The Guardian March 14, 2001


Telstra still up for corporate grab

by Andrew Jackson

Telstra's record $2.6 billion profit is proof that the company was not 
being held back by majority Government ownership, says the Communications, 
Electrical and Plumbing Union (CEPU). It stated that Telstra should use the 
money to boost investment in infrastructure and employee training, so that 
it could "serve the Australian public well".

Colin Cooper, President of the Communications Division of the CEPU said 
that no further cost cutting is needed, and Telstra should scrap plans to 
axe a further 5,000 jobs.

In the light of Telstra's profit result, they should resist market pressure 
to "spin-off" and partially privatise sectors of the company, especially in 
the growth areas of MobileNet and Network Design and Construction. "Telstra 
is looking like a reliable performer" and a "fire sale" of further assets 
was not needed.

Mr Cooper said that it was vital that adequate funding be committed to 
upgrade and maintain this national resource. "I hope we have seen the end 
of the spending cuts that have set back work in this area over the last 
twelve months".

Last year, Prime Minister Howard and Communications Minister Senator Alston 
were loudly trumpeting the coalition policy of full privatisation of 
Telstra.

Now, with a Federal election due in the next six months and the Government 
performing poorly in the polls, it appears the Government has decided to 
put the sensitive issue of privatisation on the back-burner. The public 
remains committed to the preservation of the remainder of Telstra under 
public control as the only guarantee of quality service.

When Telstra's results were announced Howard said: "Our position is that 
the sale is conditional on us first being satisfied, and I am not so 
satisfied". For the government, its privatisation plans of the remaining 51 
per cent of Telstra have only been delayed, not abandoned.

Labor Shadow Minster for Communications Stephen Smith claimed that Mr 
Howard was planning to move "full steam ahead with the full privatisation 
of Telstra".

He said that Mr Howard was only waiting until an "action plan" to improve 
services was in place, and not necessarily wait until services to rural 
Australia had actually improved.

Labor remained firm in its commitment not to sell the remaining 51 percent 
of Telstra, and the profit result vindicated its policy, said Mr Smith.

Telstra's CEO, former rocket scientist Dr Ziggy Switkowski remained coy 
about the future ownership of Telstra. "It is an election year and Telstra 
is going to be a bit of a political football", Dr Switkowski said, and 
refused to be drawn into the political debate on privatision.

Nevertheless, Telstra's Chief Financial Officer, Mr David Moffatt, vowed to 
carry on with mass job cutting, signalling that another 5,000 employees 
would need to be shed if they were to meet their commitment to slash jobs 
by 10,000.

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