John Hogg (Queensland, Deputy-President) Share this | Link to this | Hansard source

I inform the Senate that, at 8.30 am today, two senators each submitted letters in accordance with standing order 75. Senator Milne proposed a matter of urgency and Senator Conroy proposed a matter of public importance for discussion. The question of which proposal would be submitted to the Senate was determined by lot. As a result, I inform the Senate that the following letter has been received from Senator Conroy:

Dear Mr President

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

The Australian Government’s continued mismanagement of the sale of Telstra is hurting the prospects of the company as evidenced by the following claims in the recently released T3 prospectus:

(a)

the Government’s intention to force the appointment of Mr Geoff Cousins as a Telstra director despite the opposition of Telstra directors could affect the stability of the board;

(b)

the Government’s decision to dump a large holding of Telstra shares into the future fund to be sold in the future, will depress the Telstra share price; and

(c)

Government imposed regulation threatens the company’s earning prospects.

Yours sincerely,

Stephen Conroy

Deputy Leader of the Opposition in the Senate

Labor Senator for Victoria

I call upon those senators who approve of the proposed discussion to rise in their places.

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today’s debate. With the concurrence of the Senate, I shall ask the clerks to set the clock accordingly.

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

The prospectus for the impending sale of Telstra, released yesterday, is a damning indictment of the government’s mismanagement of the sale process; it is a black mark on the economic credibility of this government. While there has been an army of highly paid investment bankers tricking up the incentives in T3 to ensure that the float is oversubscribed, these efforts have been undermined continually by the government’s incompetence. What the T3 prospectus has revealed is that, in the eyes of the Telstra board, the government’s behaviour in recent months, and the way it has structured T3, undermine the medium- to long-term prospects of the company. Whether forcing a mate of the Prime Minister onto the Telstra board, creating an overhang of shares in the Future Fund or putting Telstra’s dividend under threat through regulatory uncertainty, the Howard government has undermined T3 every step of the way.

On top of this, the childish and unedifying public warfare the government is pursuing against the Telstra board and management will serve only to undermine investor confidence in the company. How can the government look Australian investors in the eye and ask them to participate in T3 when, every other day, it is attacking the company’s leadership and direction? How can the government ask Australian investors to have confidence in the future of Telstra when it clearly has absolutely no confidence in the leadership of the company?

The fact that the government is, on the one hand, trying to talk up the sale of Telstra whilst, on the other hand, trying to undermine current management shows economic incompetence on a spectacular level. Is it the government’s position that the current board and management of Telstra are loose cannons who cannot be trusted? If so, why hasn’t the government sacked them in this row? If not, why is the government constantly attacking their leadership and direction? Is it the case that Howard government ministers and backbenchers are simply so arrogant or ill-disciplined that they cannot resist pursuing a personal grudge even when it is against the interests of the Australian public?

As I said earlier, this entire farce is a black mark against the government’s economic credibility—that is, what little economic credibility the government has in the area of telecommunications after John Howard’s recent claim, when T2 was up for sale, that T2 was ‘an extremely good deal’. It was so good a deal that those who listened to the Prime Minister’s shonky economic advice lost almost half their money. The T3 prospectus makes it clear that those who were burnt in T2 by Prime Minister Howard’s irresponsible actions should be very cautious that the same thing does not happen in T3.

The first cause for concern in this regard identified by the T3 prospectus is the government’s intention to force Mr Geoff Cousins onto the Telstra board. Let us review Mr Cousins resume—all of his resume. Senator Ronaldson stood up yesterday to defend Mr Cousins. He said that he is a big company director who has run big companies and has heaps of experience in telco. Then he proceeded to talk about everything except his experience in telco. Why is that? Let us deal with Mr Cousins’s resume. He has been a consultant to the Liberal Party and a personal confidant of the Prime Minister for almost 20 years. His only experience in the Australian telecommunications sector was a stint as the CEO of Optus Vision. You will not hear the name ‘Optus Vision’ pass the lips of any government senator or member. Why is that? It is because Optus Vision, while Mr Cousins was its CEO, cost investors more than $4 billion in losses. During that time, Mr Cousins developed an industry-wide reputation for combativeness and rudeness. It is difficult to know which of these qualifications Telstra shareholders should be more concerned about.

At Friday’s investor day held by Telstra, the Telstra CEO, Sol Trujillo, stated—

Ron Boswell (Queensland, National Party) Share this | Link to this | Hansard source

Your new mate.

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

I have only once shaken his hand. Sol Trujillo stated that a harmonious Telstra board was imperative for implementing the ambitious transformation plan the company is pursuing. Telstra shareholders have the right to be concerned about what impact a combative and abrasive director like Mr Cousins would have during the implementation of the transformation plan. Let us be clear: Mr Cousins’s only experience in telecommunications companies—not TV companies or ad agencies—is to lose $4 billion of investors’ money on their behalf.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

What years were they? They were the start-up years.

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

He has been on the government’s payroll for the last 10 years, Senator McGauran. Even worse, the T3 prospectus clearly advises prospective investors that Telstra’s promised 2007 dividend of 28c per share is subject to the successful implementation of Telstra’s transformation plan. It was not that long ago that the Minister for Finance and Administration, Senator Minchin, was distributing a briefing document to coalition MPs—perhaps Senator McGauran might like to share it with us—instructing them to talk up the juicy Telstra dividends. Now the government is irresponsibly putting these dividends at risk through the arrogant and petulant nomination for the Telstra board of a Howard government stooge who lost $4 billion the last time he had anything to do with a telco.

But Telstra’s biggest fear with respect to the nomination of Mr Cousins to the Telstra board is not his combative nature but his divided loyalties. This is a man whom the Prime Minister’s chief of staff identifies as one of the Prime Minister’s few personal sounding boards—someone he picks up the phone to call when he needs advice.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

Who said that?

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

Mr Arthur Sinodinos. This confidant of the Prime Minister will be sitting in on Telstra’s board meetings discussing the impact on the company’s prospects of government actions and the best way to protect shareholders from the impacts of the Howard government’s interferences.

The T3 prospectus makes the Telstra board’s view of the appropriateness of the nomination of Mr Cousins perfectly clear. It states:

Telstra believes that if there is a risk Mr Cousins cannot be considered an independent director that this could prove disruptive to the smooth and effective functioning of the Board.

And that:

The Board is concerned that there is a risk that Mr Cousins’ previous consulting role with the Government could interfere with his capacity to be considered an independent director.

What they are saying is that Mr Cousins will act as a government spy or, even worse, a government stooge on the Telstra board. Does anyone seriously believe that a personal confidant of the Prime Minister for over 20 years will not report back to the Prime Minister on the goings-on on the Telstra board? Does anyone seriously believe this will not have a destabilising influence on the company?

It was not that long ago that the Chairman of Telstra, Mr Bob Mansfield, was forced to resign from the Telstra board as a result of some conflicts between directors. You may not remember, Senator McGauran, but Mr Mansfield was forced off the board because he went and consulted the Prime Minister about a merger proposal, a purchasing proposal, to buy Fairfax. Remember that? The Chairman of Telstra, another close personal mate of the Prime Minister, decided that the first place he should go and discuss Telstra buying Fairfax was with the Prime Minister, not with the other board members. So do not try and pretend that: ‘Oh, well, the Prime Minister would never seek to exert influence. The Prime Minister’s mates do not go and talk to him behind closed doors.’ They booted, they punted Mansfield, on the basis that he was consulting with the Prime Minister—

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

You’d say anything.

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

It’s all on the public record.

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

What happened to Mansfield?

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

They punted Mansfield because he was leaking to the Prime Minister. They punted him—that is what happened! It made the smooth management of the company impossible and forced Mr Mansfield’s resignation. Mr Mansfield’s own words—just so that you do not get collective amnesia over on the other side—were that ‘the bond of trust has been broken’. Yes: he broke it because he went off leaking to the Prime Minister.

The irresponsible nomination of Mr Cousins by the Howard government revives the prospect that these days will return to Telstra. Compounding the shambles that the T3 has become, the nomination of Mr Cousins also completely contradicts one of the government’s key rationales for the Telstra sale. The government has consistently told the Australian people that it was unsustainable for it to continue to own Telstra by virtue of the conflict that arose as a result of the government being both the owner and regulator of the company. The government told the voters that T3 would end this intolerable conflict. The nomination of Mr Cousins gives the lie to that argument. Instead of ending this so-called conflict, the government—and here is the real rort—just weeks before it flogs off its majority control, appoints Mr Cousins for a three-year term. Just when Telstra thought it was running free of government interference, on its own statements by the government, the cold dead hand of Prime Minister Howard appeared in the form of Mr Cousins and grabbed the company’s ankle.

No wonder the Telstra board recommended its shareholders vote against his nomination in their notice of annual general meeting. The nomination of Mr Cousins is the kind of behaviour characteristic of an arrogant government that has been in power for far too long—a government thinking only about its own political interests and not of the interests of those affected by its fits of pique.

The nomination of Mr Geoff Cousins shows that Prime Minister Howard has changed. There was a time when Prime Minister Howard would have been smart enough not to put his own political interests ahead of those of the Australian public. But not today. He is willing to ride roughshod over them simply to pursue a personal grudge.

This willingness to sacrifice current and prospective Telstra shareholders for the government’s political interests can be seen in the decision to dump billions of dollars worth of Telstra shares into the Future Fund. The Howard government made the political decision that it wanted to proceed with the sale of Telstra at any cost. It didn’t care whether to do this required holding a fire sale, or offering a whole suite of tricked-up incentives, or making the whole exercise a smoke and mirrors trick. It made an ideological decision to sell, and it wanted to get rid of the shares any way it could. That is where the Future Fund came in.

The government decided that, because there was insufficient demand in the market to allow it to sell its entire shareholding, it would dump the bulk of the shares into the Future Fund and claim that was the end of it. Of course transferring the ownership of the Commonwealth’s Telstra shares from the Commonwealth to the Future Fund—an investment fund wholly owned by the government—was always ridiculous.

However, the real economic incompetence comes from the fact that David Murray, the Chair of the Future Fund, has refused to allow the Future Fund to be overweight in Telstra shares. As such, the Future Fund has made it clear that it will sell down its interest in Telstra over the coming years—subject to the two-year escrow period. From the moment this shonky plan was concocted, the Labor Party was warning that it would be Telstra’s long-suffering shareholders that would pay the price for this decision. (Time expired)

Ian Macdonald (Queensland, Liberal Party) Share this | Link to this | Hansard source

What rank hypocrisy from the Labor Party in general and from Senator Conroy in particular. I regret to say about Senator Conroy that his lack of understanding of business management and of running any sort of an entity that has to make a profit is understandable. Senator Conroy comes from a very distinguished background in the unions, and union thuggery, and running an operation that has never had to pay its own way—an organisation that has turned thuggery and bullying into an art form. It is no wonder, Senator Conroy, that Senator Ray referred to you, quite correctly I have to say, as a dalek.

Senator Ray would know you better than we do, Senator Conroy. We all like you over here. In fact, we are delighted you are a shadow minister because for as long as you are a shadow minister we do not have a lot to worry about. But still, we all like you and we are delighted that you hold that position. When it comes to looking after business and having a sensible view on business, I am sorry, Senator Conroy, your years since university as an officer of some union really do not qualify you to compete with people like Mr Cousins for the operations of perhaps one of the major companies in Australia, a multinational company.

In his proposal of a matter of public importance Senator Conroy complains of three things: firstly, that Mr Cousins has been appointed as a director of Telstra; secondly, that the government is going to dump a large holding of Telstra shares from the Future Fund onto the market in future; and, thirdly, that the government has overregulated Telstra. I will address those complaints briefly because I know that my colleagues Senator Brandis and Senator McGauran will be taking up the fight when I resume my seat.

Mr Cousins is a particularly distinguished Australian with a significant record in business. To suggest that Mr Cousins would abrogate his duties as a director of a major public company is an insult and is quite defamatory. Senator Conroy should be very careful about making such allegations. He certainly would not make them outside this chamber. In all fairness, Senator Conroy should apologise personally to Mr Cousins for the suggestion that Mr Cousins might in any way have a conflict or that there would be a dereliction of the quite high standard required of him as a director of a major public company.

It is hard to understand the Labor Party’s approach to this issue. They are blaming the government for appointing a director—I am not quite sure what the real reason is—but in the same breath they are saying: ‘If we were in government we would not be selling any part of Telstra. In fact, we would be buying it back’—I think that is one of the policies Labor had floating around a little while ago—‘so that the government actually owned all of Telstra and would appoint every single one of the directors,’ as they would have to do if they were the sole shareholder of the company. Would it be okay for a Labor government to appoint all of the directors of Telstra but not okay for a Liberal government, which is still, through the agency, the major shareholder in that public company—for a little while at least—to appoint just one of those directors in a new capacity?

It is very difficult for me, and I am sure any other Australian, to understand the basis of the Labor Party’s opposition to this appointment. Is it an objection to Mr Cousins as a person or is it an objection to the fact that the major shareholder is appointing one director when the Labor Party, or so it appears, would want to appoint all of the directors? As I said at the beginning, it is rank hypocrisy for the Labor Party to conduct the sort of campaign they have conducted to try and down-sell and destroy the sale of Telstra. It makes it very difficult to understand their motivation, except to score a couple of fairly cheap political points—and they are not even going to do that.

I am one of those who have for a long time believed that the government should get out of Telstra. It should never have been involved in recent times when Telstra has been a major multinational company competing with the best in the world. I have always held the view—coming from regional Australia, as I do, and living in a small country area—that it should not be a private company that provides facilities for remote parts of Australia. It should be the government that does that, but by way of subsidy, not by ownership of a major multinational company where you are cross-subsidising other shareholders’ prospects with the obligations that all governments have of looking after those Australians who are seen to be disadvantaged, and that includes many living in remote and rural Australia.

The sooner we get rid of Telstra the better it will be for Telstra and for all Australians—and certainly those living in country Australia. It is up to governments to subsidise, not private companies. I believe we should get out of Telstra. We should have done it before now, but at last we are doing it. It is appropriate that we make this third tranche of the privatisation work. We want to get a return for all Australians who are the investors in the 51 per cent. We want to get a reasonable price for the shares. We do not want to get more than the company is worth and we do not want to get less than it is worth. But the Labor Party are out to destroy this sale by lessening the price for the T3 float in the hope that they will get some sort of perverse satisfaction out of seeing the sale fail or, if not fail, getting a very small return. I just cannot understand the anti-Australian approach that the Labor Party have adopted in this instance.

This matter of public importance put forward by the Labor Party goes on to suggest that the government is dumping a large holding of Telstra shares in the Future Fund, to be sold in the future and to depress the Telstra share price. That is not the intention of the Future Fund. The chairman of the Future Fund, Mr David Murray, a very distinguished and very capable businessman, will want to get the best value for those shares when at some time in the future the Future Fund sells them down. If you had to ask me whether you would respect Mr David Murray’s view on when to sell and what price to sell at or whether you would respect Senator Conroy’s view, I do not think there is a debate from any side of this chamber on whose business advice you would take.

The third element of Senator Conroy’s motion seems to be criticising the government for imposing regulation that threatens the company’s earning prospects. If you think about that and take it through to its end, you would say: what would the Labor Party approach be? Would it be to take back all of those regulations so that the company’s earning prospects are better? Does this mean that the Labor Party would get rid of the universal service obligation? Does it mean the Labor Party would get rid of price controls on core costs? Does it mean the Labor Party would get rid of untimed local calls, the customer service guarantee, or access regulation on the ULL? Senator Conroy really needs to explain the Labor Party approach to this. Are they trying to do the bush in? Are they trying to ensure that Australians do not get those enhancements, those benefits, those safeguards which the government has put in place? It seems from this motion that Senator Conroy is saying that the government should get rid of all those regulations so that Telstra can make a bigger profit. That is not needed to be done. As I said before, they can fit together. We need Telstra being well operated as a private company and we need the government to ensure that all Australians have fair access to telecommunications in this country. (Time expired)

Lyn Allison (Victoria, Australian Democrats) Share this | Link to this | Hansard source

The Democrats support the basic contention of this motion—that is, that the government’s continued mismanagement of the sale of Telstra is hurting not only the prospects of the company but all Australians, the people who currently own just over 50 per cent of Telstra. Like the majority of Australians, the Democrats continue to oppose the sale of this important asset. We do so on the grounds of public and national interest. We argue that telecommunications are absolutely vital to the national security and economic and social development of this country, as essential as good roads, ports and the like. It should be treated as a critical part of our nation’s infrastructure and therefore should remain in public hands.

In this country we are increasingly reliant on e-commerce, e-health and e-banking. High-speed broadband is essential for successful engagement with the modern economy and society, especially by small business and people in rural and remote areas, in overcoming isolation and lack of services. Yet Australia is still behind the OECD average in broadband penetration—ranked only 17 out of 30 OECD countries.

The decision by the government to press ahead with the sale of Telstra in 2006 despite share prices being at a nine-year low, the withdrawal of Telstra from negotiations with the ACCC on a fibre-to-the-node network and ongoing denigration of the federal regulatory regime by senior executives of Telstra, even as recently as the release of the Telstra prospectus no less, suggest the federal government has bungled the management of this sale and the sale of the first two tranches of Telstra shares. The first tranche was undervalued, the second tranche was overvalued and this tranche is likely to be undervalued from what we can gather.

Importantly, the government has mismanaged Telstra and communications insofar as competition is concerned. The telecommunications market has improved in Australia since the introduction of competition, mostly in mobile phones, but Telstra, with its ownership of the copper network and hybrid fibre coax cable delivering pay TV and broadband, is still the dominant player. Telstra has both the ability, through its ownership of the essential elements of the infrastructure, and the incentive, because of its vertical integration, to favour its own interests, and it does that. Telstra has been quite explicit about its intentions to prevent competition, yet the government has done nothing about it and is proceeding with the sale, giving up its stake and influence as though nothing is wrong.

Sol Trujillo in February this year made it clear that he did not think Australia needed competition, that a monopolistic, internationally competitive company is what will drive the best outcome for consumers. I thought that was at odds with government policy, but just a moment ago Senator Ian Macdonald suggested that this is quite okay.

Telstra’s rollout of 3G may bring more sophisticated technology to some consumers, but will ultimately reduce consumer choice, especially in regional areas because competitors who currently resell on the Telstra CDMA service will be shut out. Telstra pulled out of fibre-to-the-node negotiations with the regulator because they could not agree on an access regime for competitors. Telstra also warned the Senate inquiry examining the legislation into the final sale last year that they would not invest in new infrastructure if they were forced to allow competitors to access their network.

The government’s light touch self-regulation has failed, operational separation has failed, and putting the ‘hard word’ on Sol Trujillo and his team has failed. The Prime Minister is now bucking due process by putting an insider on the board in the hope that he will do his bidding. It is our view that this strategy is also doomed to fail. The government has well and truly bungled the management of Telstra and the telecommunications industry. It has said it was on track about competition but has failed to deliver. It has shown itself to be ideologically driven on privatisation, despite the absurdity of proceeding in the current climate. It is the current Telstra shareholders, tax payers and ultimately consumers, all Australians, who will be the losers.

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

I rise to speak on this matter of public importance: the Howard government’s continued mismanagement of the sale of Telstra. It is not the first time I have spoken on this issue and I am sure it will not be the last. We already know that the Howard government disregarded the views of more than 70 per cent of Australians when it voted to go ahead with the privatisation of Telstra and that the government is out of touch with the majority of the Australian population that do not want Telstra sold, let alone sold at any cost. It has been a debacle from day one. And, just when you thought it could not get any worse, new heights of arrogance have been reached. The public offer prospectus for the T3 float is the latest confirmation of the economic incompetence of the Howard government. The Howard government’s mismanagement of the sale of Telstra has turned T3 into a shambles. This shambles is hurting the prospects of Telstra and the interests of Telstra’s shareholders.

There are three areas where the Telstra prospectus identifies the government’s actions as hurting Telstra. First of all, there is the government’s childish obsession with forcing the nomination of government nominee Mr Geoff Cousins as a director of Telstra despite the opposition of the Telstra board. The second is the government’s economically incompetent decision to dump billions of dollars worth of Telstra shares into the Future Fund for sale at a later date, depressing the Telstra share price for years into the future. The third is the regulatory uncertainty that undermines Telstra’s investment plans.

The presence in the T3 prospectus of these three risks to Telstra’s future is extraordinary. Their presence is extraordinary because each is a risk to Telstra’s profitability, undermining investor confidence in the float that has been created by the Howard government. These risks are not the usual risks associated with business; they are additional investment risks that are purely the creation of the Howard government. The fact that, on the one hand, the government could be talking up the Telstra float while, on the other, creating risks that undermine the prospects of the float is an extraordinary demonstration of the government’s incompetence. Even worse, these risks are purely the result of personal animosity and ideological obsession—not a compromise for policy reasons but pure personal vindictiveness and ideological obsession.

The government have done what they have become accustomed to doing when they want to stamp their ideological position. They have turned to their internal line-up of Howard foot soldiers in an attempt to absorb heat over their ongoing mess, this time rolling out Mr Cousins and nominating him, confident that he will be elected as a director at the annual general meeting, even though concerns have been raised about the consequences should he be successful in winning the position.

The appointment of Mr Geoff Cousins is the basest of personal square ups. The Telstra board has outraged the Howard government simply by disagreeing with its view of the world. So, as payback, the government is now forcing a close personal friend and adviser of the Prime Minister onto the Telstra board to act as a government spy. The Prime Minister said yesterday:

... the government will be voting for Mr Cousins at the annual meeting and I feel reasonably confident that he will be elected ...

This, and the Prime Minister knows that Donald McGauchie has already written to shareholders asking them not to vote for Mr Cousins. The handling of Telstra by the Howard government is reaching the point where they are completely on the run and have few places left to turn, so much so that the government’s embarrassing performance during question time yesterday confirmed that they are out of answers and completely exposed.

Under the heading ‘Investment and other risks’ in the T3 prospectus, printed and launched yesterday as the ink was still drying, the first paragraph attempts to shed some light on the nomination of Prime Minister Howard’s nine-year part-time adviser and—as media reports say—‘friend’ as a director to Telstra. It says:

There are significant differences between the Commonwealth and the Telstra Board with respect to the nomination for election as a director of Mr Geoffrey Cousins.

‘Significant differences’, read another way, could mean a genuine risk in the view of Telstra. Telstra used the prospectus to warn investors that the election of Mr Cousins could upset the board. The prospectus says:

Telstra believes that there is a risk if Mr Cousins cannot be considered an independent director that this could prove disruptive to the smooth and effective functioning of the Board. Were this to occur, this could also affect Telstra’s ability to attract and retain qualified directors.

It goes on to say:

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.

But it does not end there. It goes on to say:

... the Board is concerned that there is a risk that Mr Cousins’ previous consulting role with the Government could interfere with his capacity to be considered an independent director. In the Notice of Meeting for the AGM, the Board did not recommend that shareholders vote in favour of Mr Cousins.

Now I will consider the government’s opposing view. The government says that it has sought the nomination of Mr Cousins and lists his experience, highlighting a number of positions he has held. The government also states that Mr Cousins will act independently. It should be noted that Mr Cousins only resigned as a part-time consultant to the Prime Minister upon his nomination. So, after years of his being a consultant to the Liberal Party, we are now expected to believe that the government will be held at a distance, that he will act independently and that his appointment is justified by his experience. In the T3 prospectus, the Commonwealth has written:

Mr Cousins has more than 26 years experience as a company director ...

My understanding is that Mr Cousins does have experience in Australian telecommunications—that he was the chief executive officer of Optus Vision, a company that lost $4 billion and was wound up. The T3 prospectus tells us:

Mr Cousins was previously the Chairman of George Patterson Australia ...

Further down, it says that he has held a number of positions at George Patterson, including Chief Executive of George Patterson Australia.

A recently released government contracts document shows that Mr Cousins’s former advertising agency, now called George Patterson Y&R, has been contracted by the government for $1.87 million for advertising agency services for the Telstra T3 sale, and today in our newspapers we read this about the government’s $20 million Telstra share offer advertising campaign:

Media buyers said the government would pay higher than normal prices because of the need to book prime time television advertising spots.

So here we have the government appointing a mate to the board, contracting the company in which he held significant senior positions and then spending a further $20 million—paying higher than normal prices—on the advertising of their sugar-coated sale of Telstra. Whichever way you look at it, the government’s actions regarding T3 have undermined its medium- to long-term prospects.

The government is attempting to get the public’s confidence by embarking on an expensive advertising campaign—$20 million worth of advertising—while continuing to attack Telstra’s direction and its leadership and not giving genuine consideration to concerns Telstra has raised about the government’s nomination for a position on the board. But Australians should not be surprised about this latest extravagant advertising campaign—it is straight off the back of the government’s $55 million Work Choices advertising campaign.

Telstra’s prospectus, released yesterday, is a damning indictment of the government’s role in the Telstra sale process. The government’s handling of Telstra has been a shambles. It is time John Howard stopped putting his own political interests ahead of those of the Australian public and Telstra shareholders. They deserve better than this. (Time expired)

George Brandis (Queensland, Liberal Party) Share this | Link to this | Hansard source

I am sorry to say that we have heard in the performance of Senator Conroy, and now Senator Wortley, an example of just how shabby the Labor Party’s approach to this issue has become. And it really is an extraordinary height of hypocrisy that Senator Conroy, on behalf of the opposition, should table an MPI discussion today attacking the government for ‘hurting the prospects of the company’—that is, Telstra—when, throughout question time today and yesterday, and in the public statements he has made since the T3 float was announced, talking down the share price of Telstra has been Senator Conroy’s only game. That is all he has been doing—talking down the share price. So has Mr Beazley. So has Mr Tanner. So, to their shame, has the Labor shadow ministry. And yet these are the people who would run communications policy were the Australian public so unwise as to elect them to government next year.

I want to come back to that, but first of all let me say a word in defence of Mr Cousins. I do not know Mr Cousins; I have never met him. I know only so much about him as I have read in the newspapers. But we do know that he is an experienced company director with extensive experience in this industry and that he is a candidate proposed by the government for the board—the government which at the moment has 51 per cent of the shares in Telstra and, even after the T3 float, will continue to be the largest single shareholder in Telstra. There is absolutely nothing unusual about the majority shareholder, or the shareholder which will continue to be the largest single shareholder in Telstra, having its nominee elected to the board. In fact, there are other directors of Telstra who are there at the moment because the government recommended them. Not only is there nothing unusual about that but it would be extremely surprising and entirely at variance with Australian commercial practice were that not the case. But we hear Senator Conroy—who has never been able to master detail and therefore is reduced to boilerplate political rhetoric and his trademark character assassination—attack Mr Cousins and use wild claims such as he would be the government spy and that he would not bring an independent mind to bear.

Mr Cousins is a reputable businessman and he knows much better than Senator Conroy seems to know that as a director of a public company he will be subject to fiduciary obligations, both statutory and at law. On the basis of this man’s quarter-century experience as a company director, there is absolutely no reason to believe that he will not in good faith discharge those statutory and fiduciary obligations. We have not heard one suggestion against Mr Cousins that in his entire history as a company director and as a businessman he has behaved inappropriately or unlawfully or in any other untoward fashion.

There has been no substance to these wild character attacks on this man to suggest that he cannot be trusted to discharge the fiduciary and statutory duties with which, after 25 years experience as a company director, he is well familiar. So that is why I say this attack is shabby. If you have something to say against Mr Cousins as to why he is not a fit and proper person to be the director of a public company, then come out and say it. But if you have nothing to say—as you obviously do not—then accept that this man will fulfil his duties which he has obviously done in a quarter-century career as a businessman. The only objection to Mr Cousins is that he is the nominee of the Australian government—the 51 per cent shareholder, the shareholder which after the sale of T3 will still be the largest shareholder of the company. As I said before, there is nothing wrong with that.

Senator Conroy and Senator Wortley gave themselves away when they both said in their speeches that this legislation is in pursuit of an ideological agenda. All of a sudden ideology, the implementation of policy in accordance with a set of political beliefs and values, has become a pejorative. Why is the privatisation of Telstra any more ideological than the privatisation of Qantas, the privatisation of CSL or the privatisation of the Commonwealth Bank? All three of them, particularly the Commonwealth Bank and Qantas, I suppose, are iconic Australian companies, every bit as much as Telstra is, and the privatisation of all was implemented by the previous Labor government.

They were good decisions, not ideological in the rather pejorative sense that has been wound around the privatisation of Telstra by Senator Conroy and Senator Wortley. They were sound public policy decisions borne of the shared belief—the memory of the Labor Party has obviously lapsed on this point at the moment—of both sides of politics in this country for the last 20 or 30 years, and of my side of politics for its entire history, that trading corporations are best governed by the market, and their capital is best traded on stock exchanges and privately held. In this day and age, trading corporations should not ordinarily be owned and regulated by governments. Australia remains the only country in the OECD and one of the only countries in the world in which the principal telecommunications company is a government owned enterprise. That is what we are trying to set to rights. We are trying to bring Australian telecommunications policy into conformity with policy everywhere else in the world, superintended by non-labour governments and, in Britain, by the Labour government. There is nothing untoward about it.

Opposition senators say its ideological, but I say to them that there is nothing wrong with implementing good public policy in accordance with a set of principles. Rather than argue the public policy, we have this shabby, ad hominem, disgusting attack on the integrity of an individual.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

We now see in the dying days of government control of the telecommunications company Telstra the government seeking to impose its man on the Telstra board. Perhaps we should not consider this to be too surprising when we look at the interaction between the government and a number of public institutions. We have seen the government argue on the one hand for the privatisation, the liberalisation or the commercialisation of public institutions and the cutting of any ties between them and government. Yet, on the other hand, we have seen the government seek through legislation or any other means at its disposal to twist the arms of organisations and bully them into implementing the government’s view of the world.

Whether it be the schools and a national curriculum, whether it be the ties to universities, which the government wants to defund and yet regulate more than we have ever seen before in this country, whether it be the health funds or whether it be the airlines, this government wants to take no responsibility in terms of funding and supporting such important public institutions and their infrastructure, but it wants to have a tremendous amount of control over what happens in those institutions and how they operate. It is a pattern that we have seen regularly from this government in its interaction with a number of services, including an essential service like telecommunications.

The Greens think it is entirely appropriate for the government to take a keen interest in the provision of public services, including telecommunications, and that is why we oppose the sale of Telstra. We have done that all the way down the line, from T1 to T2 and now T3. We have done so because we see the benefit, the public interest, provided to the whole of the community by ensuring that governments are involved in the ownership and regulation of such institutions.

We have opposed the privatisation of Telstra because we can see the impact that the sale of Telstra is already having on people who have difficulty accessing telecommunications services, and there will be even further impacts. People who are living in regional parts of the country or people who have special needs require those needs to be met by public institutions such as telecommunications providers or by the institutions that I have mentioned.

Investors have not done well out of the privatisation of Telstra. The public have also not done well out of the privatisation of Telstra so far because of the forgone government revenue. This is why it is not surprising that so many people in Australia are opposed to these ongoing privatisations, whether done by the Howard government, by the Labor government before them or by Labor governments at the state level.

That is why in this debate on Telstra we have seen so many people who live in regional Australia speaking out about the importance of ensuring that Telstra not be privatised. But people in the National Party who purport to speak in this chamber on behalf of regional Australia chose to line up with the government, with the Liberal Party, and to privatise Telstra. We have seen them do that on a number of issues. Members of the National Party have said that the concerns of their constituents, the issues that they have raised and spoken about, are not of such concern that they should oppose the new cross-media ownership laws that the government is introducing into the Senate today.

We have seen a very disappointing representation in the parliament by the party that purports to speak for people in regional Australia. It is not surprising that more and more people in regional Australia are finding that they do not have a voice through the National Party. When I and my Greens colleagues work in regional parts of Australia, we find that people want to talk about what is being done about their voice being heard on climate change, the need to have important services like telecommunications available for them and the need to ensure that there is diversity in media ownership in regional parts of Australia.

When the government has majority control of the Senate with the Liberal Party and the National Party working together, the voices of people in regional parts of Australia are silenced in the parliament. It is very important that at the next federal election people in regional Australia help us in the campaign to rescue this Senate from the control of the government, otherwise their voices will not be heard. Their concerns will not be represented in the parliament and the government will continue to steamroll through with a whole range of proposals that have tremendously detrimental effects on people in regional parts of this country, such as taking away their telecommunications, reducing their access to diversity in the media or not dealing with climate change. (Time expired)

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

I rise to support the government’s point of view on this matter of public importance and to support my colleagues Senator Ian Macdonald and Senator Brandis, who both gave fiery addresses.

This matter relates to the sale of Telstra. That is the essence of the debate here today. The sale of Telstra has been the most debated issue in this chamber for the past 10 years. No issue has absorbed the time and ire of the opposition more than the sale of Telstra. We have had three separate, full-on Senate inquiries. We have had weeks and weeks of debates with the three different sale allotments. And we have had four elections, with the policy of the opposition at each election being not to sell Telstra and with the government having a clear and definite policy to sell Telstra. The differences are stark. We have debated the issue ad infinitum in this chamber. The government is upholding its mandate to sell Telstra.

Here we are again today debating the sale of Telstra. We are debating the most muddled, confused and contradictory MPI on Telstra yet. That is some achievement, and it is led by none other than Senator Conroy. The MPI is full of policy backflips, and it is being led by the very man who is not against the sale of Telstra. He is leading an opposition policy that he does not himself believe in. Why do I say that? Because I have him on record. I can quote Senator Conroy on record from a television interview some time back. He said:

It makes no difference to the majority of Australians one way or the other about the ownership structure. What they care about is what’s the best way to get cheaper prices and better services.

It is quite well known publicly and privately that the instigator of this matter of public importance today is in favour of the privatisation of Telstra. At the very least, he is not against the privatisation of Telstra. But it gets more contradictory and more muddled than that. Let me look at point (c) of the matter of public importance. Talk about policy backflips. It reads:

... government imposed regulation threatens the company’s earning prospects.

That is straight out of the handbook of Sol Trujillo and their part of the board. That is exactly the complaint they have been railing against the government over in the last 12 months or more. Yet Sol Trujillo was the target of Senator Conroy’s own personal attacks. As the previous government speaker, Senator Brandis, rightly put it, Senator Conroy’s hallmark is exaggerated statements and personal attacks. They are a substitute for policy, study and substance.

Senator Conroy is on record as railing personally against the Telstra CEO, Sol Trujillo. One of the characteristics about Sol Trujillo that Senator Conroy was railing against was the fact that Sol Trujillo believed that there was too much regulation over Telstra and that that stifled it in the market. Now we have the Labor Party supporting that point of view. It now supports less regulation over Telstra. I am not sure if those opposite really believe that, but for the purposes of this MPI it is in there and we have to accept it as policy.

What will those on the other side abolish in regard to regulation? Is it the universal service obligation, which this government supports and backs and which this government has strengthened in its time in government? Is it the customer service guarantee? Is that too much regulation? I can tell senators opposite that Sol Trujillo and the other three amigos think it is. They think it is too tough. They would like to see it lifted. Is that what the Labor Party also supports? Is it the operational separation between the wholesale sector and the retail division? That is another regulation that the Telstra board was reluctant to adhere to.

The government introduced those regulations for a purpose. It was not to put yet another layer of red tape across this market. We would not want to do that with this or any other market. It was in fact to enhance competition. Let us not forget that Telstra—or Telecom, the previous incarnation—was a government monopoly. To give the other carriers a chance in the market, we had to introduce a certain amount of regulation so that the other carriers had access to the infrastructure of Telstra. There is a reason it is there, and it is for better and smoother competition. There is another reason we introduced elements such as the customer guarantee and the universal service obligation. That is to support the rural and regional areas of Australia so that they can have an equivalent standard of telecommunications to that of metropolitan areas.

I would have thought that the Labor Party would have supported that—and I actually thought they did support it. Thinking back over previous debates, I would have thought that you supported government regulation and intervention so as to equalise the rural and regional areas that, without regulation, would not receive a communication standard equivalent to that in metropolitan areas. It seems to me that you no longer do that. For the sake of political opportunism, you have done a backflip. You have become so inconsistent and so muddled on this issue that you now send a signal to the Australian people that they simply cannot trust you on policy. If this is the No. 1 policy you wish to debate in this chamber, it does not bode well for the rest of your policies.

John Watson (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! The time for the discussion has concluded.