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Tuesday, 24 September 2002
Page: 4727

Senator ALLISON (2:51 PM) —My question is to the Minister for Communications, Information Technology and the Arts. Minister, fund managers are reported as saying that the government would have to offer instalment receipts and discounts of at least 10 per cent on any further sale of Telstra. Minister, isn't it the case that a 10 per cent discount would cost the public purse more than $3 billion in revenue? Last year, the minister ruled out instalment receipts. Is this still the case? Do you also rule out discounts?

Senator ALSTON (Minister for Communications, Information Technology and the Arts) —It might be getting a few people excited in the financial press, but it is an entirely hypothetical and academic debate at this stage because clearly, unless and until we get a favourable report from Mr Estens on 8 November, we will not be in a position to take the matter further. That will not stop a number of fund managers, investment houses and merchant banks all proposing various formulations and approaches that might be taken. Some of them will suggest instalments, some may suggest selling it all at once—there are any number of combinations. The fact is that these are just wish list items for many in the financial sector who would obviously hope to participate in any future sale. But it does not in any shape or form indicate the government's attitude at this stage, because, as I say, we are not in a position to consider these matters at least until 8 November.

Senator ALLISON —Mr President, I ask a supplementary question. Minister, you did consider that there would be three equal sales in the last budget papers. As you mentioned, it was reported yesterday that the government is seriously thinking of selling the rest of Telstra in one hit. Do you absolutely rule that option out, and can you comment on Telstra's share prices dropping 6c at the speculation of a one-hit approach? Have you calculated the loss to the public purse of this option?

Senator ALSTON (Minister for Communications, Information Technology and the Arts) —I do not think you have to be too familiar with the way markets operate to realise that you can never have a strict cause and effect. Certainly, in this situation, there are very many factors that will affect the daily movements in Telstra's share price. They have come down from around $5 to $4.75 or so in the last few weeks. I would be very surprised if much of that had anything to do with various proposals that have been put forward. It probably has more to do with what the markets perceive as the growth strategy and what Telstra itself says is likely to be a fairly flat environment in the months ahead. So I do not think that you should for a moment assume that the budget papers tell you the last word on the subject. We will get expert advice if and when we are in a position to take further action, and we will then proceed in the way that we think makes the most sense for all concerned, including prospective purchasers.