Public ownership of Telstra hanging in the balance

Telstra's fate hangs on Queensland Senate seat

Public ownership of Telstra is hanging on the outcome of Queensland Senate votes as the Australian Democrats look set to lose a seat to the Nationals, according to Western Australian Democrat candidate Brian Greig, giving the Coalition full control of the Senate and a clear path to selling the remaining shares of Telstra.

Greig told ZDNet Australia today that "in the last hour ... it looks like the National Party might win the seat off the Democrats in Queensland, which would give the Coalition four seats in Queensland".

"The outcome of that would be that Howard, potentially, would control of the Senate outright -- he could have 51 percent in which case he wouldn't need to rely on any minors or independents," he said.

State director of the National Party, Roger Harcourt, confirmed the National Party's prospective win: "Our analysis of the count at this stage is that there is certainly a chance that we'll win this seat".

"We have a reasonably safe assumption that we have a very good chance," he said.

However, Harcourt concedes that "like many others, we just have to wait at this stage".

"There are still about half a million votes to be counted," he said.

Democrat leader, Senator Andrew Bartlett, said the party "strongly believed it was better to have almost any minor party elected than have an outright Coalition majority in both houses".

Political newcomers the Family First Party, who until today were tipped to become the controlling vote in the Senate, said it wouldn't become the Coalition's "yes-man" if given the balance of power.

National president Peter Harris said the party will not act as a "rubber stamp" for the proposed sale of Telstra, as he said "the bill needs to be good for Australian families before we will agree to it".

"We want to see broadband in place across Australia, and rural communities need to be catered for now and in the long term," he said.

However, Harris was also concerned that the Coalition may win total Senate control.

"It looks possible that the Liberal Party could win outright control of the Senate, and we might not have any power at all," he said.

The Prime Minister reaffirmed his intention to sell off the once publicly owned telco a week before the polls were open in an interview with ABC Brisbane.

John Howard told the station that "our [Liberal party] policy, subject to being completely satisfied in relation to arrangements concerning rural Australia ... [is] to sell into private hands the remainder of Telstra."

Howard claimed that "it's not good for the long-term wealth of the country [for Telstra] to be part-public and part-private."

"The community service obligations that Telstra has, the obligation to look after the bush, the obligation to maintain untimed local calls, all of those things can be adequately covered by separate legislation irrespective of whether Telstra is wholly or partly owned by the Government," Howard told the ABC.

The situation regarding the sale of Telstra dates back to the Liberal-National Coalition election win in 1996, when the party announced its telecommunications policy pledging a one-third sell of Telstra. The Telstra (Dilution of Public Ownership) Act came into effect in December that year.

The Bill was brought up again in 1998 proposing the full sale of Telstra but was defeated in the Senate by independent Mal Colston. However, the following year a bill was passed to allow a further 16.6 percent sale of Telstra with the support of Colston and Tasmanian independent Brian Harradine.

Full sale of Telstra was proposed by the government in June of 2003, and was passed by the lower house in the following month.

Andrew Colley contributed to this story