It didn’t take long for Peter Costello to put out this press release yesterday hosing down this yarn by The Age‘s
Jason Koutsoukis about Donald McGauchie not getting a second five year
term on the Reserve Bank board because of his anti-government behaviour as
Telstra chairman. The two paragraph statement read as follows:

Donald McGauchie is a valued member of the RBA Board. His value to that Board
stands on the strength of his contribution to that Board and is not assessed by
reason of other directorships.

The Treasurer has not made any comment about the Directors of Telstra in
recent times. He has made comment on the management’s attempt to change
regulatory policy which is properly the province of Government (refer to
transcripts of 17 November ABC
interview
and 18 November
doorstop
, available on the website).

Then there was this doorstop press conference in Perth which included the following on McGauchie when asked if he’d been bullying the government:

No. Can I say Mr McGauchie is a member of the Reserve Bank board, he has made
a very valuable contribution to the Reserve Bank, his contribution to the
Reserve Bank is measured on that position, it is not measured by reference to
any other directorships that he holds and we keep these issues quite separate.
When his performance as an RBA board member is assessed it is on the basis of
what he does in the boardroom at the RBA not what he does as a director of other
corporations and I want to make that absolutely clear. Having said that, I have
previously said and I will say again, that over the course of this year there
will be a lot of Australian mums and dads who have invested in Telstra who will
be quite concerned about what has happened to their savings and they are looking
to the management of Telstra to look after their savings. And I would urge the
management of Telstra to work at increasing value and looking after the company,
not work at the regulatory regime or of the governmental rules which will govern
competition. The Government will set those rules, Telstra is obliged to compete
under those rules with other telecommunications companies and a focus on
shareholder wealth rather than lobbying over the regulatory regime may in fact
be more successful.

The Age was sticking by its story today, although Stephen Bartholomeusz got it right this morning
in pointing out that the incompetent and anonymous attacks all but
ensure McGauchie will get a second term on the Reserve Bank board, if he can bothered turning up for just $50,000 a year.

Rather than McGauchie’s reputation being destroyed in the business
community, the “senior Minister” quoted in The Age must be feeling
pretty sheepish today. All eyes have been cast in the direction of
Communications Minister Helen Coonan, although her office is denying
any involvement and The AFR‘s John Durie bought the Costello line this morning that it was just some junior idiot staffer mouthing off.

The appearance of this item in The AFR’s Rear Window column on
19 September has certainly poisoned relations between Telstra and the
Government and shows Coonan has some form when it comes to recklessly
sounding off:

Coonan alters amigos to egos

Telstra boss Sol Trujillo may be tired of hearing his American mates referred
to as the “three amigos,” but it’s unlikely the new name going around
Canberra will please him any better.

Communications Minister Helen Coonan, celebrating at a Kingston
restaurant after the Senate passed the Telstra legislation on Wednesday, was
asked by Liberal senator Michael Ronaldson to make a speech.

A former barrister, Coonan couldn’t resist calling the Telstra trio
(led by Phil Burgess, who’d struggle to find a friend in parliament) the three
egos.