blog No sooner does Telstra ask, than Malcolm Turnbull delivers. The Communications Minister has told The Financial Review newspaper that the Coalition Federal Government may look into removing Telstra’s foreign ownership rules, as it has already tried to do with Australia’s other national carrier, Qantas. The newspaper reports (we recommend you click here for the full article):
“Communications Minister Malcolm Turnbull says the government could consider changing laws that restrict the number of foreign parties that can invest in Telstra by the end of the year.”
For those who need reminding, currently the rules regarding with Telstra are broadly that foreign ownership of the telco is limited to 35 percent, with individual foreign investors only allowed to own up to five percent. As I wrote just last week, do I think this rule should be reviewed? No. Clearly, in Australia, Telstra has no problems competing against its rivals and is, in fact, dominant in the market.
There is no need to give Telstra further advantages, and it is strongly in the public interest for our largest national carrier and the current owner of the majority of the nation’s telecommunications infrastructure to remain in public hands. Personally, I would feel more comfortable if Telstra was owned, perhaps by up to a third, by the Federal Government. This is one company which still needs to be closely monitored and, sometimes, controlled. I do not wish it to be bought by AT&T or BT, thank you very much. However, I think we’re seeing a very strongly ideologically controlled Government in Australia at the moment. Where it can remove rules around foreign ownership of key corporations, it will be likely to, as part of a general drive towards deregulation — regardless of whether most Australians actually want that (the evidence shows we don’t).
Image credit: Max Romersa, royalty free
I have the perception that a lot of people owe MT favours. The electorate, not so much.
Surely there are enough people/super-funds in Australia willing to buy shares. I still have mine from when it was first privatized.
I hate how this government keeps pushing my beliefs towards the socialistic ideologies. I was happy as a Labor-Greens-PirateParty GenY now I just get frustrated when I read politics. Capitalism seems to help its friends too much.
The slogan was “Australia: Open for Business”
It now appears to be “Australia: For Sale”
Foreign Ownership, to go with their Foreign Tech Support staff AND their third world copper.
Can Telstra just fuck off and take their shitty copper with them? They obviously don’t want to be here in Australia, what with their attempts to offshore everything but the kitchen sink.
Wankers.
+5
Perhaps this is the deal Turnbull struck with Telstra for them to play ball on FttN. If so, I wonder how illegal that is.
The timing is clearly suspect, considering that the government are currently in high stakes negotiations with Telstra. But I’d imagine you’d be hard pressed to find anything overtly illegal about the process.
May as well just let Sol and the Amigos buy the thing, and send in Ziggy as a PR man…
What a farce of a brain dead junta we have to endure for the next few years, thanks to the majority f..kwit proportion of the population who should have been euthanized at birth, let alone allowed to vote…
Well they did say “open for business” at the elections didn’t they? :D
I am not sure which is worse – ALP try to destroy Telstra with a non-compete clause and build a new monopoly NBN, the ink is not dry on a deal with Telstra re-negotiating the copper shutdown.
I do know that the taxpayer just keeps paying over and over again….
With respect, Telstra negotiated a multi-billion dollar settlement in return for copper services to be migrated. They are about to receive, likely several million, for the same services to remain active again.
ALP haven’t destroyed Telstra.
Indeed we would simply not need the NBN, and Telstra would have performed a roll-out very similar to that which is occurring in NZ, if they were separated prior to sale and our government followed the same basic process.
Failures in legislation and short-term greed leading to the choice to sell it off by previous governments (without legislating changes ensuring the infrastructure was separated) have put the tax payer in this position.
So the response and actions to the current situation is to remove impediments stopping large percentages of income flowing overseas. Where is the logic in this?
This, after it’s become abundantly clear separation has yet to show any sign of working, amidst the government gearing up to hand even more money to the same infrastructure owner – who could soon ship much of that income elsewhere.
Look I’m sorry but this is just idiotic. Telstra has zero issues raising capital and will see at least two cash injections from the federal government. It’s also still a monopoly and continues to aggressively interact with the market and it’s competitors.
If the enterprise was split exactly the same way as was done in NZ, then I see no reason why the Retail arm couldn’t have any restrictions as such removed – it’s no longer then in a position where that really matters as the underlying infrastructure remains primarily owned by Australian interests.
But it seems entirely illogical to do this whilst it owns a crap-ton of infrastructure needed for Turnbull’s Network of Which is Yet to be Built – of which it will almost certainly receive multi-million dollar lease fees for.
Turnbull needs to spend less time thinking (so many thought bubbles) and more time doing – as weird as that sounds.
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