Costello Ducks Telstra Comments

Date: 11 May 2000

Treasurer Peter Costello today refused to answer questions in Parliament over his comments on Telstra's future dividends, made during his post-Budget press conference on Tuesday this week.

Today in Question Time, Deputy Leader of the Opposition and Shadow Treasurer Simon Crean, together with the Shadow Minister Minister for Communications, Stephen Smith, asked the Treasurer the following questions, to explain his claim that Telstra had provided "very bad news" to the Government concerning likely future dividend payments.

SMITH TO COSTELLO
I refer to your comments on Tuesday, during which you said Telstra had delivered "bad news, very bad news" on future dividend payments.
Are you aware of comments today by Telstra's Director of Finance, Mr John Stanhope, who says "We didn't give Costello bad news at all"?
Treasurer, did Telstra deliver very bad news or not?

CREAN TO COSTELLO
I again refer to your comments on Tuesday, during which you said Telstra had delivered "bad news, very bad news" on future dividend payments.
Are you aware of comments by Telstra's Director of Finance, Mr John Stanhope, today, who says "The Treasurer's words were not helpful, no"?
Are you also aware that your comments wiped $1.07billion off Telstra's share value yesterday, before Telstra made an official statement to the Stock Exchange mid-morning?
Why won't you apologise to 'those hundreds of thousands of Australians who bought Telstra shares' and who have seen the value of their investment cut by your loose lips?

CREAN TO COSTELLO
I refer to your comments last night in relation to the letter you wrote to Telstra seeking information on future dividends and Telstra's reply to you, and in particular your claim that, and I quote:
"It doesn't mean that I have any information [on Telstra] which is not available to the market".
If as you say Telstra's advice to you does not contain information which is unavailable to the market, will you now table that advice in order to clear up the confusion surrounding your claims and those of Telstra's Finance Director?

The Treasurer refused to answer any of these questions directly, instead claiming that the questions were based on false quotes.

Here's what he actually said:

Costello: "When I'm doing a budget I write out to Telstra, I say what's the dividend going to be? When the message came back from Telstra and the Reserve Bank it was bad news, very bad news".(Costello - Post budget press conference, Tuesday 9th May)

What Telstra says: "We didn't give Costello bad news at all". (John Stanhope, Telstra Director of Finance - Australian Financial Review p1 Thursday 11th May)

While the Treasurer might try to pretend he was misquoted, the more than $1billion adverse impact of his comments on the Telstra share price makes it crystal clear that the market understood his comments perfectly.

The Treasurer must come clean, and explain to Telstra shareholders the basis on which he made his $1billion budget night comments.

The Treasurer with loose lips cannot now become suddenly tight-lipped!!

Media Inquiries:
Simon Crean's office - Phil Tardif (02) 6277 4045 or 0419 497 103
Stephen Smith's office - Patrick Bindon 0418 694 878 or (02) 6277 4108

For further information

Union:	ALP Federal
WWW:	http://www.alp.org.au

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