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'The Tempest', Telstra (a storm in a teacup boils over) and a hurricane bringing hell on earth

Craig Rowley is a Webdiary columnist

by Craig Rowley

A week ago I wrote a short first piece in what I intend to be a series on globalisation because it is a huge topic. I hope it will be a series that increases focus on accountability for actions taken in our 'global village' and opens discussion about all the many aspects of globalisation.

Most of all I hope it prompts many conversations about how we see our world, and what is happening in it, and how it could be as we shape our future. Harry Heidelberg in his opening piece - Hello, welcome to Futureworld - included this quote from Goethe and it was one of the things that got me thinking about globalisation:

There is no past that we can bring back by longing for it. There is only an eternally new now that builds and creates itself out of the Best as the past withdraws.

To me, it reminded us that "another world is possible" (and that's the essence of altermondialisme or une autre mondialisation - the idea best expressed in French of another kind of globalisation). It led me to hope we could discuss what is and is not possible, for there are many ways to go about relating to each other, many ways to "do business". There are many possible ways to progress whilst wisely conserving what is best and creating something new. I hope we can openly explore all the alternatives, ponder all the possibilities, and learn from each other.

As Harry had said in his opening piece, our dream has always been of a lively and independent space where Australians from all walks of life and of varying political persuasions will gather. And it still is what we dream of and work toward.

We've got off to a good start this past week and there were many comments on the many and varied aspects to (and understandings of) this thing we label globalisation. I noticed (with a little disappointment) that to date no one has made comment on the title I gave to that first piece - They devour their reason and scarce think - and I thought I should explain it. I am, after all, Webdiary Accountability columnist and transparency is important to me.

I used that title because I think it tells us a little about how we see the world around us now. Does anyone recognise the source of the phrase? Here is a snippet more to give some context:

… I perceive these lords

At this encounter do so much admire

That they devour their reason, and scarce think

Their eyes do offices of truth, their words

Are natural breath …

The Tempest

One of a number of reasons I selected those words for the title of my first Webdiary piece on globalisation is that we can trace the dynamics of globalisation back to the Virginia Company of London and William Shakespeare's The Tempest.

This is the work those words come from - Shakespeare's last great work. They are the words of Prospero (see Act VI, 155). The island, the setting for the play, is inspired by news of the English expedition to Virginia in 1609.

I am not the first to connect The Tempest and globalisation. Take the time for a moment to read about the Mexican Embassy in the United Kingdom and the foundation of the Atlantic relationship, the connection of the Old World to the New World. Then, if you are really keen, search for what various others including past Presidents and Prime Ministers have said about The Tempest and globalisation. You could start with what Thabo Mbeki said or what Dr Mahartir bin Mohammed said (both in the year 2000).

Another phrase often associated with globalisation first appeared in The Tempest, where Shakespeare has Miranda innocently rejoice at her first encounter with outsiders and the wider world.

"O brave new world!" she exclaims to old Prospero.

Prospero's reply is not quoted as often: "Tis new to thee."

You see Miranda is mistaken. Her innocence is ignorance. It is not a brave new world (Shakespeare was using brave in the sense of 'splendid' or 'noble'), but a rather shabby and corrupt one that has to be fixed by magic. Prospero controls all on the island with his magic: he can arrange circumstances, complicate arrangements, and set the stage for any desired solution.

In The Tempest, Shakespeare toys with the important questions: What is reality? Is it something we can judge by the evidence of our senses?

Occasionally, the characters in the play are deluded about what they see, or they see only what they wish to see, or they sometimes see what is not even there.

At all times, there is an illusion of unreality, of living in a dream world. It is the work of magic, of illusions, self-delusions. Miranda, for example, sees the ship sink, as do the rest of the fleet. The garments of the shipwrecked people are as good as new. There is a constant, mysterious presence of music. Gonzalo and Antonio perceive the air differently.

Is this not also the case with the ideology that is the neo-liberal or neo-conservative formulation of globalism? The characters (politicians, economists, consultants, managers, indeed all of us) are often deluded about what we see, or we see only what we wish to see, or we sometimes see what is not even there. Is the dream of globalism, the promise of free market utopia, not an illusion of unreality?

Consider the reality around the world, as best we can when filtered by those who report what happens, and consider both what globalism promised and what it actually delivers. Consider what free markets are intended to be and what we really have. Are these things the same? Is the version of globalisation being sold as the right way to go (indeed the only way to go) really delivering what was promised? Are you persuaded by the sales pitch that the best value for all of us comes from the kind of market-led globalisation we're told is inevitable - the one and only choice on offer - or could a people-led globalisation featuring reasonable regulation, fair trade, healthy economies, and reasonable risk/reward sharing work better?

I hope that with that first piece and with these new questions I have prompted you to think, at least just for a while, about where we have been, where we are now and where we could be tomorrow.

You see, a second reason I tied my first piece on globalisation to The Tempest is that the plot of that great play is organised around the idea of persuasion. As Prospero gradually moves his sense of justice from his own mind into the outside world, gradually applying it to everyone around him until the audience believes it, too. In the end though, Shakespeare leaves it all for the audience alone to judge by the evidence of their senses. I hope only that They devour their reason and scarce think and this piece persuades readers to think for themselves. I'm not trying to offer all the answers. I don't have them.

I introduced John Ralston Saul, not because he has (nor does he profess to have) all the answers. I introduced him only because he shares his ideas freely and, like me and you I trust, he enjoys open conversations and appreciative inquiry taking place in public - in the sunshine so to speak. What I really admire about John Ralston Saul is that he also leaves it all for the audience alone to judge by the evidence of their senses. Whatever he says take it or leave it, at least ponder the questions he raises. Like Saul's various public lectures, I believe this forum - Margo Kingston's Webdiary - is about open and genuine engagement with each other in discussing important issues which effect us all.

I also introduced the 'off limits forum', which last week did take over our Opera House and other public places in that first piece. In They devour their reason I emphasised the difference between approaches that can be taken - and taken by exercise of choice in a free society, which is a good thing. I did this by pointing out the private forum set up by the Forbes people which took place not only behind closed doors (it was invitation only with little media access), but also behind a strong-arm security shield set against the public. Whilst it took place in one of our great 'public' buildings there was the constant threat of violence to anyone approaching it without authorisation. Some people were arrested and if they broke the law that is what should happen. Personally I am thankful that NSW Police have been sensible enough this past few days for us not to have witnessed something like what happened to one innocent Brazilian - Jean Charles de Menezes - when things get unbalanced and a climate of fear prevails. It was something like that tragedy in the London tube station of Stockwell that I feared could happen here.

But that's enough of explaining what was written last week. Instead I want to share something that connects global with local and starts new conversations in Webdiary this week.

From a storm in a teacup to tempest in a teapot to big trouble brewing for T3.

It started as a bit of a storm in a teacup with skirmishes breaking between Telstra's new management team and the Government and the ACCC. Then it escalated into a tempest in a teapot as the management starting talking really tough - laying out the truth - and telling their mom's not to invest. Does it all culminate in too much trouble to see T3 through (at least in the near term)?

These are testing times for all involved - and that means all of us - with not just the future of Telstra on the line. This is a test of the future of all telecommunications within this country. Alan Kohler gives the best tips on what is the true state of things:

The Telstra revolution, including the new determination to "test" the ACCC and the regulatory environment, is being driven by the board, not management. So, it will be neither temporary nor superficial. The internal changes to Telstra's structure and culture will be total, and the confrontation with the ACCC and the Department of Communications and its minister will be deep and brutal.

The directors themselves say the company's new attitude is being driven by shareholders. You might think that probably doesn't include the majority shareholder (the Government), but it is suggested that when directors complained about intrusive regulation, the "share holder" side of the Government [Finance Minister Nick Minchin] said something like: "But you've never tested the regulation - stop complaining and do something about it." Removing Switkowski was the first step.

Three things will be tested: the idea that any investment in new services that in any way touches the company's last-mile monopoly must also be offered cheaply to its competitors; the cost of operational separation; and the regional presence guidelines.

It is also a test for the top executives - those in business and those in politics. Mr Howard has told a meeting of Liberal and National MPs that "Telstra's behaviour has been disgraceful". He also told us - through our Parliament - that "it is the obligation of senior executives of Telstra to talk up the company's interest, not to talk them down". This showed how out of touch the PM is becoming (or became some time ago). It is the obligation of senior executives of any company to tell the truth. We have to trust them to tell the truth and on this we base our investment decisions - a foundation of trust.

I did not trust what I heard before T2 and did not get tricked into tying up money in what was talked up then. Am I tempted this time? Not on your life. With Telstra's track record and the turmoil turned up in the rush to T3 you'd have to question whether you'd tip a toe in the water, let alone make a plunge. I wonder what the Treasurer is thinking today. Terrible timing? Terrific timing? Time to try some other tack?

A Hurricane bringing hell on earth

During the same week we've had a storm forming over Telstra it has been hell on earth for people in Louisiana and Mississippi, the states hardest hit by hurricane Katrina. There are questions about whether the early response to this tragedy has been adequate and questions about what comes next. What has happened is devastating and horrifying. There has been chaos and death and there is the threat of more. There have been explosions and fires. Disaster follows disaster. It must be hell on earth.

No doubt fear is being felt strongly amongst the people caught in the chaotic mess left behind by when there has been natural disaster and then worse when human nature gets nasty. The reports filtering through paint a savage situation. However, some of those amongst the wreckage at this moment may feel hope (at least I hope so) and the heart of this hope is that when things go horribly wrong we can still salvage something out of it. We can learn and better understand how these things happen and what to do when they do. We can better understand nature and we can better understand human nature.

The horror after the hurricane highlights how political priorities can be misplaced. Whilst our pollies have picked up the pace to push through privatisation of our telecommunications infrastructure there are other priorities they are not attending to. We face the real prospect of a Bird Flu pandemic. Preparation should be a paramount priority. Investment here is more important for our future prosperity than any privatisation proceeds put in a Future Fund would be.


Disclosure: Craig Rowley does not own stock in any company in the telecommunications sector. His industry superannuation fund does. Craig's current direct share holdings include stocks within the Financials, Health, Property Trusts and Industrials sectors.

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re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Perception in life is everything. At the moment the perception of Telstra is not so good. Those that wish to keep it in taxpayer hands may indeed receive that wish.

I remember quiet fondly when Arthur Andersons the accounting firm was going downhill. I think they may have well spent the most amount of money on public relations ever.

Needless to say they were quickly out of business and the world moved on. People’s money being involved has the tendency of making them quite ruthless.

All the bullshit in the world will not change a person’s opinion when he or she's bucks are on the line. I have a very strange feeling Telstra and the Government (taxpayer) is about to find this out.

This unfortunately for those that wish to see will not hurt John Howard. It will only hurt him in a taxpayer sense.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Good Morning Craig, I was wondering when someone on the team would raise these two issues.

Re 'Storm in a teacup' etc, as soon as Mr Howard made this statement under the protection of parliamentary privilege, it raised some issues with me:

"I think it is the obligation of senior executives of Telstra to talk up the company's interest, not to talk them down. That is the view which I have communicated very directly to the chairman of the board on behalf of the government."

1. "Talk up the company's interest" = Spin. Howard told Kerry O'Brien last night that he did not mean for the Execs to lie. OK, Varnish the truth. Howard is good at that. That is the only way he thinks. Spin a web so fine that would make a carny down at sideshow alley proud. He tried bully boy tactics behind closed doors but that obviously didn't work (I imagine Sol has dealt with tougher cookies in his career, so Howard's bluster will sound like samo-samo.)

Plan A did not work for Howard, so plan B is to attack the Execs of Telstra from Parliament.

There are a lot of contributors on this web who are not fooled by Howard's tactics and what comes out of his mouth. He has in recent years become so predictable it is almost boring. To ease tha boredom and to keep sane, I have been playing "spot the spin". Far better contributors (and possibly many more who don't put pen to paper) have Mr Howard pretty well sussed .

2. A report that highlights the deficiencies of Telstra, which is now public knowledge but probably wasn't intended to be, was given to Mr Howard. Which leads me to ask:

Mr Howard, if a representative of the major shareholder of Telstra comes into knowledge that impacts on the value of their investment (good or bad, it doe not matter ), if he attempts to use that knowledge for his betterment, what could that be construed as?

Unfortunately I am not that well versed in that side of the law, and I would appreciate input from those who are, but to my mind the recent case of Steve Vizard seems to be instructive.

Of course Mr Howard may be able to sidestep the issue, as is his wont.
Mr Howard has had his own way for far too long, and his argy-bargy methods just don't wash.

In the vernacular he should just shut up and pull his head in. Cheers Margo et al.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

David Eastwood, this may not be the thread for it [ed Kerri: this comment was originally posted to this thread but is more appropriate here] however I understand the point you are trying to make about Telstra.

I happen to own a small amount of Telstra shares. I have also said in different posts that I would not advise any person to buy into the company. Frankly outside of the dividends which soon will be taken away the company is a complete dog.

In the world business climate as it is at the moment there is not one company, including much larger ones than Telstra, that can afford to be all things to all people. Frankly the money expected from this company is idiotic bordering on the pyshcotic.

The deal achieved by the Nationals was a good one. Unfortunately for them this will never be realised. The company will not achieve the price to justify that type of money being handed around.

Many of the taxpayers wish to be lumbered with this monolith and I fear they may receive their wish. A business operating as a charity has a limited life span. Telstra no longer is the only bridge in and out of town and the price of its service must reflect that to survive.

I have tipped that Telstra will not exist in twenty years time at the current rate. I stand by my tip at the moment. I believe the plan of splitting the company is the way forward. I also think the Labor party has that in mind as one of their policies.

Either way Telstra will not be the same company as we know it today.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Telstra is in trouble. If it is not sold soon, the share price is quite likely to hit such a low level that the next Labor government could afford to buy it back.

It is too large to innovate and too small to expand. The only thing keeping it afloat at the moment is its effective monopoly on the last mile, that bit of wire that goes from the exchange into our homes.

Should a technology appear which eliminated this advantage, Telstra would find itself worth more in terms of real estate than communications infrastructure.

That technology may almost be here. Wimax arrives next year, voice over IP is already here. These two technologies on their own are enough to make Telstra irrelevant to the lives of ordinary Australians.

Even if Wimax is not the giant killer, the march of technology ensures that another one is just around the corner.

The monopoly that Howard wishes to sell will soon be an imaginary one. No wonder he wants to talk it up, hot air is the only thing that will keep it afloat.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Jay White: "It unfortunately for them will never be realised. The company will not achieve the price to justify that type of money being handed around… I have tipped that Telstra will not exist in twenty years time at the current rate. I stand by my tip at the moment. I believe the plan of splitting the company is the way forward. I also think the Labor party has that in mind as one of their policies."

It never really has been worth the price asked – either for TI or T2 – and is certainly not worth the "pie in the sky" numbers the government seems to think investors will pay.

The 7:30 Report interview last night was rather instructive. The government must be enduring a biblical 'wailing and gnashing of teeth' over the fact that the current Telstra management was ever appointed. I heard an interview with the Deputy Secretary for Commerce of Minnesota (I think) on 2BL yesterday. He described exactly what Telstra's US management team is doing now as "par for the course." Apparently Sol's got form in the US for this type of "disclosure" (with respect to government regulation impinging on profitability) and we should expect more of the same. Funnily enough, this fellow described the objective as nil to minimum regulation thus facilitating a deregulated, 'free market'.

Not what Barnaby would want I expect.

The PM is desperate to avoid the bloody obvious - that which Jay has posted - from being made general knowledge. How long have investors been kept in the dark over the real state of the company they are asked to plough money into? The answer seems clear. It seems just as clear that if those wishing to palm the shares off (the government) had their way, it would continue. As the PM said " I think it is the obligation of senior executives of Telstra to talk up the company's interests, not talk them down." I wonder if that advice was given to Ray Williams?

As to the constant "half pregnant" rubbish, as Kerry O'Brien observed, that is entirely of the government's own making.

Jay is correct too when he speaks of Labor policy. My recollection is that Labor's view is to keep the 'core' infrastructure business in government hands and privatise the retail side, That though, may have changed with the wind given the way the party functions these days.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Been thinking after the 7:30 Report, combined with the almighty rush Howard has shown to ram the legislation through parliament.

The question is unavoidable: Why should Howard and his ministers not become subject to an investigation as to whether or not they are guilty of insider trading - with fore-knowledge about Telstra performance - not just by playing the sale in relation to the value of Telstra shares they own, but about the shares that are owned by the Australian taxpayer?

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Nice one, Craig. While Treasurer Peter has been scavenging for votes in South-east Asia, I wonder if he looked on in plans to deal with the Bird Flu? (See Something
foul with bird flu program
at Asia Times online). Some in Vietnam have an enlightened, neo-connish way to deal with pesky regulations.

Posing as chicken traders, the reporters easily bought vaccination certificates at slaughterhouses. "A vaccination certificate costs just 3,000 VN dong [about 5 US cents], and you could buy as many as you like," they reported.

The same article seems to mention a tactic for rounding up buyers for the T3 firesale.

In the Mekong delta, farmers raise ducks in the open, driving them from place to place to feed including into harvested rice fields to feed on
fallen grain. Fattened, the ducks are taken to markets in big cities such as Can Tho and Ho Chi Minh City.

If Peter couldn't find any leadership tokens in Asia, there's still a job for him, as Telstra's duck-herder.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

"Mr Howard, if a representative of the major shareholder of Telstra comes into knowledge that impacts on the value of their investment (good or bad, it does not matter ), if he attempts to use that knowledge for his betterment, what could that be construed as?"

I think as you point out Richard Spark, Steve Vizard could show us.

Looked at from the other side, just how long do you think it would have taken for Howard to abrogate his strict observance of a law his government enacted had that report indicated a trebling in the profit forecast for the next financial year? How quickly might he have found a way to laud the company's performance had the report forecast a period of "sustained, strong growth?"

I think we know the answer to that as well.

Mike Seccombe says: "Used car salesmen everywhere must be green with envy."

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Jay White's comments appear to be the ones of some significance here so far. I wonder if he read Kennneth Davidson's comments in the Age: (Howard's Telstra Trickery), which commenced with a comment along the lines:

"Telstra has no future under existing government regulations. It's the oldest trick in the book. If its bad news, blame the messenger..."

Davidson blames the Howard government; not Trujillo, who he reckons is just calling a spade a spade and somewhat similar along the lines of Eastwood and Darroch in an another Webdiary thread, identifies the problem as Telstra's place in the "regulatory regime" firmament. This something rather complex and relates to the context to which the term "regulatory regime" applies in situations like the telecommunications industry, given its specific and unique components and structure at this time in its history.

Davidson's other main point is that lay people will not identify the notion of "regulatory regime" in the context to which it applies, as to the modern telecommunications industry, and says this derives too much from a too-narrow government interpretation of, for want of a better description, what I would call "Competition Theology".

Davidson seems to see Telstra as something tragic; the beast that has proverbially fallen into the Amazon to be devoured by rent-seeking piranha profiting from a regime that won't allow Telstra to compete on even terms, given the expenditures it has been forced to make in creating the functional environment for telecommunications.

One is inclined to wonder therefore, how much the participants in the second tranche, buying at upwards of $7 a share a few years ago, have been patsied, now the thing is heading south to round $4, and worse from there on.

Like wise Taxpayers who weren't told the truth about the money spent propping the share price up ready for a quick sale before folk woke up, rather than on infrastructure, as sworn on a stack of bibles by the government, particularly in response to the Nationals.

What will Telstra be worth to the Australian public who own it, once it has been completely devalued in favour of opportunists able to feed of its infrastructure without ever having had to contribute to the slow accumulation of that, over generations?

When governments start pleading "commercial confidentiality", as Howard and Joyce did on different shows last night, you have to know how deep the mess is. In the context of privatisation situations pleading commercial confidentiality, or some variant of it, is tantamount to pleading the Fifth Amendment.

The Telstra situation is following the same pattern as occurred when the Olsen government in SA privatised electricity behind everyone's backs. This proved its undoing in the next election, as consumers began to suffer unforseen price and efficiency problems emanating from the new set-up.

I've got to admit this stuff represents a learning curve for me at the moment. God knows what it must mean for many others even more functionally illiterate than myself (and there would be some) But the detail (and its various devils) seems to emerging only slowly and reluctantly, and that's a worry too as its significance, particularly when the press would rather eagerly obsess over issues of such moment as politicians bottom-pinching girl-reporters, rather than facing up to explaining these more complex, but perhaps more relevant situations.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Graham McPherson, your summary of Telstra is so very very true. Even without future technology I think many would be shocked at how many people are ditching their land line phones.

I still have one, I guess I am just old fashioned. However the amount of people under thirty I have come across who only make use of a mobile is staggering. There is also no reason to assume their mobile coverage is through Telstra.

Michael Park "It never really has been worth the price asked – either for TI or T2 – and is certainly not worth the "pie in the sky" numbers the government seems to think investors will pay".

From a taxpayer perspective this is not a sin for the Government to commit. They do have an obligation to get the greatest value for money. I think that is what they are attempting to do at the moment but the wheels are beginning to fall off.

My argument Micheal is that the most rabid pro sell crowd and don't sell crowd are so similar. They are both living in the land of myth and delusions. Both crowds way over estimate the value of the company.

I would have liked all of Telstra to have been sold. I simply think the money made from this would have been of much more use in taxpayers' hands and put into other more worthy projects. I would have also of liked this to occur with the Government (taxpayer) receiving top dollar.

Investers can weigh up the pros and cons of any share purchases. It is a free country and their money is theirs to do with as they like. I think the cat is now out of the bag so to speak and the Government certainly will not be getting the type of money they would have liked.

However those that think Telstra remaining in public hands will be all wine and roses may also like to do a little rethinking. The previous years level of dividends are very unlikely to continue. Also if remote areas are to be subsidized this can only take place by putting the prices up in more profitable areas (city). This is 2005 not 1970.

As I have already stated Telstra is not the only bridge in and at of the town. I and I suspect many others will not be paying this extra cost. Technology is very simple maths you either keep up or get out. Telstra should be putting their money into keeping up not into charity.

At the moment on first world standards Telstra is not even close.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Paul Walter, no I have not read the article in The Age.

My comments are my own thoughts. Ones that I have had for some time. I sold most of the shares I held in Telstra about three years ago.

I did this with the suspicion many of the things happening now would take place. My timing was a couple of years off though I held on too long (wry grin). As they say nobody rings a bell.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

"From a taxpayer perspective this is not a sin for the Government to commit. They do have an obligation to get the greatest value for money. I think that is what they are attempting to do at the moment but the wheels are beginning to fall off.

"My argument Michael, is that the most rabid pro sell crowd and don't sell crowd are so similar. They are both living in the land of myth and delusions. Both crowds way over estimate the value of the company."

No disagreement with getting the 'best' price Jay just as long as it's done transparently. The majority shareholder appears to have no interest in that. Sol mind you is running hard on a (as much as possible) deregulated environment and so of course has his barrow to push.

Your second point is fair, although it's fast reaching the stage that it no longer matters.

The main thing here is where Sol and his crew want to drive this. And that's a US style deregulated market. How long's his contract? Or, how many political cycles will it last?

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Jay White said "Investors can weigh up the pros and cons of any share purchases."

Unfortunately in this situation they can't. Unless the Government's requirements to service the bush are known, and independently costed, investors cannot know the costs the company will incur in the future.

I believe this is the nub of Sol's problem. The government blithely asserts Telstra has a responsibility to provide parity of service and price to the bush. For how long! What technology etc. This is effectively the government asking Telstra to sign a blank cheque, which can be cashed over and over again, as long as the government wants to.

It's a bit like selling your car, and telling the buyer you expect to be able to drive it every Sunday while he has the car.

Howard believes if Sol will sign off on the deal, any service deficiencies country customers experience in the future can be sheeted home to Telstra. He has the power to do whatever he likes, but doesn't want the bush service which will never keep up with city technology, to be a poison pill to turn dissatisfied country customers/voters off.

As for separation of network from the rest of Telstra. With the network in government hands and the rest sold off. Fine for maintaining a national carrier, but then there's nothing to sell beyond a few thousand reps in sales offices. No, the value of Telstra is in the access lines and the network.

Disclosure: I own shares, and worked for Telstra in the past.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Terrence Pihlgren: "Unfortunately in this situation they can't. Unless the Government's requirements to service the bush are known, and independently costed, investors cannot know the costs the company will incur in the future".

Every stock listing must meet a standard of regulatory requirements (laws). It is assumed the investor can read a prospectus and balance sheet. It is not the role of the Government to give advice to investors one way or the other.

"As for separation of network from the rest of Telstra. With the network in government hands and the rest sold off. Fine for maintaining a national carrier, but then there's nothing to sell beyond a few thousand reps in sales offices. No, the value of Telstra is in the access lines and the network".

This assumes that the network will always be of value and never become obsolete. A rather big assumption considering the rapid change in technology.

Hypothetically looking into the future it is not impossible to assume that there may come a day when people may be able to avoid a Australian carrier altogether. With the rapid rate of expansion in satellite technology it may one day be possible to hook into the network of another nations carrier with the simple use of a credit card.

It truly then will be a deregulated market. How equipped do you think Telstra are to compete on this scale. If somebody would have told me about the internet thirty years ago I would have thought they were insane.

A common mistake many make in assessing the price of anything is to assume that value remains constant. This is rarely if ever the case.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Can we all try to get our facts straight here.

Michael Park, re your statement “No disagreement with getting the 'best' price Jay just as long as it's done transparently. The majority shareholder appears to have no interest in that.”

The majority shareholder is the Australian public not a political party. It is a publicly listed profit driven corporation, which observes the same rules as a BHP. It just happens to be majority owned by the Australian people. Telstra has not been part of the public service for many years.

Also to those like Michael Park, Jack H Smit and Richard Spark.

You all suggest that John Howard should be investigated for insider trading.

There are 3 major problems with this.
Firstly it would have to be attempted insider trading, because Telstra has not changed hands. I’m not sure that ASIC would be all that interested.
Secondly the Vizards and Rivkins were trading on their own accounts, not on behalf of the Australian public.

Finally, Telstra is the party who has potentially breached the Corporations Law (this is where the insider trading laws reside) and ASX listing rules by not disclosing price sensitive info to the market as a whole.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Thankfully nobody as yet has used the term "mum and dad investors". A more meaningless idiotic phrase I cannot not think of in the last ten years.

Wearing the parent hat you are a "mum or dad" wearing the investor hat you are a "investor" two quiet different things.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

A lot of the debate so far in this thread has been on what the current Government can get for the sale of Telstra. With the view that it can be better spent somewhere else. I would like to know where and what the overall benefits are. I mean Telstra is keeps paying dividends in so many ways each year. Despite the one billion dollar plus dollars the government receives each year.

The Telstra network is like roads we use them and take them for granted until they are not there or need repairing. The good thing about the phone is that we don’t have to drive down them we just pick up the handset. Given that most Australians over the years have paid for the Telstra network through additions to their telephone bills for the maintenance and development of the network and technology. Why can’t the taxpayer continue to get both the benefit of using them and the dividend by a way of return to consolidated revenue that the annual dividend provides.

Why is this issue wasting so much time of the nation when the likely return from the sale will be a net loss to today’s and future Australians.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

But release me from my bands
With the help of your good hands:
Gentle breath of yours my sails
Must fill, or else my project fails,

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

The PM made an interesting Freudian slip on the 7:30 Report last night. Did anyone notice it? He was starting to defend this idea of 'talking up' the interests of the company, but he said "the interests of the country" then quickly corrected the slip of the tongue. Does this reveal his way of thinking about things - something akin to an advertiser's view where benefits are 'talked up' and disbenefits never mentioned?

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Jay White
Jay if the agreement with the government is to keep the bush services in parity with price and service, I still maintain an investor could have no way of knowing the impact, unless the consequences are spelt out. The prospectus didn't do this with T1, or T2.

Your point about network obsolecence is right. However the ownership of ducts that can handle any form of terrestrial wiring/optic has passed the test of time. Whereas satellite has not. Don't forget that satellites also wear out, and the replacement cost is considerable.

I am not arguing the network will be an asset into perpetuity. However it is an asset in the present, and probable near future. On the subject of terrestrial technology who would have ever thought we would still be using undersea cables for modern comms.

I am in agreement that the network is over valued, so no dispute there. However again it is the main asset. I agree with what you say about Telstra's difficulty in competing on an international market. Its venture into Asia lost billions of dollars.

I believe the three amigos are on the right track. At least if they persist we will have a telco better able to face world competition. However unless the government takes responsibility for the bush ( and I don't mean the paltry 3B$ ), the bush will be left behind.

What remains a concern for me is a private company owning all the key telecoms infrastructure, including the last mile.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Craig , I don't have any doubt that Howard sees his role as "talking up" the Liberal party, rather than talking it down. I'm quite sure if he were asked directly he would say so.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Craig, I like the richness & free association of ideas here. Webdiary is a tight place and it could do with a bit of loosening up.

My own view of getting a constructive dialogue going on globalisation is that it is going to end in disappointment. Requesting that other people think/engage or question their own ideas is a difficult task of itself but it becomes even more difficult, if you don't have clear ideas of your own, to give people something to kick against.

I think you've already come to a conclusion, albeit a cautious one, which is that it is possible to run a capitalist economy in a fair way, with appropriate regulation. That is not a new idea, or an overly controversial one. Somewhere along the way, though, the bottom seems to have fallen out of it, in favour of militant de-regulation, militant anti-globalisation or militant apathy. My only real problem with this little world of ours in '05, is that I'm not really a stakeholder in it. I'm in no position to influence or change anything. It runs me down.

Corporate people, if the rumours are true (and they seem to be), are boring dead-heads that do indeed scarcely think and devour their own reason. I'm unappalled by wealth-generation, since wealth is merely power and power is only terrible in its abuse. God is powerful and wealthy. Thrones of Gold and all that.

I'm appalled by the stultifying, regimentation, institutionalisation and desperation that I'm sensing coming out of people in the corporate world. They seem to want the government to give them permission to squeeze their workers, throw them off at a whisk and to commit acts of negligence with no reprisal. That is the essence of Neo-Liberalism; Permission to be an incompetent, clumsy businessman.

To me, it seems the biggest sins seem to come out of incompetence, rather than pure greed. If people are competent and comfortable in generating-wealth, there isn't any need to resort to low tactics. Greed will also play a part, when obsessive-compulsive types find themselves in positions of responsibility.

Reading work by right-wing fruitcakes like Ayn Rand, when I was younger, taught me about the way in which academic performance can often translate its way in to the world of money. Both Marks/Money, are objectively determinable expressions of self-worth to some people. If they make money, they feel happy. They are doing a good job. Howard is drunk on money and votes right now. The more the merrier. I'm haunted by the process.

In my own thread I tried to tear down the concept of "numbers" as measures of success/intelligence and re-define it as something more akin to the ability to solve problems and be adaptable. I'm still haunted at the idea; I have this impression of people as little bees, straining their limbs to accumulate more numbers, then growling at you, if you try and stop them from doing so, like you're taking their candy away from them; All throughout society. Rich people have more money than they could need. They enjoy the process. It's not simply greed either, since most executives are professionals now and do it to serve their shareholders, rather than themselves. It puts them in the position that they want; Loyal servant, accumulating, thoughtless, repetitive, number-creating animals.

Since it is so difficult and they work so hard, anything new in their environment upsets them. Nobody has time for ethics, or for new ideas, or for ambiguity. Like any addiction it creates extremes of highs and lows.

Thanks to emerging middle-class investment and compulsory superannuation schemes, people can start "creating" wealth, without any skill. I think this encourages irresponsibility, as it creates the perception that money is easy to come by, if you just play the game properly. It is like forgetting that every time you buy a carton of milk, there is someone out there that took the time to milk the cow; Disassociation from the act of creation, breeds complacence, apathy and a sense of entitlement.

I'm haunted by Howard's defintion of the role of the role of an executive to "Talk up" the position of a company, rather than "Talk down". I really hope this idea doesn't appeal to the "Mum and Dad" Shareholders. It reminds me of Enron. I wouldn't trust this man to run a company. He'd just hand out good news, whilst the place rots from the inside.

Somewhere, in all of this world though, are the people that make the real decisions and solve problems as they come. They live off their own thought, rather than the thought of others. That is the kind of corporate person that I want to know and understand.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Terrence Pihlgren I think you make some very fair points. It seems that in this thread we can all get along.

I also think that the Telstra case similar to democracy is much bigger than mere politics.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Terence, you touch on the key challenge of privatising any piece of public infrastructure. No doubt the non-natural monopoly pieces of Telstra are pretty much worthless, it’s the network. I’m a fan of privatising it all, but split it up first. Anything that’s a natural monopoly in one bucket, anything that isn’t in one or more others.

The non-monopoly stuff can get out there and compete, and be sold for what it really is worth – but of course the challenge will be painting a picture of it in a prospectus that isn’t disguised and rose tinted by past internal subsides. My guess is that pretty much all the non-monopoly parts of Telstra, lose money in their own right.

As to the monopoly infrastructure, the universe of options I can see are:

Keep it public: This is the “Death of a thousand cuts” option. If you accept my thesis that public servants make crap managers, and/or buy the notion that generations of politicians will exploit the network monopoly by systematically under-investing to limit negative short term budget impact, then we will simply carry on with second rate infrastructure and services. Our broadband infrastructure is years, even decades behind other markets, and costs more. I believe public sector accountability is an illusion in these cases – there’s nothing the electorate can practically do an a meaningful time frame to break this death spiral.

Mutualise it - Sell the network to its customers: Intuitively this isn’t a bad idea, but Mutuals are fraught. It looks neat having profits shared amongst customers some way, but there’s a big risk of internal battles around distribution, customers subsidising others (the bush) and levels of management accountability in Mutuals are historically shocking. Mutual owners/customers have strong incentives to fleece non-customers who are buying in. Mutuals have trouble borrowing, so funding for capital works can end up being extracted from customers who won’t ever benefit, more nasty internal equity issues as a result. Look at NRMA’s tribulations over the last few years, and the AMP crisis. I’ve never heard this one being put forward as a serious option.

List it on the share market: Potentially very, very scary as the management of the listed entity have a duty to maximise shareholder return, and likely will be much more competent that public servants. This equates to a massive wealth transfer from customers (pretty much all taxpayers) to a subset of them who end-up holding shares directly or through their super funds and investments. But it’s not all bleak. A strong; regulator can mandate service levels, and in some countries even mandates the amount of profit that can be made by the monopolist. This is the most often used solution, and it is also replicated in new infrastructure projects like Sydney’s tunnels or Melbourne’s Citylink tollway. Typically private sector owners negotiate extremely good deals in these cases – Macquarie Bank is a master in the art. I haven’t quite wrapped my mind around how all this magic happens but I suspect it’s something to do with perceived risk and how that is priced into the deals. The actual risk the investors are taking on – which is very low in reality.

I believe this solution can work –combining the right management incentives with damage limiting regulation, but I suspect governments and regulators in general have a way to go in getting these arrangements right.

Sell it lock stock and barrel to a buyer or consortium – “Trade Sale”: In theory pretty much the same as the previous option, except to the extent that a government or regulator can pressure the new owner not to turn nasty through the threat of losing the asset back to public ownership or some other form of sanction. In theory this would be neater than listing, less management overhead in not dealing with the share market, but there’s a serious political risk. The “optics” just aren’t good, and the purchaser would most likely be foreign given the size of the assets in play.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Thanks for your comments Gareth Eastwood. I am in good company!

I cannot see the difference between Steve Vizard's and Rene Rivkin’s actions, and that of John Howard. Perhaps the only difference is that Howard suddenly found he has a lemon and can't flog it off because now everyone knows. Mr Howard did not want that kind of negative information getting out. If what the new team at Telstra put out is incorrect or misleading, then they will be dealt with as appropriate.

The way I see it is this:
Steve Vizard and Rene Rivkin hold shares or are given information not widely available to anyone else, that certain activities by XYZ Company will either enhance their value which means buy buy buy; conversely they receive information that things aren't looking too bright for a Company in which they hold shares, so they get rid of them before the market finds out.

Both the above gents were found guilty but the end result was not the same as widely discussed elsewhere.

So my question is this - why is Howard any different to Messrs Vizard and Rivkin? He represents the major shareholder and I see his pattern of behaviour pretty much the same. The only difference is of course that it was acted out in the public arena.

To be sure, if the news that Telstra brought was quite the opposite, I cynically believe Mr Howard would have waved that document around for all the world to see.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

To tell or not to tell, legal or not legal. Surely borrowing to pay dividends etc is nothing to do with the regulator but everything to do with the shareholders. So all this stuff now being divulged affects the shareholders and should be told to the Government in its capacity as shareholder not regulator, and that being the case it should have been told to the rest of the shareholders too. Is it so hard to determine what concerns shareholders (all of them) and what concerns the regulator?

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

I can foresee a gathering storm down the line when the T3 shares have been hived off into the Future Fund and their value slowly but inexorably declines. John Howard will be long gone from the scene and will have taken his Public Service Superannuation out of the pot, however those that are counting on what is left may well find that they don't get exactly what they were expecting.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Hold the phone, Barnaby... Hold the phone!!

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

I think the rest of the 48.5% shareholders (me being one in T2 share issue) have every right to be angry over the withheld information. After all the shareholders lose out through a diminished share value.

As pointed out in prior comments there appears to be little difference between the actions of Steve Wizard and Rene Rivkin, to that of John Howard. I really believe that the government, by being defensive, saying it was illegal for him to disclose the dividend borrowings and future capacity of Telstra's infrastructure impinges on minority shareholder rights.

This means that John Howard could have exposed the government to a class action law suit where confidentiality vs disclosure of material information to minority shareholders. If this happens, who ends up paying? Ultimately the mug citizen and taxpayer.
Thank you very much John Howard.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Act III, scene IV.

Awake, my good lord! Verily, Titanic Australia has struck the petroleum iceberg!

See my liege how vermin swarm the Telstra lifeboat. They scorn to scorch their pelts with the heat of humbler labours.

Could I but lay my sword upon the yokel who demoted this nation's nerve to a mere geegaw to be sold, who butchered this swift steed to barter its sinews, verily would I sever his haggots.

Then would I confront this small Cortez who scrapes his boot with my 51% and smite his entourage of priests who worship the holy dollar, prospectus writ in labyrinthine ways.

Even now, the deceitful dalek maketh laws which are sold for the common good, but which are only to his own personal comfort.

No terrorist me, but were I to meet him man to man, then would I stuff his loot so far up his clacker as to make his tongue protrude and use him to licke my stampes.

Exit stage left.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

"The majority shareholder is the Australian public not a political party. It is a publicly listed profit driven corporation, which observes the same rules as a BHP. It just happens to be majority owned by the Australian people. Telstra has not been part of the public service for many years."

All well and good Gareth Eastwood, a fine distinction. We as those "shareholders" have had as much to do with the handling of those shares as we have had with the disbursement of the dividens paid by them.

The governmment has had everything to do with those shares and the monies generated by them In this instance, it has decided on our behalf to sell our shares. As such it is acting as a defacto "broker" on our behalf.

It was given vital information relating to that sale. It then had every opportunity to insist that Telstra make that information public - to us - as the owners of those shares. It did not. When the company eventually did, it then through its spokesman J Howard, publicy abused the company as being "foolish" (note not for informing the public to shareholders) but for "talking the company down" (and hence the price the "broker" gets.)

As to any law Telstra may have violated, this is a law enacted by our "broker" with this sale firmly in mind.

Why did our "broker" not insist the information given it be immediately put into the public domain?

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

I actually think that what Rene Rivkin was severely punished for was less criminal than what Steve Vizard has done and what our Prime Minister is doing and did!

I have never been able to get past the fact that Rene Rivkin was given price sensitive information by a head of Qantas and the head of the Qantas that gave out the information did not have to answer or was not punished for giving out the price sensitive information to a stock broker. How can that possibly be fair? Why was the head of Qantas protected? Shouldn’t the one that leaks the information be the one that gets into more trouble and not the one that hears it? Mr. Rivkin never asked for it, he really didn’t even know if it was true or not. If hearing information is enough to have the book thrown at you then the majority of stock brokers or persons that own shares could risk being in jail, as how else do you decide what shares to buy except from what you hear.

Our Prime Minister wanted us to hear that things were just dandy with Telstra, he was trying to mislead and lie to the people so that Telstra’s shares would not drop and in essence to cheat the public as when you cover up failures in the end there will be a crash. It seems to me that the Government really didn’t care if after the sale was made there was a crash as it wouldn’t be their problem. They would have already received their money.

This whole situation is very disturbing as the people are what make up the country.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Terry Embling, I agree, but while we're here can I include 'playing the blame game'?

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Am much better informed for the considering of the ideas offered by different contributions within this thread. Not a dud amongst them, except for this writers' own rather hurried convoluted one a while back.
But must concur with Chris Shaw, re, "...I sever his haggots".
Am sure that would be most painful. All ten of them? (pssst, Chris, what the F- is "haggots"...hurry up, or they'll realise I'M
dumb, too...).
By the way,concening cultural classics, the writer has just had an insight he offers to share. John Winston is apparently fond of Trollope.
Now, folk will recall the ABC screened a BBC adaptation of "The Way We are Now", with David Suchet in the lead role of the obnoxious paradigm for criminality, the vain and grasping financier Melmotte, who literally "sells" the smug, ignorant and class-ridden society of 1870's Great Britain to wrack and ruin, with his share swindle that shakes British society to its knees.
It is really Victoria Collins' post that has got me onto this line of thinking. Can anyone guess where it is travelling....?

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Jolanda Challita, I think it was the head of the airline being sold to Qantas who supplied Rene Rivkin with the inside information but I agree with what you said. Rivkin, a very ill man was dealt with far too harshly by being jailed and my perception is that it was because he was viewed as 'crass' outsider to the establishment.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

"Thankfully nobody as yet has used the term "mum and dad investors". A more meaningless idiotic phrase I cannot not think of in the last ten years."

Agreed Jay, although "The war on terrorism" must come a very close second.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Gareth No Relation I fear the major shareholder is not actually the Australian public, but their intermediary, the Government. The more thay can pump into consolidated revenue / "future funds" or whatever, the more latitude they have to buy our votes with pork and tax cuts next election, and the one after, and the one after that etc, etc, etc. There's not a lot of practical accountability to force the benefts to flow back to the taxpayer as one may feel they ought.

Having had plenty to do with Telstra internally over the past few years I can concur that it's no longer public service. It's much, much worse. The lazy underachieving elements of the public service are now augmented by the some of the profit seeking aggression of a corporate management culture, all with only a limited amount of sharemarket discipline applied. It's a shambles.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Dear Mr. Joyce

Before being pushed to far hither and thither by your colleagues and your ambitions, remember a simple rule for anyone interested in Policy in Australia: Look to a country with less than ½ our population yet with hugely more successful application of almost every practical policy, including a damn good positive balance of trade. True, it is an old country with more than 1500 years of successful international ventures. True, its people are not ‘laid back’ and ‘no worries’ is not in its vocabulary. True, it is not perfect and has its own problems and is being edged slowly to the old laissez-faire mode the Libs so love. But just take a look at TeliaSonera: a Telstra equivalent including fixed and mobile coverage with an extremely strong national and international IT/Telecommunications record and still with 59% government control (shared between Sweden and Finland).

America is not the best model. It is not even a good model. Not for nothing do many of its customers know it as Cell Hell. I note that the National Party’s Page Research Centre Report makes no reference to either country. Is Australia vacuum-packed?

The truth is, surely, that regional telecommunications will always be ‘uneconomic’. But then, if it were only a matter of economics, we’d shoot all smokers.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Solomon, you (really?) want something important to fight against... something that the (veritable) foundations of both - current - versions of the Right and Left seemingly fought against? Well... try 'power' - because it fits the bill... exactly. And yes... I, like you (except I'm aged 43), am no 'stakeholder' in any 'right' or 'left' order on the cards to date...

Still, given that the current left mainstream is such a shambles, why don't you try reading one Adam Smith - 'founder' (not that he was, really) of economics - on corporate power and the dire results which eventuate once businessmen have common (political) goals to pursue.

Because, contra your (explicit) point, "power is (NOT) only terrible in its abuse." On the contrary, the (pure) logic of power is genuinely horrifying. Try reading this essay, wherein I attempt to exemplify/summarise the 'wisdom' of its first (and best) systemetisers - the ancient Chinese 'Legalists' - and, be prepared to be very (very) frightened... because this IS the genuine logic of pure power. Machiavelli was an innocent compared to these monsters:

However, the (entirely) justified bankruptcy of the Marxist left has - unfortunately left us in an (entirely different) dire position: subject to the whims of those who've entirely failed to learn old Adam's essential lessons, yet hypnotised by the (narrow) remnants of same, supposedly embodied in neo-classical economics. Unlike, I'd have to say, many of the founders of said discipline.

Kenneth Arrow, for example, one of the key figures here, is (unrepentedly) a 'liberal' by US standards, and yet his maths is nigh-on essential in supporting the modeling which underlies ALL of the anti-governmental rhetoric so common today. So, why does he not oppose same? Well, it's because he (simply) refuses to engage polemicists - to our detriment - and (largely) restricts his commentary to purely professional publications.

Which means, I'd have to say, that - if you really wanna fight for something worthwhile here - your position (however much you may prefer to deny it) is, like mine, somewhere amidst the centre-left, because, the key bastion which needs to be undermined (today) is the overweening confidence of those who still believe in the 'magic' of markets, whilst winking at the reality of market power. In contrast, I'd have to say, the mantra 'government knows best' is almost NEVER proclaimed without (huge) reservations.

Full stop, eh?

But... if small (rather than large) business was politically dominant - see Taiwan for an example - the kind of 'incompetent, clumsy' business you attack simply wouldn't stand a chance. Business power a problem - and said businesses owned by shareholders? BREAK 'EM UP is what I say... and let the markets handle the process. But (sadly) the conventional left never wants to play this (sensible) game, so, we're left with nothing to vote for.

But, PLENTY to argue for, as I've found the vast majority of small-business owners (quickly) agree.

So - in conclusion - what I'd like to say is this. There IS a worthy (essentially bipartisan) opponent out there. And its name is Power particularly market power, in the present climate. Forget the biases of most contributors here. And (please) forget that the (conventional) right want you to ignore the market. And, forget that the (conventional) left want you to ignore all governments that fit their (stupid) models. Because - and, to quote a musical group that I (personally) can't stand - once you learn to (purely) "fight the power" you'll never be in such a ridiculous dilemma again.

And because - to echo Christopher Boehm (one of the very best current evolutionary anthropologists) - fighting against power is one of the defining evolutionary characteristics of our species and, we wouldn't wanna let the side down, now, would we?

All the best.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

I wonder if ASIC, or any other body designed to keep players accountable, will look into transactions by parties related to National MPs. Mark Vaile shared with his party room information that John Howard tells us he could not share with either his party room nor the public his party is meant to serve (remember 'all of us' John).
How many politicans in that party room with Mark Vaile walked out after hearing the insider view, found a spot where their mobile would get a signal and phoned someone - an accountant, a broker, a brother or sister, a friend, a financial supporter - and mentioned something that triggered a sell order or two?

Then there is other insider information not being shared, and perhaps some body is there to protect our rights as citizens - a body that ensures some accountability - could look into the rumour reported by Crikey some weeks ago that a member of the Nationals (say a former Minister) is buying up supplies of face masks.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Suddenly news on the fight to prepare for a possible mass outbreak of bird flu in Australia is itself breaking out. On Thursday or Friday (I'm on holiday and losing track of the days) the Australian carried an article predictably defending the Government's efforts to prepare to date. Then on Friday it starts being reported that Kevin Rudd is arguing that the time has come for action. The good news - we're starting to talk about things that really matter now. If John Howard wanted a diversion from Telstra headlines, he should have started talking about this real threat to national security, sharing with the nation what is being done to protect us and laying out the plan for what we'll do should the county catch this flu.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Craig, I just despair at the Government. They blame anything that they can on the animals or the minority groups because they don’t have the means and/or power to defend themselves.

I don’t buy this Bird Flu rubbish. They use the word bird to try to make it sound like it is not a threat to humans and that there is nothing to worry about so long as we kill the birds, but it is blatantly obvious that humans do get it and for all we know the humans could have given it to the birds. Those poor little chickens can’t defend themselves and they live in such squashed conditions that it is no wonder that the virus spreads like wildfire.

This is what annoys me about Governments. They think we are stupid and that if we hear the truth that we will all panic. Maybe they are basing their view on their own reactions and actions and we all know how well our Governments deal with matters.

There is a type of virus that birds and animals (including humans) get that is activated by stress called Mycoplasma and it causes similar symptoms of bird flu and much worse symptoms. Just Google Mycoplasma and cattle and Mycoplasma incognitos, or Mycoplasma and bird flu etc.

It's about time they started taking this virus epidemic seriously and started really looking at its origins. Or maybe they don’t really care as at the end of the day it is the poor and the weak that are most likely to die, just like with Aids.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

John, thank you for that. I don't think power can be fought and defeated, only portioned out differently, or excercised in a more intelligent, compassionate or sophisticated way. I used to hate any form of power imbalance but I am coming to accept it now, as necessary, so long as it is used sparingly and rooted in justice or in love.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

It is now 11.53 am September 11 Hawaiian time. On this day in 1992 the the third largest hurricane in recorded US history struck the island of Kaua'i. She was named Iniki which is Hawaiian meaning 'sharp and piercing as in wind or the pangs of love'.

This category 4 (or 5 depending on who you talk to) passed DIRECTLY OVER Kaua'i.

Iniki caused 80% damage or destruction to homes, holiday resorts, infrastructure, crops and vegetation. Thankfully very few lives were lost as a direct result of this storm.

Because Iniki moved and changed direction so quickly, even though most people on Kaua'i knew she was out there, no-one was able to leave the island.

They had to batten down as best they could.

All communication was lost - it would be four weeks before 20% of the electricity would be restored. Ham radio operators were the only people who could tell the world what happened. If you do a google on "Hurricane Iniki" there are plenty of first person accounts of that terrible day, as well as technical stuff.

But take a look at this and this here.

George Bush was the president at the time. His (and the Administrations) reaction to this catastrophe was in stark contrast to that of the present incumbent.

This offering is not about the US Government, it is my acknowledgement of how the people of Hawaii pulled together in the face of a mutual disaster.
I am proud to call Kaua'i my home.

I first visited the island in November 1992 after being on Big Island during October. We heard little down there about the hurricanes impact, so we were just haole ( white non Hawaiians) tourists going do the touristy thing.
Most of the debris had been cleaned up and there areas around the island dedicated to dumping all the rubbish. Most people sifted through all that to recycle anything they could.The people of Kaua'i were recyclers even before it had a name.

In August of that year a new County government were sworn in, dedicated to cutting back on government waste. A qualified CPA was sworn in as Chief Financial Officer. She (yes that's right) immediately set about making a wish list.

Fast forward to post Iniki.

The US Government were flying in supplies 24 hours after Iniki hit. Ships were also standing by just outside the harbour with supplies. Twenty four hours after the disaster. From what I have heard shops were very generous with their stock - some charged, a lot didn't.

"Whatevah you need Brah"

This was the Aloha Spirit in action. The criminal activity that was reported as taking place in New Orleans is monumentally distressing. I am sure that there are many reason for it happening.

But on an island with 50,000 people, 20,000 homes of which nearly 13,000 were lost, crime was the last thing on people's minds. The island was devastated for years afterwards - I have been on island (as they say) extensively since 1992, and can attest to the Hawaiian spirit.

One of my dear friends once said to me "we survived because we are used to going without. We are Ohana ( family) here."

On the Hawaiian coat of arms is the motto Ua Mau Ka Ea O Ka Aina I Ka Ponoitalics - 'The life of the land is perpetuated in righteousness'.

Iniki hurt them, but Kaua'i is beautiful once more.

Although this post has been submitted to Webdiary (whether it gets posted is up to you guys), you can be sure I will be with my Hawaiian family in spirit on this day.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

From Senator Steve Fielding, Family First

Family First rejects Telstra sale

Family First is disappointed that the Government, which claims to be a champion of the family, is refusing to tell families how selling the rest of Telstra will affect them.

When the Prime Minister announced during the election campaign that he would take up Family First's proposal to prepare Family Impact Statements, the public thought the idea was to benefit them. So did Family First.

Had Mr Howard explained to Australian families that Family Impact Statements were solely for the benefit of Cabinet, people might have thought they were not worth much at all. Family First feels the same.

If ever there was an issue where families needed to know how they would be affected, it is the sale of the rest of Telstra. This is especially so given the Government's record on this issue.

Last weekend the Communications Minister said the full sale of Telstra has been government policy for nine years. If she is right, Australian families might think they have been misled.

Back in 1996, the Prime Minister denied Cabinet had any plans for a full sale.
He said: "We have a commitment to sell a third…Self-evidently if some people support the sale of a third of Telstra, they can vote for legislation to sell a third of it and vote against any legislation that might be submitted in 10 years time to sell any more."

Back then, owning two-thirds of Telstra did not present a conflict of interest between being both owner and regulator. But less than 10 years later, we are told that owning 51 per cent of Telstra presents huge problems.

A couple of years after the Prime Minister assured Australians that supporting the sale of a third of Telstra did not mean selling it all, he said his goal was to "make Australia the greatest share-owning democracy in the world."

A year later many Australians headed Mr. Howard's call and bought shares in Telstra, at $7.40 each. They are now paying the price.

The fundamental issue today is whether the role of government is to provide services or run businesses.

Australians expect governments to provide essential services, including telecommunications. They do not want them to provide those services as though they were businesses driven by the bottom line.

Today we are paying the price for treating Telstra as a business rather than a provider of services. To appease 'the market', Telstra borrowed $500 million this year, and will borrow $2 billion next year, to pay dividends, presumably to prop up the share price.

Meanwhile there has been under-investment in infrastructure; more than 14 per cent of all lines are faulty; old equipment has not been replaced; IT systems are inadequate and an additional $2 to $3 billion should have been invested over the last three to five years.

All this while the Government has been assuring us that services are up to scratch.

If this reflects how much Telstra has deteriorated while the Government has control, it does not require much imagination to work out what will happen if Telstra is completely sold off.

As for regulation, who is going to trust a government, which nine years ago said that a decision to sell a third of Telstra was not a commitment to sell all of it, to maintain its proposed level of regulation after it has sold all of its shares?

We know what Telstra wants. Its management has spelt it out in detail. And we know the general view of the Finance Minister is that the Government should be "light-handed in their regulation".

Telstra management has told us who will be the biggest losers from a completely privatised company driven by market forces. They will be people in regional, rural and remote Australia where Telstra's market share is more than 90 per cent.

I support free enterprise, not the free market. This sorry tale is a stark example of the difference between the two.

Australians believe the Government should use some of Telstra's dividends to fix up its problems, keep directing some of that money into defence, pensions, health and education as currently happens and still retain ownership of Telstra.

Despite the Government's best efforts, 70 per cent of Australians are not convinced that selling the rest of Telstra is in our interests.

In May, I asked the Minister for Communications for a Family Impact Statement on Telstra and I said: "I need to be shown how (selling the rest of Telstra) will benefit Australian families." I added that I did not want "to see this only about how it will benefit us economically. I want to be convinced that it's a good idea."

The Government has failed to convince me.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Interesting comment just published online by Australasian Investment Review - It’s Never Going To Look Pretty At Telstra.

The opening paragraph attracted my eye:

When an internationally renowned expert such as Morgan Stanley draws up a table ranking global telecommunication companies according to their relative profitability with Telstra (TLS) residing in the top section, smart investors know something’s not quite right.

Now this is particularly interesting to me because I've just been reading Peter Hartcher's Bubble Man: Alan Greenspan & The Missing 7 Trillion Dollars and on page 44-45 is a description of Morgan Stanley's form during the Great American Bubble. Morgan Stanley settled with the Securities Exchange Commission for the set of dodgy practices it was involved in back then (laddering - an illegal way to escalate IPO stock prices after the float). Is this what AIR is referring to when it says what smart investors know?

So far I've not been a dumb investor. My portfolio is healthy so I reckon I qualify as a smart investor. But to tell the truth I'm not sure what AIR is talking about and I cannot locate the table referred to by them (a link would have been good, but AIR doesn't provide it).

As I read it the news for days (if not weeks now) has been that Morgan Stanley analyst Andrew Hines remains the market's biggest Telstra bear, slashing his 12-month target price for the company.

So who would you trust here? The suits at Morgan Stanley or those at Australasian Investment Review?

No wonder inexperienced investors find themselves too often losing out, while those with the inside running gain the most.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Just read comments on FF, Wall Street and Abbott.

Wall street was amusing, although I should say I'm ignorant at this sort high finance esoterica. But I think I got the gist. When I say 'amusing', I mean as sole alternative to 'cry'.

Like wise FF, only even more so, after the nonsenses put about today, lead by the Farmers Federation.

The question with Abbott is, why does he sort of GLARE, at the camera eye, in the weirdest of any sort of possible ways. Is he trying to freak we viewers? I mean, really weird, disconcerting sort of trick; any thoughts, anyone who saw this? Also, still virtually nothing from mainstream media about Sea King inquiry, despite it being of such fundamental importance and such an anomolous incident.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

Lateline tonight covered Australia's preparedness for the H5N1 avian influenza pandemic should it come. An interview with Health Minister Tony Abbott was featured. Key messages - the threat is greater than that of terrorism; we've been spending much less to guard against it (but according to Abbott we're spending all we can given the government's current risk assessment); and, in those famous words from The Hitchhiker's Guide - "Don't panic". Transcripts tomorrow.

Meanwhile, hope that the Health Minister picks up the news from Rueters - Rich-poor divide hobbles Asia's bird flu plans - and gets the message through to The Boss (currently in New York). Then hope the message gets through to those making decisions on making poverty history (along with the many risks continuing poverty presents to all of us).

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

The Lateline transcript of the interview with Tony Abbott on avian influenza preparedness as promised.

Dee, I'll need to think about those scenarios overnight before responding.

With respect to the first scenario you may be interested in what Stephen Bartos, Director of the National Institute for Governance, University of Canberra and former deputy secretary of the Finance Department, argues in an opinion piece published in the AFR today - a full scale break-up of the telco could be a better option than operational separation.

I'm still pondering that argument at the moment and will share thoughts on it tomorrow.

re: 'The Tempest', Telstra (a storm in a teacup boils over) an

G'day. Beazley's doorstop yesterday on the Telstra scandal is here.

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