It must be fun in Telstra board meetings. Directors and senior executives chatting to each other and being straight and direct to the point. Of course CEO Ziggy Switkowski, the king of circumlocution always manages to slow things down, while his nemesis Sam the man Chisholm, chairman of Macquarie Radio network’ watches through thinly-lidded eyes. Nevertheless the exchanges are full and frank and so it must have been in preparation for Monday’s trip to Canberra for the Senate committee bunfight.
These are great rituals in public accountability. After all Telstra is still controlled by the Australian Government, on behalf of all taxpayers, isn’t it? For some reason Ziggy couldn’t make the trip. Perhaps he decided that other executives should have their chance and be exposed to the rigours of Senators’ questioning. Character forming and it would be a quick test to see if these lesser executives on the Telstra greasy pole were Ziggy material in the event that Sam Chisholm and Ross Greenwood at PBL get their way and force the CEO from office.
So that’s why John Stanhope, Telstra’s Group Managing director Finance and Administration was the sacrificial executive, along with the head of spinning and lobbying, Bill Scales, formerly of the Productivity Commission and Jeff Kennett’s Premier’s Department.
So, what happened? Well, according to news reports Telstra can put up the cost of paying Telstra bills by credit card because, well, it’s Telstra. No, fair dinkum that’s what Mr Stanhope said in answer to a question from the ALP’s Senator Sue Mackay who had asked how Telstra could justify the new charge, which starts in July.
“Because we are able to,” Mr Stanhope replied. Ahh, the frankness is to be admired. It must have been honed in all those board presentations while Optus Bob Mansfield was running the show.
“It’s not a full recovery of Telstra’s costs,” he said in revealing that about 38% of customers pay by credit card. But in answer to Senator Mackay, Mr Stanhope said the company had not considered offering people who pay with cash a discount.
Big John’s fortrightness continued when asked about how much Telstra stood to gain by jacking up line charges. “On a pure price basis about $200 million,” he told senators. But he said there would be a $20 million fall in call revenue because of price changes starting in June. An extra $70 million gross was expected to from the line rental charges increase in July of last year.
So the net figure for the two increases in line charges (July 2003 and July 2004) looks like being around $250 million, a quarter of a billion dollars! That’s a handy way to meet your performance hurdles and grab your bonuses. And all by a company controlled by a board hand-picked and voted on at every AGM by the Federal Government.
The prize for ‘straight-shooting’ however goes to head flack Bill Scales. He told the Senators that Telstra didn’t expect the million dollars a year it paid 2GB in Sydney would mean Alan Jones would make positive comments about the company.
“Telstra doesn’t involve itself in cash for comment,” Bill said. “The arrangement we have (with Mr Jones’ employer) Macquarie (Radio) is purely a commercial arrangement. There is nothing in our arrangements that required him to make any positive comment about Telstra,” he said.
So why didn’t the senators ask Bill what would happen if Alan got all Gloria and had a go at Telstra, say, along the lines of the early bucketing he gave Macquarie Bank over Sydney airport?
Anyway, a top performance by Bill and John, which will now doubt earn them a standing applause from the Telstra senior management team and board in Melbourne. But you’d be entitled to ask what was the point of the whole performance. David Marr and Media Watch have given Telstra far more trouble.
You can see why Ziggy couldn’t make it to Canberra. He would have bored for Telstra instead of straight-talking effort from John and Bill.