PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING MP
DOORSTOP AT 4 TREASURY PLACE, MELBOURNE, 23 JANUARY 1996
E& OE PROOF COPY
PM: Well it took 100 hundred years to build Telstra, Telecom. It is Australia's
greatest business. It is the largest business in the country. It is the
business with the greatest potential in Australia. It is the one Australian
business with the greatest potential in Asia. It has a chance of being the
great East Asian communications company the great East Asian phone
business. John* Howard wants to now sell it and he is going to let foreigners buy one
third of each tranche. He says he will let them buy one third of the first
part and then he will decide about the next two bits, he says, if he were to
be the Government after this election and before the next. I will come to
that in a moment because he couldn't sell more than one third of it and
would be flat out selling one third of it now anyway.
But the key point is why is he selling it. He is selling for some money for
election bribes. So he is about to sell, and allow foreigners to own, a
business that we began to build -a century ago. With rudimentary
exchanges in Sydney and Melbourne and telegraph lines on poles across
the Nullarbor Plain, the one indigenous great business, he now says he
will let foreigners own 35 per cent of the first tranche. And then he has
got a minimum requirement, but what it would mean is a corporate force,
or a foreign telephone company perhaps, would then be able to exercise
control. And the people who represent the remaining government
interest, who are only people appointed by the government, would stand
there tryir'g to argue against then a set of private shareholders.
Now let me say this about Telstra. In every country I go to I raise
Telstra's interests. I did with President Soeharto to help them secure a
licence in Java, which they now have. I did last week with Prime Minister
Mahathir. I have done so with President Ramos. I have done it with the
Thai Prime Minister. I regard it as Australia's one great business the
one business where we can have a brand name in the world the way
when you think of Germany you think of Mercedes Benz and you think of
BMW or Japan, Toyota and Sony. Australia's does not have a great
brand name. The one great brand name we can have in the fastest
growing area of business in the world, is Telstra in the business of
telecommunications.
Yet the Liberal Party in their bankruptcy, bereft of policy, with what he
thinks now is an easy resort to money, wants to sell one third of the
business, which is roughly valued at around $ 10 billion. Now you know
this market was flat out digesting the Qantas float which was $ 1500
million. John Howard is telling you, trying to make a virtue of the fact, I
am only selling one third first. One third first is $ 10 billion. $ 10 billion is
six times the size of Qantas.
I mean the market would choke on a privatisation of this size. That is why
he wants the foreigners in and this is at a time when you see the
scramble for telecommunications resources going on all around the world.
MCA buying into the News Corporation because they know that the
transmission of pay television and content and film product and other on
line services are going to be used, are going to go below the medium of
phone companies and you have got British Telecom then buying into
MCA. British Telecom and MCA and particularly British Telecom and if
the American regulators will' let them, the American phone companies and
IT& T and the likes of IT& T, will be out there bidding to control our phone
company, our great telecommunications business.
In otherwords, you know, the tragedy of. the Howard view is that it took us
a cent'Ey to build-it and he is going to let it at this point just as it is about
to blossom, when the greatest potential we have ever had is opening up
for fibre optics and phone businesses and the traffic of digital information.
Then he wants to sell it after a century to foreigners and that is why what
he is proposing is cheap, it is cheap jack and it is unconscionable. And
every Australian who has got any pride in this country, any belief in
Australian enterprise, any imagination about building a big and great
business, should be utterly devastated by the bankruptcy of the Coalition
and their Leader.
Can I also say that our great electronics industries, every electronics
industry in Australia, the fastest growing part of our elaborately
transformed manufactures, lives off essentially the body of Telstra.
Where it goes, they go and if foreign owners favour foreign suppliers,
foreign owners of Telstra, and invariably foreign owners start siphoning
work off to foreign suppliers, that even this core of our electronics
industry will change.
And you might ask the question, as I did earlier, what is this for? What
does selling one third of Telstra and allowing foreigners to own a piece of
it do and why? So he can get some money to try and buy his way into
office. Nothing more, nothing less. No thought, no plan, no strategy,
nothing about building the great East Asian phone business, nothing
about the fact that we have actually got a technically competent large
business with a huge cash flow, that we can actually for the first time ever
build a great world business with, no imagination, no invention just a
sort of hand-me-down sale policy for an asset which has such strategic
significance.
J: Prime Minister, what is the difference between the Coalition's plan to sell
per cent of Teistra and your Government's plan to sell 49 per cent of
Qantas?
PM: Well Qant as has no chance of being a dominant world business in a part
of the woirld. If you go to Melbourne Airport or Sydney Airport, you will
notice, if you haven't already, all of the other carriers who compete and
bring people in and out of Australia. I mean this is a business which has
had a monopoly in Australia for a century. This is one of those things
nations build once in their history and the thing about Qantas is that
Qantas is just another airline. But worse than that, Qantas was just
another airline that didn't have enough government capital to keep it
running and we put the capital into it. The thing about Telstra is that it
generates its own capital. It is actually a big producer of revenue for the
Budget and that big production of revenue for the Budget would then start
to move off shore, part of it would move off shore or go to Australian
private hands.
J: Mr Howard says that you would sell off Telstra on returning to office after
the election
PM: Mr Hovard has got no right to say that. He knows that and every
Australian commentator knows and the public I am sure knows, that
whenever the Labor Party has agreed to sell any major asset, we have
had a production bigger than Ben Hur. It has gone to each
National Conference for Australian Airlines, for Qantas, for the
Commonwealth Bank and you know our traditional position and what it
has always been. Telecom is simply not for sale.
J: In what time frame?
PM: I've just told you.
J: It is not for sale then?
PM: It is not for sale.
J: Why should the Government be running telecommunications?
PM: Because at the time we had a continent with very few people and we built
a business. And as we have, we built a very profound and good business
and one that is technically very competent. We find ourselves now in the
fastest growing part of the world, which we were never in before at any
other time in our history, where all our markets are here, not in Europe or
north America, and now the phone companies the telecommunication
companies are basically the avenue, the highway upon which the digital
information will flow.
The roll out of the cable is the information highway. The information
highway here, or a very big chunk of it other than Optus, belongs to the
people of Australia. In other words, we have by developing and holding
this business for a century built a great business so it becomes a
strategic national asset. To give it now to foreigners, to let British
Telecom go and get their foot on this or a group of international investors
who would then operate the policy, you know if this thing is sold in a
broadly spread company, anyone holding 35 per cent of the stock or
per cent of the stock is in control.
J: Won't the of Telstra hinder Telstra when the market is deregulated in
1997?
PM: What it will do is do what it has already. What Optus has done under the
Government's communications competition policy ' and that is to lower
phohie tariffs, lifted efficiency. The efficiencies of Telstra have grown
enormously and with it, of course, its revenues. It is a big revenue earner
for the Government and it has enough internally generated funds to fund
a massive capital expansion program. Let me just remind you, it is laying
out the fibre optic cable without any budgetary contributions.
J: Prime Minister, after having sold icons like the Commonwealth Bank and
Qantas, having broken an earlier adopted Telecom?
PM: No, look, that is not true what you have just said. All of the things the
Governo~ ent has done it has done with the big notice, the big public
panopJl'iof coverage of its national conferences, it has been a most public
process. Let me just say about the Commonwealth Bank, the
Commonwealth Bank used to be the Reserve Bank of Australia. It had
the Reserve Bank function. When the R eserve Bank Act came in it was
just another savings bank and then just another trading bank and there
are now three major trading banks and with it four. And, there is a host of
private housing banks out there. So, the Commonwealth Bank had no
special role..
J: But as an icon, surely?
PM: What does the word ' icon' mean? What do you mean an icon?
The Government is not into romanticism, we are into actual utility.
I mean, the Commonwealth Bank when now no longer a central bank,
was just another bank and I might just say that because the Government
successfully sold it here, the last 49 per cent of it was worth more than we
valued it at at the start. So, it was a very successful thing for the people
of Australia and they have got a brand new institution out of it another
premium, first class, well funded, well capitalised bank, It is all the world
of difference to the strategic opportunity of Telstra.
J: Do the Opposition undertakings on community service obligations
address your concerns about foreign ownership?
PM: All that goes, it might stay there a year or two years, but what people in
rural Australia have got to know and people who live with some of the
community some of the cross subsidies within Telstra is once it's in the
hands of a private business, private owners particularly foreign owners
and particularly foreign telephone companies they will operate it like a
business. That is, they will move to all the things that make it like a
business and this question regarding some pledge by the Government to
keep community services obligations, they'll just say to the Government
you want it you pay for it.
J: ( inaudible) which foreigners?
PM: I don't know, I have got no idea where that would end up or what the likely
ownership would be. One thing is for sure, this nation has basically got a
major asset. It has got a major phone company with a huge cash flow
sitting right in the middle of the biggest growth telephone market in the
world and wouldn't we be complete fools to give it to foreigners.
J: The Coalition also plans to review the Government's cross media rules,
the Government may change the rules if re-elected.
PM: Governments maintain the rules, but gradually you are starting to see
John Howard's policy. What he believes in is you can own the television
station and major capital city dailies in the same city. What he calls
reviews are simply ways of moving to take the cross media rules out. So,
we have now got diversity in television ownership, diversity in radio
ownership, diversity in print ownership, that would change. Journalists,
for instance, can go and work for Network Seven or Network Nine or
Network Ten or the ABC or Austereo or Southern Cross or Prime or the
Sydney Morning Herald Fairfax or News Limited, this was not the case
before the Government's policy. And, where journalists can go and get
independent work, there will be independent news and views for the
Australian nation, ie diversity.
J: Mr Howard said this morning that if Mr Carr can change the Governor of
NSW without consulting the people, you could do the same thing on the
Australian flag.
PM: What else would you like to get in to? I mean, play a game of Ludo while
we are at it? Maybe snakes and ladders.
ends i