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Keeping Telstra for the benefit of all Australians [media release]



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Kim Beazley - Keeping Telstra For The Benefit Of All Australians http://www.alp.org.au//media/1001/kbmstel201001.html Tuesday, 23 October 2001

ALP News Statements

Keeping Telstra For The Benefit Of All Australians Kim Beazley - Leader of the Opposition

Media Statement - 20 October 2001

Labor will keep Telstra in majority public ownership.

The Howard Government's plans to fully privatise Telstra will cost Australian taxpayers $566.6 million in its first two years: 2003-04 and 2004-05.1

This costing proves that Australian taxpayers will lose on the full privatisation of Telstra.

And while John Howard and Peter Costello pretend that they won't fully privatise Telstra, they can't hide from the fact that it is included, in black and white, in their own Budget papers, including the Mid-Year Economic and Fiscal Outlook (MYEFO) released this week.

After three and a half years, the Commonwealth taxpayer is already $0.5 billion worse off as a result of the sale of the first third of Telstra.

In that period, the cost of selling Telstra and the amount of dividend lost to the Government has been more than the interest the Government has saved by retiring debt.

Retaining Telstra in Majority Public Ownership

  1997/98 1998/99 1999/00 2000/01 2001 (1H) Total

Debt retired ($m) $6,930 $5,850 - - - -

Public Debt Interest saved ($m) $343 $741 $895 $895 $448 $3,322

Actual Dividend ($m) $901 $1,802 $4,247 $2,316 $1,415 -

33.3 percent of Dividend ($m) -$300 -$601 -$1,416 -$772 -$472 -$3,561

Sale Costs -$260 - - - - $260

Net impact of sale -$303 $140 -$511 $123 -$24 -$499

In short, John Howard has already cost Australian taxpayers more than $3.8 billion to save just $3.3 billion.

This situation is likely to get worse as Telstra's dividend continues to grow, while the interest savings remain static.

Since the partial privatisation of Telstra, the Howard-Anderson Government has committed just over $1.1 billion over eight years to improve communications services in regional Australia. The vast majority of this has come from the proceeds of the partial privatisation of Telstra.

However, as a result of the Telstra's record $4.1 billion profit announced in August this year, Telstra has paid more than $1.2 billion in dividends to the Commonwealth as a result of one year's work alone.

In other words, Telstra has paid more to the Commonwealth in dividends for one years work than the Howard-Anderson Government has given back in improved regional communications services over the eight years it has budgeted for.

And if Telstra is fully privatised then a further $436 million will be paid to the lawyers and accountants at the big end of town just to sell it. That's more than three times the $140.5 million in new money that the Howard-Anderson Government has allocated over four years to improve mobile phone and Internet services in regional Australia. This Government's priorities are completely wrong.

Labor has continually argued that Australians are better off relying on the ongoing dividend stream from Telstra rather than a one-off flog-off. Today's figures and the figures for the sale of the first third of Telstra clearly show that.

Costing

  01-02 02-03 03-04 04-05 Total

Retain Majority Public Ownership of Telstra 0 0 -230.6 -336.0 -566.6

Total 0 0 -230.6 -336.0 -566.6

Authorised by Geoff Walsh, 19 National Circuit, Barton ACT 2600.