Tanner: Telstra split not a Labor back flip

Tanner: Telstra split not a Labor back flip

Summary: Despite icing a 2002 plan to pursue Telstra's structural separation due to concerns Labor had for its private shareholders, Minister for Finance Lindsay Tanner today said its current position was no different.


Despite icing a 2002 plan to pursue Telstra's structural separation due to concerns Labor had for its private shareholders, Minister for Finance Lindsay Tanner today said its current position was no different.

Razor: Gershon and Tanner

Sir Peter Gershon and Lindsay Tanner.
(Credit: Brian Hartigan)

"Where, in effect, the government has landed in its initial position on Telstra ... over the past few months is actually very similar to what it was back then," Tanner said today, responding to a question by ZDNet.com.au at the launch of Telstra's The Government Productivity Report.

"Which is to say to Telstra: 'If you do not wish to fully separate into two companies — we are not proposing to legislate to [fully separate]; we are not proposing to force separation. We are saying, 'If you do not do that, then we want to head down the path of functional separation', which is in effect the position that we adopted in 2003."

"In 2002 I put out a discussion paper which canvassed a half a dozen structural reform options, perhaps the most radical of which was a formal break-up of Telstra," Tanner said.

By 2003 Tanner, then the shadow Communications Minister, was copping flack from Liberal Senator Richard Alston over Labor's "humiliating back down" on the issue. The report Tanner had commissioned was Separating Telstra: Protecting the Interests of Minority Shareholders.

Referring to the report, Tanner said, "It concluded that it would take a very long time, and would face all kinds of complex issues, and frankly would be too hard." Tanner said at the time that "minority private shareholding in Telstra" made it "an inappropriate strategy for reforming Telstra".

He said structural separation was the most "extreme" form it proposed and that the government's current position in relation to Telstra is "very similar" to what it was then.

However, one month ago at the announcement of the current telecommunications reform package, Minister for Communications Stephen Conroy said it was the government's "clear desire for Telstra to structurally separate".

A key threat to Telstra in its current proposal is barring the telco from future wireless spectrum auctions, which may prevent Telstra from upgrading its highly-prized Next G network to 4G or LTE technologies, unless it separates voluntarily.

But Tanner went on to say that the "underlying thinking" in Conroy's current approach was similar to his. "The core objective remains exactly the same: that we have world class broadband, universally available, and that access to the network is competitive and open and that service providers can compete on equal terms."

Tanner and Conroy are the two ministers that must approve funding in order for the NBN Co to acquire network assets. While the legislation is being battled out in Canberra, the NBN Co is believed to be in ongoing negotiations with Telstra over how it will vend in its assets such as ducts, pits, poles, and its copper network.

The finance minister went on to blame the Howard Government for creating a policy framework that encouraged Telstra to "game the system", noting that telecommunications lawyers were "cleaning up" because of it.

"They created a structure which had all the incentives for Telstra to dedicate as much of its enterprise, activity and innovation, to gaming the system... We are keen to get away from that kind of world," he said.

"Telstra ... inevitably have different perspectives to us on some of these issues — that's understandable — but ultimately they are the same kinds of objectives, which is to bring Australia into that new world of possibility, that maximises Telstra's competitiveness, innovation and capacity to earn money for their shareholders — well, we're neutral on those things — we want all telcos to do that."

Topics: NBN, Broadband, Government AU, Telcos, Telstra

Liam Tung

About Liam Tung

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, security and telecommunications journalist with ZDNet Australia. These days Liam is a full time freelance technology journalist who writes for several publications.

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  • I don't understand.

    "Which is to say to Telstra: 'If you do not wish to fully separate into two companies � we are not proposing to legislate to [fully separate]; we are not proposing to force separation. We are saying, 'If you do not do that, then we want to head down the path of functional separation', which is in effect the position that we adopted in 2003."

    Could someone please translate these sentences to English for me plz?
  • He took the tack, that bullsh!t baffles brains

    Don't be confused and keep your brain.
  • Fair Go or Fight.

    As a Telstra Shareholder, if the Company and the Government can't come to a consensus decision. acceptable to all concerned, I call on the Telstra Shareholders to commence a Class Action against the Government based on the fact that the Rudd Government said publicly that they had no intention of splitting Telstra.
  • @fair go

    yeah yeah and lets do another for the never ever gst, too.
  • @fair go

    Fine you start your own GST caper I'll get a group together and go in hard for compensation for the Rudd blackmail and damage of Telstra.
  • @@fair go

    Had Sen. Conroy said, we are going to give the NBN to Telstra to do with as they wish and the share price doubled overnight, would you be complaining about the governments' involvement?


    Governmental decisions impact upon companies and their share price all the time. This time they impacted upon yours.

    But as has been mentioned here numerous times, regulatory changes were outlined in all 3 prospectuses!

    Maybe instead of rubbing your hands together in anticipation for those TLS shares to increase ten fold and reading the Ferrari brochure, it may have been prudent to have read the prospectuses, instead.

    Grow some balls and take the blame "you" bought TLS and knew this could happen or should have known.

    But then, off to court is the Telstra way, isn't it?
  • @@fair go

    I didn't buy Telstra shares, but honestly forced Telstra separation has wider implications than just the telecommunication sector. Who would invest in Australia when the government can rob a company of its assets at will
  • Your sins will find you out.

    RS you still don't get it do you.

    This is not about Telstra shares. This is about a dictatorial Government seeking to destroy competition to help an election promise (which Australia could never afford) and which should have been costed before being promised.

    Now Mr Rudd finds that to have any chance of success opponents must be banned and worse, their assets and customers must be confiscated. Naturally, RS and others like him who hope to gain from the Telstra destruction urge the Government on.

    Hopefully, as a result of present negotiations between Telstra and Government will come a conclusion that allows a happy situation to emerge for all concerned but, if this is not the case Australians should not accept a situation where a Government is allowed to ride roughshod over the Australian people.

    Much has been made of regulation warning in the Telstra prospectus but no mention was made of a forced Telstra breakup and I am sure no investor, after careful perusal of the document, imagined that the referred to warning related to a devastating and destructive tearing apart of Telstra.

    It is my belief that past and present Governments have stated that this proposed Telstra breakup was not envisioned. What other Australian company can now feel confident that they, as Telstra, will not have devastating regulation enacted against them should they have need to exercise their rights to question a vindictive Government.

    You see RS it is you who are disingenuous and greedy in your promotion of self interest, and I call on you to desist from your vile and misinterpretation of this situation, recant your ways, and become an honourable Australian citizen.
  • Mr back flip

    Sydney you are a goose and a greedy disgusting goose. You have argued from day one because of your wife's shares and no other reason.

    But only yesterday heres what you said -

    Sanity prevails. Sydney Lawrence -- 23/10/09 ..."Sensible and undeniable truthful comment from Don Argus, Mel and RS"...

    So I'm "undeniably sensibly truthful", yesterday and "just don't get it" today, Mr back flip, lol? So much for undeniable, Sydney style.

    I see you've also found a new excuse to unsuccessfully try to hide your greed. You've dropped calling other disparagers, dropped the pseudo patriotism, stopped comparing yourself to the ANZACS and Jesus and now you've grasped the "dictatorial government/blackmail angle", lol.

    This might say it better. Ode for Sydney (in the form of a limerick)...

    "There once was a greedy fool named Sydney.

    Stupidly bought Telstra shares... didn't he.

    Now prays to the gods each night

    For his worthless shares to come right

    Just $4 each... he'll sacrifice a kidney"
  • Sydney Lawrence is a cleverly written ZDNET bot!

    How can I not think this, when at *every* Telstra article on this site, I inevitably think: "Hmm.. wonder if that goose Sydney Lawrence has commented on this." Then lo and behold, there he is. Like clockwork, like gravity, like the twinkling of the stars. Sydney Lawrence is both the strong AND weak nuclear force keeping us glued to these Telstra articles.

    ZDNet, you are geniuses!! Way to build community, by creating these intelligent bots that unfailingly stay on topic and say the same thing over and over and over in so many different ways. You guys should be in Google!! hahahahah

    And this news just in: Telstra shareholders ARE NOT the same as the Australian public. There's a lot of you, but there's more of us.
  • ROFL.....ahahahhahahahahahahahah

    i need a rest...oohhh...hahhahahahahahahah
  • @Your sins

    BTW Sydney, my initial comment was directed at "anonymous" not you.

    But you took offence on anonymous" behalf"... yes...ok, lol!
  • Only a fool loses his cool.

    RS I do honestly appreciate our jousts and do believe that at times we both are capable of utterances that have merit.

    Hence my sincere referral to your Post concerning Mr Don Argus. My constant advice to you, and I believe your shortcoming, is your tendency to become exceptionally abusive.

    If possible try to emulate my balanced, objective and enlightening manner of debate and note that no matter how devilishly provoked I never lose my cool or stoop to abusive rhetoric.

    I know that you do have much knowledge to impart but your delivery and robust attitude must be refined. Please believe me when I tell you that my opinion is not one eyed but encompasses a fair go for all industry participants.
  • Hello then FOOL

    Sydney Lawrence 24/10 ..."and note that no matter how devilishly provoked I NEVER LOSE MY COOL OR STOOP TO ABUSIVE RHETORIC. I know that you do have much knowledge to impart BUT YOUR DELIVERY AND ROBUST ATTITUDE MUST BE REFINED"...

    Then later the very same day -

    Sydney Lawrence 24/10 ..."You see RS it is you who are DISINGENUOUS and GREEDY In your promotion OF SELF INTEREST, and I call on you to desist from your VILE and MISINTERPRETATION of this situation, recant your ways, and BECOME AN HONOURABLE AUSTRALIAN CITIZEN".

    So much for not losing your cool or stooping to abusive rhetoric!

    Can you ever tell the truth Sydney (simple answer - NO)!

    Maybe it's time for you and tour "ROBUST (shareytale) ATTITUDE" to become a little more "REFINED", by you not letting those shares overule your entire existence, disgraceful, greedy, L I A R..
  • Consider your verdict.

    M'lad I rest my case.
  • Rest (in peace)

    Your typical one rule for you/Telstra another for the rest, pot and kettle case, is resting in peace not resting!
  • Class Action against the Government

    Unfortunately all politicians have legal protection from being sued for any statements they make so all parties can lie to their hearts content.
  • Re:Your sins will find you out.

    Seems Syd is rather confused regarding the villain in his comments. It should have read:

    "This is about a dictatorial Telstra seeking to destroy competition."
    "Australians should not accept a situation where Telstra is allowed to ride roughshod over the Australian people."
  • ROFL.....ahahahhahahahahahahahah

    You may need a rest, however you most certainly need a lobotomy.
  • re rofl

    what and be like you, no thank you, telstra moron?