Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I move:

That the Senate take note of the answers given by the Minister for Finance and Administration (Senator Minchin) to questions without notice asked today relating to Medibank Private and Telstra.

As much as I would love to take note of Senator Santoro’s answers, I am moved to take note of all of Senator Minchin’s answers today. Today we saw the most extravagant example of arrogance and losing touch with the community that this government has demonstrated in a long time. Senator Minchin said that it is the fault of T2 shareholders that they have not made any money. They should have sold out at $9 and if they lost any money it was all their own fault. Don’t worry that the Prime Minister told them that T2 was a great buy. Don’t worry about that. Don’t worry that they tricked up the dividend and the yield back in 1999 to sucker in as many T2 shareholders as they could. Unfortunately, innocent small shareholders like Senator Minchin’s mum and Senator Barnaby Joyce’s mum and dad bought T2 on the strength of the recommendation from the Prime Minister. Not you, though, Senator Ferguson—you are a canny investor! You knew a dog when you saw it. You stayed away from it. But we saw mums and dads in Australia—like Senator Barnaby’s mum and dad and Senator Minchin’s mum—get sucked in by the Prime Minister. He told them it was a great buy. Just today we have seen Senator Minchin asked two or three times to table that document that he circulated to all of the coalition backbench—

Bill Heffernan (NSW, Liberal Party) Share this | Link to this | Hansard source

Tone down! Turn the volume down.

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

That’s right, Senator Heffernan, you have got a copy.

Alan Ferguson (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Ferguson interjecting—

Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Senator Ferguson has got a copy and Senator Humphries has got a copy. They have all got a copy of the document circulating from Senator Minchin’s office, and will one of them table it? Senator Minchin would not table it. Would one of them table it? No, they would not. What did it tell them to do? It told them to talk up and spruik a particularly attractive dividend stream from T3. Come on down, Senator Ferguson—show us that document. You could table it. You have got a copy. Senator Minchin does not want to table it because the coalition MPs have been instructed to talk up T3 by spruiking a particularly attractive dividend stream despite the fact that Moody’s, Standard and Poor’s and Citibank have all said the same thing about the yield and the dividend stream: that it is unsustainable.

This is a smash-and-grab. You are going to mug T3 shareholders just like you mugged T2 shareholders, and every single one of them is going to have the same names tattooed on their foreheads: Minchin and Howard. Senator Minchin and Prime Minister Howard are the ones flogging it off to us. They are the ones who set up the smash-and-grab. The institutions have said: ‘We are going to buy this. We know a good smash-and-grab when we see it.’ But will they be holding it in two years time when it goes ex-dividend? Oh no, they will not. They know what is going on. They recognise the scam.

Even Paul Neville, the chairman of your own backbench committee, has worked it out. He has said that they do not want to see the small shareholders being sucked in by the T3 offer and the special inducements that Senator Minchin and all the merchant banks have got away with. John Howard, the Prime Minister, knows this. Senator Minchin knows this. Once the dividend drops, so will the Telstra share price. This is a smash-and-grab being set up by the government to mug and suck in T3 investors. This is the worst possible time to sell Telstra. We have a smoke-and-mirrors trick. Just talk about the yield. Just talk about the dividends. Don’t mention the long-term value. Poor Senator Joyce’s mum and dad. He has given them advice—heaven forbid—to hold onto it for the long term. There isn’t an institutional investor in this country that would give them that advice. They know the smash-and-grab. They are going to be sucked in and mugged just like Senator Minchin’s mum and just like Senator Barnaby Joyce’s parents. (Time expired)

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

If the strength of Senator Conroy’s argument were measured by the volume of his contribution, he would have a very powerful argument indeed! Unfortunately for him, that is not the basis upon which this debate will be decided. This debate on the future of Telstra, and the way in which the value of that asset should be returned to the Australian community, is a matter which is properly decided by public policy—public policy, I might say, which has been consistent for not just the life of this government but at least the last 20 years. We have had 20 years in which major Australian public assets, which have been assets of the marketplace and assets which were at risk in a changing marketplace, have been subject to policies of privatisation. Nobody in this debate who has listened to the sound and fury of people like Senator Conroy should for one minute forget that it was the Australian Labor Party in government which systematically and consistently sold off public assets of the kind that Telstra represents. And, as surely as night follows day, if the Labor Party returned to the government benches in the future, they would continue to sell those assets where continued public ownership represented a bad investment for the Australian community.

We heard from Senator Hutchins, who talked about a tricked-up dividend, saying that that was a good reason to be very suspicious of this process. Senator Conroy talked about a smash-and-grab policy. It seems to me that both of those contributions recognise implicitly that there are very powerful reasons why Australian governments should not be in a position to make decisions, if indeed they ever were to be made, with respect to Telstra shares or Telstra’s assets in the marketplace. Of course we reject the premise of those remarks—that in some way the government is manipulating the dividend that Telstra pays to its shareholders. But, even if it were true, it is a compelling argument against governments being in the position where they can influence dividends and share prices on the open market. They should not be in that position; there is a fundamental conflict of interest. That is why we are proposing that the government’s share be sold down.

Back in 1994, an important figure in the then Labor government said:

The fundamental role of both corporatisation and privatisation is of course in the microeconomic reform context—in pressing our economy further ahead down the path of international competitiveness.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Who said that?

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

You may well ask, Senator Bernardi. It was none other than Kim Beazley, the present Leader of the Opposition. Now, if he was right in 1994 about those sorts of assets in that context, he is right about them today. As we well know, the then Labor government talked seriously in the early 1990s about divesting itself of Telstra and doing exactly what this government is doing today. If you do not believe that is the case, tell us how you were going to sell Telstra differently to the way in which it is being sold today.

The fact is that countries all over the world have realised that it is bad public policy for them as governments to be in the business of owning major operations, major corporate entities, which compete in marketplaces where government ownership represents a fundamental conflict of interest. It is simply not tenable to retain that kind of involvement. The particular volatility of the telecommunications market makes it imperative that governments not be involved as owners of businesses of that kind. In almost any other industry you could get away with holding back on privatisation, but, of all the marketplaces affecting Australian businesses at the moment, telecommunications is surely the most volatile and surely the last that governments should be involved in as shareholders.

Countries like Cuba and China are in the process of selling down, or have already sold down, their shares in their telecommunications companies—even countries like those. There are very few countries in the world today where you will find government owned telecommunications enterprises—very few. But that mob over there think that Australia should be one of the few to retain that kind of ownership. We do not. We think it is vitally important that we protect the value of the Australian public’s assets. We want to put that money in the Future Fund. We want to protect the value of those assets and make sure that the Australian community is protected. (Time expired)

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I rise also to take note of answers by Senator Minchin today to questions on Telstra. First of all, I have to admire Senator Humphries for coming in here and trying to defend the indefensible. I noticed that neither the Minister for Finance and Administration, Senator Minchin, nor the Minister for Communications, Information Technology and the Arts, Senator Coonan, is prepared to come in here and defend this government’s mismanagement and its irresponsibility when it comes to Telstra, particularly the proposed T3 share float. Senator Humphries tried to dredge up the past to develop some sort of a defence for what has become a scandal.

I never thought I would see the day when we had the conservative party in this country using the communist regimes in Cuba and China to defend its position. As for arguing about what the Labor Party did when we were in government—we sold Qantas because, whilst it was a publicly owned asset, it was used by about five per cent of the Australian population; and we sold the Commonwealth Bank because it was just like any other bank. But we never sold Telstra, and we said we never would, because Telstra is different. At the end of the day, Telstra is the network in this country that every single Australian depends on and is a part of. What this government has done since its initial decision to privatise Telstra is fundamentally undermine the basis upon which Telstra has operated in this country since it was Telecom—and even before that. Shareholders, who are themselves getting screwed, have apparently been deemed by this government to be the desired beneficiaries; but, if you live in the country and you depend on getting services, you are not going to get them.

What is this government’s record? What they did was talk up the sale of T2. They put the shares on the market at $7.40. Those shares are now worth $3.50. We said at the time that this would happen. We predicted that this would happen. But, of course, we had the Prime Minister out there saying this was an extremely good deal—Australians should queue up and buy shares at $7.40 in a company that effectively they were already part-owners of because they were members of the Australian community and Australian taxpayers. And what is a share now worth? Three dollars fifty. The government are now trying to say it is still a good deal because shareholders just received a 14c dividend. But, as Senator Conroy pointed out, there is no guarantee that that level of dividend, if there is any dividend at all, will continue beyond next year. The major financial institutions that have been mentioned, those that track these things—Standard and Poor’s, Citibank and so on—have raised serious doubts about that future dividend stream.

Senator Minchin says those who bought into T2 have done very well. He described it as a good deal. Only a person who reads those emails about Nigerian lottery scams and thinks they are a good deal would parrot that sort of nonsense. This has never been a good deal. It is rubbish. But, in their haste and urgency to get the sale of T3 through and get rid of the rest of Telstra, they are trying to talk that sale up. They are circulating, as the minister acknowledged here today, a brief to their backbench to go out and say that this is an attractive deal. Whilst the minister says he is not in the financial investment advice business and is not entitled under the law—quite correctly—to proffer financial advice, that is effectively what they are doing. Isn’t it ironic that Senator Minchin the other day on TV said that he hoped his mum would buy shares in T3? He is encouraging his mum to buy shares in T3 but at the same time Phil Burgess, the senior executive of Telstra, is telling his mum not to buy shares in T3. Who are the mums of this country supposed to believe? On this score they probably would believe Mr Burgess—admittedly, one of the three amigos—who is making the situation with Telstra even worse. This is an absolute scandal. It is a scandal that this government should come in here and try to make a silk purse out of a sow’s ear! (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

It is interesting to listen to Senator Forshaw talking about irony. I have to say it is particularly delicious irony to listen to some of the arguments that have been made. Senator Forshaw touched upon the role of financial advice, and Senator Minchin has quite rightly said that he should not be providing financial advice to people to make an investment decision. The Labor Party spokesman on this issue also agrees with that. However, we have a very intriguing approach by Mr Swan. He does not feel constrained by the responsibilities of the Corporations Law or the financial advice law; he simply comes out and says he would not recommend that anyone invest in Telstra and he would not recommend it to the people of Australia. Such an undisciplined and ironic contradiction to what Mr Tanner has said—and, of course, Senator Minchin—says to me that the Labor Party are a bit bereft of ideas about a consistent and coherent policy initiative.

The simple fact is that the Labor Party is absolutely controlled by the union movement, and there are a number of industry super funds that are equally controlled by their union movement. I would bet London to a brick that most of these industry super funds have shares in Telstra. When you talk about who is going to be buying shares in Telstra as your industry super funds are dumping them, it says to me that there is a fundamental misunderstanding of the market. You cannot sell shares unless someone is prepared to buy them. So for all your posturing and indignation about no-one being prepared to buy the shares, in that case no-one will be able to sell them either.

The real scandal about the sale of Telstra—and I have to say there is a scandal attached to it—is the cost of the Labor Party’s inconsistent and incoherent policy that has flip-flopped and backflipped, however you want to describe it, over the past decade; it started back then. Their decision to oppose the sale of Telstra, upon which we have been elected four successive times, has cost the Australian taxpayers somewhere around $50 billion. Telstra would be a far better company and would be better at rewarding its shareholders and providing better services if it had been completely privatised earlier with the support of the Labor Party.

We have to go back. I do not know why they have changed their policy on these privatisations. I do not know why we have to change our policy, because it was Mr Beazley, I understand, who condemned the Fraser government for only selling the Belconnen Mall, if I am correct. Mr Beazley even boasted to the House of Representatives that they were selling two airlines and the Commonwealth Bank. Hang on! Is that an institution that nearly every Australian had some involvement with? Gee, it is.

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

No, not at all. Rubbish.

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Senator Forshaw, I think you are being inconsistent because you were saying five per cent of the population were using an airline. The Commonwealth Bank probably had more access to everyone. You guys privatised a section of the Commonwealth Bank. The CSL—do you remember that? Do you remember selling that? How much did you sell that for? Two dollars a share, something like that. What did you cost the Australian taxpayer? ADI—you did that as well. And, of course, you were preparing the airports for sale.

I have already mentioned, in a previous taking note debate, Mr Beazley corporatising Telstra and putting an independent board in to make their policy decisions to ensure that they were acting in the best interests of the company rather than at government direction. Of course, Mr Beazley has been a very strong proponent of privatisation when it suits him. We had a quote from Senator Humphries about moving the country forward economically. In the national interest, we are better off with $8 billion or $10 billion or preferably $15 billion or $20 billion sitting in the Future Fund and available to fund our ongoing needs than we are having that money simply invested in a telecommunications company. The Labor Party has consistently demonstrated a complete lack of understanding about the importance of planning for our future. We have talked about our economic management— (Time expired)

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

It is indeed a pleasure to have the four amigos of the right wing of the Liberal Party in South Australia here this afternoon. If the press reports are correct, their numbers are going to reduce over the next few years, as the Christopher Pyne forces have started to get the numbers on Nick and his crew.

Government Senators:

Government senators interjecting—

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

It may be that you have the opportunity to correct that later, Senator Ferris. But it is good to see the four of them here together and being solid amongst each other. I suppose for all of us the pilgrimage to get to Canberra is one which sometimes has a lot of very difficult paths. The thing is that, when you look at the right-wing Liberals that have been controlling the Commonwealth government for the last 10 years, you see that they now have the opportunity that they have always been prevented from being able to acquire—that is, complete control of the Senate, which they have had from last year.

We have seen the government’s ideological obsessions being put into legislation in the last 12 months, with not only Welfare to Work but also Work Choices. And, finally, we now have the Telstra sale. Mr Deputy President, all those men and women from the right wing of the Liberal Party, who came here with ideas and imbued with some zeal for their causes, have now become those accomplished fanatics that we know will deliver the opposition power at the next federal election.

We know, with the situation with T3 and T2 and the government’s involvement in the shameful exercise of selling Telstra, that there was a full week of dithering by the Commonwealth government on whether or not it was going to go down the path that it finally did. Mr Deputy President, you may recall that, on the afternoon of the day of the announcement by the Prime Minister that the government was going to proceed down this path, there was certainly an indication that there was going to be no announcement made on the future of Telstra. But later, towards that Friday afternoon, the Prime Minister came out and did make the announcement that cabinet had finally, after a week of dithering, made a decision on how to proceed.

You and I know, Mr Deputy President, that the T3 shares will become dogs of shares. We already know that the government has no idea about how to proceed with the sale of this iconic Australian structure. Part of it is going to be put out in shares at some point; and another 30 per cent, I think it is, is to go into the Future Fund. Senator Minchin has been walking the streets of what I think is called the ‘windy city’, Chicago, trying to interest investors in the sale of Telstra, but he has been rebuffed. He has gone to San Francisco trying to do the same thing and he has been rebuffed. Even Senator Coonan has even been able to get into the act—wandering around the streets of Sydney and Melbourne talking to investors there—and she has been rebuffed as well.

Everybody who has taken an interest in the potential sale of this Australian icon knows that the government do not have a flaming clue as to how to proceed. We know, if we proceed down the path that they are putting forward, that men and women who attempt to invest in the T3 structure will lose their money, as they have before. And as to Sol Trujillo and his gang, how will those three amigos—let alone the four that are still left in the Senate chamber—propose, in a situation where we have worsening communications infrastructure in this country, to make all these effective changes?

One thing Mr Trujillo wants to do by the end of 2011 is shed 12,000 jobs in Telstra. He wants to have a favourable regulatory environment, which is what the whole debate between the government and Telstra is about. Mr Trujillo wants these affectations to occur so that the government can try to buy its way out of the problem it has got itself into. If I had more time I could highlight the difficulties that Mr Paul Neville has clearly highlighted to the government in relation to regional Australia. But this is where we are up to at this stage, Mr Deputy President: the fanatics have taken over the Commonwealth government—(Time expired)

Question agreed to.