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The Coalition's communications policy



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Leader of the Opposition

23 Jan u ary 1996

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TRANSCRIPT OF THE LEADER OF THE OPPOSITION THE HON. JOHN HOWARD MP PRESS CONFERENCE - SYDNEY

topics; The Coalition’s Communications Policy

E & O E

Ladies and Gentlemen, welcome to this press conference. I am here with my Shadow Ministerial colleagues Senator Alston and Mrs Bronwyn Bishop. We are here today to formally launch the full Communications Policy o f the Coalition and the Privatisation Policy

o f the Coalition for the forthcoming election.

I’ve decided to release both o f these documents together because o f the clear common ground between the importance o f the path o f privatisation o f Telstra to Communications Policy and the centrality o f that partial privatisation o f Telstra to the Privatisation Policy o f the

Coalition.

The Communications Policy is a comprehensive blueprint o f how a Coalition Government will ensure that the communications industry o f this country is able to expand, diversify and develop into a strong, modem component o f Australian society well into the 21st century. I don’t need to remind an audience such as this o f the importance o f communications, o f the

exploding technology to the industry sector, o f the opportunitie: for job creation and growth. It’s one o f the fast growing sectors in the Australian economy and the opportunity, if the right regulatory decisions are taken and the right philosophy is adopted, then the opportunities for growth and expansion, particularly in job generation are enormous, as we move into the 21st

century.

The way in which communications have demolished the tyranny o f distance in Australia is one o f die most significant social developments that this country has witnessed in past decades. But it must be the role of the Coalition upon assuming government to provide the

right political leadership and the right regulatory framework in order to ensure that those benefits are M y developed.

Now, there are a number o f particular features o f the Communications Policy. Naturally there will be interest in the parts o f privatisation itself but the details come in a m om ent But there will also be interest in the strong commitment o f the Coalition to have a public, and I underline the word public, inquiry into the appropriateness o f the existing cross media rules relating to media ownership. I might point out that we are committing ourselves to a public

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inquiry unlike the Government which is already embarking on a private, secretive inquiry into the the existing cross media rules.

I am on record as many o f you know, going back to 1987 as having express reservations about the appropriateness o f cross media prohibition. Those rules were designed in 1987 not to provide an altruistic public policy framework. They were designed by the current Prime

Minister to prickle the then Fairfax organisation and to undermine the strength and authority of the then Herald and Weekly Times organisation.

The existing law was conceived in malice and not with the public intent uppermost in the minds of the thcn-Govemment The public inquiry process that has been outlined in policy will ensure that all options for determining what is the right mix between the public interest

considerations of foreign ownership and greater diversity, what is the right way o f responding to these issues in the modem communications framework, public inquiries are supposed to ensure that tire best answer is delivered, and l and the members o f my Government will

approach that public inquiry without any commitments, without any preconceived prejudices and having a completely open mind as to what the results o f that inquiry will be and what the response o f the Coalition will be to that inquiry, bearing in mind that it’s clearly in the national interest that there be the maximum degree of Australian ownership and there be the mavimnm (inaudible) of ownership within the media, consistent with the economics of the industry, consistent with the achieving o f high quality media products and consistent with the size and the dynamics o f the Australian economy and the size of our (inaudible).

So far as the partial privatisation o f Telstra is concerned, I want to make a number of things clear at the very beginning. Under no circumstances will any Coalition Government ever permit foreigners to own or to be sold Telstra. That is an absolute commitment that in view of (inaudible) in Parliament and it is a fundamental principle o f our approach. Wc have decided on a partial privatisation o f Telstra. What that means that in our first term we will

sell no more than a third, and of that one third no more than 35% can be owned by foreigners. The remaining two thirds o f Telstra will remain fully in the public ownership so that at the end o f a first time of a Howard Government, at the end o f the first term o f a Howard Government, it will not be possible for more than 12% o f the company to be in foreign hands

and I make that statement against the overriding commitment that under no circumstances can ever under a Coalition Government the control or ownership of Telstra fall in foreign hands.

There are a number of features that we float including the provision o f special arrangements for the 72 000 employees o f Telstra. They will receive as a special bonus, they will receive one free share in the float for every four shares they purchase up to a maximum o f 500 shares. There will also be loyalty bonuses provided to the employees of Telstra and the details of those loyalty bonuses are explained in the document.

This is an intelligent approach to the privatisation issue. It takes account o f the obvious advantages o f partial privatisation, demonstrated by the strengthening of telcos overseas that have been involved in the privatisation process.

I want to make one political point. It’s a very relevant point, very strongly to all o f you. There is a difference between the Prime Minister and myself on this issue. The difference is that I have been honest enough to say before the election what I will do. He will not tell you

before the election what he will do after the election if he is re-elected. There could be no doubt ladies and gentlemen that if Paul Keating wins the next election, he will sell the whole or part of Telstra just as he sold the whole o f the Commonwealth Bank despite solemn assurances in writing to every employee at the Commonwealth Bank given before the 1990 election, he promised not to sell Qantas but he did. He promised not to sell Australian Airlines but he did. He will promise not to sell Telstra but he will if he wins the next election.

Wc arc making it very plain that we will sell one third o f Telstra, no more. We have no commitment to do anything further. If we were to decide towards the end o f our first term that it was in the public interest to go further we would formulate a proposal and seek a specific mandate on that proposal at the then forthcoming election and that would be for the Australian people to decide at that election as it will be for the Australian people to decide at this election. That is a policy that they would wish to support. I also particularly draw your attention to the guarantees that are contained in the policy. There will be a complete continuation o f the cross subsidies assisting the Australian bush so far as the provision of telecommunication is concerned. The community service obligations will be guaranteed in legislation. There will be a cap on local calls. There will be no timed local calls under a Howard Government. There will be no loss o f the cross subsidies implicit in present arrangements under a Howard Government and if you examine the experience o f overseas telcos, in particular British Telecom, you would find that despite the fact that the privatisation process in that country has been under way now for something like nine or ten years. The caps on calls and the guarantees of community service obligations have endured despite the, in that case, full privatisation process.

Ladies and gentlemen, my two Shadow Ministers are here and I’m very grateful for that because not only have they o f course played the major in this case in formulating the policy but their mastery of some of the technical details in this very intricate area, I unashamedly acknowledge is infinitely greater than my own but those issues that I’ve mentioned, ladies and gentlemen, represent some of the highlights of these two policies. I think the balance that we have struck in relation to the privatisation of Telstra is a very good one. There are clear public benefits in the path of the privatisation process. There are understandable community

interests in the preservation of the community service obligations and it’s made very clear right through the document that those obligations are going to be maintained. I believe it is a policy for all Australians. I believe it is a policy that in the case of Telstra will enable

Australians to invest in a very successful company which is in the eye of a rapidly expanding industry sector in Australia and which would be very much part o f our lives as we move into the 21st Century and I commend very warmly both o f the policies to you.

JOURNALIST:

(inaudible)

HOWARD:

Well that’s not a fact. We just changed our policy from the last election. That happens with all sorts o f parties in all sorts of circumstances.

"Zb. 3

JOURNALIST:

(inaudible)

HOWARD:

From the partial privatisation? We’re not committed to the sale of....we're not selling Telstra. We are partially privatising Telstra in the order o f $8 billion. That’s for the privatisation o f one third. That is a figure that has been given to us by a wide range o f people who have been

consulted by Bronwyn and Richard and it’s a figure that I feel very comfortable with. My colleagues feel very comfortable with and it seems to have drawn a lot o f positive response from the markets.

JOURNALIST:

(inaudible)

HOWARD:

No, no. I've said that there will be no foreign control or domination o f Telstra.

JOURNALIST:

(Inaudible)

HOWARD:

Look, that is an entirely hypothetical question. The only thing that is not hypothetical in this and the only thing that endures for all time against all circumstances and all political contingencies is that a Coalition Government will never permit Telstra to be owned, controlled or dominated by foreigners. As to particular percentages, well the time to ask me that question Glen is if and when in the lead up to the next election, we might propose a .

further privatisation. We may not because we are not committed to it. The only thing we are / committed to from this day on is a privatisation of one third and the time to ask me is if and f when we adopt a policy in relation to the remaining two thirds, and I can tell you, we don’t have some kind o f hidden agenda to sell the rest in the future. It will entirely depend upon

our assessment o f the public interest. I mean, our belief is that the public interest is best served by selling a third now in the circumstances that I’ve outlined. Now in three years time, nearing the end of my first term as Prime Minister, if I and my colleagues believe that there is a case for doing something in relation to the remaining two thirds, well, we will put a proposal to the public and we’ll outline some each but it will be against the background of that overriding commitment The Coalition will never permit foreigners to own, control or dominate Telstra.

JOURNALIST:

(inaudible)

A .

HOWARD:

Rule out what?

JOURNALIST:

(Inaudible)

HOWARD:

Look, I will rule out foreigners getting more than 35% in the one third that we are committed to sell.

JOURNALIST;

(inaudible)

HOWARD:

Malcolm, two responses to that. Firstly we are not totally driven by market considerations. Privatisation is not about satiating the appetite of financial markets, Privatisation is about serving the public Interests.

JOURNALIST:

(inaudible)

HOWARD:

1 have no doubt in the world that we have fixed on a conservative figure. We will not sell Telstra in bits. We will preserve its corporate integrity. The policy makes it clear that we are not going to break it up and sell it off in bits. The only bloke who wants to do that is Paul Keating. He tried to do it before the last election, before the last Budget, and Frank Blount

spiked him. We’re not going to do that. We're going to preserve it as a corporate whole but I repeat, we are not driven in these things totally by market considerations. They are important, but as 1 have demonstrated in relation to the privatisation o f Sydney airport» our privatisation policy is not one that says that privatisation is an end in itself. We only support privatisation or partial privatisation If there is a public benefit. If there is not a public benefit, we don’t support it.

JOURNALIST:

(inaudible)

HOWARD:

Well, Ϊ don’t believe that the Democrats have sort o f spoken a final word and completely slammed the door, certainly not on this proposal. I don’t know what Senator Kcmot or the

two Greens have said publicly about what I have outlined today. I would be interested to see, I would not expect that they would have slammed the door entirely on what I have proposed today.

JOURNALIST:

(inaudible)

HOWARD:

Well, that’s a matter for them. I respect their views. 1 have discussed the matter with Senator Kemot, as the Leader o f the Australian Democrats but not might I say before the policy was formulated but I’ve had a discussion with her. I look forward to constructive dialogue with Senator Kemot and the Greens. I’ve..

JOURNALIST:

(Inaudible)

HOWARD:

Look, I would never presume to put words into the mouths o f other political leaders. It's a matter for her to speak for her party. I would merely add that I would hope that, I mean I would see a lot o f sense in neither the Democrats nor the Greens in purporting to slam the door on this particular proposal. I might also add of course, Sally, that we’re in the business o f winning control of the Senate in our own right and I go into this election with that goal in mind.

JOURNALIST:

(Inaudible)

HOWARD:

I’m sorry, would you mind starting that again. There was a bit of noise when you got to your punchline.

JOURNALIST:

(inaudible)

HOWARD:

Well, I don't know that I’ve sought, 1 haven’t sought a lot o f advice on that because I mean we decided on what was an appropriate level o f foreign ownership in the public interest without regard to what that would mean so far as the price is concerned. 1 mean, we’re not

driven totally by money.

6 L ·

JOURNALIST: ‘ %

(inaudible)

HOWARD:

No I think for us to do other than to set a foreign ownership limit in the national interest would be to let down the majority o f the Australian people.

JOURNALIST:

(inaudible)

HOWARD:

I want to make it very clear to you that none of the money that will be raised from this partial privatisation will be used to fund recurrent expenditure. None o f it. Not a cent o f it is going to be used to fund recurrent expenditure, and in any event as far as recurrent implications are concerned, when you sell an asset, the saving is in reductions o f public debt interest

JOURNALIST:

(inaudible)

HOWARD:

I thought that was clear. I mean we’re not going to use it for recurrent expenditure. I mean, look, you essentially use the proceeds of privatisation for debt retirement.

JOURNALIST:

(inaudible)

HOWARD:

I haven’t read the judgement. Peter Reith is in the building and I think he can handle that very adequately as he did Laurie Brereton the other night t think that’s i t Thanks folks.

ends

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