MEET THE PRESS

SEPTEMBER 4, 2005

INTERVIEW WITH COMMUNICATIONS MINISTER HELEN COONAN ABOUT: THE SALE OF TELSTRA, FEDERAL LIBERAL PARTY LEADERSHIP BATTLE, NSW LIBERAL PARTY LEADERSHIP,

PAUL BONGIORNO, PRESENTER: Hello and welcome to Meet the Press. The Communications Minister outlines her vision for the future of Australia's media as Labor ramps up its campaign to shame the Nationals into voting down the Telstra sale legislation this week. And concern for lone mothers and disability pensioners as Cabinet meets to finalise its welfare-to-work reforms. But first, what the nation's press is reporting this Sunday, September 4. All the papers have extended coverage of the Katrina hurricane catastrophe in the US. President George W Bush has ordered more troops to help evacuate and secure New Orleans. The reinforcements will bring to 40,000 the number of military involved. Thousands of survivors have been ordered out of the two major shelters, the Superdome and Convention Centre where they've endured brutal conditions. Nine Australians are among those bussed out of the city, another 40 are believed stranded. In Sydney, the 'Sunday Telegraph' has: "$50 million Labor plan to shield children." Kim Beazley is proposing a $30 rebate for parents to buy software filters to prevent children accessing pornographic and violent websites. The 'Sunday Mail' in Adelaide has PM to Costello: "Sorry I spoke." John Howard attempted to patch up a new row with the Treasurer over tax policy in a late-night phone call. In a TV interview, Mr Howard appeared to contradict Mr Costello on cutting the top rate. The 'Sun Herald' in Sydney has: "Brogden considers future at secret country refuge." Former State opposition leader John Brogden has moved from a psychiatric clinic to a secret rural retreat. The paper also reports the Greens saying, "The State Liberal’s shift to the right on gays and abortion is deeply troubling."

Besides guiding the Telstra sale legislation through the Senate today's guest is working on new laws for Australia's media which inevitably will lead to changes in the way moguls like Kerry Packer and Rupert Murdoch can play in the market. And, indeed, how major overseas investors can enter it. Welcome back to the program, Minister.

HELEN COONAN, FEDERAL COMMUNICATIONS MINISTER: Thank you, Paul.

PAUL BONGIORNO: If I can just go to Telstra. You're bringing five pieces of legislation into the parliament this week. Will you allow the Senate to scrutinise those bills by way of an inquiry or a committee?

HELEN COONAN: Well, obviously a decision will be taken as to how the bills proceed. They'll be introduced this week and I would think they will be debated for some considerable time. That's what the Government expects. But I'd certainly like to get a vote on the sale legislation and, indeed, all the other legislation, particularly the big spending packages that are attached to it that are going to look after consumers, by the end of the second week.

PAUL BONGIORNO: Labor makes the point that the details of these bills haven't yet been seen and often scrutiny by Senate committees picks up unintended consequences.

HELEN COONAN: Well that, of course, has been the traditional role of the Senate. I imagine it's traditional role will be discharged in relation also to looking at the Telstra bills, but whilst, of course, there is a potential for great complexity, it is really a very straightforward process of securing the authority to proceed with the sale of Telstra, which is really what it does. And then, of course, there are a lot of other parts of the legislation that support it, including, of course, the very significant package - $3 billion package - to ensure that services will be secured into the future.

PAUL BONGIORNO: You don't think the Nationals might want to have a very close look at that package to make sure that you are delivering what you say you are?

HELEN COONAN: Well, I propose also to have a ministerial statement, Paul, which will pull together all of the parts of the package and all of the things that we have agreed to do in connection with seeking the authority to sell. Obviously some of the things are contained in licence conditions, for instance, that don't require legislation, but clearly those who are interested and indeed vitally concerned about this will be able to see the whole package. And where the Government is actually implementing the package in the ministerial statement.

PAUL BONGIORNO: Minister, Kim Beazley's idea - a $50 million package to give parents a rebate to install software filters - do you have any sympathy for that? Do you think it's a good idea?

HELEN COONAN: Well, the Government's already mandating the fact that ISP providers have to offer filters to parents so that, in fact, it's a chosen experience, it's something that parents can do in their own homes to keep their children safe. Together with that, we've got a $30 million cyber safe program that we announced in the last election. That is a very targeted amount of money that also helps the federal police actually weed out this nasty stuff on the 'Net. And we've also got a very effective organisation called NetAlert which is actually currently conducting a roadshow all around Australia to actually help parents and teachers teach children how to use the Internet. I think that these combination of measures, which also understands the enormous cost to ISPs and small business, that this kind of proposal would entail, will, I think, be a better overall outcome for the safety of children on the Internet which the Government takes very seriously.

PAUL BONGIORNO: Much of last week was dominated by the Treasurer pirouetting around his leadership ambitions and tomorrow his image broadening sees him flying out to Indonesia and Aceh with a planeload of journalists. Here's what Wayne Swan thought of that.

WAYNE SWAN (EARLIER MEDIA APPEARANCE): He has turned this trip into a taxpayer-funded leadership campaign for photo opportunities. It's that simple. The Treasurer's turning his back on the parliament, showing his contempt for the Prime Minister and leaving the country at a time when the parliament is sitting.

PAUL BONGIORNO: Minister, haven't we reached the point where everything Peter Costello does is seen through the prism of his leadership ambitions? Don't you think, perhaps, the time has come to bring it to a head, to sort it out?

HELEN COONAN: Well, I think Wayne Swan's comment, quite frankly, was particularly puerile. I mean, why would you criticise a Treasurer going as part of a finance meeting, going and having a look at what's happening in Aceh, that is actually using Australian aid money? I mean, I think that was a very silly statement by Wayne Swan.

PAUL BONGIORNO: On leadership, you see in Britain Tony Blair has nominated that he won't contest the next election. Our Prime Minister himself in London agreed that he's no lame duck, Tony Blair. I mean, John Howard could do something the same without damaging himself, couldn't he?

HELEN COONAN: Well, I think the point about the leadership, if I may say so, is we do have an outstanding team. I have, in fact, been on the record saying that I think the Prime Minister has earned the right to say when he will go and how he will go. But - and that obviously we have a leader in waiting and an obvious successor, a very talented person who will be able to step into those shoes. The other point I've made about the Prime Minister is that he has very good judgment and with the commitment that he's made to the Liberal Party over the years I am absolutely certain that he will make a decision not only in his own interests but also in the interests of the party when he makes it.

PAUL BONGIORNO: Well, as a senator for NSW and as a Liberal, obviously you're a member of the State division. Patricia Forsythe, a frontbench Liberal in the State House says that the division has been taken over by right-wing extremists. And I know Dr John Hewson, former federal Liberal leader, has the same fears. Are they overstating it?

HELEN COONAN: Well, I think that obviously with the tragic events of last week - and I do hope that John Brogden and Lucy are able to get their life back together and I'm sure we all send our best wishes to them - I think the really important thing is that once you've had that kind of cataclysm in a leadership it's important that whoever is now the leader - and that's Peter Debnam, he's very able - that they settle down and they focus on winning the next election. That's their job, and it's not to rake over the coals and to try and attribute blame. I think it's very important that they get on with the job of trying to win government in NSW.

PAUL BONGIORNO: There's no right-wing takeover?

HELEN COONAN: Well, I certainly wouldn't have thought so.

PAUL BONGIORNO: Coming up - Telstra warns the Government its new regulations will lead to less investment and poorer services.

PAUL BONGIORNO: You're on Meet the Press with the Communications Minister Helen Coonan. And - welcome to the panel, Jennifer Hewett, the 'Australian Financial Review' and Louise Dodson the 'Sydney Morning Herald'. The Labor Party has launched a last-ditch campaign in Queensland to pressure the Nationals not to hang up on Telstra when the legislation comes into the parliament this week. Kim Beazley found a phone box without a phone in it and he seized on remarks from Telstra's American 2IC, warning service regulations would turn Telstra into a loser. Kim Beazley (earlier media appearance): When we look at the news as today, what we see abundantly clearly is this - once privatised, as far as the senior leadership of Telstra will be concerned, it's off the map.

JENNIFER HEWETT, THE 'AUSTRALIAN FINANCIAL REVIEW': Minister, the Telstra organisation seems to be in war with the Government when you're the majority shareholder. Really what chance do you have of controlling it once it's privatised?

HELEN COONAN: Well, of course, you've got the same controls that you have now. We, in fact, control the way in which Telstra operates by way of licence conditions, not because we have a government ownership in Telstra and, in fact, that remains, that legislative framework remains. The ability to look after consumers, the ability to control the competition environment, that all remains quite irrespective of whether or not we have an ownership in Telstra.

JENNIFER HEWETT: But there's plenty of ways to skin a cat, Minister. They could do a go-slow on investment, they can continue to fight the ACCC even harder. I think they can make life difficult for people, particularly in rural Australia, can't they?

HELEN COONAN: Well, Telstra can do what Telstra can do now and it can do what it can do after it's sold, if, in fact, the Government proceeds to sell it. And the regulatory regime will remain the Government's responsibility and the Government's decision. That will be the case whether or not we've got an ownership overhang in it or whether we don't. But what I can say is that Telstra is running a business. It's the largest telecommunication company in this country. And I would be astounded if they don't want to make investment, grow the business. The new management team were, in fact, brought in to do just that. They weren't brought in to roll back the regulatory regime. They were employed on the basis that they had a job to do within the existing environment. And dismantling the regulatory environment is certainly not their core business.

JENNIFER HEWETT: Phil Burgess says he wouldn't put his mother in the stock. Would you put yours in?

HELEN COONAN: Well, I think what's important is that I don't give advice about shares or the value of the shares. What I can say is that no-one has yet made a case that the current status of the shares has anything to do with regulation. In fact, the current regulatory regime has enabled Telstra to deliver the largest ever profit it's ever made. I mean, $4.4 billion in the existing regulatory environment. People who have advised Telstra and people who are independent experts have, in fact, referred to the fact that Australia has a light regulatory touch and have actually gone and argued for the Australian regime in other jurisdictions, such as Canada. It just doesn't wash. We don't have over-regulation. We want to make sure that there is a level competitive environment so that Telstra, as the largest provider, doesn't swamp the competitors. And we know that competition works in this country because we've now got over 100 telecommunication providers, an economy that's $10 billion bigger. It employs over 30,000 people and it's very good for small business and consumers. I think that the longer that this kind of public comment - unhelpful public comment - goes on, the more it fortifies the Government in its view that the regulatory regime is necessary to protect consumers and we won't back away from that regulation.

LOUISE DODSON 'SYDNEY MORNING HERALD': Minister, the day Telstra posted its $4 billion profit CEO Sol Trujillo flew to Canberra with a submission which warned, "The old way is bad for Telstra and even worse for consumers because it leads to even less investment in new networks and technologies to provide advanced services to consumers and especially consumers in rural and regional Australia." That's quite a threat from Mr Trujillo. Should he go back to his box and make the system work rather than threatening the Government with poor services?

HELEN COONAN: Well, what I think needs to be explained is why the share price is the way it is by the management. I mean, there's been $2.2 billion written off because of bad previous management decisions. That's got nothing to do with the regulatory environment. That's poor management of Telstra. There has been under-investment in the network and it is important that Telstra starts to tell its story to the market, to the mums and dads that have got a real stake in Telstra, about what it's going to do to upgrade its network and to roll out some response to the fact that there's pressure on its fixed line network. This is happening all round the world with every dominant telecommunication company and the response has been to look at new networks such as, for instance, BT's recent announcement as to how they're replacing their fixed network. It's not to go after the regulatory regime which, after all, delivers a competitive environment for more than Telstra.

PAUL BONGIORNO: The market seems to...

HELEN COONAN: And also, Paul, if I just may finish, and also provides guarantees for consumers. This is very important and people in rural and regional Australia need to have confidence that the Government will not be backing away from a regime that looks after them and will look after them into the future.

PAUL BONGIORNO: The market seems to believe the executives rather than the Minister and the Government?

HELEN COONAN: Well, I think what's being said by executives needs to be based on fact and needs to be accurate, because if it's not accurate then it's getting to a stage where - I don't know whether or not this will be the case - but the stock exchange may need to be informed, and it's very important that misleading statements aren't made about why the company is under pressure. Certainly, no case has been made that the - any pressures in the company are due to regulation - and, in fact, just the contrary because it's managed to make $4.4 billion worth of profit with the light regime we have.

JENNIFER HEWETT: When you say the stock exchange may need to be informed, what do you mean by that?

HELEN COONAN: Well, I don't know whether or not there is such pressure on the share price that there would need to be any information given to the stock exchange. That's obviously a matter for the management and a matter for the board. But it is important, I think, from a public perspective that we say, well, what is - what are you being impeded from doing by the regulatory regime? We still don't know what that is. The second point is, we have not seen yet how the existing regulatory regime is impacting at all On Telstra's ability to make a profit.

LOUISE DODSON: So you think the Telstra management might be deliberately talking down the share prices?

HELEN COONAN: Look, I'm not going to be imputing motives to anybody. What I'm dealing with is facts here and the facts are that the government makes the rules about the regulatory regime. The management is there to look after the operational side of the company. And we are, as the Government, responsible for ensuring that there is a responsive consumer regime and that where the market fails we have targeted investment in rural and regional Australia to ensure that people will not be left behind, irrespective of whether the Government continues to own Telstra or whether it's sold.

PAUL BONGIORNO: Minister, just on media, won't the changes that you outlined on Wednesday lead to Rupert Murdoch and Kerry Packer being able to keep the assets they have now and extend their influence in Australia?

HELEN COONAN: I think the point I want to make, Paul, about that is that what I have flagged is a series of ideas. Cabinet has not made a decision yet as to what will be the media flesh-on-the-bones to our long-standing policy to relax foreign investment in media and cross-media. But what I've suggested is that we need a floor under diversity and obviously the ACCC will decide whether or not the kind of mergers that people might want to undertake will substantially lessen competition. So there are significant safeguards.

PAUL BONGIORNO: Thank you very much for joining us today, Senator Helen Coonan. And coming up - the President of the National Welfare Rights Network, Michael Raper, and his fears on welfare reform. And the cartoon this week, from Bill Leak in the 'Australian' who hones in on Peter Costello's leadership ambitions. Captioned - 'Naked ambition', Peter Costello tells a bewildered crowd, "I feel like I'm the Emperor already."