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

My question is to Senator Minchin, the Minister for Finance and Administration. Does the minister recall his extraordinary claim on the Sunday program last week that even those who bought into T2 have done very well? Hasn’t the Telstra share price more than halved since T2, costing long-suffering Telstra shareholders more than $8 billion in capital losses? Is the minister so out of touch that he seriously believes that T2 investors did very well when they bought T2 shares from the government? Does the minister think that small shareholders who have lost half their capital will buy more shares from a government that is so economically incompetent that it believes investors who lost more than half their money have done well?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

In answer to that question, I cannot recall the exact words of my answer but what I recall is making the point that, despite the loss of capital, on the face of it Telstra 2 shareholders have done well with seven years of very good dividends. Of course, if they have not sold, they have not lost their money but they have received good dividends. We hope that, in due course, they can recover their capital by the improvement in the Telstra share price. I would also make the point, in further answer to that question, that most of the shares that we have so far sold were sold in T1. Two-thirds of the shares that we have issued were sold in T1. Shareholders in T1, particularly if they sold at the top of the market, would have tripled their money as a result of the government’s issue of the stock at, I think, $3.30. The stock peaked at over $9. If they sold at the top, T1 shareholders would have tripled their money. If they have not sold, they are still ahead and they certainly would have benefited from the extraordinary dividend flow that has occurred as a result of Telstra’s dividend policy.

I am pleased to have this question to confirm the government’s very good decision to proceed with T3 and to offer Australians about $8 billion in a retail offer of our Telstra shares, with the residual to go into the Future Fund. We think this is the right policy for Australia; it is the right policy for this company clearly, the right policy for Telstra customers and for taxpayers. It is very interesting that the opposition focuses on Telstra shareholders. Of course, if the opposition had its way there would be absolutely no Telstra shareholders whatsoever. Senator Conroy points to this apparent loss on paper. The thing that the opposition always forgets is the position of taxpayers. The opposition has absolutely no regard for taxpayers. I said, I think, in the last sitting fortnight that as a result of the opposition’s behaviour—its blocking of a further sale of Telstra in 1999—taxpayers are $50 billion worse off as a result of the Labor Party’s actions at that time in blocking a sale. If the government had been able to proceed with the full sale at that time and invest the proceeds in a diversified way across the Australian equities market, Australian taxpayers would be $50 billion better off.

We think it is time to proceed with this sale. We find the ALP’s position on this matter extraordinary. Once this sale proceeds, their policy at the next election will apparently be to retain a $15 billion investment in Telstra ad infinitum. They are going to lock up taxpayers in this $15 billion investment in a company which Mr Swan says nobody should buy any shares in. They want to lock up taxpayers in perpetuity. We know that if Labor got into government and got into significant financial difficulty, they would be the first ones to flog that $15 billion in Telstra shares the minute they could, just as they very sensibly sold Qantas and the Commonwealth Bank.

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

I refer the minister to a specific small shareholder in Telstra—not you, Mr President. Is the minister aware that his mother has summed up her Telstra investment by saying, ‘Obviously, the second lot have halved in value.’ Can the minister confirm that his own mother, as well as hundreds of thousands of other small investors, lost $2 per share on her T2 investment—even after dividends? Is the minister so out of touch that he does not even realise his own mother has lost thousands of dollars through the government’s incompetent management of the sale of Telstra?

Michael Forshaw (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Yesterday was Father’s Day.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

Just as well it wasn’t Mother’s Day.

Paul Calvert (President) Share this | Link to this | Hansard source

Order! When the Senate comes to order, we will proceed with question time.

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

My mother, like many Australian investors, knows the risks of investing in the Australian stock market and those risks were pointed out in full at the time of T2. We should remember that T2 was at the time of the dotcom boom. It was a good time to be a seller of shares. Taxpayers benefited enormously from the fact that Senator Colston and Senator Harradine supported the government’s further sale of shares at that time and those who still have Telstra shares have received very handsome dividends in the meantime.