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Tuesday, 15 August 2006
Page: 19

Senator SHERRY (2:00 PM) —My question is to Senator Minchin, the Minister for Finance and Administration. Is the minister aware of the Prime Minister’s statement last Friday that the government does not want to dud existing Telstra shareholders as part of its plans to sell Telstra? Is the minister also aware of comments by leading columnist Terry McCrann that dumping Telstra shares into the Future Fund would be ‘plain dumb, utterly pointless and against the interests of 1.6 million voters otherwise known as Telstra shareholders’? Given the Prime Minister’s stated wish not to dud Telstra shareholders, can the minister explain why he is actively considering a policy that is against the interests of Telstra shareholders? Why is the minister intent on making Telstra shareholders pay for his incompetent management of the sale process? Haven’t the shareholders already suffered enough?

Senator MINCHIN (Minister for Finance and Administration) —The whole country—and, indeed, Telstra—continues to suffer from the idiotic policy of the Labor Party which has consistently denied all Australians the opportunity to have a stake in this company. The Labor Party have cost the Australian public $50 billion by denying this government the right to sell Telstra at the time of T2. A $50 billion bill hangs around the heads of Senator Sherry and his colleagues because of their refusal, and they have clung to their old socialist mantra that this company should remain hostage to the government. It is an outrage the way the Labor Party have behaved in relation to this company, forcing it for so many years to be shackled by government ownership. I will not take any abuse from the Labor Party about this. How dare they, when they have cost Australian taxpayers $50 billion because of their intransigence on this issue?

The great thing that happened as a result of the last election was that the Australian people gave us a majority in this parliament, which enabled us to at last be in a position to free this company from the shackles of government ownership imposed on it by the Labor Party—in its hypocrisy. Having freed the Commonwealth Bank and Qantas from those shackles, Labor cannot see the wisdom of so doing in relation to Telstra. We can.

As to whether or not we will exercise the authority given to us by this parliament for a sale, that is a decision that we have not yet taken. We will take it in due course. There are a range of options open to the government. Of course, the government can do nothing. We can continue with the situation which has applied since 1999, with half the shares held by the government and half held by individual shareholders. Alternatively, there could be a full retail offer. There are a range of options in between, and we have suggested that one of those possibilities is that some or all of the shares could be placed in the Future Fund. I reject the commentary made by Mr McCrann. I cannot see the difference between the government continuing to hold the 51 per cent and the Future Fund holding those shares. Mr McCrann does not, in any way, indicate what the difference would be from the perspective of his criticisms of a shareholder owning 51 per cent. That is the point. What Mr McCrann is worried about is the fact of one shareholder—whether it is the Future Fund or the government—holding 51 per cent. He is quite right in that concern, and we want to end it.

Senator SHERRY —Mr President, I ask a supplementary question. I do not know about ‘socialist mantra’ but we do know about your capitalist incompetence. Is the minister also aware of comments by Telstra CEO, Sol Trujillo, that a decision to dump Telstra into the Future Fund would be bad policy, bad for shareholders and it would create a ceiling for where a share price could go? Isn’t Mr Trujillo right when he says that the dumping of Telstra into the Future Fund would be bad for shareholders, who are already reeling from significant losses—from $7.40 to $3.60 per share? Why is the minister intent on pursuing a policy that will dud Telstra shareholders? Isn’t this what the Prime Minister said he did not want to do?

Senator MINCHIN (Minister for Finance and Administration) —Mr Trujillo is entitled to express his views as the managing director of the company. What he is worried about is having a large shareholder who may want to sell down their shares. That is the situation now. You have the government with 51 per cent, as a result of the Labor Party, that wants to sell down its shares. We would like to do so by way of a retail offer. Your question is utterly hypothetical because we have not yet made a decision, but I do reaffirm that placing the shares in the Future Fund remains one of the options.