Give Telstra Back to Us

also published in Courier Mail and The Advertiser on 6 August 1998

How do we free Telstra from being a politicians' plaything whilst retaining control?

Simple!  Follow the lead of the AMP and give it back directly to its owners -- us.

This would be the fair and democratic thing to do.  It would also allow Telstra to get on with the essential business of helping build the information super-highway.

The fact is that the original rationale for government stewardship of Telstra -- the need to counter monopoly power -- has evaporated.  The telecommunication industry is now a competitive, international business with literally hundreds of players.  Although Telstra still dominates locally, its monopoly position is gone for good.

More importantly, governments make lousy owners.  They just don't respond well to the need to keep costs down or to create wealth.  Nor do they face, a strong incentive to seek out new consumers and services, to take risks and innovate.  Moreover, being political beasts, they inevitably succumb to the lure of the marginal voter and the pork barrel.

If government ownership days are past, why then the persistent chorus to keep Telstra under government ownership?

For many its the desire to "keep with tradition" and for others it's an ideological thing.

Still for others it is an concern about more unemployment -- though, given the rapid growth in jobs in the telecommunications industry, this fear is misplaced.

More validly, people are concerned about loss of ownership and the threat of being left behind.  Telstra is a big deal -- indeed it now easily the single largest business in Australia.  People quite rightly do not want to lose their legitimate stake in the biggest show in town.

The best way to allay concerns about ownership and control is not with continued government stewardship but rather by returning the asset back to us -- by issuing every citizen on the electoral roll with an equal share of Telstra.

Once it is returned to the people, they can decide to keep, sell or buy according to our own preferences.  If an individual wants to retain ownership she can.  If a person would rather take the money, he can.  If a person wants to keep Telstra Australian-owned, she can by retaining ownership and vote accordingly at shareholders meeting.

Understandably many pollies and interest groups will not like the idea.  Once Telstra is given back to it owners, they will not be able to use Telstra for their own pet projects and interest groups.  But is it not more democratic to allow the people as individuals to make these decisions for themselves?

Access to the best telecommunication facilities is also a big deal.  The future will largely be played out along the information superhighway.

The question is how is the issue of access best addressed?  By government ownership?  If this were the case, people in the bush would not now be complaining about poor service and high prices.

The fact is the only way to overcome the tyranny of distance in the end is by having a competitive and innovative industry -- something which is hindered rather than helped by government ownership.

There is a role for governments to help people with access to the communications services.  However, governments have many options other than ownership.  They can regulate -- as they now do with local calls -- requiring firms to provide certain services at certain prices.  They can pay firms to proved service at subsidised prices -- as is now does with most assistance to industry.

If more funding is required, then the government can sell a bit of Telstra.  For example, the 16% of Telstra the Howard Government now plans to sell is expected to raise around $12 billion, which enough to fund a six-fold increase in current level of telecommunications assistance to the bush for forever and a day.

Although de-nationalising Telstra would not please all, it is like to please most where it counts most.  For example if 50% of Telstra were divided evenly amongst all Australian families, the average household kitty would receive a growing asset worth at current market prices about $6,500.