Well ladies and gentlemen, I've called this news conference to announce that the Government Joint Party Room has approved the Government's plan for the sale of the Government's remaining interest in Telstra. This is a very significant and very beneficial announcement for the benefit of all Australians. It provides a very important addition to a process that Government has undertaken since it was elected, of improving telecommunications all around Australia. The sale legislation which will of course reflect the decision taken today will be introduced when parliament resumes in two weeks time. And that legislation will authorise the sale of the remaining 51 percent. The precise timing and nature of the sale will be something that will be determined later. The scoping study has already indicated that the most proficuous time at this stage for sale will be in 2006 - but the ultimate nature of the sale will be determined at that time.
The decision that we've taken today will I believe reflect a fundamental reality, and that is that it is quite counterproductive and not in the national interests for the Australian Government to own more than half of the largest company in Australia. But the conditions attaching to the sale contain very important and valuable additions and commitments to the future of telecommunications around our country. They provide for what will be known as a 'Connect Australia' commitment, which will give Australians the additional telecommunications services with a 1.1 billion rollout of broadband, new regional clever networks, mobile services and also valuable additional services for the indigenous community.
There will be, if the sale legislation is approved, and after the Government has disposed of a significant part of its remaining interest, there will be established a trust fund of some $2 billion, and out of that trust fund the revenue earned, the revenue earned from that trust fund will be committed to addressing any identified gaps, or shortfalls in telecommunications. And the recommendations in relation to those gaps and shortfalls will be made by an independent review committee with the final decisions to be made by the Government. There will also be strengthened telecommunications competition regulation and a tightening of consumer safeguards.
I would like at this stage to compliment the Minister for Communications, Senator Coonan, for the excellent work that she has undertaken. And I also want to thank and pay tribute to my colleague, the Deputy Prime Minister Mark Vaile for the very constructive role that he has played, obviously in discussing the final details and negotiating the final details of this package. It would be idle of me to pretend that there hasn't been a range of views on this issue, inside the government over the last 9 « years, of course there have. But what we have produced today is the latest but in many respects the most important instalment in a process of repairing Australian telecommunications over the last 9 « years.
But importantly the decision does represent recognition of market reality and that is, it is absurd and counter-productive for a government to own more than half of the largest company in Australia. This is a good outcome for all telecommunications users around Australia, particularly but not only in rural and regional Australia and it's a package that received very strong support from the joint party meeting and it's a package that I believe that when its benefits are fully explained to the Australian community, as it will be over the weeks and months ahead, will be very warmly welcomed.
JOURNALIST:
Prime Minister did anyone in the joint party room serve notice that they reserve the right not to vote for the legislation?
PRIME MINISTER:
One member of the House of Representatives did.
JOURNALIST:
(inaudible) last week that a lot of regulation will stifle Telstra's growth and do you believe that Mr Trujillo ...
PRIME MINISTER:
Well inappropriate regulation will stifle growth, but none of the regulation at present, particularly having regard to its settings is inappropriate.
JOURNALIST:
Has Barnaby Joyce committed to supporting the legislation Prime Minister?
PRIME MINISTER:
Well I'll let Mr Vaile speak to that.
VAILE:
Barnaby and along with all our other senatorial colleagues and members of the House of Representatives are absolutely committed to delivering these outcomes in terms of what is in this package, for as the Prime Minister says all telecommunications consumers across Australia, but particularly in terms of the assurance that people living in regional Australia wanted with regard to telecommunication services now, in terms of technology rollout and in the future in terms of how that is going to be accommodated in the future. How the prospect if, eventuality of market failure will be dealt with in the future. And of course what we've announced is an additional $1.1 billion, and bear in mind that is on top of a billion dollars that the Government has already spent improving telecommunications services across Australia - so this is not just a starting point, this is a continuation of what we've been doing.
That takes us up to a point in four years time and beyond that the establishment of the communications fund, the Perpetual Communications Fund where the proceeds, the dividend streamed from that fund will be made available to fund where there is market failure-identified by the regular review of services, these are all things that we've been talking about for some time. These things are being delivered in this package. Of course everybody wants to see the legislation and all these measure reflected in the legislation and those representatives in my party and in the Liberal Party that have been representing the views and the concerns of regional Australia will be wholeheartedly supporting this when the legislation goes through.
JOURNALIST:
Mr Vaile one independent described this as the end of the National Party...
VAILE:
Well we'll see about that at the end of 2007.
PRIME MINISTER:
They've been forecasting that for a long time, I tell you they are still very much alive and kicking.
JOURNALIST:
(inaudible) competition and try to boost competition both in the cities and the bush. I was just wondering if you could just explain really simply to us what you're...
PRIME MINISTER:
Are you talking to me?
JOURNALIST:
Well I'm not quite sure whose the... probably the Minister for Communications. What would be your expectation of who would be competing in the bush in the future under your model?
COONAN:
Yes thank you Laura for that question. What the package is designed to do of course is to be competitively neutral, and also to not pick any particular technology so the whole package of $1.1 billion is designed to encourage new entrants designed to allow combination of technologies and to allow anyone who is qualified under the guidelines that we've established to roll out different solutions because we know that different solutions are appropriate in different parts of the country and we think the package will be quite capable of responding to that.
JOURNALIST:
[inaudible] reality that you can't sell Telstra while the share price is under $5.00?
PRIME MINISTER:
Well Mark there have always been two stages, have always been two stages. You give authority to sell and then the precise timing of the sale and the elements that comprise that signing are matters you decide on according to market circumstances.
JOURNALIST:
Can you explain the operational separation, what that will mean for the company and should Telstra's shareholders be worried in any way?
COONAN:
Well the second part of the answer to that question is actually no, the shareholders shouldn't be worried because the model has been developed largely in consultation with Telstra to take account of their particular business model and what it simply means when it's stripped right down is that competitors can be confident that Telstra is not treating its own retail customers more favourably than it treats its wholesale competitors.
JOURNALIST:
Would the $1.1 billion package have been forthcoming regardless of the National's [inaudible]?
COONAN:
Yes what we have done here is to identify going forward what is an identified need now and it will feed in in four years time to a regular review of telecommunications that we've undertaken to do on a regular basis and that's when of course we'll also have on screen an additional amount of income established from the Communications Fund so it should be a seamless attention to the emerging needs in the future for rural and regional telecommunications.
JOURNALIST:
Barnaby Joyce, will you be talking about these figures today?
VAILE:
We've been talking about these solutions for a number of years. Just remember we've been a government that's been in office for about 9 « years during the course of that period in office, we've been talking about how we manage and improve telecommunications in Australia. As I said earlier on, we've already invested over $1 billion in improving the telecommunications infrastructure in Australia, we are making a commitment to go further and invest another $1.1 billion and then putting a communications fund in place that gives certainty to consumers in the future that there will always be an ability to fund gaps where there is market failure in the roll out of new technology. So this is not something that's sprung up overnight. I mean the government has worked on this for a number of years in consultation with a broad range of interest groups right across the community and of course all our Members and Senators have been involved in the development of this proposal. But fundamentally again, it is about improving the overall infrastructure network within Australia to maintain our competitive edge in this country and that's what a highly developed economy in a country like Australia should be doing and these measures will certainly deliver on that quite significantly but it's not just something that has come up overnight. I mean if you have a look at the list of investments that have been made over a number of years, we've been working on this for a lot of years.
JOURNALIST:
When Senator Joyce says, as he did in his maiden speech last night, that he delivered for the people of Queensland and you wouldn't have got this outcome if it hadn't have been for his activities on this, you don't agree with it?
VAILE:
Well I am not agreeing or disagreeing. What I can say is that we were cognisant of some of the views that were expressed in the five point resolution if you like coming out of the Queensland National's Conference and by the way at that stage we, the Minister had already been developing responses to a number of those. I made the suggestion at that stage, that to give certainty and security to consumers in the future, that they will get reasonable access to new technology when it comes on stream. If there is market failure, that we should have this mechanism that the Minister is now calling the Communications Fund. So there have been any number of people involved in the debate and the development of the policy on this and of course Senator Joyce has been one of those.
JOURNALIST:
[inaudible] management committee that Barnaby Joyce will consult, or said he will consult in Queensland so is there a risk that Barnaby will still vote against this?
VAILE:
Well I can reflect the views of the President of the National Party in Queensland, Bruce Scott, who believes this package is a very very good and well balanced package, will deliver on the needs today and into the future in terms of regional telecommunications.
JOURNALIST:
Is there a risk that Barnaby would vote against it? There is that risk.
VAILE:
No I think that you will find that all members will want to go and sell this now as a very very positive, as a significant investment in the future of telecommunications in Australia. The Minister will bring the legislation back, we'll all have the opportunity to look at that and go through that in a couple of weeks time and that the government will support what has been put forward, or members will support what's been put forward as being a very very important and significant investment in the future of telecommunications in Australia.
PRIME MINISTER:
I've got to get ready for Question Time, see you later. I beg your pardon?
JOURNALIST:
Sol Trujillo says it will take $5 billion.
PRIME MINISTER:
Pardon?
JOURNALIST:
Telstra CEO says it will take $5 billion, why is this package so much smaller than that?
COONAN:
The reason is that Telstra's package had a combination of proposals where it was obviously going to be commercial for Telstra to roll out part of their network and to upgrade their network and they were seeking government investment for the other part of it. What we've really done is to look at areas of market failure; it's a demand driven programme. Telstra had a different approach, so that's why this is a targeted programme to where there are identified areas of need and market failure and we are not favouring any particular provider in the programme.
PRIME MINISTER:
And this is finally the end, we've got to get ready for Question Time.
JOURNALIST:
Should Trujillo pull his head in with his talk on regulation?
PRIME MINISTER:
Look no, Sol is a good bloke.
[ends]