July 12th 2003

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Articles from this issue:

COVER STORY: Will Telstra sale complete Liberals' takeover of Nationals?

EDITORIAL: The states' gambling addiction

WEST PAPUA: Rising US concern over Indonesian army killings

AGRICULTURE: Factory closure linked to stalled sugar reforms

STRAWS IN THE WIND: Counter-culture / Houses divided against themselves / Oil theories

DEFLATION: Is the world economy sailing into unchartered territory?

Partition of Kashmir? (letter)

Something rotten ... (letter)

Senate 'obstruction' (letter)

WORLD ECONOMY : The market is unpredictable

INTERVIEW: Cross-fertilisation the key to a vibrant world

SOUTH AUSTRALIA : Sex Education course leaves parents fuming

FAMILY: Tax splitting comes in from the cold

BOOKS: The West and the Rest, by Roger Scruton

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Will Telstra sale complete Liberals' takeover of Nationals?

by News Weekly

News Weekly, July 12, 2003
Deputy Prime Minister and National Party leader John Anderson had one message to the millions of people who live outside the privileged coastal cities of Australia: "Trust us".

It is a big ask in anyone's language and one from a party that at best has blurred the ideological lines between it and its long-time Coalition ally, the Liberal Party of Australia.

The guarantees of service delivery for a sold-off Telstra will not be known for up to 15 years, according to Mr Anderson - long after he and all but his most junior colleagues have left the Federal Parliament.


In fact, there are persistent rumours that Mr Anderson will depart the stage as soon as the next election - before the telecommunications giant is sold. Mr Anderson's claim to have "future proofed" the bush from changing technology failed to convince even senior National Party officials in Queensland - where the party has been fighting a rearguard action from marauding Labor, Liberal, One Nation and independent attacks on its political base.

It needs to be remembered that even at the last election, after all the troubles and hijinks inside One Nation, the ramshackle party still managed to outpoll the Nationals in the Senate in Queensland 215,400 to 196,845. The well-regarded Senator Ron Boswell survived simply because all the other parties preferenced against One Nation.

Yet, despite their clear wish to keep Telstra in public hands, all Queensland National MPs will vote alongside their Coalition partners to sell off Telstra.

Mr Anderson has denied his party has sold out, and maintains that even the most cynical person in the bush admitted deep down that selling Telstra was inevitable.

"Far from being backward or somehow retiring or wringing my hands in agony about whether we've done the right thing, I say to you this is a good outcome," Mr Anderson said, in response to claims that he had sold out. Interestingly, the Telstra sale has been seized on by the Labor Party as the last great defining issue which distinguishes the Nationals from the Liberals.

Clearly, Labor is going to use Telstra to its political advantage at the next election. Lindsay Tanner, Labor's spokesman on Telecommunications, says the Nationals have themselves been the subject of a political takeover by the Liberals.

"This is a pale shadow of the party that used to be dominated by people like Ian Sinclair and Doug Anthony and Peter Nixon," he said. "The National Party cannot even stand up to the Liberals on the one big issue that its own constituents want it to stand up for."

The Government's clear determination to sell its 50.1 per cent shareholding in Telstra, in its response to the Estens Inquiry, suggests that it is so confident of winning the next election, it believes the regions will not buck even over Telstra.

It believes that Labor is so on the nose throughout Australia the anti-Telstra vote will not matter.

But the $181 million appeasement money for the National Party still seems quite small against the $30 billion the Government might expect to gain if the last remaining portion of Telstra was successfully floated on the market.

Compelling case?

In purely economic terms, the case for selling Telstra is in many ways a compelling one. On the one hand, revenue from its half share is now well in excess of the cost of interest debt, so Telstra is really a good "investment" for the Government.

On the other, it is increasingly dubious to argue in favour of a government being in the business of telecommunications given that phone companies are moving into television, program production, internet sites and other forms of entertainment and business tools.

What the Nationals (and the Liberals for that matter) fail to understand is that Telstra is a symbol for all that is wrong with government policy in terms of its market-driven, hands-off, anti-local industry approach to economics.

It is the last bastion of government ownership and country people want to keep it as their safeguard against overseas ownership, untrammelled competition, and being left behind again by their more affluent city cousins.

In this sense there is now a fundamental dislocation in thinking between the parliamentary representatives of the National Party and the constituents they represent.

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