Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Money for nothing banks get the fees.



Download PDFDownload PDF

MEDIA RELEASE

LINDSAY TANNER MP SHADOW MINISTER FOR FINANCE

MONEY FOR NOTHING BANKS GET THE FEES

Finance Minister Nick Minchin’s decision to appoint three investment banks for an initial $12.3 million to coordinate the sale of Telstra is a waste of money.

ABN Amro Rothschild, Goldman Sachs JBWere and UBS Australia have been appointed ahead of any decisions being taken on the timing or method of the Telstra sale. Given the level of confusion about the sale, it is unclear what these banks will do to earn their enormous fees.

As Telstra’s share price plummets to $3.90, all shareholders have the right to know what Senator Minchin’s plans are for the Government’s remaining 6.446 billion shares.

Many questions remain unanswered including: how many shares are to be offloaded to retail or institutional investors, at what price and how quickly? How many will be dumped into the Future Fund? If the bulk of the shares are to be dumped into the Future Fund, why engage expensive investment banks to undertake a relatively routine transaction?

The accountability, governance and investment arrangements for the Future Fund are still a mystery with legislation yet to be introduced into Parliament.

The appointment of bankers before the sale timetable is finalised is a classic case of putting the cart before the horse. This is yet another example of Senator Minchin being free and easy with public money.

25 November 2005