Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Hansard source

What we have seen today and over the previous week in relation to Telstra is the Howard government yet again being willing to ride roughshod over both good practice and Corporations Law requirements to get the political outcome it wants. We have seen this time and time again from this government. Previously we have seen the government leaning on the board to provide dividend payments at unsustainable levels. We have heard the government previously gag Telstra executives from criticising the government’s regulatory policy. Perhaps none of these things, though, are as important as what the government has sought to do in relation to the issuing of the prospectus for T3.

We have laws in this country regarding the disclosure of risk, particularly in the context of the issuing of prospectuses when shares are being offered to the market for the first time. It is incumbent upon directors of a company to give a full and frank analysis of their opinion as to the risks a company faces. Through newspaper reports and through the responses given by Senator Coonan today, we have seen that the government was happy to have those requirements watered down when it came to the board’s view as to the risks associated with the Cousins appointment.

Regardless of one’s view about the Cousins appointment—and Senator Conroy and the Labor Party have made our view about that appointment clear—the fact is that the board of directors of Telstra was required to properly disclose to the market what it regarded as the risks associated with that appointment. What we have seen through the newspapers, and what we can infer from the delay and the involvement of the Australian Securities and Investment Commission, is that the government wanted to water down the disclosure of risks. It wanted to water it down because it wants its political outcome to be paramount—not compliance with both the detail of the law and the spirit of the law.

The government is happy to put pressure on the Telstra board to reduce what the Telstra board says to the market about the risks associated with the Cousins appointment. As a result—and Senator Coonan did not deny this when it was put to her—the Australian Securities and Investment Commission had to come in and presumably negotiate some sort of resolution or at least provide advice as to what was required, under the government’s own law, to be disclosed to the market. Now we have a rather odd disclosure in the prospectus for T3 where the government is saying one thing and the Telstra board directors are saying another.

I want to make one particular point about this. It is very interesting that the government, in relation to this clearly politicised appointment, is happy to ride roughshod over its expectations for the behaviour of other companies that are listed or proposing to be listed on the Stock Exchange or involved in the issuing of prospectuses. This is the government’s law and it is the law of the country—the Corporations Act and what must be disclosed.

In addition, the government seeks to ensure that companies comply with the Australian Stock Exchange corporate governance rules. What have we seen? We have seen the government telling the private sector and other companies to do one thing but seeking to do something else to get a political outcome in the context of the Telstra board and the T3 sale. The government is telling other companies, ‘You have to go over all these high jumps. You have to meet all these standards. We expect this of you.’ But when it comes to its own political interests in the T3 sale, it is happy to try to push a lesser level of compliance.

We know from the prospectus itself that the Telstra board has said quite clearly, and I will read from the prospectus, which was issued today two hours late:

The Telstra Board did not seek Mr Cousins’ nomination and did not have the opportunity to adequately assess Mr Cousins’ candidacy in accordance with its governance processes, which include assessing a proposed director having regard to the independence requirements of the Board’s Charter and the ASX Principles of Good Corporate Governance.

In other words, the government is asking Telstra not to observe the ASX good corporate governance principles and guidelines, which it expects all other listed companies to observe.

In addition, we know that we have had ASIC involved in consultation in relation to the prospectus. Senator Coonan has not come clean as to why they were involved. I say to the government: why don’t you come clean and tell us what you really wanted in there and what ASIC told you you had to put in there in order to comply with the law? I will tell you what: this smells pretty bad. We have the government wanting one line in the prospectus. We have ASIC being involved. We know that. That has been indicated and confirmed. Tell us what you didn’t want in there.