One of the striking features of the
Australian political system over the past decade has been the
conformity that big business has shown to the Howard Government agenda.
With a business sector still dominated by licensed businesses and
domestically focused service companies such as retailers and banks, it
is rare indeed for a major corporate figure to attack the
That’s the way the highly disciplined Howard
government likes it. Step out of line and you’ll be crunched. It’s a
lesson that even Rupert Murdoch has painfully learnt for backing Paul
Keating before the 1996 election when Kerry Packer strategically
changed horses and was dutifully rewarded with regulatory protection,
unprecedented political access and a taxpayer funded memorial service.
This is what makes Telstra’s war with the Federal Government so
unusual because it’s just not part of our corporate culture. While
there is clearly blame on both sides for Australia’s pathetically slow
broadband, it’s hard not to conclude that the Federal Government and
its ever-supportive man in charge at the ACCC, Graeme Samuel, aren’t
putting “retribution for insolence” ahead of sensible policy.
has long argued against the dangers of monopolies, oligopolies, cartels
and concentrated corporate power – but when was the last time the
Howard Government died in a ditch for consumers or genuinely
facilitated greater competition in a market place?
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access, financial services consolidation, the unprecedented profits of
the banking cartel, allowing the ASX to demutualise and take over SFE
Corp, locking Singapore Airlines out of the Pacific route, accepting
Toll’s bid for Patrick, bankrolling the ABC Learning childcare
behemoth, allowing Coles and Woolies to reach 80% of the grocery
market… These are just some of the many examples where the big have
been allowed to get too big and top end of town profits have been put
ahead of consumer interests.
Playing hardball with an incumbent monopoly like Telstra is strangely out of character. The AFR’s
John Durie ripped into Telstra this morning for arrogance, myth-making
and regulatory gaming, but a more detailed examination of today’s
papers suggests the government must share a large portion of the blame.
Bryan Frith was more measured in The Australian,
suggesting the stand-off might deliver more regulatory certainty and
keep the 28c dividend intact. Yes, but what about the national
interest of faster broadband, Bryan? Telstra shares have today
recovered 4c of yesterday’s 8c drop but the rise is only in line with a
stronger market, which suggests the business case for the $3 billion
fibre-to-the-node network is marginal and the government has
gone in too hard.
Graeme Samuel and the Federal Cabinet seem to have forgotten that 19.9%
of Telstra was sold at $7.30 a share in 1999 and the stock is now
$3.84. This is hardly like the 51% of the Commonwealth Bank which was
flogged off for $10 a share in June 1996 and is now at $46.67. If
anything the taxpayer should gift Telstra $2 billion and tell them to
build a fast broadband network that will also add shareholder value and
deliver an excellent and cheap service to customers. It’s too important
for the nation, but instead we have a Federal Government hell-bent on
retribution against an imported management team which doesn’t accept the
local culture of corporate subservience.