Senator BOB COLLINS —My question is addressed to the Minister for Communications and the Arts. Minister, I refer you to the Prime Minister's statement on 30 October 1996: `There is a world of difference between a decent market rate and a salary of over $2 million.' Can you confirm that Telstra's chief executive, Mr Frank Blount, has recently received a $500,000 pay rise? Can you also confirm that Mr Blount earned $1.4 million in 1996-97? Can you confirm that this pay rise in the form of a three-year performance bonus comes at the same time that Telstra has written off $1.1 billion to pay for the redundancies of 25,000 staff over the next three years?

Senator ALSTON —Here we go again, Madam President; the politics of envy. The opposition are obviously not prepared to recognise the disparity in government business enterprises and the private sector. As you well know, Telstra is, if not the largest company, probably the second largest company in Australia. Certainly in terms of employment levels it is in the top two or three. So I would have thought that it is very understandable indeed that the chief executive of one of Australia's largest corporations should have a salary level that is roughly commensurate with that on offer in the private sector. That has certainly not been the case to date.

The CEO's remuneration package is a matter between the Telstra board and the CEO. In other words, the government does not set it. However, Telstra advises that, compared to remuneration paid to CEOs of similar sized companies, Telstra's CEO is paid at the lower end of the salary scale. Telstra has also advised that for the financial year 1996-97 the CEO's remuneration of $1.4 million included a long-term incentive payment accumulated over three years. In previous years the CEO's salary has fluctuated largely as a result of incentive payments.

I do not propose to go beyond saying a person who is running an organisation like Telstra would really need to have a range of skills that are very rarely available in this country. You have to put up with the likes of Senator Schacht rambling on endlessly giving you gratuitous advice about all sorts of mickey mouse issues.

Senator Jacinta Collins —What about you falling asleep?

Senator ALSTON —That is different. The fact is that running a company of this magnitude requires a very important range of high quality skills, and this country has been very lucky to have Mr Blount in Australia over recent years. Remember that he was appointed during your time. We endorsed the decision at the time and we have continued to support him in that very difficult work. I think he ought to be given an extra entitlement for having to put up with the likes of Senator Schacht, but I am sure he would gracefully decline that.

The concept of an incentive payment is not unknown in the private sector. Indeed, in many respects it is a very desirable approach to take because it ensures that people simply do not get paid irrespective of performance. I would have thought that rather than being churlish and not concentrating on the main game, as usual, you would be prepared to recognise that this is one of the most difficult jobs in the country and that like many public servants Mr Blount has not been overpaid to date.

Senator BOB COLLINS —Madam President, I ask a supplementary question. I must say that it is an extremely curious reason to advance to justify a salary package of $2 million a year. I have been putting up with Senator Schacht for years and I get paid a fraction of what Mr Blount gets paid. In terms of those generalisations that the minister just indulged in, which he said was advice from the Telstra board, and I presume he has advised himself on this issue, what are in fact the market rates that Mr Blount's increase has been benchmarked against?

Senator ALSTON —I am sure, if you want to go and ask Telstra to give you chapter and verse, they will consider your request on the merits. It is an extraordinary proposition. I got up and announced that I had advice from Telstra that the CEO's remuneration of $1.4 million included a long-term incentive payment. So what happens? Senator Collins gets up and talks about a $2 million payment. I do not know where he gets his numbers from. Maybe he ought to go and talk to Senator Schacht on this occasion. I can understand your reluctance to contaminate your mind with the sort of low-grade input that you would be likely to get from Senator Schacht. We are seriously considering reclassifying him as a no-impact facility. We previously had him as a low-impact facility, but I think events have changed for the worse as far as he is concerned.

But the important thing is that, if Senator Collins wants to make contact with Telstra and find out what is on offer in the private sector and what Telstra are paying, I am sure they would be happy to point him in the right direction. I do not say that because I think they are likely to make you an offer—they probably are not—but you never know what might happen out there if you find out what is going on in the real world.