PM Transcripts

PRIME MINISTER
FOR PRESS 30 OCTOBER 1978
The Prime Minister sent the following telex to Mr Hamer today:
My dear Premier
I have noted the views expressed in your message
regarding the annual profit announced by Telecom
Australia. Telecom's profit of $ 185 m. represented a return
of only 2.7% on its net assets, a very modest
return by the standards of most business enterprises.
The $ 185 m. will be used towards the
financing of Telecom's Capital Development Program
of over $ 900 m. in 1978/ 79.
If the profit made by Telecom had been smaller, it
would of course have been necessary for its
borrowing in the market to be greater in order to
finance its capital program. This would have
added to the pressure on interest rates and made
it more difficult for us to achieve the reductions
which we all regard as essential. It would also
have made it more difficult for semi government
authorities in your own and other States to raise
the funds they require in the market without
upward pressure on interest rates.
I believe that we should welcome the efficiency
of this enterprise and the fact that it is able
to generate capital from internal sources while
providing an important community service.
As you will be aware, Telecom has announced extensive
cuts in STD charges effective from 25 November and
is moving to a 60% reduction in off-peak STD charges
and extension of free line plant entitlement to 16 km.
Telecom is also examining the possibility of extending
local call areas around the Metropolitan centres
and is looking at varioug options aimed at assisting
rural areas including one which would give isolated
rural subscribers access at local call rates to a
centre providing a reasonable range of goods and
essential services. Since your message to me was
made public, I am releasing this reply.
Yours sincerely,,
( Malcolm Fraser)