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High-octane week in Canberra -

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High-octane week in Canberra

Reporter: Michael Brissenden

MAXINE McKEW: While hostilities in Canberra seem to have ceased - at least for the moment - the
business of government rolls on. After four days of tit-for-tat exchanges, we now know that the
Prime Minister is not for turning and that the Treasurer can no longer hide his impatience. Both
men have told us of their ongoing ambitions for the country and tomorrow's meeting with the state
premiers will be an interesting test of this. There's a full agenda, with demands from the states
to push ahead on a range of reforms. In the meantime, the Government has announced significant and
long-awaited changes to media laws. There's also the fate of Telstra. And in an interview with the
7.30 Report, Finance Minister Nick Minchin has conceded that there is still only a 50/50 chance
that the final sale of Telstra will go ahead. A decision on that should be made quite soon. So it
might be the winter break for the parliament, but as political editor Michael Brissenden reports,
it's been a high octane week.

MICHAEL BRISSENDEN, REPORTER: So, after three days of twists and turns, stand-off and bluster,
nothing's changed and everything's changed. John Howard is still prime minister, and more
significantly, Peter Costello is still treasurer. All the talk of resignation and exile to the
backbench, forced or not, has come to nothing. Has Peter Costello once again walked to the
precipice only to succumb to another attack of vertigo? Well, yes. But there's no doubt the issue
is still unresolved.

JOHN HOWARD, PRIME MINISTER: I have had an ongoing dialogue with my colleagues in different ways
about this, and I'll continue to do so. And I'm not obviously going to be pressured or stampeded
into taking some decision or making some immediate announcement just because of the events of the
past few days.

MICHAEL BRISSENDEN: But the Prime Minister admits those talks have become, if not more urgent,
certainly more intense. And certainly, while he does have overwhelming support within the
parliamentary party, many do now want the matter resolved. There is pressure for a decision, and
something definite is expected now within weeks.

PETER COSTELLO, TREASURER: It's a matter for him. He has indicated that he is going to consider
that and he is going to make a statement. And, that's a matter for him. I think, as I said
yesterday, after he's considered the matter, he'll make a statement. There's indications today as
to when that might be and when we know what that is, then there'll be an appropriate time to
respond.

MICHAEL BRISSENDEN: Until then, Peter Costello will maintain his version of the now infamous
meeting in 1994 is correct, and will pointedly continue to refuse to rule out, or in, any
challenge. And the Prime Minister? Well, he's been busy underlining his continuing enthusiasm for
the job. This doesn't look like a man about to decide to hang up the spurs.

RADIO PRESENTER: Are you still ambitious?

JOHN HOWARD: Oh, yes. There's still a lot of things I want to do. I find that I'm still very
committed to this job and I still get stimulated by it.

MICHAEL BRISSENDEN: While the business of politics remains up in the air, the business of
government continues. There's unfinished business that's being attended to through the fog of
interpersonal rivalry. It was the Prime Minister who declared on Tuesday that at least normal
transmission had resumed. Hard to see how. The lines of communication within the Liberal Party
might seem complex, but they're nothing compared to the new media laws announced by Helen Coonan
today.

SENATOR HELEN COONAN, COMMUNICATIONS MINISTER: What we need to do is to ensure that you've got a
transition to a deregulated environment that doesn't take away from consumers what they expect and
enjoy now.

MICHAEL BRISSENDEN: The Cabinet on Tuesday ticked off on new laws that will deliver what the
Government calls comprehensive reform for the media industry and create a competitive framework for
the digital age. It will include two new digital channels reserved for new digital services such as
mobile television. Relaxation of the current restrictions on cross-media ownership but with a
guarantee that no fewer than five independent voices remain in metropolitan markets and four in
regional areas. The removal of existing foreign ownership restrictions but the retention of the
media as a so-called sensitive sector under the Government's foreign investment policy. Extending
the switch over target from analogue to digital TV to between 2010 and 2012. And allowing
multichannelling on free-to-air television stations once that digital switch over is completed.
Media policy is a snake pit of competing commercial and political interests. In getting Cabinet
support, Helen Coonan has achieved a rare victory, one that eluded her predecessor Richard Alston.
But she still needs to get this past the National Party in the Senate.

HELEN COONAN: Well, I've had a very long conversation today with both senators Joyce and Mr
Neville, who called me from overseas, and we've walked through the package. I think they're broadly
supportive of the package. But it's a very complex package and it's important that for the purposes
of people voting they understand what they're voting for.

REPORTER: You're confident the Senate will back this?

HELEN COONAN: What I think is that Cabinet's backed it. There were three National Party ministers
in the Cabinet who supported it.

MICHAEL BRISSENDEN: Analysts say the relaxed foreign ownership and cross-media rules will create
open season for mergers and acquisitions. Fairfax shares jumped 5% almost immediately. But the
Opposition says despite the guarantees, there will be fewer independent media voices as a result.

LINDASY TANNER, OPPOSITION FINANCE SPOKESMAN: It's pretty clear what will happen. We'll see mergers
of major media companies and we will see circumstances where the key media outlets, the major talk
radio stations, the key newspapers, the TV networks, will all come within the same conglomerates
and instead of having six or eight different sources of public information and debate in a major
media market, you'll end up with only two or three. That means that a lot of voices will be shut
out, a lot of Australians won't get a say and voters won't have the same degree of choice to
exercise when they're making up their minds how they want to vote.

MICHAEL BRISSENDEN: Of course, the Government still has its own media company as well. Telstra has
a big chunk of Foxtel and is a willing player in the new media environment. All the Government
wants to do with it, though, is sell it - and soon.

SENATOR NICK MINCHIN, FINANCE MINISTER: The professional advice to us is in terms of a retail
offer, the timing should be October-November and then there's - obviously in terms of preparing a
prospectus and things like that, we need to make a final decision within the next few weeks.

MICHAEL BRISSENDEN: The share price has fallen and may well go further yet but T3 is still a big
bucket of money held up by fights over deregulation and, in particular, rules that would apply to
Telstra's proposed $4 billion optical fibre broadband network. And although he'd clearly like to
see the sale go ahead, Finance Minister Nick Minchin says it's still far from certain.

NICK MINCHIN: We've not made a decision to go ahead with this sale. My job is to ensure that we're
in a position to do so, if we want to make that final decision. I'd say at this stage it's probably
50/50. There's still some uncertainty about the regulatory environment for Telstra that would cause
uncertainty for investors. We do have, of course, the option of - now that we have legislative
authority to move all our shares into the future fund and allow them to gradually sell down the
shares that's a real option for us.

MICHAEL BRISSENDEN: The Government has consistently said it won't sell at any share price and won't
enter into a fire sale. But some market analysts, at least, believe the current price of around
$3.70 has already factored in the float and that the Government will move this year.

IVOR REES, ANALYST, BAILLIEU STOCKBROKERS: Once the company's full-year results are out there's a
wonderful opportunity there after those numbers are in the market for them to sell the whole lot,
and if I was advising the Government I'd say, "Sell the whole lot, sell now. "

MICHAEL BRISSENDEN: All in all it's a busy time. Leadership tension might be distracting but the
business end of government rolls on relentlessly. Tomorrow, the Prime Minister sits down with the
states for a COAG meeting with an ambitious agenda. Last week Peter Costello was calling for a new
federalism, but the old structures are still well and truly in place and the premiers and the
current Prime Minister certainly seem to like it the way it is.