Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I thank Senator Fifield for that question. I do appreciate the opportunity to report to the Senate on the outcome of the T3 sale last week. As senators are aware, when we announced on 25 August that we would proceed with T3, we said we were targeting an offer size of around $8 billion. I am pleased to confirm that, as a result of the structure of the offer that we put together, and Telstra’s success in rolling out their transformation strategy, the demand for T3 dramatically exceeded our own expectations. Thus we have been able to sell $15.5 billion worth of Telstra stock—4.25 billion shares at a price of $3.70 for institutions and $3.60 for retail investors. Thus, T3 is the second biggest public offering in Australia’s history.

We deliberately set the price at $3.70 to balance the interests of taxpayers, in getting fair value for their interests, with the interests of existing and new shareholders in having an orderly aftermarket in the shares. I think we have achieved that aim. The price of Telstra shares as of today, a week after the sale, is $3.69. So I think we got the pricing pretty right. The T3 instalment receipts traded up in the first week from a price of $2.10 for institutions and $2.00 for retail to around $2.25 as of today. I hope the investors are in there for the long run, but I am pleased the shares have traded positively in the short term. I do want to thank those investors who have participated in T3, especially the more than 100,000 new Australian investors in Telstra.

The other real benefit, of course, in being able to sell $15½ billion worth of shares is that the remaining stake to be transferred to the Future Fund is a lot smaller. The fund will only hold 17 per cent of the company, a much smaller and more manageable stake. The fund will also get the full benefit of the $15½ billion in proceeds, which means the Future Fund is now very well placed to address the long-term pressures on Australia resulting from an ageing population. The only real threat to that task of meeting our targets in relation to the Future Fund and the ageing population is of course those opposite.

It is disappointing that the Labor policy on this is to strip out the earnings of the Future Fund and blow them on a pork-barrel scheme. As fund chairman, David Murray, warned in estimates, stripping out the earnings would mean the fund’s real growth would be ‘zero to negligible’ and would greatly damage the fund’s ability to meet its targets. Mr Murray also commented on Labor’s inane policy of stopping the fund from selling down the remaining 17 per cent of Telstra shares. As Mr Murray objectively explained, it would distort the fund, limit its growth and result in it being permanently overweighed in Telstra. This is the silly policy that the Labor Party want. They want to strip the fund and freeze the Telstra shareholding, which demonstrates just how unsuited to government they really are.

Labor are commercially clueless as well. They spent the last three months trying to talk down the sale. They said it would be a fire sale, they said the price would fall during the sale and they compared Telstra with a used car—they did all they could to talk down this sale. Despite their best efforts, T3 has been a great success. Telstra can now grow and prosper without the government as the major shareholder and we can address our responsibilities as the regulator of telecommunications with that conflict of interest completely abolished.