06/09/2005 - 22:00

Plain speaking on Telstra sale

06/09/2005 - 22:00

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TELSTRA is the classic example of why business and government don’t mix. The current furore over the telco’s new and outspoken leadership team is all politically driven, despite criticism of some management for talking down the price of the stock.

Telstra is the classic example of why business and government don’t mix.

The current furore over the telco’s new and outspoken leadership team is all politically driven, despite criticism of some management for talking down the price of the stock.

Since when has honesty been a crime?

Telstra is hamstrung by its ownership and former status as a monopoly telco. To add further regulation to this is not in the best interests of the company.

That is the simple message being proclaimed by the new management. And as brutal, frank and lacking in finesse as that message has been, it is accurate.

Those observers criticising this ought to consider the environment Telstra operates in.

The Australian Stock Exchange requires full and fair disclosure, yet many people seem to think management should shut up and allow the public to be potentially duped into paying too much for the next tranche of Telstra.

The situation is increasingly untenable.

The Federal Government should sell its stake in Telstra as soon as possible and put the proceeds wherever it likes – back into the bush if it deems that appropriate.

To have a majority shareholder pushing its weight around and directing its investment to do things that don’t suit the minority investors, of which I am one, is plain wrong.

If I recall rightly, management and the board have to act in the best interests of the company and all its shareholders, not just one that happens to have elections on its mind.

Get this horrible situation over and done with.

Katrina highlights systemic failures

THE disaster that has unfolded in New Orleans is a reminder about priorities, and how sometimes democracy fails when strong leadership is absent.

I am not talking about the apparent failure of the Bush administration to react promptly to this tragedy, I am thinking of the misallocation of resources that has led to unfortunate collision of poverty and disaster.

In the US, for instance, billions of dollars are wasted propping up inefficient farming practices because the recipients are key voters in major states such as Iowa.

Yet the poor of Mississippi and Louisiana miss out because their states don’t have the clout – or they are not swing voters whom presidential candidates have to buy off with billions.

The frightening stories and harrowing scenes from New Orleans provide a horrific, if not slanted, impression of America. It will not help George W Bush sell his message of democracy to the Middle East or beyond.

Instead, it reinforces the shortcomings of democracy, namely when leaders won’t challenge the status quo simply because it upsets people who are comfortably nestled in the old way of doing things.

Governments need to continually review whatever they are doing at a particular time, and question the value of that.

There are times when government expenditure has to shift from those who don’t need it any longer to those who do – rather than simply taking more and more off the rest of us.

In the end, like any part of the economy, the market rules. In this case, shocked by a natural disaster, the market is telling the people of the US that they spent too much in some places and not enough in others – namely New Orleans.

You expect leaders to recognise that and guide the change.

Heads of democratic states that rely on incumbent practices, fail to assess the risks, don’t collect adequate data to judge the opportunity and make necessary changes are not leaders.

And that is everywhere from your school board to the US president.

Issue worth exploring

EXPLORATION is the lifeblood of Western Australia’s minerals sector and the industry has long bemoaned the failure to keep up satisfactory levels of investments.

So it is disappointing to be the bearer of bad tidings.

Despite a 27 per cent increase in expenditure from the March to June quarter, the trend is really only a moderate increase, still below levels of the late 1990s and now being impacted by rising skills and equipment costs.

While the dollars are being spent, they are buying less.

• See pages 14-16

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