Lindsay Tanner (Melbourne, Australian Labor Party, Shadow Minister for Finance) Share this | Hansard source

No class at all. Senator Minchin is referred to by Terry McCrann in his article as ‘idiotic’. McCrann describes Senator Minchin’s statement as ‘words of astonishing stupidity’. He says:

Minchin ... “announced” he was not competent to be finance minister ... the nation’s finances should not be entrusted to his care.

They are pretty damning words from the nation’s, if not premier business commentator—and certainly no friend of Labor—then one of its premier business commentators. The government is tricking up the Telstra sale to paper over the huge downward pressure it is putting on the share price and the huge negative impact that is having on existing shareholders. Firstly, they are giving people access to the full dividend for the share in this financial year, even though the people who purchase shares in T3 will only have to pay for part of the share. They will not have to pay for the other part until, perhaps, 18 months later—John Howard’s buy now, pay later scheme, straight out of Harvey Norman. Secondly, the government has forced Telstra, only weeks after Telstra had said they did not want to do this, to commit to paying a 28c dividend in the next year. That requires Telstra to borrow further to cover that dividend, an outcome which is unsustainable—Terry McCrann has said it is unsustainable, Standard and Poor’s has said it is unsustainable and Moody’s has said it is unsustainable. The government has also muzzled the Telstra board and management in an agreement which is designed to stop them from speaking out in the debate about regulatory issues.

Finally, we are waiting for the details of the preferential arrangements the government are going to offer existing Telstra shareholders. In spite of all the gimmicks and the tricks the government still will not reiterate its claim in 1999 that ‘Telstra shares are an extremely good deal’. Remember John Howard in 1999 telling prospective investors, ‘These shares are an extremely good deal—you should sign up now’? Nothing like that is happening now. The government’s alibi for not doing that now is that legislation has changed and they cannot present themselves as financial advisors. That is a very thin fig leaf indeed. The reality is the government know they would be laughed at by investors, particularly those who have lost a lot of money on T2.

What is keeping the share price relatively stable at the moment is the fact that the details for T3 have not been finalised. The shares are obviously not yet on the market. The real negative impact is not going to be felt for a couple of years because the artificial dividend arrangement that the government has entered into will prevail for a while. But once that dividend arrangement is finished, the negative impact on the shares will manifest. If the government wins the next election, once the Future Fund is free to sell down its holdings that will also have a big impact on the share price. For the last time I will quote Terry McCrann—to illustrate what is really happening with this share offering and its true impact on the existing shareholders:

... the Government is quite deliberately setting out to artificially entice you to invest. It is doing so by giving you an unsustainable supercharged dividend income.

That says it all. So the first losers are the existing Telstra shareholders. What about taxpayers? What about the people who ultimately own the asset and who are seeing that asset sold? How are they faring out of T3? The government is selling its shares in a falling market and contributing to the decline in that market. It is giving away free dividends. So while it is still part-owning shares, it is giving away the dividends, at the cost of several hundred million dollars to the budget. It is preparing other sweeteners which are yet to be announced. In the middle of huge regulatory uncertainty and debate about the stalling of high-speed broadband in this country and the absence of any strategy on the part of the government to address this, the end result is a substantially lower return to taxpayers for the sale than otherwise would have been the case. Is this a good time for a vendor? Is this a good time for owners of large numbers of Telstra shares to be selling to the market? I don’t think so.

The government suggest that it is Labor’s fault that the value of Telstra’s shares has gone down, and that it is Labor’s fault that the government were not able to sell the shares earlier—in other words, Labor has prevented them from ripping off Australian investors to the tune of billions and billions of dollars that the government otherwise would have taken out of their pockets had they been able to sell all the Telstra shares at $7.40. It is Labor’s fault for preventing that. All of the incompetence, all of the mismanagement of Telstra since that time—whether it was for allowing line rental fees to go up to $30 a month and pushing more people over to mobile phones or whether it was for wasting billions of dollars in losses in Asian investments—is somehow our fault. Somehow the mismanagement of Telstra under the auspices of the government is Labor’s fault; in other words, Labor is responsible for the government’s incompetence.

There are two losers so far: shareholders and taxpayers. But what about consumers? What about the people who ultimately matter most—the 20-odd million Australians, businesses, families and individuals who rely on Telstra, still nearly two-thirds of the entire telecommunications sector, to get high-quality, high-class telecommunications services? What about consumers? First, they are going to lose on accountability.

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