The Guardian July 24, 2002


The Telstra sale: some very false assumptions

by Peter Mac

On the steps of Royal Perth Hospital last week, Prime Minister John Howard 
stated that: "You can't indefinitely have a telecommunications carrier the 
size of Telstra half-owned by private shareholders and half owned by the 
Government".

It is not often that the Communist Party of Australia can agree with 
something Howard said. Mind you, he then spoilt the whole effect by adding: 
"And we're obviously not going to renationalise the 50 per cent we've 
already sold."

He also added a level of absurdity to his argument by declaring that ".when 
our telephones were delivered by the old PMG" (i.e. some 30 years ago) 
"they were nowhere near as efficient and available as what they are now"!

Nevertheless, Howard's statement had the effect of highlighting the issue 
of the sale of our national telecommunications system, despite the attempts 
by hisGovernment to promote the idea that the sale of the remaining 
government-owned part of Telstra is a foregone conclusion.

Such an assumption is certainly unwarranted.

The assumption that the only opposition to the sale of the remainder of 
Telstra comes from rural communities is also unwarranted.

Widespread opposition to sale

The majority of people  city and country  oppose privatisation. They 
are well aware of the parasitic nature of the private companies entering 
the Australian telecommunications industry.

They know that these companies utilise the public telecommunications 
infrastructure without contributing to it.

They provide a less reliable and lower level of service than could be 
supplied by an adequately-resourced public utility

The fracturing of the communications into many service providers creates 
many inefficiencies and much wasteful duplication. It is more expensive 
with the many layers of profit and need to advertise widely, and by the 
Government's own admission, is not prepared to provide a universal service 
at a universal price. Only a publicly owned system with cross-subsidisation 
can do that.

The Government would have us believe that the sale is inevitable  with 
the aim of weakening opposition to its full privatisation, not just amongst 
the general population, but also within the ranks of the federal 
parliamentarians.

Behind the scenes lobbying of "weak links" in the parliamentary opposition, 
particularly among Democrat and Labor members, is constantly taking place.

The Government has delayed the Bill to sell off the remainder of Telstra, 
not just to persuade National Party MPs that country services are up to 
scratch, but in the hope that it will find the extra votes it needs in the 
Senate.

And that's why public action is necessary, to let the politicians know that 
the sale is unacceptable, and to thus ensure that parliamentary opposition 
to the sale doesn't crumble as it did with the GST.

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