Stephen Conroy (Victoria, Australian Labor Party, Deputy Leader of the Opposition in the Senate) Share this | Hansard source

I rise today to speak on a matter of public importance: the collapse in the share price of Telstra since T2, and the contribution to its decline by the Howard government’s continual bungling, misrepresentation and financial incompetence on telecommunications. By now, Telstra shareholders must cringe every time they see a news report of a Howard government minister talking about Telstra. It would be an entirely understandable response. It seems that every time someone in the Howard government opens their mouth about Telstra, one way or another it is the company’s 1.6 million shareholders who are on the receiving end. Whether it is the Prime Minister’s incompetent spruiking of T2, the communications minister’s attacks on Telstra’s management or the finance minister’s botching of the announcement of T3, the Howard government is never short of a word that will hurt Telstra shareholders’ interests.

The detrimental impact on Telstra’s shareholders of the Howard government’s bungling, misrepresentation and incompetence in telecommunications started in 1999 when the government was pushing ahead with its sale of the second tranche of Telstra. The Prime Minister was travelling around the country and talking up the government’s T2 offering. John Howard, the Prime Minister, told Australians that T2 ‘will be an extremely good deal for those who get involved’. He told prospective investors that T2 was a ‘marvellous opportunity for more of the mums and dads of Australia to buy shares in this great enterprise’. The Prime Minister supported his claims by basing his T2 offer on a front-end loaded, tricked-up yield flowing from large Telstra dividends, coupled with an instalment payment structure.

However, those who listened to and believed John Howard’s claims about T2 have been badly burnt. Seven years later, Telstra’s share price is less than half its T2 retail offer price of $7.40. Small investors who bought into John Howard’s tricked-up T2 yield structure have now lost around $2 on every Telstra share they bought, even after the company’s dividend stream is taken into account. For every $1 that those small investors invested in T2, they now have just 74c left. That is right—for every $1 put into Telstra by those poor small shareholders, they now have 74c left.

I am sure that Telstra shareholders who bought into T2 on the strength of the Prime Minister’s word are now wishing that he had kept his mouth shut. I know for a fact that they were wishing that the Minister for Finance and Administration, Senator Nick Minchin, would have kept his mouth shut this week. The Telstra investors who have lost thousands of dollars by investing in T2 are rightly furious at Senator Nick Minchin for telling them this week that they have done very well out of T2. It is hard to know whether such a patently absurd statement is the result of economic incompetence or spectacular arrogance. It could of course be both. The fact that the minister then went on to say, ‘If they have not sold, they have not lost their money,’ simply beggared belief. Terry McCrann, in the Herald Sun, described the comment as one of ‘astonishing stupidity’, and he was dead right. Telstra shareholders would have been merely exasperated.

Clearly, Telstra investors have no chance of sympathy from this government when the minister is so out of touch that he does not even realise that his own mother has lost thousands of dollars from the T2 debacle. Senator Bernardi may well laugh, but this is the public record. Senator Minchin’s own mother has taken a bath. In fact, in question time this week, Senator Minchin hung up on his mum over Telstra and showed no sympathy for her losses or Telstra’s other 1.6 million shareholders, and they can hardly hold out for much compassion.