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Senator discusses the proposed partial sale of Telstra

REBECCA GORMAN: The partial sale of Telstra still hangs in the balance this morning, after a long-awaited Senate committee report yesterday revealed what everyone already knew, that the Opposition and the Democrats oppose the sale, while Government committee members endorse it. The report is now in the hands of the two people whose opinion really counts: Independent Senators Brian Harradine and Mal Colston. Communications Minister, Richard Alston, was quick to condemn the majority report as a mish-mash of inaccuracies and tired old prejudices. Catherine Job asked committee chairperson, Democrat Senator Meg Lees, if there was any evidence in the report to prove him wrong.

MEG LEES: Well, I think the only recommendation that the Government was expecting was the first one, and that is that we shouldn't sell. And, indeed, as we go through the report, I would really like the Government to point out to us where their empirical evidence is; where is, for example, the overseas evidence that a profitable telco, such as Telstra, is going to be improved by privatising it? It's a fashion overseas in particular to move towards privatisation in this area, but why do we simply follow them down that track?

CATHERINE JOB: Well, the report itself cites a World Bank report into 6,000 privatisations around the world. Are you saying all these people are wrong?

MEG LEES: That was a study done of mainly East Germany, looking at privatisation there after the end of communism, and also looking at privatisations in the Third World, including in the Caribbean. And I think of all those 6,000, only one was another telco, and that was a telco that was running at a loss; it had a huge administrative problems and organisational problems.

CATHERINE JOB: But British Telecom wasn't in the red when it was privatised.

MEG LEES: It was a monopoly. It was very close to being in the red, if not in the red and, in particular, if you look at some of the problems that they've had, the regulator has had to step back in time and time and time again, bringing costs down, requiring higher standards of service, and it simply isn't the case that privatisation made a difference. What is making a difference is often competition, not privatisation.

CATHERINE JOB: But there again, you had a different scenario there. British Telecom was privatised as a private monopoly, rather than as a private competitor.

MEG LEES: Exactly, and they had all sorts of problems, and that's ....

CATHERINE JOB: But we're not doing that, are we?

MEG LEES: Well, no we're not doing it, and therefore arguing why on earth do we have to do it, because we already have a situation where, with competition, Telstra has improved its performance markedly in all areas bar one, and that's the one the Government likes to keep highlighting, that is the number of employees per line.

CATHERINE JOB: You asked the question: Why should we do it? Senator Harradine, himself, said last night there's one answer to that, and that there simply wouldn't be the money for environment programs from what the Democrats suggest, that is by using Telstra profits, but that would be by selling a third of it and using the money to establish the Natural Heritage Trust.

MEG LEES: Well, I'm sorry, but the money is there. I have to disagree with Senator Harradine there. What we are looking at is somewhere between $140 million and $155 million a year for five years, and then as little as $28 million to $30 million thereafter. Now, Telstra's profits this year are going to be 2.6 billion and it looks like at least half of that will go back to government coffers as basically income for us to spend on services. So, out of about $1.2 billion, $1.3 billion, if we can't find that $140 million, $155 million, then there's really something wrong.

REBECCA GORMAN: Democrat Senator Meg Lees with Catherine Job.