Radio National - Comments made by Telstra CEO are sideshows

FRAN KELLY: Meanwhile though, in politics, the last time Kevin Rudd made news in New York he was visiting a strip club. Well, this week in front of the very sober and discerning Wall Street investment community, the Labor leader was praised for his clear view on broadband, that it should be the future of modern economic policy and, in a further ringing endorsement, the audience was told political leaders who understand that, quote, 'are going to be the ones who thrive.' This very political intervention in New York was given by Telstra chief executive, Sol Trujillo. He was speaking at a Merrill Lynch Australian investment conference in the Big Apple and his message was crystal clear, that a Kevin Rudd government was best for business.

I'm joined now in the Sydney studio by Senator Helen Coonan. She's, of course, the Minister for Communications. Minister, good morning.

HELEN COONAN: Good morning, Fran.

FRAN KELLY: Well, we've heard plenty of fighting words before from the Telstra boss. Does this take your stoush to a new level of brinksmanship or even political partisanship, do you think, basically Sol Trujillo talking up Kevin Rudd overseas?

HELEN COONAN: Well, look, to be perfectly honest, I think a lot of that is a bit of a sideshow and our main game, of course, is concentrating on delivering services for all Australians regardless of where they live, at affordable prices.

I think it really does show, however, that Telstra and Labor are hand in glove and I think that there is a very real risk that a Labor government wouldn't be able to stand up to the bullying of Telstra. We know that they haven't been able to stand up to the states, haven't been able to stand up to the unions and they'll be bowled over by Telstra too.

FRAN KELLY: Do you think it's safe to put it just down as bullying though? I mean, this is - it sounds like despair and it's not good for the Government or for our country to have a senior business leader go overseas and accuse the Government, your Government, of making the same stupid mistakes - that was the quote - that the US made in telecommunications policies in the '90s. Pretty heavy criticism.

HELEN COONAN: Well, Mr Trujillo obviously has a particular view and the particular view is that Telstra should be able to run rampant over competitors in Australia and clearly that's not good for business either.

What we obviously need both for consumers and for the industry more broadly, is to have a level playing field where obviously there can be proper competition, proper prices and services that are going to be available to all Australians regardless of where they live.

Telstra's plan and Labor's plan for broadband will leave out about three million Australians and they will absolutely get nothing under Labor's plan and the Government's plan, of course, is for a new high speed network. It will be a competitor to Telstra. Telstra doesn't like that but it will deliver services to all Australians regardless of where they live.

FRAN KELLY: Telstra doesn't like a lot of things about the Government's telecommunications policy and I guess we'll know soon enough whether the voters are believing Sol Trujillo's criticisms or your defence but later this morning you're actually going to be back in the Federal Court. Telstra's challenging your decision a few months ago to award a $958 million contract to a consortium which is headed by Telstra's competitor, SingTel Optus, to build a broadband network for the bush.

Sol Trujillo said in New York he was astounded that the Australian Government would subsidise a foreign company to compete in the domestic market. Does he have a point?

HELEN COONAN: Well, that's really a bit rich, isn't it? I mean, Telstra by its capital strike has stood back and not provided the kind of services that Australia needs. There's another process where there's a consortium that's stepped forward to provide affordable services, metro comparable prices, right across Australia…

FRAN KELLY: Well, Telstra applied for that too.

HELEN COONAN: Yes, but Telstra put in a non-compliant bid and this is a simple case of sour grapes, an inferior bid being trumped by a much more superior bid, and Telstra obviously doesn't like that.

FRAN KELLY: It's pretty extraordinary to find yourself in the Federal Court with Telstra, isn't it? Presumably the Telstra board, which includes government appointees like Geoffrey Cousins, Tony Clark, the chairman, Donald McGauchie, have signed off on this. This is not just Sol Trujillo, is it?

HELEN COONAN: I think the real issue here is, what are the shareholders doing? I mean, do the shareholders really think that this is a good investment on behalf of shareholders, these stoushes that Telstra instigates? The Government, of course, doesn't instigate this. What I'm interested in doing - I mean it is a bit of a sideshow and I'm interested in focusing on consumers, on affordable prices, on getting all services out to Australians where they - where they live. Obviously the Government needs to defend these - these actions, and we will, and we do. We defend it vigorously.

FRAN KELLY: Will you win this case?

HELEN COONAN: But it is really just a sideshow. It's a background, it's a PR exercise that Telstra runs whereas I'm actually focused on sticking up for consumers and delivering them the services they need, otherwise they're not going to get them and they run a real risk, if Telstra just simply rides roughshod over providing services to Australians.

FRAN KELLY: You're listening to ABC Radio National Breakfast and Communications Minister Helen Coonan. Senator Coonan, everything in politics was pretty much a sideshow this week, too, the Liberal leadership contest. Now, as a senior minister you were one of those involved in discussions over the weekend about the leadership. We now know that the majority, perhaps a majority of ministers concluded that the PM should go. Where did you sit in that? What was your view?

HELEN COONAN: Well, look, I don't think we really achieve anything by revisiting the events of the past week. I mean, we've all moved on here. We know now that we've got a transition plan. I think it's a very sensible plan, it's very honest and upfront with the Australian people and we now know, of course, that we will go to the election with a good team. We know that we'll be able to deal with the issues, deal with the future, have a stake in the future and I think that's really the important outcome from last week.

FRAN KELLY: I was surprised to hear you describe it as constructive, this past week. It's hard to - it's hard to construe all those public introspections and the fact that at one point the majority of the Cabinet seemed to think they'd be better off at the next election without the Prime Minister - how is that constructive?

HELEN COONAN: I think it's constructive to get an outcome. I mean, that was what I was referring to and we now have a…

FRAN KELLY: Any outcome?

HELEN COONAN: No, not any outcome, a good outcome, and one where we have the experience of the Prime Minister leading into the next - the next term. We know that we're going to have a very clear succession, we've got the most successful Treasurer the country has had being prepared to step up to the plate as Prime Minister. I think that is a very constructive outcome not only for our party but for the Australian people. It's what we're offering for the future.

We have a stake in the future, we've built a platform whereby we can now have a stake in the future, look at the big problems going forward.

FRAN KELLY: The whole country knows that Peter Costello and John Howard don't have a great personal relationship. We've all read about the fact that Peter Costello's never been invited with his wife to Kirribilli House for dinner over the 11 years. Is it believable that as these two go forward side by side as a team, working together, when we all know, not just about the Treasurer's ambition but there's bad blood between these two?

HELEN COONAN: Oh, look, you don't have to have a close personal relationship to work very effectively as a team. You can see that in the way in which Cabinet works. I mean, we work in a collegiate kind of way. We work as colleagues and I've worked very closely both with the Prime Minister and the Treasurer, particularly when I was the Assistant Treasurer, I was very much involved, and they work very constructively, very effectively together, and they will continue to do so. I think we're offering the Australian voters the experience of the team and I think that's something that voters will be very pleased to see, that we've got a succession plan.

FRAN KELLY: You're a senior New South Wales Cabinet Minister. You're a bit of a strategic - you've got a strategic interest in politics. What do you think when you read in The Daily Telegraph today that the New South Wales Liberals, federal Liberals in New South Wales, have allegedly surrendered all hope of winning any extra seats in New South Wales and that ALP polling shows swings of between eight and 12 per cent in up to 10 seats, even that the Liberals have even started polling in the blue ribbon seat of North Sydney? Things are pretty bad.

HELEN COONAN: Well, I think that you see these kind of headlines but it's very difficult for them to really see, at least it's difficult to see what they're really meaning - meaning - getting extra seats.

I think the really critical thing is here, we will be - I'm sorry about that phone, Fran.

FRAN KELLY: That's okay. Just ignore the phone everybody.

HELEN COONAN: Yes. We'll be seriously defending our hold on New South Wales, on all of those marginal seats.

FRAN KELLY: Are things that bleak in your home state?

HELEN COONAN: Well, look, our polling doesn't show it quite like that and it's an extraordinary headline to think that there's some criticism if we're not actually trying to win an extra seat. We'll be defending all of the seats we have in New South Wales.

FRAN KELLY: Helen Coonan, thank you very much for joining us.

HELEN COONAN: Thanks, Fran.

FRAN KELLY: Communications Minister, Senator Helen Coonan.