Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

My question is to Senator Minchin, the Minister for Finance and Administration. Does the minister recall the Prime Minister saying in November 2002, when the government was considering the full sale of Telstra, that, ‘We’ve got to be satisfied that we sold at a time and a price that would maximise the return to the Australian public’? Wasn’t the Prime Minister justifying the government’s decision to postpone a possible full sale in 2003? Wasn’t the price of Telstra shares at the time $4.50? If, in 2002, the Prime Minister was not satisfied that $4.50 a share was a good return to the Australian public, why should we now be rushing into a fire sale of shares at $3.60?

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

The tragedy for Australian taxpayers is that the Labor Party opposed the full sale of Telstra in 1999. That ideological position has cost the Australian taxpayers $50 billion. The Labor Party have cost Australian taxpayers $50 billion by requiring the government, through this place, to remain locked into a shareholding in a telephone company which they corporatised, which they required to operate commercially, which they set up for privatisation—and we know they contemplated privatising it in their time in government.

We did not obtain the necessary legislative authority for a further sale of our shares until late last year. So there was no possibility of us contemplating any further sale, obviously, until that legislative authority had finally been obtained, despite the Labor Party’s consistent ideological opposition to a further sale of Telstra. We have now been in a position for some 12 months to be able to contemplate a sale. We have indicated for some time that October-November is the period in a calendar year that our professional advisers regard as the best time to make a retail offer. We have been preparing for a retail offer for some time. We have been considering the advice provided to us. It was the overwhelming advice—indeed, the unanimous advice—of our professional advisers that this was an appropriate time to offer to the Australian public and the international public a further $8 billion of our shares, that the pricing was appropriate, that the market price fairly reflects the fundamentals of this company and that Telstra is trading at a price which is roughly equivalent to its peers—and certainly as good as its peers internationally. To suggest otherwise is to suggest that the market has the matter entirely wrong.

We do not believe that. The market for Telstra shares is deep and liquid. It is one of the most highly traded stocks in the Australian market. We do not have any evidence available to us that the market has got the price of Telstra completely wrong. We see no point in not proceeding with an offer of shares at this time. Of course, to the extent that there is an upside in the Telstra share price, which of course we hope will be the case as a result of Mr Trujillo’s transformation strategy for the company, then those who do participate in T3 will be the beneficiaries and, indeed, to the extent that there remains a shareholding in Telstra in the Future Fund, then taxpayers indirectly will be the beneficiaries of any upside in that share price.

Dana Wortley (SA, Australian Labor Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Does the minister recall his spokesman saying in November 2002, following comments of the Prime Minister, that no further Telstra shares would be sold until the share price improved? Given the price of the shares has fallen by a further 20 per cent since then, from $4.50 to $3.60, was that another broken promise from this government? Isn’t this panicked fire sale all about selling before an election year and nothing to do with getting a good return for taxpayers?

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

That is a completely bizarre question. They are accusing us of breaking promises. What we are trying to do is honour a promise we made to the Australian people to relieve them of this shareholding in Telstra. It is this mob over here that is trying to make us break our promise. They have been doing that for the last eight years by opposing our proposals for a further sale of Telstra and by so doing they have cost taxpayers $50 billion already. Mr Swan is out there talking down Telstra, trying to sabotage this sale.

Opposition Senators:

Opposition senators interjecting—

Paul Calvert (President) Share this | Link to this | Hansard source

Order! Senators on my left!

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

This will cost taxpayers even more money. They have $50 billion hanging around their necks. We want to get Telstra out of government ownership and allow it to prosper as a fully privatised corporation.