The beautiful state of economic policy in this country, to the point of justifying an interest rate increase today, contrasts pretty sharply with the mess that we are getting into on national broadband and carbon emissions policies.

You don’t have to be against either the National Broadband Network or the emissions trading scheme — and I’m in favour of both — to realise that the government’s handling of both issues is becoming treacherously divisive.

And the divisions have been created unnecessarily by this government’s ruthless brand of politics, as Kevin Rudd uses both the ETS and broadband as wedge tools against the coalition. But these are two of the most important and difficult policy challenges this country has ever faced. Using them as political tools against the opposition is both self-serving and very risky.

There are a lot of increasingly angry Telstra shareholders who are being left dangling while a process of backroom negotiation takes place over the future of their company.

They, and everybody else, were stunned by the secret drafting of legislation requiring an enforceable undertaking from Telstra that it would structurally separate before it could receive 4G wireless spectrum.

After a few days of triumphant publicity for the government, the whole thing has gone back into secrecy mode, with the head of the NBN Company, Mike Quigley, talking in riddles about possibly buying telco assets and persuading Telstra to use his network instead of its own.

What does this mean? How does what Quigley is doing, whatever it is, sit with the government’s legislation designed to split Telstra?

Specifically: if Telstra supplies the required undertaking, would its separate wholesale network compete with the NBN or merge with it?

Nobody, by the way, is guaranteeing that Telstra shareholders will not lose value. All there has been is an unsourced suggestion in the Financial Review yesterday that any split of the company would be put to a shareholder vote. Well, of course it will. Is anyone seriously suggesting they won’t get to vote in this?

And why was the structural separation condition on getting mobile spectrum put in legislation in the first place, with no warning?

Answer: pure politics — to put pressure on the coalition.

After a promising start, the Rudd government’s process on broadband is now in stark contrast to the Obama administration’s in the US, where the Federal Communications Commission was given 12 months to come up with a National Broadband Plan.

A few days ago the FCC issued a statement about what’s been done so far. There have been 26 workshops, 230 witnesses examined, 41,000 pages of written testimony, and 40 blog posts (gosh, that many?). Anyway, the FCC is engaged in an inclusive process of consultation and everybody knows that in 135 days will produce a Plan. It could be shocker, of course, but at least everybody will have had a say.

In the total absence of prior consultation on the current NBN or the plan to split Telstra, and now in a vacuum about what’s going on, Telstra shareholders are naturally revolting.

Yesterday even the mild-mannered Bruce Teele of Australian Foundation Investment Company started getting stuck into the government. Kevin Rudd and Stephen Conroy will know they’re in trouble when Bruce Teele’s leading a rebellion.

But even before the unnecessary Telstra legislation gets to the Senate the ALP is enjoying watching Malcolm Turnbull burst into flames and the coalition start to crumble over the emissions trading scheme legislation.

In fact the ETS may be so excruciating for the Liberal and National parties that by the time they get to voting on Telstra, the coalition may well be nothing but rubble, unable to think coherently about anything.

Which is all very well and enjoyable for Kevin Rudd, but quite the opposite of what’s required for a sensible and cohesive national policy. Australia’s ETS, in fact, appears to be specifically designed to generate opposition and division.

Kevin Rudd and his ministers seem to think they are all just playing a political computer game (Doom II: Hell on Earth?), in which the aim is to kill as many bad guys as possible.

But broadband and emissions trading are both nation-changing issues. This is not the way to go about it.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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