to meet community service obligations and to estimate their cost in corporate plans (s.33(d), s.34(g)). Those obligations can reduce short‑term commercial returns; the Act requires the Board to factor these costs into financial targets (s.34(g)) and allows the Commonwealth to reimburse Telecom for financial detriment resulting from Ministerial directions (s.52). The Commonwealth bears the fiscal cost of initial capital and any direct capital injections (s.47–48) and may receive dividends and capital repayments governed by Ministerial directions (s.48–50).
Incentives and enterprise effects: the Act directs Telecom to act consistently with sound commercial practice “as far as practicable” (s.26) while also requiring it to meet community service and government policy obligations (s.27–28). The Board can set charges and form subsidiaries, joint ventures and other business arrangements (s.19, s.29, s.16), which economically incentivises revenue generation and diversification. Ministerial powers (policy notifications under s.44 and directions under s.45) introduce government‑level objectives that may override pure commercial choices, with a statutory reimbursement mechanism (s.52) to partly address the incentive conflict.
Trade‑offs and opportunity costs: requiring Telecom to balance social accessibility of the standard telephone service (s.27) against earning reasonable returns (s.34(a)) creates a trade‑off between universal service and profit maximization; the Act requires the Board to articulate this balance in plans and financial targets (s.31–35). Ministerial ability to vary financial targets or community service statements (s.36) can change Telecom’s priorities quickly, which may impose opportunity costs on commercial projects (s.42) but the Act provides for notification, consultation and possible reimbursement where directions cause detriment (s.36, s.52).
Compliance burden and administrative discretion: Telecom faces ongoing planning, reporting, audit and land‑use compliance obligations (s.31–41, s.55, s.87–93). The Minister and Governor‑General have appointment, direction and termination powers that create administrative discretion over governance (s.45, s.69, s.75). The Board has delegated powers and may set detailed commercial terms (s.99, s.29). The Act centralises several decisions (capital, dividends, major business notices) with the Minister (s.47–51, s.42), generating points where political or administrative discretion affects commercial operations.
Concentrated benefits, diffuse costs and capture risk (mechanism‑focused): the Act authorises Telecom to form subsidiaries and participate in profit‑sharing arrangements (s.19(d)–(f)) and to make value‑added services and directory information (s.18(a)–(b)). These powers can concentrate potential commercial gains within Telecom and its executives. The public obligation to provide a standard telephone service is distributed across all consumers and government budgets (s.27, s.33(d)). The Act mitigates some risk of unfunded public directions by requiring estimates in corporate plans and allowing reimbursement for financial detriment (s.33, s.52), but it also gives the Minister significant discretion to set policy and directions (s.44–45).
Implementation risks and practical requirements: accurate asset revaluation at least every five years (s.49), robust accounting and Auditor‑General access (s.54–55), and dispute resolution/compensation procedures for land access (s.92) are practical necessities. Failure to keep proper records or to cooperate with auditors carries penalties for false or misleading information (s.55(7)–(8)).
Bottom line (mechanical): the Act creates a corporatised national telecommunications provider with broad commercial powers and protected operational rights over land and property, subject to specific public service obligations, Ministerial oversight on policy and finances, and statutory reporting and audit obligations. It sets the financial and governance mechanisms that determine who funds Telecom’s public obligations, who decides strategic and operational choices, how Telecom may earn revenue, and how costs imposed by government direction are to be handled (see especially ss.14–19, 26–28, 31–36, 47–52, 87–95).