TRANSCRIPT

THE HON PETER COSTELLO MP
TREASURER

Interview with Tracey Grimshaw

Today Show

Thursday, 2 December 2004

7.10 am

 

SUBJECTS: Telstra, Consumer Spending, Exports

GRIMSHAW:

Treasurer good morning.

TREASURER:

Good morning Tracey.

GRIMSHAW:

From the Government’s perspective and looking ahead to full privatisation

of Telstra, had Ziggy Switkowski simply become a liability?

TREASURER:

Well it was a decision that was made by the board, it wasn’t the Government’s

decision. You have a Board of Telstra that has to operate the company in the

interests of all of the shareholders including the private shareholders and

they came to this decision. We respect that decision, we hope that the board

gets somebody who is really up to the job – it is a tough job – in the interests,

not just of the Government as a shareholder but those millions of Australians

that are also shareholders.

GRIMSHAW:

You obviously have an interest in making as much money as possible out of

T3. Do you expect to make more money now that he has gone?

TREASURER:

Well, we have made it clear that there are a couple of conditions that have

to be met before further shares can be offered to the public and one of course

is that the price is a good commercial price. The reason for that of course

is that this is an asset which is held for the public generally and we wouldn’t

want to make a loss or a bad commercial sale in relation to the public and the

public interest, so…

GRIMSHAW:

So with a view to that is it better that he is gone?

TREASURER:

…well, we will be looking to a good price. Whether or not the new CEO

can actually get Telstra into a more competitive position is a matter for the

Board and whoever takes over that job.

GRIMSHAW:

You have said that he had a difficult job serving two masters. But the share

price has slumped, billions of dollars were lost in overseas investments. Does

he deserve a payout of around $3 million?

TREASURER:

Well, I am very critical of some of those overseas ventures, but I do think

that it is a bit rich to say that the only person responsible was Ziggy Switkowski.

These were matters that were considered by the Board and a whole team of executives

so let’s make that point first. On the question of his contract, he has

a contract to go until 2007 I believe. The company as a reputable company has

the obligation to either honour that or to pay it out, that is what happens

in business. If that is his contract then the company has to honour it and the

directors are expected to honour it.

GRIMSHAW:

Just on your comment about the overseas investments being, that the board

should wear full, some of the responsibility for that, does the board have your

confidence?

TREASURER:

Oh yes the Board does but, and many of the members of the Board have changed

since those days, I should also make that point, but there were some bad ventures,

there is no doubt about that, and they lost a lot of money but they weren’t

Ziggy Switkowski out in the frolic of his own. He had a lot of executives that

were part of them and of course they would have been signed off by the Board.

So the whole company bears responsibility in relation to those ventures, that

is the only point I am making.

GRIMSHAW:

Okay. Do you have any preferences on who should replace him? Do you, would

you prefer an Australian or do you think that the net should be cast globally?

TREASURER:

Well naturally I would prefer an Australia, yes of course, to run a big Australian

company, I think we have got very talented people in this country, but having

said that, if the best person is a person that is currently overseas then the

Board should consider that as well. But I hope that they do look carefully at

Australian candidates because I think Australian executives and Australian business

people are as good as any in the world.

GRIMSHAW:

Alright, on the issue of the economy, it is slowing. You said yesterday it

is time we pulled our horns in in terms of spending in the lead up to Christmas.

Retailers will be very happy to hear your words.

TREASURER:

Well I made the point, and I have made it before at Christmas time, there

are a lot of families who naturally want to give their children the best at

Christmas and I just said, be careful, remember that after Christmas come the

credit card bills. I think the most important thing you can do at Christmas

is show them a lot of love. It is great to give presents too but remember the

credit card bills always seem to come around in January or February.

GRIMSHAW:

How worried are you about exports?

TREASURER:

Well, there has been a patch of weakness in relation to Australia’s

exports in the quarter just past. And I acknowledge that it is tough for our

exporters because the Australian dollar has been high – that makes it

harder for them on the international stage. We would like to see Australian

exports pick up in the rural area, in the minerals area, in the manufacturing

area, and it is important that we continue to work on new trade opportunities

for them. That is what this proposed free trade agreement with South East Asia

is all about – giving Australia’s exporters better opportunities.

GRIMSHAW:

Alright. You took the Prime Minister’s chair for the first time I believe

in Parliament yesterday. Was it comfy?

TREASURER:

It is not a bad chair as far as chairs go.

GRIMSHAW:

You could get used to it, do you think?

TREASURER:

Well I will be back in my usual spot today so when you have somebody overseas

you can fill in for them and when they are back you are just as happy to go

back to what you were doing before.

GRIMSHAW:

Alright, thanks for your time this morning.

TREASURER:

Terrific, thanks Tracey.