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Telstra sale not in public interest.



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Senator John Cherry

Communications spokesperson Australian Democrats

October 27, 2003 MEDIA RELEASE 03/776

Telstra Sale not in public interest

The full sale of Telstra fails the Howard Government’s own test of not supporting privatisation unless ‘it is demonstrably in the public interest’, with the regulatory system failing to deliver competition, service standards, new technology and closing the digital divide between city and country, the Australian Democrats’ report on the Sale Bill has concluded.

Democrats’ Communications spokesperson and Senate Committee member, Senator John Cherry, said his Committee report tabled today made a series of recommendations on work that needed to be done by the Government to meet its own public interest test.

“The Howard Government’s 1996 Privatisation Policy made it clear that privatisation should not proceed unless there was clear evidence of a public benefit and a focus on consumers, community service obligations and recognising the special needs of rural and regional Australia,” he said.

“On each of the Government’s own criteria, this sale bill has failed and should be defeated.

“For the Government to demonstrate that this sale is clearly in the public interest, it needs to comprehensively overhaul the regulatory arrangements on competition and services, which evidence to this Committee demonstrates are clearly not working.

“Even the ACCC told the Committee that the structural issues in telecommunications preventing competition need to be dealt with prior to the privatisation vote occurring.

“The National Competition Council stated that the Government had failed to properly investigate structural separation as recommended by the OECD, and the Australian Communications Authority has indicated that it is awaiting the Government’s response to its recommendations on toughening up the Network Reliability Framework.

“Simply put, the evidence to the Senate Committee shows that the Government has not done the work to ensure that consumer interests will be adequately protected.

“The sale of Telstra would reduce the value of the public sector by $10-30 billion, increase the gap between city and country, fail to address the decline in Telstra’s investment in infrastructure and fail to address the lack of competition in a market dominated by Telstra.”

The Democrats Committee Report recommends: � That the Telstra (Transition to Full Private Ownership) Bill 2003 be rejected. � That regulation to protect consumers, increase competition and improve network reliability be strengthened before any further privatisation is considered.

� That in accordance with sub-clause 4(3) of the Competition Principles Agreement (CPA), an independent authoritative review is undertaken on structural separation, including consideration of the ACCC Emerging Market Structures in the Communications report, before any further consideration is given to the full privatisation of Telstra.

� That a comprehensive analysis of Telstra’s investment in infrastructure be undertaken, and that Telstra be directed to increase its investment in infrastructure to meet tougher performance standards.

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For further information: James Lantry 0408 752 750