Treasurer
Interview with Michael Brissenden

7.30 Report

Tuesday, 16 August 2005
7.30 pm

SUBJECTS: Telstra sale; Future Fund

JOURNALIST:

The Labor Party says this is a $3 billion softening for the Nationals. Is it?

Are you buying off National support for Telstra?

TREASURER:

Sorry, what is a softening?

JOURNALIST:

The supposed $3 billion you have set aside for Telstra and the $2 billion coming

out of the Future Fund.

TREASURER:

Well, no decision has been made yet.

JOURNALIST:

Are you prepared to spend money out of the money that has been put aside for

the Future Fund?

TREASURER:

Look, the position of the Government is this: we have now reduced the Labor

Party debt by $80 billion. It was $96 billion and we have reduced it by $80

billion. The proceeds for the sale of Telstra should not just be spent: – because

if you spend the proceeds at the end of the day you have got no shares and the

money is all gone. So what should be done with those proceeds is that we should

invest them on behalf of the nation. The Future Fund is the vehicle that we

have set up to invest on behalf of the nation and we have always said that the

proceeds of a major privatisation should be either building a new asset, which

the Future Fund will do, or retiring debt.

JOURNALIST:

So it has been no truth to the speculation, I admit it is speculation at this

point in the papers, that $2 billion of that money may be used in a special

Telstra Future Fund?

TREASURER:

What was put forward was a proposal that the earnings on $2 billion would be

available for ensuring that services in rural and regional Australia are kept

up to scratch. I have said that you would have to look at such a proposal very

carefully, and it is quite a considered proposal, but these are matters that

have not been decided by the Government yet.

JOURNALIST:

But this is one of the things under consideration by Cabinet?

TREASURER:

Well, Mr Vaile put forward a proposal that a fund be earmarked so that the

earnings from that fund be available in relation to modernising Telecommunications

in rural and regional Australia. I have said that is certainly well worthwhile

looking at, it is something which you would have to consider very seriously.

It has not been considered yet, but I have indicated that it is quite a serious

proposition.

JOURNALIST:

So it does not contradict what you have said a couple of weeks ago, I think

it was, putting aside a large amount of money would be inflationary and economically

irresponsible?

TREASURER:

No that is what I precisely did say a couple of weeks ago, that a $2 billion

fund with earnings to be directed to telecommunications, particularly ensuring

that new technology is accessible would be a serious proposition and would have

to be seriously looked at.

JOURNALIST:

Now Wayne Swan says that you are guaranteed in the Budget that the Future Fund

would be a locked box, doesn’t this suggest that you are prepared to dip

into it willy nilly?

TREASURER:

No, because there is nothing in it. Unfortunately, I do not think Labor yet

understands the Future Fund. Once you put money into the Future Fund it will

be invested in the future for all Australians. But as of today there is nothing

in it. This is a question of ensuring that some money is put into it and invested

for the future of all Australians.

JOURNALIST:

This is just one of a number of proposals that you are looking at or that Cabinet

will be considering?

TREASURER:

Well Mr Vaile put forward a proposal, I think it is a proposal that is well

worth looking at, but these are matters that are being considered.

JOURNALIST:

The sale itself would have to be still, how should we say, the share price

certainly is not where you would like it to sell it anyway to (inaudible) is

it?

TREASURER:

Well the share price went down in response to recent announcements from Telstra

but the Government has always made it clear we are not a distressed seller,

we do not have to sell. We would want to sell in a way which maximises the benefit

for the Australian people and invest the proceeds for future generations. What

we do not want, a situation like the Labor Party had, when it sold off assets,

spent the money, put the Budget into deficit and lost both the shares and the

proceeds. That is what happened in the end with Qantas and the Commonwealth

Bank. We do not ever want to see a repeat of that performance.

JOURNALIST:

Will you also be considering the Trujillo $5.7 billion proposal, what do you

think of that one personally?

TREASURER:

Well, Mr Trujillo put forward his proposal, various Senators have put forward

their proposals, various analysts have put forward their proposals, obviously

we consider those that have merit and the Government will announce a position.

JOURNALIST:

Clearly you need to bring someone like Barnaby Joyce on board, don’t

you? He seemed, yesterday at least, (inaudible) this $3 billion speculation.

He seemed to be pretty happy with that.

TREASURER:

It is not the question of one person, it is a question of all the members of

the House of Representatives and all of the Senators – all have an interest

in this. But I would say even more than them what is in the interests of the

nation as a whole. What we have got make sure is that when the status of Telstra

is resolved the Government does not just waste the assets and spend them, but

the assets are put aside, either to retire more of Labor’s debt or to

build an asset which we can use for future generations.

JOURNALIST:

Do you think Senator Joyce is adequately taking note of what is in the national

interest in this case?

TREASURER:

I think it is important that we all take notice of the national interest. This

is something that is a very large financial decision and it is something that

I want to be able to say set us up for opportunity in thirty years time. That

is the time frame I have got in mind here. Thirty years.

JOURNALIST:

What is the time frame for a decision?

TREASURER:

Well, all these matters will be considered and hopefully we will be in a position

to get the decision soon.

JOURNALIST:

Treasurer, (inaudible).

TREASURER:

Thanks.