Privatization the solution to Telstra price hike: PM

While the Labor Party was busy criticizing Telstra for its forthcoming price hike on line rental fees, the Prime Minister John Howard used the increase to again argue for the telco's full privatization.

Howard described the government's majority ownership of Telstra as "ridiculous" pointing out that it is "not the business of government to run the largest corporation of Australia".

He told Melbourne radio station 3AW it is the business of government to provide a good economic environment.

The Prime Minister said the telco's announcement yesterday of an increase in line rental fees for private homes by up to $3.45 from June 1 was beyond his control, adding that Telstra would be more accountable if it was privatized.

Labor criticized the increase claiming the telephone is fast becoming a luxury item and fees had jumped by almost 150 percent since the year 2000.

Opposition communications spokesman Lindsay Tanner said Labor estimates that Telstra gained an extra $150 million last financial year from line rental increases.

Organizations with a mobile workforce or employees who work from home will be affected by the increase, especially as Telstra also announced plans to introduce new fees for those who pay their bill by credit card.

The fee for credit card payments will be introduced on July 26 and varies depending on the type of card used.

Primus Telecom managing director Greg Wilson said it is disappointing that the line rental charge, which is under the control of Telstra, continues to rise substantially and is being passed on to other carriers and ultimately to customers.

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