11 September 2005

Government guarantees $2 billion cash for fund

Following the successful passage of the Telstra sale legislation the Government will create a Communications Fund using $2 billion cash to future-proof telecommunications services in Australia, Minister for Communications, Information Technology and the Arts, Senator Helen Coonan, announced today.

The sale bill had been drafted to allow the Government the flexibility of constituting the fund out of cash, shares or a combination of cash and shares.

The Government has committed to a $2 billion fund and I am announcing today that the fund will be made up of cash, not shares.

This should allay any concerns that constituting the fund of shares would somehow have eroded its value or integrity.

The Fund will be established as soon as practicable after the passage of the sale legislation and money for the fund will not be conditional on any actual sale of further shares in Telstra.

Having made this decision, the Government will consider any necessary changes to the legislation before Parliament.

The perpetual $2 billion Communications Fund is a key component of the Government’s commitment to future-proofing telecommunications services in rural, regional and remote Australia.

Legislation before the Parliament explicitly links the Communications Fund to regular, independent reviews of telecommunications services.

The first of these reviews will be held before the end of 2008 and then every three years after that.

Sydney
10 September 2005