Interview with Catherine McGrath

ABC AM

Wednesday, 17 August 2005
8.05 am

SUBJECTS: Telstra

MCGRATH:

A short time ago Treasurer Peter Costello outlined the arguments to the AM

programme.

TREASURER:

I think the proposal which is going to be put to the Liberal Party and the

National Party today is a very good proposal. It can resolve the ownership of

Telstra, it can ensure that there is open competition, it can safeguard services

in rural and regional Australia and it can also set Australia up for dealing

with the demographic time bomb that is going to hit us in 20 years time and

prepare financially for the future through our Future Fund. So, I think that

if you can square off all of those aims of policy, it is a pretty good arrangement

and it will resolve this issue once and for all.

MCGRATH:

Is it going to be enough money given that telecommunications changes are happening

so rapidly, we can’t predict what is going to happen in five or 10 years

time?

TREASURER:

Sure, things are changing rapidly but not only is capacity increasing but costs

are falling, you have got to remember that. And the good thing about telecommunications

is that a lot of this new technology that is becoming available is getting cheaper

and cheaper and technology is also enabling us increasingly to overcome distance.

So, I think the prospects of ensuring that services in rural and regional Australia

are kept up to a very high standard are good, very good.

MCGRATH:

What is the timing going to be, when do you think we will see Telstra sold?

TREASURER:

Well, the actual sale of Telstra is quite different to the enabling legislation.

I think the Parliament has got to resolve this enabling legislation as soon

as possible. But the sale doesn’t have to go through immediately. You

are talking about a very large number of shares which the Government owns. The

value of those shares rises and falls on a daily basis. Last week the Government

lost $2 billion on its Telstra shareholding because of one announcement. So,

the actual sale should be timed for a point when the return can be maximised

for the Australian taxpayer. We are not a distressed seller, we don’t

have to put these out into the market because we need the money. What we actually

want to do is maximise the return for the public and in particular for the public

facing this big demographic challenge.

MCGRATH:

Well when will we see the legislation?

TREASURER:

Well, I think that once an agreement is reached in relation to the proposal

we should see the legislation more or less straight away. But an agreement has

to be reached, that is not reached at the moment. I hope that an agreement could

be reached in the near future. Parliament gets up at the end of this week and

I hope that we would see legislation pretty shortly after that.