28/49 to 34/33 ratio, props pulled, page-10

Last week, there were suggestions that what is left of Telstra must be carved up. Here the mistakes as I see them go back not just to the Rudd government, but to the previous government. When John Howard took office, the then government-owned Telstra was a powerful organisation that returned good profits to the government.

For a while after privatisation, it continued to do so and many investors paid heavily to buy shares. But those investors were conned because it was always the intention of the government to create more internal competition, to make sure that Telstra gave away more of the business it had to other operators.

Now it has to be carved up for a national broadband network that has not been well explained. It may be desirable, but we know it is enormously expensive and there has been no cost-benefit analysis. There are suggestions that those to whom its services are already available are not taking up the opportunities because of the cost. To make it a success, Telstra has to be further damaged.

Good government policy should make it possible for powerful Australian companies to be competitive on a world scale. Certainly they need to justify themselves to their own customers - and we have all heard stories in which people suggest that Telstra has not always looked after its customers as well as it should - but it is the only network that seeks to cover the entire country.

Instead of tearing Telstra apart, the government could have said that, subject to safeguards, the company was going to be supported but the price for that was for Telstra to become a world-class, world- competitive telco competing in markets overseas. One could legitimately draw the conclusion that some politicians do not want Telstra to be able to compete adequately even in markets in Australia. Similarly, you have to assume that politicians and the press want the banks to be diminished.

Malcolm Fraser was prime minister from 1975 to 1983.