Privatization Of Telstra

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Privatization Of Telstra

What
are the advantages of privatizing Telstra and how does this impact it's ethical
conduct while striving to satisfy community expectations? I believe that putting
important public assets into select private hands is not in Australia's
long-term interests, and oppose the partial/full sale of Telstra for the reasons
that the Government has given. The argument the Government has given for the privatization
and corporatisation of Telstra has been a budget conscious one where the
proceeds of Telstra will provide a "one-off" opportunity to: 1)
abolish Telstra's pastoral call rate and provide untimed local calls in extended
zones in remote Australia; 2) increase funding for Networking the nation; and 3)
pay off foreign debt left over by the previous government However, this is not
true as the Minister, Senator Alston already has the power to direct Telstra to
provide services and upgrade infrastructure (points 1 and 2). If the USO
(Universal Service Obligations Act) or performance standards under the CSG need
changing, then the Minister should invoke his power to direct, and these changes
should be made distinct from any attempts to sell Telstra. Statistics also show
that the sale of the first third netted a total of $0.37 billion loss to the
Commonwealth. By the year 2000, it is estimated that Telstra earnings will
exceed $2 billion annually. The Howard Government estimats an interest saving of
about $2.4 billion per year. This doesn't take into account the income that will
be lost to the government every year in revenue earnings from Telstra. By 2007,
the sale of Telstra is expected to create a budget black hole of $4 billion. The
government cites that the "Mums and Dads" of Australia will benefit by
purchasing shares in the float, which is true. But eventually the real
beneficiaries will be the multinational companies who will have the controlling
majority, not the Australian public. This can have detrimental effects on
society, especially to the rural regions of Australia. The Democrats and the
Labor Party also disapprove of the privatization of Telstra for the above
reasons. Privatization is when a Government Business Entity (Statutory Body) is
sold to the general public and becomes a public company. There is a belief that
Government run businesses are inefficient because their motive isn't necessarily
money, although there is no consistent evidence that privatization increases
efficiency. However in the case of Telstra, there h...

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