The Guardian 17 August, 2005


Telstra squabbles

Strongly contending and contradictory forces are threatening to undermine the federal government’s determination to completely privatise Telstra. The Liberal Party has not wavered in its aim to push through privatising legislation as soon as possible. At the same time, the political forces standing up in the National Party and the failure of Telstra to provide adequate telecommunication services in many country districts is forcing them to manoeuvre.

The recently imported American, who is now Telstra CEO, Sol Trujillo, is fully in favour of privatisation but wants a deregulated market place so that a fully privatised Telstra would be able to do as it pleases, ignore the needs of the countryside, put up prices and sack even more Telstra workers.

There is a tug of war between the Liberal Party and some National Party Senators who are demanding a multi-billion dollar fund to guarantee that country users get a service that is not less than that available to city subscribers.

In an attempt to hasten and guarantee the success of the process of privatisation Sol Trujillo has proposed a $5 billion fund to meet the needs of the countryside but the suspicion is that most, if not all, of this huge sum of money would be provided by taxpayers. This blatant proposal comes despite the fact that Telstra has just announced an annual profit of $4.4 billion. When asked what proportion of this proposed fund would be provided by the federal government, Minister Mark Vaile refused to answer.

Despite some initial reluctance, federal government leaders have indicated that they are looking at the proposal. As on other occasions, the government has been prepared to pay out huge sums of taxpayers’ money when it is a question of achieving its political objectives. Enormous sums have already been paid out to upgrade country services without the expenditure having had much impact of the quality of country services.

Treasurer Peter Costello, who will have the job of finding the money, is justifying privatisation claiming that it is in the "national interest", ignoring the fact that most Australians are not in favour of the privatisation of Telstra. Opposition in the country is running at about 80 percent according to some recent reports.

This is a fact that those in the National Party who are raising points of difference, including newly elected Senator Barnaby Joyce, should take into account. Any sort of deal, no matter how many billions of dollars are put into a fund, which results in privatisation will be a betrayal of the real national interests of Australia and a slap in the face for that majority opposed to privatisation.

Another indication of the mood of the electorate is the fact that support for National Party Senator Barnaby Joyce increased substantially following his much publicised stand against the Howard government’s policies.

The difficulties that the government now finds itself in have arisen not merely because some National Party Senators are attempting to pressure the government to bring country services up to scratch. They have more to do with the basic policy of privatisation and the failure of the government (which continues to hold a majority shareholding and therefore is able to appoint a majority of the board of directors) to appoint representatives who really look after the interests of Telstra subscribers, whether they reside in the cities or in regional and rural Australia.

Competition policies do not result in proper services because private companies are in it for the profits; profits first, last and always. The Telstra board members, coming predominantly from the corporate sector, are all motivated by private enterprise ideology. As directors of a corporation, they are bound by law to maximise profits.

A fully publicly-owned Telstra, which has been the situation for most of Telstra’s and its predecessors’ existence, is a much better proposition. There is nothing wrong with publicly-owned and accountable monopolies that are properly led by a competent board of directors that not only have the necessary technical know-how but accept that their first responsibility is to provide telecommunications services to the people of Australia.

The choice is between full privatisation or full public ownership. What we are witnessing at the moment is the failure of full privatisation by a bunch of corporate manipulators and their political henchmen.

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