Senator CHRIS EVANS (Leader of the Opposition in the Senate) (2:03 PM) —My question is directed to Senator Coonan, in her capacity as minister representing the Minister for Finance and Administration, Senator Minchin. I refer her to the minister’s signature at clause 5(17) of the T3 prospectus, which says that he has given his consent to its issue and lodgement with the ASIC. Can the minister indicate exactly when Senator Minchin first sighted a draft of the prospectus? Did the minister and/or his department request changes to the draft as a condition of granting consent? What changes were requested? When exactly did the minister give his consent to the prospectus being issued, given that the announcement was delayed by a couple of hours this morning? Does the minister’s consent mean that the government accepts the damning assessment of the suitability of appointing Mr Cousins to the Telstra board contained in the T3 prospectus that Senator Minchin signed off on?

Senator COONAN (Minister for Communications, Information Technology and the Arts) —I thank Senator Evans for the question. I can confirm that today the Australian government has participated in the launch of T3. That marks the formal launch of the T3 sale offer, including the prospectus. The prospectus outlines basic information about the company. It informs investors about potential risks. It provides details of the offer. The government has already announced that the size of the offer will be around $8 billion. That is a very large public offering—the biggest in Australia since T2. The prospectus is obviously a document that needs to comply with legal requirements in Australia and in other jurisdictions.

The prospectus has been the subject of consultation and advice. It enables retail and institutional investors to pay for their T3 shares in two instalments, with the second instalment payable in 18 months. It gives investors the opportunity to receive three dividend payments before having to pay the final instalment. It provides for the first instalment for retail investors to be at $2 a share. It represents a discount for retail investors of 10 per cent per share to the price payable by institutional investors. Subject to the caveats around Telstra’s dividend guidance, a 14 per cent franked dividend yield for T3 shares is expected for next year.

As the government and Senator Minchin foreshadowed in the lead-up to the offer launch, a new element in T3 that is different to T2 and T1 is a loyalty share. Rather than offer a cash discount on the second instalment, we are offering retail investors bonus loyalty shares. Senator Minchin said that the government had under consideration, in the lead-up to the offer, the way in which this loyalty arrangement would be constructed. So investors who purchase instalment receipts in T3 and hold them until the final instalment is due and paid will receive a loyalty discount of one bonus loyalty share for every 25 shares purchased in T3. A one-in-25 bonus share is an effective discount of four per cent.

Senator Chris Evans —Mr President, I raise a point of order. The minister has made no attempt to answer the question asked of her. I ask you to draw her attention to the issue of relevance. If she wants to read a brief, she will have the option of a dorothy dixer later in question time. The question went to the minister’s involvement in the issue of the prospectus, and I ask you to draw her attention to the question.

The PRESIDENT —Minister, you have one minute and 19 seconds remaining, and I would remind you of the question.

Senator COONAN —Thank you, Mr President, and I am grateful for Senator Evans’s interjection because what I am doing on behalf of Senator Minchin is to indicate to the Senate a reflection of the agreement that he has reached with the board for the launch of the offer document. This reflects the agreements and discussions that the senator has had in the lead-up to the launch of the offer document.

I would have thought it very important that those listening to this broadcast are aware of what the offer document contains, which represents Senator Minchin’s efforts over the past few months. Reflecting our commitment to reward existing shareholders, there is a guaranteed entitlement for existing shareholders of 3,000 shares, or one for every two held. That is clearly something that was negotiated in the lead-up to the offer, with Senator Minchin’s participation. In comparison it is worth saying that in T2 the existing retail shareholder entitlement was just one share in five, so that puts the existing shareholders very much—(Time expired)

Senator CHRIS EVANS —Mr President, I ask a supplementary question. I ask the minister to have another crack at the primary question. When was the prospectus agreed by the government? Why was its issue delayed by over two hours this morning? What changes were requested by the government which resulted in this unseemly fight with the Telstra board? Minister, will you answer those questions? Does the consent/sign-off by the Minister for Finance and Administration mean that he and the government accept the damning assessment of the suitability of appointing Mr Cousins to the Telstra board, contained in the prospectus? Given that you have signed off on that damning assessment, does that mean that you now agree that Mr Cousins is an inappropriate appointment?

Senator COONAN (Minister for Communications, Information Technology and the Arts) —The prospectus has been signed, and very clearly the government supports the nomination of Mr Cousins, which has been accepted. The Labor Party has a real hide to criticise the government’s handling of the privatisation of Telstra. Labor, as usual, speaks out of both sides of its mouth: it opposes the sale on the one hand but refuses to buy back shares from the Future Fund. If it believed in public ownership you would think that the Labor Party would try to get its line straight about where it is going with Telstra.

Labor will not remove the remaining shareholding in the Future Fund. They say that Labor is ‘at pains’ because it will not say what it will do about Telstra. Unlike the Labor Party, this government has a coherent plan for the privatisation of Telstra and for the telecommunications industry, which is today marked by the T3 launch.