Title: ENVIRONMENT, COMMUNICATION, INFORMATION TECHNOLOGY AND THE ARTS: Interactive Gambling (Moratorium) Bill 2000: Discussion

Date: 25 August 2000

Committee: ENVIRONMENT, COMMUNICATION, INFORMATION TECHNOLOGY AND THE ARTS

Reference: Interactive Gambling (Moratorium) Bill 2000

Place: Canberra

Questioner: CHAIR; Bishop, Sen Mark; Lundy, Sen Kate

Responder: Prof. McMillen; Mr Coroneos; Ms Webster

Page: 1

Proof: YES

Database: Committees Considering Bills

Source: Senate

CHAIR —I welcome representatives from the Australian Institute for Gambling Research, the Inter-Church Gambling Task Force and the Internet Industry Association. The committee has before it a submission from the Australian Institute for Gambling Research, which it has authorised to be published. Do you wish to make any alterations or additions to your submission?

Prof. McMillen —No, thank you.

Mr Coroneos —The IIA did not put in a formal written submission.

Ms Webster —And the Inter-Church Gambling Task Force has not submitted a written submission either.

CHAIR —Would you like to make an opening statement, individually or as a group?

Prof. McMillen —We would prefer to talk individually—we are quite different organisations. The Australian Institute for Gambling Research is a university based research centre at the University of Western Sydney. I would like to thank the committee for allowing me the opportunity to address these issues this morning. This is a very significant piece of legislation, and I would like to remind the committee that this is the first time that the Commonwealth has tried to restrict gambling since 1903, when they tried to stop the Tattersalls lottery being sold across borders and failed magnificently. So it is a very important piece of legislation.

Basically what I am concerned about is that there seem to be some very important inconsistencies between the government's objectives for the moratorium and the practical and policy implications of the bill. In that sense I think there are some inconsistencies between the objectives and the possible effects of the moratorium. I have detailed those in my submission very briefly. I have also concentrated in the submission only on the bill, looking at the rationale as explained in the explanatory memorandum. Then I tried to evaluate whether the bill would actually achieve those objectives that are spelt out in the memorandum. As I said, I think are some inconsistencies.

So I have not looked at the merits of interactive gambling per se. I have made submissions to the Productivity Commission on that issue, to the Senate select committee on information technologies and to NOIE, so I have not reiterated those submissions. I have just concentrated on the bill and tried to assess whether it would achieve its objectives, and I do have some serious concerns about that.

Ms Webster —I am representing the Inter Church Gambling Task Force today. The Inter Church Gambling Task Force was established by the heads of the Christian churches in Victoria to monitor and provide advice to the heads around issues to do with gambling. I am the Catholic Church nominee to that particular group. The Inter Church Gambling Task Force has had a longstanding interest in the issues of interactive gambling. We also have made submissions to the Productivity Commission inquiry, to NOIE and to the Netbets inquiry. I think it is fair to say that our position is one of prohibition, but in terms of today's presentation, I will be confining my comments to the merits of the moratorium.

CHAIR —Do you want to make comments about the merits of the moratorium now?

Ms Webster —I will do that in the body of my submission.

CHAIR —This is your opportunity to do it, and I would prefer you to do it now.

Ms Webster —I have already said at the outset that we are supportive of the 12-month moratorium. The Inter Church Gambling Task Force believes the government has a responsibility to act for the common good of its citizens, and we believe that a 12-month moratorium on further interactive gambling licensing provides a breathing space in which we can examine the implications and the possible mechanisms appropriate to a wider prohibition. The Inter Church Gambling Task Force believes a moratorium is important for the following reasons.

Firstly, Australia does not need more problem gamblers. The Productivity Commission inquiry demonstrated the extent of the problem. The agencies of the churches can attest to the impact on both problem gamblers and their families in terms of demands of services. Interactive gambling represents an expansion of the industry, and we know that with every expansion of the gambling industry, there is an expansion of both the group of the problem gamblers and the total number of problem gamblers. With gaming machines in Victoria, it was women who became the new group entrapped. While the current profile of the Internet gambler is male, middle aged and with a high income, we anticipate that the extension of the availability will shift the profile to other groups, and we are particularly concerned about the young. We are not satisfied that consumer protection mechanisms held up in the legislation of the various states will prevent the capture of new and vulnerable groups of problem gamblers.

The moratorium for 12 months will ensure that gambling sites will be harder to find. In addition, the credibility of the sites and of interactive gambling will not be further legitimised, sanctioned or enhanced socially. A large percentage of the population already consider gambling to be out of control. This was also demonstrated by the Productivity Commission report. In Victoria, there have been six reports on community patterns of gambling commissioned by the Victorian Casino and Gaming Authority. In all of them, attitudes of opposition to the introduction of interactive gambling have held up over a period of time, with 70 to 80 per cent of people surveyed being opposed.

An additional and major concern is the entry of gambling to the home. This is particularly a concern to the heads of churches and has been echoed in their comments to the Premier of Victoria. Victoria has recently—last week—acted to remove children from the open areas of gaming venues, where a small number of machines are often located. The rationale for this is that exposure to and modelling of gambling behaviour and the gambling environment is harmful to children. A ban on interactive gambling will reduce the degree of accessibility for a large proportion of the population and their children. Access to physically proximate, readily available, 24-hours-a-day interactive gambling is reduced. This is the area we think has the potential for most harm, particularly to families and children.

So these are the reasons we believe that a moratorium should be supported. We understand that there are complexities about introducing such a moratorium, technically, socially and politically. We want to assure the committee that the Inter-Church Gambling Task Force are not interactive troglodytes but we do believe that a moratorium is important to allow a breathing space for the issue to be fully considered given the concern of the community. Thank you for the opportunity.

CHAIR —Thank you, Ms Webster.

Mr Coroneos —I would just make some preliminary comments before I invite you to ask questions of me on behalf of the association. The IIA is the national industry body for the Internet industry in Australia. We have members that span both the carriage side of the industry—that is, Internet service providers and telecommunications carriers—and members that are involved at the forefront of developing e-commerce solutions, web sites and content development. We have banks and insurers and in almost every area of commercial activity of the Internet Australia is, in one way or another, represented through our membership.

I would like to emphasise at the outset that the Internet Industry Association does not necessarily advocate, nor do we condone necessarily, the practice of gambling. From a public perspective, we are here to talk about—as Professor McMillen has intimated in her introduction—the efficacy of the moratorium and the extent to which, on its face, it is likely to achieve the objectives that the government argues it is there to achieve. The IIA has sought to proactively address social issues on the Internet as a measure of our concern for end users who are the market for our members and who, also, drive consumer demand for the medium generally. Recent examples of that include our work on disability access and privacy and the development of a code of practice including measures addressing consumer protection in e-commerce and online content. So we believe that we are addressing some of the difficult social issues head-on in a proactive way.

But in looking at the bill we have concerns about the efficacy of the legislation and the extent to which it can address the concerns that it attempts to. We are also concerned because we do not want the Internet to be characterised as inherently harmful, as is implied in the legislation. For this reason we feel compelled to submit to your committee a number of observations, and I will just quickly run through those. Some of these have been articulated already today; others I am sure will be in the course of the proceedings.

Firstly, sites which are subject to control within Australia will be substituted for unregulated sites overseas. In view of the lack of efficacy of the legislation one is forced to ask: what does it hope to achieve?

Secondly, present state and territory licence conditions for online operations force them to greater degrees of restriction than exist with their offline counterparts. This means that as more people move onto the Internet their protection will actually increase provided they stay with Australian sites. In addition, betting from home avoids other social problems associated with offline premises, for example, the adequate supervision of children, consumption of alcohol in gambling venues, and so on. So I think that when you read the words of the explanatory memorandum and look at the objectives and the implication that somehow bringing this into the home is necessarily bad, we question that and we actually raise examples of how bringing it back into a home environment may actually lessen some of the problems that are currently existing.

Thirdly, the argument within the explanatory memorandum, that allowing gambling into the home will set a bad example for children, is in our view not necessarily sustainable. Applying this argument suggests that no alcohol should be consumed in the home in case it teaches children to become alcoholics. We have often heard the contrary view from groups concerned about alcoholism, which talk about modelling appropriate consumption behaviour in the home. We think, by parallel reasoning, that it is arguable that the majority of Australians who do engage in responsible gambling will have the opportunity to model that responsible behaviour in front of their children. Problem gamblers, on the other hand, are less likely to engage in the practice in full view of their families, so we do not think there is any scope for the modelling of inappropriate behaviour by those whom the legislation seeks to protect.

Fourthly, our members who are Internet service providers fear that the moratorium is in fact nothing more than a precursor to a complete ban. We have serious concerns about the technical capabilities of implementing a ban. Should a ban be intended—or at least should laws come into play that require ISPs to attempt to block access to overseas sites—we would be concerned about the consequential effects on the costs of Internet access in Australia. That has a bearing on issues like the information divide. I note, by way of an aside, that a study was released yesterday, partly promoted by ACOSS, the Australian Council of Social Services, which showed that the information divide is a continuing problem in Australia. We are concerned to see that the government, in attempting to address one social dimension, does not inadvertently create greater ramifications in what we say is a far more serious area of concern; that is, the disenfranchisement of a large segment of Australians from full participation in the information society by reason of cost. Apart from that, our ISP members are concerned about the effect on network performance and the stability of the Internet as a medium which is and will continue to underlie commerce in Australia. For those reasons there are serious concerns that I have been asked by those members to convey today.

Fifthly, we see elements of the bill specifically as problematic. The extraterritorial nature of the bill means that even businesses that are located offshore, have some corporate nexus back to Australia and seek not to target Australian users will still be caught. You may have a situation where there is no other connection to Australia than simply the location of the corporate head office. The activities that are occurring are targeted, as we heard from Richard Farmer, on the US market. There are no Australians at risk through these operations, nor are there likely to be, and yet we find that the moratorium would seek to criminalise that behaviour within sites that are not already in operation.

The banning of the sale of lottery tickets online seems to us a fairly ludicrous proposition when they are legally available from the local newsagent. We question why the moratorium seeks to go so widely in its effect at a time when we are dealing with an activity which is legal and is responsibly enjoyed by many Australians. As a general rule, we argue, across many of these social issues, that what is legal offline should be legal online and that the Internet should not be discriminated against simply on the basis of accessibility. If accessibility is a problem—and I note the comments of the previous witness on the issue of accessibility—then the technology also provides means by which protections—in fact greater protections—can be addressed. We have many members that are developing high levels of security and technical barriers to the entry of certain groups of people and we believe in that regard the technology itself provides better measures of protection for both problem gamblers and children than exist offline.

Sixthly, we believe the retrospectivity of the legislation to the date of the media release of the minister on 19 May does not exemplify good policy-making. We believe it arbitrarily disadvantages businesses that have no means of managing that risk. Indeed, some of them have entered into contracts and/or raised public capital prior to that date and we are concerned as to the precedent of policy making in this manner. I also understand that some of the states have raised similar concerns.

We note that the Senate, being the state's House, ought really to consider the scope of the expansion of subsection 51(5) of the Constitution which, as you know, is the telecommunications power, into areas of traditional state responsibility. Again, this is a concern that has been echoed by the states. As more and more of the activity which has fallen within the purview of state control moves onto the Internet then there is a very clear opportunity, I suppose, for the Commonwealth to rely on section 51(5) to exercise jurisdiction in those areas. So we start with gambling today. Tomorrow we could be looking at health or education or many other areas of state control. I think this is a very real concern. Again, while the IIA does not necessarily take a position on the merits or otherwise of that expansion, it is certainly an issue that the Senate ought to be aware of and the moratorium, perhaps, represents the precursor to an expansion of the Commonwealth power in that regard. So those are my preliminary comments.

Finally, looking at the bill itself, there is no objects clause. To divine the intentions of the government one is forced to look at the explanatory memorandum, which is fair enough. When you look at the explanatory memorandum you will see that the two primary motivators of this policy appear to be the protection of children and of online gamblers. So we say that it is in regard to those two vulnerable interest groups that the efficacy of the moratorium ought to be evaluated. Again, in respect of the points I have just made, our view is that neither of those interest groups will be protected by this piece of legislation. On that basis we conclude that the moratorium is not helpful and is likely to have serious negative consequences.

CHAIR —Thank you, Mr Coroneos. I would like to ask a couple of questions. Firstly, Professor McMillen, you said that very early in the piece the federal government tried to stop Tattersalls operating across state borders. Could you perhaps just give us some more detail about that?

Prof. McMillen —Yes. Tattersalls were selling their sweepstakes and lottery tickets through using the postal service. The Commonwealth tried to prevent the use of the postal service. People found very clever and imaginative ways around it and it clearly failed. Tattersalls are now the largest private company in Australia. People can buy lottery tickets across border. It was significantly a failure. I have a great deal of difficulty with the legislation and some sympathy with the need for a pause. In fact, I argued for a pause three years ago—that is in my submission. I have made the point that I think that was the time for a significant moratorium, to stop and take stock of what was going on. At that stage we had only a handful of online operators. But it was very clear that the market was going to grow. The New South Wales TAB was lining up to set up Internet betting, and sports betting, in particular, I could see was going to be an opportunity down the track. That is the way it is shaping up.

But now, as I said in my submission, the horse has bolted. We have had a proliferation of online interactive gambling licences, both gaming and wagering, and that was accelerated once the Commonwealth announced its proposed moratorium. So even within Australia we have got a fairly substantial market in terms of licensed operators. But more significantly, the operators offshore are expanding quite dramatically. We have now got very legitimate respectable countries with good gambling regulatory regimes starting to move into the area. Internet wagering is very common in Britain because their legislation basically sees it as a version of a telephone service, and it is advertised widely. All you have to do is look at the Leeds United web site to see the way sports betting is actually providing a cash cow for the development of sports associations in that country. Some of the British bookmakers have moved offshore, notably to Gibraltar where they pay lower taxes. So you have got the three biggest bookmakers in the world—Coral, Ladbrokes and William Hill operating in Gibraltar—all reputable names. So the offshore market has expanded dramatically.

Australians, in the nature of this moratorium, are going to continue to gamble through Internet service providers both within Australia and offshore. If the primary objective of the legislation is to restrict the market so that we can look at the issue of problem gambling and prevent the expansion of the increase of problem gambling, I think that is going to fail, simply, as I said, because people are going to bet with existing Australian licensees, and some of them do not have effective consumer protection programs in place. There is no requirement in this bill for that to occur. They are also going to bet offshore. Other people have made that submission to you, and people will move offshore.

In terms of e-commerce, there is a dramatic uptake of e-commerce by Australians. We are showing a particular affinity for it, and gambling is just another product in the Australian environment and people bet offshore without understanding what they are doing. The third reason why problem gambling is going to increase is there is no effort to deal with the significant and major problem of land-based gambling opportunities. The Productivity Commission made it very clear that that is where the source of the problem lies. This bill is really dealing with a very small but growing player in the market. The major source of problem gambling lies with land-based gaming machines. So that market is going to continue to grow. Some states are developing proactive policies and are trying to grapple with that, but it is happening because of the nature of our federal system; it is happening in a very ad hoc and patchy way. So problem gambling is going to continue to grow over the next 12 months, both with Internet gambling and land-based gambling. So I think the bill is defeated in its purpose in that regard.

The third concern I have got is that I think a 12-month moratorium is probably not necessary. The Commonwealth has commissioned its own study by NOIE to look at the feasibility of a ban. Reading the memorandum, that seems to be one of the objectives of the bill: to buy time and space for the Commonwealth to look at the feasibility of a ban. If the NOIE study does its job and achieves its objectives, that report will come down next month, which will be plenty of time for the government and opposition to consider its recommendations and findings. I would suggest that a three-month moratorium is quite adequate. As I have said in my submission, if implicit in the bill is that you need more time to do research to find out what impacts of online gambling are, 12 months is not enough because, first of all, a moratorium is going to create an artificial and a distorted market. It is freezing the clock at 19 May. It is also just simply not enough time to do the type of research that is required to monitor the effects, to identify the problems and to come up with a solution to ameliorate those problems. The databases are inadequate. There are a number of reasons which I have detailed in my submission why 12 months is not enough time to do an effective study of the social and economic impacts of this form of gambling.

CHAIR —I would like to ask Ms Webster a question and then I will go to Senator Bishop. Ms Webster, you were particularly concerned about problem gamblers, especially women and young people getting into this kind of thing and becoming problem gamblers. We have heard earlier evidence that under the Australian system there are already mechanisms in place which help prevent problem gamblers getting too far into debt, such as a debit system in an account and a 100-point identification system before individuals can access gambling. We have also just heard Professor McMillen's views on the impact of problem gambling. Why is it that you do not feel that altogether those measures will not prevent problem gambling becoming an increasing issue through this mechanism? We have also just heard Professor McMillen's views on the impact on problem gambling. Why is it that you do not feel that altogether those measures will not prevent problem gambling becoming an increasing issue through this mechanism?

Ms Webster —Perhaps I can address the two points that you raised, the 100 point ID system a la passport identification, the registration of gamblers, and also some of the credit access controls. Our experience, certainly of identification systems in protecting the young, is varied, particularly in Victoria in relation to areas such as under age drinking. There seems to be no end to the creativity of young people seeking to access adult forms of entertainment, and we believe that unless there is a strong social sanction against Internet gambling, which a moratorium would assist with, then the young are still vulnerable.

Concerning the points system, I have looked only in detail at the Queensland and Victoria legislation. There is variation between the states on some of those provisions, and if further down the track we do have a legitimated and regulated interactive gaming industry in Australia then we would be strongly urging that there is a national uniform approach.

In relation to the credit system, my understanding is that some of the proposed controls would act to prevent large credit withdrawals, but our major concern from the churches is the use of family income for gambling when the purpose of family support and family obligations are not met. So it is really a distortion of the available family income rather than the heavy indebtedness, although we have endless tales of extreme indebtedness in Victoria. Certainly the call on church agencies—and I was talking to the director of St Vincent de Paul in Melbourne yesterday about this—comes from families who are using their income for the purposes of gambling. It is not credit that they are using, it is their available disposable income, and that has really severe impacts on children and families and results in supplementary food parcels from St Vincent de Paul. They would be two concerns that we have.

In respect of Professor McMillen's assertion that the horse has bolted, we do not believe that the horse has bolted. We believe that this represents a significant chance for the federal government to take both an international and a national lead on this issue. We do not know what the long-term consequences are. And in respect of land based gambling, we now have really significant problems after we embarked on wholesale expansion without pausing to consider what the impacts would be. And now we have concerns about inadequate moneys for direction to problem gamblers, and inadequate moneys directed towards advertising around the harms of gambling, when in fact perhaps a more purposeful and contemplative approach to the introduction of these additional options of gambling would have resulted in smaller manifestations of problem gambling than we currently have in Australia. So we are very strongly arguing that the horse has not bolted, that there is need for a pause.

CHAIR —Thank you.

Senator MARK BISHOP —The chair really raised one of the key issues as far as I was concerned. My memory of the Productivity Commission report, and then both the government report and the opposition report in the Senate inquiry was, firstly, that there had been a huge expansion of land based gambling, and in particular, gambling machines along the east coast and in South Australia. That had caused over time huge social problems, some of which you referred to, Ms Webster, and others referred to in the other inquiries. Next, those social problems were directly correlated to the low income working-class and welfare dependent areas. All of that has been occasioned by what you described as the lack of purposeful planning in the various state jurisdictions. I do not quarrel with any of those comments you make—I think they are dead right and the states have been negligent in this area. My problem is that if the government gets its way and has a moratorium of 12 months, or even a ban into the future, that is not going to address any of those real problems in Victoria, New South Wales and South Australia.

My question is: do your organisations, the churches and the various welfare groups hold out any hope of the various state governments paying real attention, as opposed to notional attention, to the problems derived from the proliferation of machines, facilities and sites along the east coast? Every time I go down to those states I am amazed at the number of people in particular areas using the machines and the problems attached to that. No-one that I am aware of is really paying serious attention—and by serious attention I mean seriously restricting access or seriously allocating large amount of resources to attend to those social problems. Are your various organisations and network groups doing anything in that area? Secondly, do you hold out any serious hope of serious attention by the various state governments in this area?

Ms Webster —I am personally most able to comment in respect of Victoria. We have recently in Victoria, under the new Labor government, had community consultation around the issue of all aspects of land based gambling, but particularly gaming machines because that is generally acknowledged as being an area of most difficulty. It is my understanding from the conversations that the Inter-Church Gambling Task Force has had with the minister that there will be serious attempts to address the issue of both access and the problems arising from access to gaming machines. Obviously, the final outcome is subject to the political process but I would have to say that the Inter-Church Gambling Task Force is very happy with the level of consultation we have had thus far and I think the introduction of the regulations that I alluded to in my initial presentation around prohibition of children from the general areas of gaming machine venues is one of the first steps on the way.

In terms of the issuing of licences, which is actually a control process—it does have controls on accessibility—these provisions have recently been revamped in Victoria. The Victorian Casino and Gaming Authority has been given far strengthened powers to examine the social impacts before the granting or extending of licences and must include local governments in that consultation process. I am hopeful that now we have some opportunities in Victoria to, perhaps, address the issues in the longer term. I think it is fair to say that we are waiting with some uncertainty around how the government will respond in terms of some of the advertising controls and, also, its own program in terms of amelioration of problem gambling.

Prof. McMillen —With your permission, perhaps I can clarify that issue. A working party of the state and territory gaming regulators met last month to raise this issue about how to share information and discuss perhaps movement towards a common approach in terms of responsible gambling policies. Three states have moved fairly significantly since the Productivity Commission report—New South Wales and Queensland most of all, and Victoria, as Miss Webster indicated, is also considering moving. That working party will meet again on 4 September. I understand that a representative from the Department of Family and Community Services will attend the meeting. I have been calling for a national strategy for some time. What is lacking, I think, is a champion at the Commonwealth level to take this through. We found in other public health areas—for instance, tobacco, alcohol, road trauma and the AIDS campaign—that you needed a champion at the Commonwealth level, and that is lacking. So at this stage we are working with inconsistent state governments but they are making some effort to at least share information and discuss the possibility of getting some common standards and policies in place. But that is taking a long time—you know what these processes are like—and meanwhile people are hurting. The problem, I repeat, is land based gambling. I am hoping that that working party will also incorporate Internet gaming in its brief. I am not sure what is happening with Internet and interactive wagering. One of the greatest inconsistencies to me is that the gaming operators and the gaming regulators are setting the benchmarks in some states. Wagering is slipping through the net, and that is where the growth area is.

Senator MARK BISHOP —Is it on the wagering or on the gambling?

Prof. McMillen —It is on wagering and sports betting in particular. Even though sports betting is a small part of the market it had a growth rate of 42 per cent in the last financial year.

Senator MARK BISHOP —Is that new growth or transfer within the market from phones to Internet?

Prof. McMillen —That is what we do not know. I have a small grant from the Australian Research Council which is looking at the development and effects of interactive gambling in New South Wales and Queensland. One of the questions we are exploring is whether there is an additional market or whether it is just migration from telephone betting—which, of course, the TAB operators would be delighted with. You heard about the cost effectiveness of this. I suspect it is a new market. There probably is migration and that will probably accelerate, but I also think there is a new market. History has shown that when technology facilitates the development of a new product and a new mode of delivery in gambling the market expands. The cake gets bigger; it is just the slices of the cake that shift. It happened with casinos; it happened with gaming machines; it happened with online lotteries, and now it is going to happen with this form of gambling as well. We will end up with more Australians gambling and gambling more.

Senator MARK BISHOP —Ms Webster, following that line from Professor McMillen, your support for a moratorium and eventually a ban extends to both the wagering and the interactive gambling. You do not distinguish between the two, do you?

Ms Webster —No, we do not distinguish.

Senator MARK BISHOP —Coming back to my earlier question: are the states providing sufficient resources to attend to this huge problem of social gambling or is it just bandaid stuff?

Ms Webster —There is a very significant proportion of money from the Community Support Fund in Victoria allocated to problem gambling services. I would have to check the exact amount but I think it is about $30 million a year. I believe that that is probably sufficient to be directly devoted to problem gambling counselling services, but far more needs to be done in the devotion of resources to prevention, that is, advertising, provision of information generally to the community about sources of counselling, and provision to ethnic community groups and to general family and community support organisations which are dealing with problem gambling issues because problems come in that are not necessarily identified as such. There does appear to be a barrier to presenting to a specific problem gambling counselling service.

Senator MARK BISHOP —That $30 million you referred to, are those additional funds from government related to the development of social problems attached to gambling or is that a transfer of funds from, perhaps, monies that would have been allocated to other social problems and now gambling problems have a higher priority?

Ms Webster —No, it is a hypothecated tax situation. It is drawn from the community support fund which raises its money from the tax on gaming machines.

Senator MARK BISHOP —And your comments are for all the states or just Victoria?

Ms Webster —That relates to Victoria—that is the situation I know best. I am not really able to comment on the sources of funding for gambling counselling services in other states. Jan may be able to do that.

Senator MARK BISHOP —Professor McMillen, can you help us out?

Prof. McMillen —Yes, it varies from state to state and the federal structure intervenes. Victoria is streets ahead of everybody else in terms of the availability and allocation of resources. Some states are considering further funding. Queensland, for instance, has now set up a policy directorate and a responsible gambling advisory committee to do appropriate research on policy development so that we get evidence based policy development which has been seriously lacking both with the expansion of the Internet and with land based gambling. It depends what state you live in, and that really worries me. I have called several times for the Commonwealth to take a role. In fact, I think they have a responsibility to do so in terms of public health policies including consumer information and community education. At the moment it is a jigsaw puzzle. Some states are doing very little and it is a token gesture. In other states they are making a systematic attempt to do it. The moratoriums or freezes that are being developed in some states differ—every state is different. Some have a cap on the number of gaming machines per venue, some have a statewide global cap, some have got regional caps and a statewide cap. We do not know which policy works.

At the moment what we are getting, as the Productivity Commission pointed out, is policy development without the type of reliable information to make sure that policies that do emerge are effective. Then what is lacking are resources for implementation and for enforcement and evaluation. That is not happening anywhere in Victoria or as proposed in Queensland. We are really not doing proper evaluation programs to see whether the taxpayer's dollar is being effectively spent and whether the services are going to the people who need it.

Senator MARK BISHOP —Thank you, Professor. Mr Coroneos, you have constantly argued—and I think there is a fair amount of strength to your argument—not to isolate the Internet or to have technology specific solutions. You have raised this issue of regulated Australian licence sites and bona fides as opposed to regulated and perhaps less than desirable offshore sites. Are there other solutions that would be acceptable to your organisation perhaps through regulation of credit card providers or the various financial provision acts to overcome this problem of less than desirable, shall we say, offshore sites?

Mr Coroneos —We were asked that question, in fact, by a parliamentary inquiry in South Australia last year. Our response then is really the same as my response to you now and that is to say that we would be very concerned about the message that it sends to people transacting over the Internet if a lawful transaction voluntarily entered into were somehow attacked at the level of the processing of the payment or, indeed, the credit card provider was expected to honour that transaction. It would actually send a very wrong signal. As it is—let me just go back a step—the research is showing that one of the main impediments to uptake of e-commerce in Australia is the lack of security or lack of confidence on the part of people engaging in transactions over the Internet. It would be our view that to try and attack a gambling transaction at the credit card level would adversely impact on the broader conception of the safety of a transaction, and to have the government as the instrument of that kind of policy, we really think, would be a retrograde step.

Senator MARK BISHOP —Isn't that then an argument for not only no regulation of the Internet but also no regulation by other means that impacts upon the Internet?

Mr Coroneos —No, we are not saying that there should be no regulation here. As I understood your question, you were asking whether we could use the transaction itself as the basis of regulation.

Senator MARK BISHOP —Let me be more specific. The argument from the Productivity Commission was that, if you are going to have licensed, regulated, audited sites with a high degree of probity, that necessarily imposes a cost on consumers in Australia; it is passed on to them. You then have these unregulated, unlicensed sites of dubious probity or whatever, and they have a lower cost embedded in their structures and hence can compete more effectively. If for public policy reasons you are going to regulate interactive gamblers out of Australia, there needs to be some sort of mechanism to prevent the others from gaining market share. Professor Quiggin suggested in his submission that one way to do it would be to go via outlawing credit card transactions, for example, to those non-licensed, unregulated sites. That is what I am asking you about.

Mr Coroneos —I still stand by my comments in that case. I think the solution is not to attempt to differentially attack transactions but rather to rely on good and high levels of reputation within Australian operators, and hopefully Australians would choose to go to those sites within Australia where they know that they are subject to the probity requirements and whatever else. In that context it becomes unnecessary to go down that alternative path.

Senator MARK BISHOP —You would argue that there is sufficient information in the marketplace, that the problem of unregulated sites is so minor that it is not worthy of attention.

Mr Coroneos —We would argue that, provided that end users understand the difference between regulated and unregulated sites. Perhaps there is a role for education in that and perhaps there is a role for the Commonwealth to assist in that education. But ultimately you drive it through driving the market. In fact, that is very consistent with how we are operating in other areas of Internet governance, where we are trying to brand responsible online traders with certification and trust marks and so on. So you actually use the regulatory environment in which they are operating, in which they are offering services, as the differentiator between a reputable side and a disreputable site. We think that is a far more efficacious solution than to attempt to undermine the transactions themselves, having regard to my point about consumer confidence generally.

Senator LUNDY —Mr Coroneos, on the issue of the moratorium, the title of the bill is the Interactive Gambling (Moratorium) Bill. Do you see it as a moratorium, or do you see this as the first stage in an ongoing ban?

Mr Coroneos —In fairness, I think we have to look beyond the title to look at the objectives of the legislation. The explanatory memorandum makes it clear that it is not attempting to ban the activity per se. But I think what we find worrying is that, even in the explanatory memorandum, at least in one place and possibly two we see statements to the effect that the government is favourably disposed towards a ban. So I suppose it is the context in which this is occurring and the accompanying message coming with the bill that is causing a lot of our members to see this as a precursor to a complete ban.

Senator LUNDY —Given that context, are your members approaching this bill as effectively that and adjusting their business plans accordingly?

Mr Coroneos —It depends which of our members you are talking about. I must say that we do have a very small number of members who are engaged in interactive gambling themselves now. You would have heard from some witnesses today, and I think no-one who has spoken so far, perhaps with the exception of New South Wales TAB Ltd, is a member. Undoubtedly the message we are getting from both member and non-member interactive gambling operators in Australia is that this moratorium will leave them with no option but to relocate. So to that extent they are adjusting their business plans.

In terms of the ISP members, they are looking at this with as much consternation as they looked upon the online content legislation last year and they are asking themselves whether this is just another example of the government seeing something on the Internet it does not like and then expecting ISPs to become the police of the policy.

Senator LUNDY —What is your understanding of the options that are being considered for the creation of an ongoing ban? Whilst I understand this is the subject of the NOIE inquiry, I would like you to draw on your experience with the online services act.

Mr Coroneos —I actually do not have a lot to go on. Until we have seen the outcome of the NOIE reports, it is difficult to ascertain what the thinking is there. In a worst case scenario, we would be looking at a situation where, whether or not the moratorium were to go ahead, a subsequent ban would require ISPs to somehow monitor requests for access to Internet sites with accompanying criminal sanctions applying to them if they were not taking all reasonable steps. In fact, that was the language that was used in the original draft of the bill last year on online services legislation. So it is hard to know how a ban would be cast. In any event, it is really about a sense of confidence. Speaking on behalf of the ISP members, it is a sense of, `Why is it, when we are merely the conduits of information and have no knowledge of its contents and are no more than common carriers of information—just as Australia Post is when it delivers letters or Telstra is when it delivers phone calls—that we should have imposed upon us the responsibility of giving effect to a policy which, in any event, we do not believe is capable of working?'

Senator LUNDY —On that point, it seems that one option for the government's perpetuating of this ban would be to remove the sunset clause within this legislation. Potentially, another option may be to model, as you have alluded to in your description, regulations that call upon the provisions of the Broadcasting Services Act and the provisions of the online services act to give effect to that ban. Exploring a little hypothetically, given that the online services act really only operates because of the cooperation of the industry in the development of the code of practice, what would your association's position be if you were similarly approached by the government to develop a code of practice that would in some way attempt to give effect to a perpetual ban that operates in the same mode as the online services act?

Mr Coroneos —Our engagement with the government in the online services scenario was on the basis that we did not, and still do not, think it is feasible to block access to international sites. We do not cooperate in giving effect to that. In fact, it was by our intervention that that does not now occur in Australia. Instead, we have put in place codes of practice which have far more of an orientation towards empowering end users and providing them with the filters by which means they can take control over the content which is coming into their homes. We are not the instruments of the policy that requires the banning of anything. That is the first point. On the second point, you said that the removal of the sunset clause in the moratorium could be one mechanism by which a ban is implemented. In fact, that is not strictly correct because all that would really do would be to limit the proliferation or the growth of sites within Australia, where everyone acknowledges that the greater problem is likely to be in the access to unregulated sites offshore.

I know you want me to address the issue of a code of practice, and I think I could speak with a fair degree of certainty on behalf of our board and our members in saying that we would not be minded to any constructive work on a code of practice which sought to limit the access of Australians to sites on the Internet internationally. We simply do not think it is feasible and, for the reasons we intimated earlier, it will have other negative consequences that will hamper the development of the medium within Australia.

Senator LUNDY —The point I was pursuing was that, in terms of the operation of the online services bill, that model of legislation does not in fact give effect to the sentiment expressed in that original bill either, in that it was somehow technically feasible to restrict access to Internet content whether it was located here in Australia or overseas. You have clarified that. Thank you. Going to a broader issue about government attempting to regulate, in light of the evidence you have just given, what message do you think it sends to a developing Internet industry that this government has now twice attempted to very clearly restrict access to a range of services that are available on the Internet—whatever their respective merits?

Mr Coroneos —Again, we think it shows a lack of the understanding of the nature of the medium itself. I must emphasise that we are not advocates of no regulation. In my introductory comments I talked about the work we are doing in improving disabled access to the Internet and in providing consumer protection in the online medium, so we have a lot of constructive suggestions to make. But in terms of the message that we think it sends to the industry at large, we would much rather see a cooperative approach implemented here—a coregulatory approach, if need be—that takes into account the feasibility and the growing and the changing nature of the medium and puts that side by side with some social objectives and attempts to develop outcomes that will provide real protection for end users as opposed to aspirational ones that are never capable of being implemented.

Senator LUNDY —Just on that point, I am interested to explore the difference between what I loosely describe as content regulation, as opposed to Internet regulation. It seems that the online services bill that sought to restrict access to sexually explicit sites still relied on the content laws that existed within the states. In this case, again, there are content laws, if you like, that regulate content that happens to be online gambling services of some nature, as opposed to an attempt to regulate the Internet per se. I am just trying to clarify this. Are you saying that you support the concept of regulating the actual content but challenge the ability of governments to regulate the Internet, because of the nature of the medium?

Mr Coroneos —That is correct. That goes to my comments about the ban more than it does to the moratorium. We think, in respect to the moratorium, there are very stringent requirements. Professor McMillen would probably be in a better position to give you the analysis of this, but the stringent requirements that we understand to be in place in respect of getting a licence for operating an online gambling service in Australia are quite high. A 100-point identification is not a trivial thing for customers to be required to provide you with and will address issues like inadvertent access by children, limits on credit card betting and even, arguably, subject to privacy requirements, information sharing between registered providers within Australia so that you cannot have a problem gambler jumping from one registered site to another and clocking up large gambling debts that way. The technology permits these things to occur in a way that can never occur in preventing someone going from one casino to another or from one race track to another or from one offline poker machine to another. This is our point really: look at the strengths of the Internet. Do not look at the issue as simply access to poker machines 24 hours a day; look at the extent to which the medium itself can provide that. Structure in your licence requirements to stipulate who may access your service and upon what conditions, and deal with it that way. We think that way you address the social policy concerns, which we also share, but you do not do it in a way that has these unintended and adverse impacts on the rest of the Internet industry.

Senator LUNDY —Professor McMillen, do you want to comment on that point?

Prof. McMillen —Yes. I guess what concerns me is that a lot of the comments that have been made at this forum have referred to the highest benchmarks that exist and perhaps not identified the fact that the regulatory standards, either in licensing or in the operating standards, are consistent either between the states or between the providers. Some of the best operators, certainly, have set some benchmarks that I think could even be improved further; but we also have, as Netbets report quite rightly identified, some licensed operators in Australia who do not meet what I think are even basic, adequate standards. That is my major concern, I think. I agree that a pause is necessary to look at the issues, I accept the Commonwealth's preference for a ban, but I am unconvinced that a ban is either technically feasible or that it will actually be cost effective in policy terms. If that is the case and it is shown that a ban is not feasible, I would call again for urgent and concentrated effort on improving the regulatory standards that exist in this country, to establish a national approach that includes issues of consumer protection and of the probity and operating standards for the industry.

Senator LUNDY —On that point, following the publication from the Productivity Commission inquiry into gambling, what efforts were made on behalf of the Commonwealth government, the coalition, to give some effect to the primary issue of social concern highlighted in that document in relation to land based gambling, particularly poker machines?

Prof. McMillen —As I said, I have seen only recently some indication of a collaborative effort with the states and consultation with the states to look at the issues of the extent of problem gambling, the service delivery models that exist in the states and the policies for responsible gambling that are being developed. That has only occurred in the last couple of months, as far as I know.

Senator LUNDY —Is that from the states themselves or is there a Commonwealth role? Prof. McMillen —My understanding—and I am only offering second-hand information here—is that the working party of state and territory gaming regulators was already established and that the Commonwealth Department of Family and Community Services is now participating in regular meetings of that working party, I am not sure at whose initiative.

Senator LUNDY —You or Ms Webster mentioned before some activities with respect to states regulating to a further degree the land based gambling environment.

Prof. McMillen —Yes. Queensland had a gaming review parallel to the Productivity Commission inquiry and they have undertaken a very broad agenda of policy reform and set up a specific institutional base to action those reforms. Victoria has, of course, been held up by a change of government, but they are moving towards changing the responsible gambling provisions in that state. New South Wales introduced a raft of legislation, changing all the gambling legislation to introduce very prescriptive requirements for more responsible gambling by the operators. They have also established a steering group through the New South Wales department of health to look at service delivery models, so New South Wales is moving down that track. It is not as coordinated as I would like.

What worries me about New South Wales, given the scope of the problem that was demonstrated in the Productivity Commission report, is the effectiveness of the programs that are being introduced and the requirement for compliance by the operators. There are still some questions over that. Most of them are operating through codes of practice, and my research demonstrates that industry based codes of practice without some form of effective sanction and monitoring process are fairly ineffective.

Senator LUNDY —Thank you. You mentioned in your submission or your comments that a three-month moratorium would be sufficient to allow the NOIE study to be completed. Is it your view that the NOIE study could actually be completed without a moratorium in place, provided there was the will on behalf of the government to progress the discussion and that particular study? I am asking you what you think the relationship is between the NOIE study and the moratorium.

Prof. McMillen —The NOIE study, if they are able to undertake the tasks under their terms of reference, is not affected, to my mind, by the moratorium. But unfortunately, because that issue is out there now and the Commonwealth has declared its hand and its preference for a ban, we have already seen a proliferation of licensing around Australia, particularly, as was pointed out earlier today, in the states that perhaps have most to gain and less to lose and are prepared to take some risks. I am worried about that. I know how long it took, for instance, Lasseters to establish itself in the Northern Territory and for Queensland to license GOCORP. I think the fast-tracking of licensing immediately drives the standards down and I have a worry about that.

Senator LUNDY —The impact of the announcement of the retrospective application of a moratorium is actually potentially driving those state standards down. Is that what you are saying?

Prof. McMillen —No. I do not know, but I think that there is a risk that that is the case. I find it very difficult to understand how the same level of probity checks, for instance, were undertaken for those recent licensees. At this stage we have not been able to investigate that and I do not want to malign those jurisdictions, but I think that question has to be asked. I know some of those applicants had their applications in for a long time, but the rather concentrated proliferation of licences just before the date of the moratorium concerns me.

Senator LUNDY —Finally to you, Professor McMillen, you mentioned also that the moratorium will create a distorted market given that the bill before us allows the continuation of the operation of existing services online. Again, can you extrapolate on that distorted market and how that actually affects the stated objectives of the coalition with regard to this bill?

Prof. McMillen —Yes. The moratorium is proposing a freeze as of 18-19 May. Operators who had introduced their own policies to restrict certain activities—and I think some of those policies were very responsible—under the moratorium will have to continue to maintain those conditions. I gave two examples in my submission, and one is Lasseters which has voluntarily agreed not to take bets from Australian residents outside the southern region of the Northern Territory. Under the moratorium they will not be able to take bets from Australian citizens. Centrebet has restricted its services to United States citizens because they were conscious of the debate in the United States about prohibition. It is a very sensitive and, I think, responsible approach. But that self-imposed restraint on their market disadvantages them, for instance, to Canbet who this morning made it very clear that most of their market is offshore and Canbet has publicly in other fora indicated that they take a large share of their market from the United States.

So it is an artificial market that in some respects disadvantages some of the operators and, unfortunately, they are being penalised for responsible initiatives that they have undertaken to let the politicians sort out the mess and develop an appropriate regulatory framework. It is an artificial market in terms of business activity but it is also I think an artificial market in terms of the impacts of online gambling. It really is not allowing the market to set the agenda, as it will, once the moratorium is lifted. We have two options: one is an attempt to ban and one is the moratorium will be lifted and market activities will change and gambling activities will change. That 12-month time frame is really quite a false environment.

Senator LUNDY —Do you think if that second option were to become a reality, and again I know this is in the hypothetical, but if the moratorium is supported and they are unable, through their investigations, to find an appropriate way of perpetuating a ban and the moratorium gets lifted, what are the risks in that scenario because of that distorted market for then a proliferation perhaps of lesser quality service offerings entering the Australian market?

Prof. McMillen —We have to use this opportunity to develop a national approach to online gambling and set some standards. We can do that relatively quickly if people are prepared to act. What is lacking at the moment, I think, is a willingness to cooperate between the states and the Commonwealth. I think the nation will suffer from that political impasse that resulted from the ministerial council. I would encourage people to overcome that problem. But we need the states and the Commonwealth working cooperatively to establish a regulatory regime. My suggestion is we will probably move towards a co-regulatory model but we do not know what the options are. Nobody is debating the options. Years ago I asked for a task force to be set up. I repeat that call. Let us act to get a task force together that gets people to put options before that task force and make sure that the community groups are included in that task force, consider the options and act on them.

Senator LUNDY —I have two points on that. Was the federal government's approach to the ministerial council helpful in terms of progressing towards an effective co-regulatory model?

Prof. McMillen —I do not want to point the blame just at the Commonwealth government but unfortunately this became a game of political football. Both the states, the territories and the Commonwealth, I think, must accept some blame for the brinkmanship and political impasse that exists at the moment. I think it is very unfortunate. I was encouraged to hear that there was at least a move towards collaboration and consultation on consumer protection issues. But I would also like to see that happen in terms of regulatory standards—the whole concept of the future of Internet gambling and of land based gambling. The regulatory standards for land based gambling are just as inconsistent.

Senator LUNDY —In terms of the agenda that we are now in the midst of—the contemplation of a bill and the awaiting of the outcomes of the NOIE study—is that further preventing, in your view, meaningful discussion on the establishment of a co-regulatory regime?

Prof. McMillen —Yes, I think it is. It is taking a lot of time and effort for people to contend with this new introduced environment. State governments are not sure which way it is going to pan out; industry is not sure which way it is going to pan out. So people's attention and efforts have been distracted to the moratorium bill rather than to getting on with what I think is the main issue.

Senator LUNDY —Thank you, Professor. I have a few questions for Ms Webster. According to your observations, what efforts has the federal government made specifically in relation to dealing with the issues raised in the Productivity Commission report about land based—particularly poker machine—gambling and the social problems associated with that?

Ms Webster —My observations would be those of the general public. I am certainly aware of the joint ministerial meetings that have happened, and I know that they have canvassed more than just the issue of interactive gambling. I certainly think the expressions of concern by the Prime Minister about the impact of gambling on the community had resonance with community groups who have a concern about that problem.

Senator LUNDY —I will come back to that point. Can you tell me anything specifically that the federal government has done with respect to land based poker machine gambling and the problems identified in the Productivity Commission report?

Ms Webster —No. I am not aware of anything that the government has done apart from setting in place those consultative processes to which Professor McMillen has already alluded.

Senator LUNDY —Is that the ministerial council chaired by Senator Newman?

Ms Webster —Yes, Senator Newman.

Senator LUNDY —When was the first meeting of that ministerial council?

Ms Webster —I am not aware of the exact date. I understand that it was in the early part of this year—possibly February.

Senator LUNDY —You mentioned the public statements by the Prime Minister about gambling. Because the focus has been very much on Internet gambling and interactive gambling has he made any public statement going specifically to the federal government's intention to intervene in a regulatory or legislative sense with respect to land based poker machine gambling?

Ms Webster —I am obviously not in possession of all the public statements that the Prime Minister has made.

Senator LUNDY —Are you aware of any? I presume you would be.

Ms Webster —Yes. I have certainly read the press statement that accompanied the announcement of the ministerial council. There were concerns expressed there about land based gambling. But my reading of that statement is that it was left very much to the deliberations of that council to work out options.

Senator LUNDY —To your knowledge, is the ministerial council actively contemplating federal legislative intervention with respect to land based poker machine gambling?

Ms Webster —I am unable to comment on that. I do not have knowledge of the deliberations or discussions of the council.

Senator LUNDY —In terms of your organisation's involvement in this, and I recognise the position of your organisation in supporting prohibition with respect to gambling per se, when did you become involved in the discussions surrounding a potential ban on Internet gambling?

Ms Webster —Can I just clarify that the Inter-Church Gambling Task Force has expressed support for a prohibition on interactive gambling but has not expressed support for a prohibition on other forms of land based gambling.

Senator LUNDY —I am sorry; I thought it was general.

Ms Webster —No, it is not.

Senator LUNDY —Why have you chosen to express a view of a prohibition on interactive gambling as opposed to poker machine gambling?

Ms Webster —We believe that there is an opportunity to act now to further prevent the extension of problem gambling and that there is an ideal opportunity now to do that. We understand that to a certain extent, in respect of land based gambling, the horse has bolted, that there is a saturation of gaming machines in a good part of the eastern seaboard although there are some states that have chosen not to travel that path. While there are probably some limited actions that state governments can take to reduce the number of gaming machines, we believe that obviously at this point in time a prohibition in respect of land based gambling is not feasible.

Senator LUNDY —What is your response to the Australian Institute for Gambling Research's statement that the horse has bolted specifically because the proposed ban effectively endorses the existence of the current services being offered in an interactive environment?

Ms Webster —Obviously, it is a very real consideration. But we believe that the number of sites thus far licensed is relatively small, that the impact on the community thus far is relatively small and that, if there were a moratorium for 12 months, this would send a fairly powerful message to the community about the concerns and dangers that interactive gambling represents.

Senator LUNDY —You are supportive of the bill, which you have made really clear. Is the question of political leadership in expressing concern about gambling more important for you than the actual functionality of being able to access an interactive gambling web site?

Ms Webster —To a certain extent the two are linked. Very briefly, an option for a regulatory environment means an option for a focus on protection of the consumer. An option for a focus on a moratorium represents an option for a focus on protection of the wider community, women, children and families in particular. So we are interested in more than just consumer protection.

Senator LUNDY —So it is very much a statement of values?

Ms Webster —I think all of the statements of the Inter-Church Gambling Task Force come from a statement of values, an expression of concern, about what kind of community we want to create for our children and what kinds of values we want to see emphasised. That is very strongly the direction of the heads of churches in establishing the task force.

Senator LUNDY —I respect that. If there is a clear community message in the position you take on a range of propositions like the Interactive Gambling (Moratorium) Bill 2000, is it conceivable that the organisation could also express their values with respect to other forms of gambling in a similar way—that is, express your values of your prohibition of the poker machines as a way to give substance to it, albeit acknowledging that there has been proliferation over many years of that service?

Ms Webster —I think there have been. Certainly, the Inter-Church Gambling Task Force, individual heads of churches and the heads of churches jointly have made strong expressions and statements about the values introduced to Victoria, particularly, by the prevalence of gaming machines and what that has done to community and family life. The pivot on which the difference in direction goes for the task force is the fact that at present we have a nascent interactive industry that now provides an opportunity to act. In the case of the land-based gambling options, as I have said, the horse has bolted. Much of the direction of the Inter-Church Gambling Task Force has been amelioration of the problems that have emerged. We are trying to prevent the emergence of a new set of problems.

Senator LUNDY —I am trying to ascertain the distinction with you not expressing prohibition with respect to poker machines but expressing it with respect to interactive gambling. The essence is because you can, and you believe that an opportunity exists. It is not that interactive gambling is worse; it is just that there is an opportunity at this point in time to take a harder line.

Ms Webster —No. We believe that there is a significant difference in the dimension of the potential problems which might be introduced by interactive gambling by virtue of its accessibility, its 24-hour availability, its presence in the home. We believe that represents a very significant shift in the nature of gambling opportunity.

Senator LUNDY —A further point on that with respect to interactive services in the home is that the socioeconomic split between those who have Internet access and those who do not is very distinct. Poorer, disadvantaged people have a very low percentage of connectivity. As a result of studies like the one Mr Coroneos mentioned earlier, what is commonly characterised as the `digital divide' is likely to grow despite a general rise in Internet connectivity. How did those statistics influence or impact your view on where it is likely to proliferate in the home, given that the inequity that exists could serve to be some advantage to the position and concern that you have expressed?

Ms Webster —At the outset, could I say that we are very concerned about inequities, especially in access to some of the more modern resources of our community, including access to interactive opportunities. However, the issue is going to become one of diminishing importance for low income groups. With interactive television now on sale at Harvey Norman for less than $2,000, with a black box and all the accoutrements, and the various time payment provisions which inevitably trap low income groups, we will see these groups connected. Obviously, we are concerned to see these groups connected but justification of expansion of gambling on the back of equality of access to interactive potential we do not believe is justifiable.

Senator LUNDY —Do the organisations from which your task force is drawn campaign actively for improved Internet connectivity amongst your constituents?

Ms Webster —We have. Some years ago a colleague of mine completed a report on the disadvantages for young people and families with inadequate income in terms of access to Internet. In the forthcoming week we will release a further education report in relation to exclusion and alienation from school which further picks up that issue. We are concerned at a wider level.

Senator LUNDY —Professor McMillen, did you want to add something to that?

Prof. McMillen —Yes. I would like to say that I share the inter-church task force concern about the public being alerted and educated about the risks of gambling, and not just Internet gambling. There is very little being done in that area. If we are going to actually address this issue of problem gambling, I go back to a point that I made earlier that we are operating in an information vacuum. We all intuitively feel what might happen but we do not know. We really do not know at this stage who is gambling on the Internet, the extent of that gambling or the nature of the problems that might emerge. We might find, for instance, if we do appropriate research, that the nature of problems that emerge from this form of gambling are quite different from the problems that are associated with poker machines. I would also like to repeat the point that was made by the Internet Industry Association, that there are some licensed operators at the moment who really do have fairly significant consumer protection policies in place that certainly are not there for poker machine providers and venues.

Senator LUNDY —I have one final question to Mr Coroneos. In a number of pieces of significant legislation or bills before the federal parliament right now, and also previously, the government has given expression to the desirability of those pieces of legislation being technologically neutral—whether it is the copyright agenda bill, data casting and so forth. This particular bill before us moves in the opposite direction. I am just looking for some comment from you about that inherent contradiction in the government's message, particularly in relation to social problems and outcomes associated with technological change and why you think it has been appropriate to be technologically neutral in other forums and what could be the motivation for technological specificity with respect to this, despite obviously the social problems manifesting themselves, certainly at this stage, in an area that in fact has little to do with the Internet.

Mr Coroneos —Our starting point is that technological neutrality is always preferred at a policy level because governments, who are the authors of those policies, are really in no better a position than anyone to judge the direction in which the technology is likely to develop. We believe as a starting point it is always better to look at the principles and the outcomes that you are attempting to achieve and then find appropriate regulation through which to achieve them. In terms of the signals that the government is sending through its broader legislative program, we are concerned that we do not yet see in Australia, as perhaps we are seeing in some other countries, a clear articulation of a vision from the highest levels of government as to this government's commitment to pursuing the empowerment and the building out of the information society. The Prime Minister made some very valuable comments in December 1997 when he made the Investing for Growth statement, but we have not seen anything further, to my knowledge at least, from the Prime Minister on the vision of the government in terms of the broader issues of the technological society. Indeed, at the same time we have seen statements of that nature from the President of the United States and the Prime Minister of Britain.

It would be refreshing for us to understand and to feel confident that this government is unanimous in its support for this new technological revolution and the huge degree of empowerment and the huge potential to address social equity issues through this medium. It disappoints us when we see legislation emerging from time to time which to us seems retrograde in attempting to take the technology and the Internet as a discrete entity and as an attempt to regulate it in a way that we do not honestly believe can be done. The industry itself is ready, willing and able to constructively engage with the government in working through these social policy areas in a way that we can be positive with all the legislation that we see, rather than attempting to segment off and isolate certain aspects of it when perhaps there is a political imperative or a perception that there is a need to be addressing something—`Let us attack it on the Internet because we have jurisdiction or because people do not yet understand that it not really a problem and so we might score some points.'

I am not necessarily directing those comments to anyone in particular, but I would like to say that the industry in Australia has a great deal of faith and is investing a lot of money, and we see constantly stories of empowerment, even from the disabled community who we were recently engaging with on issues like access to the Internet so that they can in unprecedented ways re-engage with society, both at an economic level and also at a social and community level. What disappoints us is that on the cusp of this tremendous revolution we are still seeing inconsistent, divergent policy responses which we think would be unnecessary if we had a better, perhaps, commitment there.

That is a fairly broad statement from me, but I think it reflects the sentiments of our 300-odd most dynamic Internet companies in Australia at the moment.

CHAIR —Thank you very much, witnesses.