PRIME MINISTER:
Well ladies and gentlemen I have called this short news conference to confirm that the Government will proceed with a public share offer of its just over 50 per cent shareholding in Telstra. We propose to offer to both retail and institutional investors in the order of $8 billion of stock in the company. The sale will take place in October and November of this year. It's the unanimous advice of the Government's investment advisers that market conditions are appropriate for this sale. The remaining number of Government-owned shares will be placed in the Future Fund, to be sold down by that fund during the future.
As has been the case in the past, instalment receipts will be available to investors and they can pay for their shares in two instalments over an 18 month period and those who are doing it by instalments will be entitled to the full dividend that was guaranteed by the company a short while ago.
The Government has always been committed to the full privatisation of Telstra, or at least, of course, since 1998, and we would have sold the remaining shares in Telstra a lot earlier, at a higher price than the market is now offering, had it not been for the legislation being blocked in the Senate by the Labor Party and by others.
We think there is an irreconcilable conflict between a government which is both a regulator and a major shareholder and it's in the interests of the company, it's in the interests of telecommunications policy and it's in the interests of the existing shareholders in the company that this sale proceed.
I've had a number of discussions with the chairman of the company over the past few days and the company is fully committed to making this sale a success. And simultaneously with the news release that I have put out in Canberra, the chairman of the company has issued his release detailing that and also dealing with other matters that were the subject of comment in the media this morning.
Could I on another matter, entirely, but something that's very relevant to Tasmania, point out that since Strengthening Medicare, that is our changes to the Medicare system were introduced early in 2004, there has been a 21.6 per cent increase in the level of bulk billing in Tasmania. And the level of bulk billing in Tasmania for the June quarter has now reached 70 per cent, and that is the highest level of bulk billing in Tasmania for four years. And it is particular evidence here in the state of Tasmania of the Government's very strong commitment to Medicare and as my colleague Tony Abbott says, the Howard Government is the best friend that Medicare's ever had. Are there any questions?
JOURNALIST:
Prime Minister with Telstra shares at half the price they were at the last float, why is it good for the taxpayer now to be selling them?
PRIME MINISTER:
Because if you don't sell, the constant overhang of those shares has the capacity to further depress the share price.
JOURNALIST:
How did you arrive at that eight billion figure on total...
PRIME MINISTER:
Well it's $8 billion. That was a figure that is obviously based on an assessment that's relevant to the current price the stock is trading for, and it's an amount that was advised to us by our investment advisers as being appropriate. The precise amount that will be sold will depend somewhat on the market response.
JOURNALIST:
Is the National Party fully supportive of this?
PRIME MINISTER:
Well it's a Government decision and the legislation's gone through, so we have the power, the Government, the executive Government has the power to sell because Parliament's authorised it. The question of the attitude of individual people to the sale now is; we've moved on from that because Parliament's authorised it and it's really out of the hands of Parliament. Parliament approved the sale of the shares and it was left to the Government to decide when.
JOURNALIST:
What guarantees can you give people living in regional areas at this point in time?
PRIME MINISTER:
Well this does not bear in anyway on the services. We have given guarantees. We've put aside $3 billion for broadband and for other services and they were all dealt with at the time of sale legislation went through the Parliament.
JOURNALIST:
Is it an appropriate time to sell, why not sell more than the $8 billion?
PRIME MINISTER:
Well we think the price will be better if do it in this way.
JOURNALIST:
Is $3.50 (inaudible) an appropriate price to sell at, is that a reasonable price?
PRIME MINISTER:
Well I think it's a question of letting us see how the market works out.
JOURNALIST:
Sol Trujillo says leaving a large amount of shares in the Future Fund is going to cause more upward pressure on the ultimate share price...
PRIME MINISTER:
When did he say that?
JOURNALIST:
Um I'm not sure....
PRIME MINISTER:
No, well I think he may have made that remark in another context.
JOURNALIST:
So what it is a reasonable price?
PRIME MINISTER:
Well I think a reasonable price is something for the market to determine, I don't think it's appropriate for me to be nominating reasonable prices. What I know is this; that our investment advisers have said that it is appropriate to go ahead with it. I think if we had not gone ahead with the sale now the affect on the share price would have been quite significant. It wouldn't have been good existing shareholders, there would have been that enormous number of shares overhanging the market and everybody came to the conclusion that that would have had a depressing effect on the share price.
JOURNALIST:
What factors were in play in deciding to keep a portion of the shares in the Government's hands?
PRIME MINISTER:
Well that was, well we don't want to keep them in the Government's hands, we're putting them in the Future Fund.
JOURNALIST:
Well why not just put it all, open slather? Why some in the Future Fund?
PRIME MINISTER:
Because our advice is that you'll get a better price doing it that way, and isn't that in everybody's interests? Your interests, you're a taxpayer and the interests of the existing shareholders as well.
JOURNALIST:
If they are going to be sold in the future, when?
PRIME MINISTER:
Well that will be a matter to be decided by the Future Fund.
JOURNALIST:
Prime Minister, a Telstra executive famously said about a year ago that he would not advise that his mother buy shares in Telstra, what's changed?
PRIME MINISTER:
What's changed? Well I don't accept that he was speaking with wisdom and authority.
Thank you.
[ends]