Telstra privatisation debate heats up

A senate committee report has recommended the federal government proceeds with plans to fully privatise Telstra, despite opposition from industry players, the Democrats and Labor Party.

The release of the report last week coincided with a parliamentary debate into the issue, in which Independent Senator Brian Harradine warned the government he is likely to vote against plans to sell the remaining two-thirds of Telstra.

Harradine indicated he would be in favour of selling the next 16.6 per cent of Telstra, but was against the full sale.

According to Alan Eggleston, chair of the Environment Communications, Information Technology & the Arts Committee, submissions put to the committee supported the full privatisation of Telstra, which would raise funds to "specifically benefit regional and rural Australians in Western Australia and Queensland".

"Following the sale of Telstra, the government is committed to improvements in regional telecommunications, which will mean faster data transmission, Internet access and government pro-vision of SBS-TV to towns with populations of 10,000," Eggleston said. Most submissions were concerned with service issues rather than ownership of Telstra, he said.

According to Democrat Senator Lyn Allison, the Democrats feel full privatisation of Telstra "is not, in an economic sense, in the best interests of all Australians.

"In our view, the gains made by overseas investors was at the expense of the Australian public. "We would sooner see revenues from Telstra directed at [government] initiatives," Allison said.

Since Telstra's partial privatisation, job losses and the decline in quality of services -- especially to rural areas -- also concerns the Democrats, Allison told Computerworld.

Last week's debate raised issues regarding the plans for an independent private inquiry into Telstra's performance, Allison said.

The inquiry would be conducted over six months and would precede the sale of the remaining 50.1 per cent. Allison said the Democrats would rather see a public inquiry or one conducted by the Senate Committee.

Allison's arguments echoed Senate Committee submissions from the Communications Electrical Plumbing Union (CEPU), Consumer's Telecommunications Network (CTN), and Professor John Quiggin (Department of Economics at James Cook University in Townsville, Queensland).

According to the Senate report, the CEPU, CTN and Quiggin oppose the further sale of Telstra on the grounds that "a fully privatised Telstra will look after shareholder interests to the detriment of consumers", and the "quality of service had already suffered under partial privatisation".

The issue is expected to be voted on before Easter.

Telstra officials were not willing to comment on the issue, only saying that "the decision was a matter for the parliament and government".

Senator Harradine and Senator Stephen Smith, Federal Opposition Minister for Communications, did not respond to calls from Computerworld before going to press.

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