Telstra appears to be on a collision course with the federal government over its obligation to provide services to rural areas,
with only days to go before Cabinet considers the conditions of its
sale, reports theSMH. Far from backing down from its earlier position, Telstra’s new
chief executive, Sol Trujillo, used a speech in Lismore last night
to mount a defiant attack on the government’s regulatory regime,
describing it as “rules that belong to the last century.”

It was a delicious coincidence that in his first bush trip, Trujillo arrived at the same place, on the
same day, as the National Party’s meeting to determine his
company’s fate, says Alan Kohler in The Smage. And it turns out that they have more in common than they might
have believed – they both want to get their hands on some of the
loot from T3. It is, of course, no skin off Sol Trujillo’s nose if Mark Vaile
and Barnaby Joyce manage to siphon $2-5 billion out of T3 to
subsidise regional broadband to capture bush votes. In fact, it
would be a beautiful thing for Telstra, which is why Trujillo
praised the idea as “creative thinking” in his headland “Telstra
loves the bush” speech.

Meanwhile, Peter Costello, is having kittens over
the prospect of handing over billions of dollars of precious
Telstra receipts, claiming that this could result in a rise in
interest rates, says Elizabeth Knight in the SMH. Joyce’s demands could be an ambit claim, and Costello may think
it’s profligate – but it’s clear that the full privatisation of
Telstra is going to come at a price.

The Australian reports that Medibank Private could fetch as little as $500
million if sold by the federal government because of the poor
profitability of the private health insurance industry. Bankers estimated the health fund would be
sold for between $500 million and $700 million, compared with its net
asset backing of about $450 million. Also in The Oz, BHP-Billiton has finally completed the compulsory
acquisition of WMC, raising its stake to 100%.

Soaring oil prices and demand for better urban infrastructure have
fuelled investment spending in the second quarter, with new offshore
gas and transport projects driving growth in the domestic economy,
reports The Fin Review. The total value of major resource and
infrastructure projects rose to $375 billion in the June quarter, up
$37 billion over the previous quarter.

On Wall Street, US stocks closed higher overnight amid broad optimism on the health of the economy
sparked by a raft of upbeat data. The Dow Jones was up 60.59 points at 10,683 – MarketWatch has a full report here.

Peter Fray

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