Telecom privatisation
It was not surprising to read that the man who gave Sydney a white elephant at Darling Harbour and a leaky monorail is now following a much bigger quarry, the privatisation of Telecom. One of Labor's "mates", Laurie Brereton — formerly a minister in the NSW Labor government — is reportedly sniffing around big financial institutions for advice on how to flog off Telecom should Labor win the next election.
Nor is it in the least surprising that the government would again trample over Labor Party policy to achieve the sale of one of the country's biggest enterprises — that has been the hallmark of the Hawke-Keating Labor dynasty. According to a report in the November 13 Australian Financial Review, Brereton is working on a secret brief from Prime Minister Paul Keating to assess strategies for the sale.
No doubt, many customers think Telecom's operations in the past have left much to be desired from the point of view of service and cost. But privatisation will make phone services worse, not better. And in true economic rationalist style, it will place another major industry in the hands of private capitalists who will slash jobs and working conditions.
The revelation gives the lie to Keating's supposed change of heart on economic questions. And it is not too difficult to discern that selling Telecom has been behind the government's changes to the telecommunications industry all along. The whole episode could go under the heading of a surreptitious privatisation by attrition.
First, the private carrier Optus was allowed into the game by buying out Aussat and controlling satellite-based communications, allegedly to provide competition for Telecom. To assist Optus, Telecom was forced to reduce spending in such areas as expansion of services. Now, competition from Optus is said to be threatening the market value of Telecom as a saleable asset.
Meanwhile, leading ministers ingenuously argue it would be irresponsible to let Telecom suffer from an inadequate capital base to respond to Optus. Yet Telecom has lost revenue to Optus in overseas communications and now in domestic long distance calls and supposedly must look offshore for increased income, which will require substantial new investment.
Telecom management is reportedly in favour of privatisation. The US-based telecommunications giant AT&T and Japan's NTT are both interested in a stake. Earlier this year, the government recruited former AT&T manager Frank Blount as Telecom chief executive officer on a salary of around $500,000.
Management has led the pre-privatisation drive to shed all but core operations — contracting out installation and service, cutting operator services to a bare minimum, selling the manufacturing hicle fleet and equipment, selling property, closing down the stores and closing training and staff facilities.
It's all just too convenient. Labor's platform maintains that Telecom will remain in public ownership, but the sale could net the government $12 billion to $20 billion, presumably a nice cushion for government spending that will be needed to lift the economy out of recession. The idea that big business and the rich should pay their share of taxes to provide revenue for job creation remains in Labor's too hard basket.