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Thursday, 29 May 2003
Page: 15461

Mr McMULLAN (2:08 PM) —My question is to the Treasurer. Isn't it the case that whatever measure is used—GFS market value; AAS31—none of these valuations would justify the $3 billion increase in Telstra's value shown in your budget?

Mr COSTELLO (Treasurer) —No, it is not the case, because, as I have just explained, under AAS31 Telstra is valued at historic costs; so it is not the case at all. As I have previously indicated, the statement of net worth does not affect the budget year, the underlying cash surplus, the headline cash surplus, the operating statement, the fiscal surplus or any of those other matters. It is an attempt to try and get to the net worth of the Commonwealth, which the Commonwealth has variously estimated under different measures. It could be negative $46 billion or negative $50 billion, depending on the kind of price that you want to put on defence platforms. But I will say this: it is absolutely true that the value of the 6.5 billion shares that the Commonwealth holds in Telstra has declined—absolutely true.

If the Senate had passed the government's legislation, and the government had sold those shares at the time of T2, the Commonwealth would have received around $29 billion more than they are worth today. I do not know what point the Australian Labor Party is trying to make here. This much is true: the Australian Labor Party, by its efforts in defeating the authorisation for the government to put equity of Telstra on the market—

The SPEAKER —Member for Fraser!

The SPEAKER —The member for Fraser is ignoring the chair.

Mr COSTELLO —has presided over a $29 billion loss in net worth. I do not know whether the Australian Labor Party considers that a great success. The government has, in fact, marked down its valuation of Telstra shares. That is the effect of having those 6.5 billion shares at the kind of market prices that now prevail rather than the prices that prevailed at the time of T2.