pm's push on telstra sale

PM's push on Telstra sale
By Steve Lewis and James Riley
November 18, 2004

THE Howard Government is moving to fast-track preparations for the $30 billion privatisation of Telstra, with a high-level scoping study to be established as early as Christmas - a move that may further inflame tensions in the Coalition.

Although senior ministers have not formally agreed on timing, Communications Minister Helen Coonan confirmed the Government was working on "pulling together all of the strands" towards privatisation.

Some National MPs remain opposed to selling off the Government's remaining 51 per cent holding in Telstra until guarantees are given that services in the bush will be maintained.

Finance Minister Nick Minchin and Senator Coonan will oversee the scoping study which will outline to the Government how best to privatise Telstra.

Outlining an ambitious timeframe, Senator Coonan told The Australian that a formal decision to proceed with the study could be taken by the end of the year, "but it will take a little while before it all gets under way".

"The actual study would not start until early next year, and we might get the results around April," she said.

Senator Coonan said the study would be similar to the pre-planning work done prior to the sale of the first two tranches of Telstra shares.

"We are now working on pulling together all of the strands to get to the (Telstra sale) outcome we said we would deliver," Senator Coonan said.

"We are looking at how we put in place the scoping study, and all of the other things that need to be done on the sale side," she said.

The study would investigate the options for structuring the sale, including whether it is put to the market in one tranche of shares or in a staged process.

"We'll get advice from banks, financial advisers and various others and look at the various options on how we might structure the sale," she said.

But the study's recommendations would not commit the Government to the sale. "Just because you have a scoping study, that doesn't mean that you have to (proceed)," she said.

"It is simply something that has got to happen in order for the Government to get it right later on, (when) making decisions on how you're going to structure these things."

News of a scoping study is likely to further unsettle National MPs, who are wary of backing privatisation until they receive assurances about future services in the bush.

But at least one senior National, Senate leader Ron Boswell, believes the rural-based party will fully back privatisation. He accused the Labor Party of trying to place a "divisive rift between the Nationals and the Liberal Party".

"Now let me tell you this, you couldn't put a cigarette paper between us," Senator Boswell told the Senate.

Senator Coonan said the Government also hoped to introduce, as early as February, the "future proofing" legislation promised in its response to the Estens inquiry into regional telecommunications.

The legislation would include requirements that Telstra maintain a presence across regional Australia, and that regional consumers have "equitable access to new and emerging technologies". It would also require that future governments conduct regular independent reviews of regional services.

In conjunction with the scoping study, Senator Coonan will review the telecommunications industry's regulatory framework, and whether changes are required to govern a fully-privatised Telstra.

The Australian

http://finance.news.com.au/common/story_page/0,4057,11421031%255E462,00.html