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Wednesday, 11 November 1998
Page: 119

Mr TANNER —Mr Speaker, may I congratulate you on your election. My question is to the Minister for Finance and Administration. Why did you let the Office of Asset Sales run a selection process for a private consortium to manage the Telstra sale without any reference to the fees to be paid and only negotiate fee arrangements after the consortium had been chosen for the job? How do you explain the Auditor-General's findings that they were paid almost $500,000 in success fees for shares that were given free to Telstra staff or not even sold, even though there was no requirement for this in the contract, and that success fee benchmarks were set at an excessively low level, thus costing the taxpayer an additional $5 million to $10 million? Why were the total Telstra sale costs $65 million over budget?

Mr FAHEY (Finance and Administration) —Let me start at the last statement made by the honourable member for Melbourne. The simple fact was that the fees that were paid for the sale of the first tranche of Telstra were not over budget; they were exactly in accordance with what was approved by cabinet. Let me just indicate this on a comparative basis: the fees that were paid for the sale of Telstra amounted to 1.8 per cent of what was returned. With telco sales in other parts of the world, in Europe or the United States, the average is four per cent. The cost of selling telecommunications companies on the open market averages four per cent. Our cost was 1.8 per cent. Clearly, great value for money was received. What Labor does not accept is that that particular offer by the coalition government was overwhelmingly embraced by the Australian people.

Mr Beazley —Mr Speaker—

Mr SPEAKER —The minister will resume a seat—I do not ask him to return to his seat—and I call the Leader of the Opposition.

Mr Beazley —Mr Speaker, I raise a point of order. The point of order is this: a series of specific questions arising from an Auditor-General's report into the competence of this minister's handling of this particular matter have been raised. They are very specific. They did not require the response of a generalised answer.

Mr SPEAKER —I remind the Leader of the Opposition that I noted the question as it was being asked and I consider the minister to be entirely in order. I call the minister.

Mr FAHEY —What I am indicating very clearly to the House is that this was not a decision that was welcomed by the Labor Party at the time and they wanted us to pull the sale. They talked about the fire sale. They told us we were going to flog off the shares for nothing and get no value for taxpayers. It was $6 billion or $7 billion that was being predicted by the Labor Party—not value for money—but I say clearly that the very cost-effective work done by those advisers appointed by the government meant that it did return to the Australian people $14.3 billion on top of a $3 billion recapitalisation.

Mr Tanner —Mr Speaker—

Mr SPEAKER —Order! The minister will resume his seat. I call the member for Melbourne.

Mr Tanner —Mr Speaker, I raise a point of order on relevance. The minister was asked specific questions about a rorted tendering process and taxpayers' money that has been wasted, and he has failed to answer the question.

Mr SPEAKER —The member for Melbourne will resume his seat. I have ruled on relevance. I gather the minister was winding up, but I invite him to do so.

Mr FAHEY —I simply conclude by saying this: an independent assessment was done to appoint the business advisers. Due regard—in fact absolute regard—was taken for getting value for money for Australian taxpayers. That was achieved, and the Auditor-General stated very clearly that it was a remarkable result in a very volatile market which existed at that time.