Daggett
1 “Your comparison of this figure with how much could be earned on $30billion is, therefore, completely meaningless.”

Daggett your Ignorance shows – and Oh how it shows.

My calculation was 30 billion @5.25%.

5.25% is the RBA base lending rate and the absolute minimum return for zero risk ventures.
Real world (the one which I live in and which seems to elude you) - a “risk venture”, any commercial undertaking whether government or privately owned, would produce a market value in which the return would exceed this risk-free rate. Your statement show a profound absence of commercial experience and understanding.

And

2 “the nonsense that a Government cannot be regulator as well as player.”

Obviously you believe in a situation where such conflict of interest would not exist. History has proved nationalised industries have held governments to ransom by bullying unions and retrenched employment practices. The communist economic basket cases which proliferated under the “benevolence” of Stalin, his successors and his ilk are legacy of the economic disaster which you are promoting.

If you think your view will ever work I suggest you stand for parliament on that manifesto – in the meant time I will continue to support the more prudent and reasoned view of our Prime Minister.

3 “Col Rouge wrote : “you are out-classed, out-smarted and out-performed”.

Perhaps others should be the judge of that.”

Oh they do – among my “commercial involvements”, I design and implement corporate financial forecasting models. The current price I charge for these is in excess of $25,000 each. I am currently turning work away because I do not have time to handle it all.

I, for one, am happy to count the ones who pay for my services as judges – they put their money where their mouth is and invariably come back for more.

Kartiya – If the poor want their “spirits lifted and to find hope” – suggest with under 5% unemployment, they get a job, or a second one – gainful employment is a great source of fulfilment and self esteem

CORRECTION

Firstly, a few posts ago I should have written "The finance department, itself admitted we would could the Australian taxpayer "$255.5 million between 2004 and 2008" if the sale PROCEEDS."

This should have read, "The finance department, itself admitted we would save the Australian taxpayer "$255.5 million between 2004 and 2008" if the sale IS STOPPED."

-

My apologies for any confusion caused to site visitors from the negation of the meaning of that sentence. (That makes two mistakes I have made in this discussion thread, so far. However, I notice a reference to "retrenched work practices", whatever that is, in Col Rouge's latest post, so I suggest that he not throw too many stones my way over this one, however ...)

Col Rouge writes "Daggett your Ignorance shows - and Oh how it shows."

This is no substitute for argument.

Of course I understand what interest is and know how to work out what could be earned if the $30billion was invested at 5.25% interest.

(money earned over 4 years = ($30billion x 1.0525^4) - $30billion

= $6.83 billion
... if you don't believe me).

The correct figure to compare this with would be projected earnings, and NOT the $525 million figure I gave, which must have already taken the above figure into account, if the Finance department had given the Labor Party the figure it had asked for.

It baffles me that, with all your financial background and the
$25,000 plus you say you charge for corporate financial forecasting models, that you can't grasp this simple point.

You are suggesting that dividend earnings will go down because of the regulatory and competitive environment, in which case, those buying the shares at its current value are paying too much. If this is true, then why would they buy the shares, and not, instead invest the money at a minimum, as you say of 5.25%.

If they choose to buy, then I would guarantee that they have other plans to recoup their money at our expense, and we will pay very dearly for this in future.

(to be continued.)

(continued from above.)

I admit that my knowledge of finance is limited, but I would suggest that a great deal of financial knowledge is unnecessary to be able to understand the issues at stake.

Any teenager can understand that it makes no sense to sell your house to pay off your mortgage, or, in this case, if you don't owe any money on your mortgage, to pay for some other future anticipated liability.

The only argument that the case for the sale hangs on (apart from the spurious 'half pregnancy' argument - what complete fool made it 'half pregnant' in the first place, then?) is that it is somehow 'unfair' for the Government to be both regulator and a participant in the telecommunications sector.

This is a value judgement.

I would suggest that having broken up the natural monopoly of telecommunications at great expense, including for example, the shutting down of the analogue network valued at $5billion, in order to obtain the agreement of Vodaphone and Optus to come here was 'unfair' to the Australian community, that is, the current owners of Telstra, 70% of whom don't want Telstra sold, if you hadn't already noticed.

Having cut into Telstra's earnings so much as you, yourself, have alluded to in order to allow other players to duplicate so much of our existing telecommunications network was also 'unfair' to taxpayers, and ultimately 'unfair' to consumers who must ultimately bear the costs of all the unnecessary duplication.

Does holding such a view mean that one is an advocate for 'socialism', still worse, Stalinist 'socialism' together with secret police, gulags and mass executions?

If you are adamant that it does, then I won't try to convince you otherwise

Col Rouge writes - >>if the poor want their “spirits lifted and to find hope” – suggest with under 5% unemployment, they get a job, or a second one – gainful employment is a great source of fulfilment and self esteem<<

Let them eat cake then Col!

1. The unemployment rate does not reflect the reality when employment is calculated at a hour a week - hardly a living wage.
2. Many people are not even registered as unemployed - preferring to survive on their savings until they find work - as I understand that Trinity states she is doing.
3. a second job - how blithely you pontificate - raise kids - quality parenting & work two jobs - and somewhere fit in having a life.
4. "gainful employment" - is a right and everyone should be encouraged & supported to find employment which pays a living wage and therefore brings about the "fulfillment and self esteem" that such employment provides. Only a minority bludge - don't persecute the majority.
4. Your talk of your business indicates that you are in the 'bigger end' of town, doubt you really know what it is like to be on the dole.

daggett - your summary of the telstra sale is founded in common sense rather than Howard-style rhetoric.

Interesting, way back when various governments jumped onto the privatisation bandwagon, it was originally justified as selling off non-profitable concerns in order the pay off government debt. Yet Telstra is clearly profitable and apart from the National Debt, our economy is in surplus. I doubt that it will be used towards the ND. Wasn't it originally earmarked for environmental issues?

Xena; one incentive for rolling out this privatization bandwagon was the need to get rid of AUSSAT. May I suggest certain elements of our government infrastructure were embarrassed back then and a buyer was “made” for the occasion. But to make that deal square with the public we had to have an environment for “real” competition. Telecom would need to be shackled then strangled. We also had to stir the pot so someone could introduce a whole new bag of tricks including one called HDTV.

Moving on, the issue here should be who minds the backbone once it is fully sold. Excellence in communications in the bush and the big cities won’t just pop out of the slush bucket. Our way forward requires real skill as it always did. Who trains the technical would bee’s in the practical when all the shareholders want is a quick buck? In my day some 80,000 technical were lopped off. I will bet my rightful Telstra share to your dollar most of them have ducked off from the industry by now.

A Senator wrote “I can see that we are all worse off if those skills disappear” after I made a case for our regions putting their hand in the bucket for home grown skills development after Telstra is dismembered. I said the PMG once offered me a lifetime in radio engineering but I declined. But I think it’s sad others won’t get that chance in their country town. Also the industry that did train me then send me off for a look see at other advanced technology is all but shut down today after share raiders grabbed the natural assets for raw exports.

Elsewhere I wrote “Fudging figures on our current practical skills is now a national occupation”, in regards to this issue, others and our hospitals in particular. Things like tower rigging are not a subject at university. These must be acquired on the job over time under direct supervision from an expert.

Has anyone else thought government should also look at the role of industry educator?

Daggett “I admit that my knowledge of finance is limited, but I would suggest that a great deal of financial knowledge is unnecessary ….”

Knowledge helps – especially when you introduce matters of “profitability” and “dividend”.

I am not going to nit-pick your numbers and calculations – the more I look at them the stupider they seem.

Real point of your post

“Having cut into Telstra's earnings so much ...... in order to allow other players to duplicate so much of our existing telecommunications network was also 'unfair' to taxpayers, and ultimately 'unfair' to consumers who must ultimately bear the costs of all the unnecessary duplication.”

I guess the matter of “competitive pricing” has not entered your tiny mind, being a concept likely omitted from someone where “knowledge of finance is limited”.

The point is – monopolies exploit consumers in two ways
A price control
B service obsolescence (the deliberate exclusion of innovation to enable existing technologies to be exploited for greater profit) – this for the exclusive benefit of the monopoly owner (telecom employees & unions)

When competition exists, (A) prices tend to reduce to absorb the available supply capacity to the point where entry of additional marginal supply is no longer viable -
because prices are then at breakeven with the return expected from the industry risk profile,
Marginal supply being based on (B) industry best practice / technology (eg fibre optic v copper wire)

Introducing competitors into the telecomm market benefits the consumer.

Anti-competitive behaviour is curtailed by organisations like ACCC in Australia, Monopolies and Mergers Commission (UK) and Federal Trade Commission (USA). These organisations aggressively pursue oligopolies and anticompetitive behaviour (just ask any concrete company in Eastern Australia or funeral directors in USA).

I was always amazed Woolworth / Safeway Coles / Myers mergers got through but that was a long time ago when labor held the federal reigns, so all forms of incompetence is understandable.

Nationalised industries in Australia, like elsewhere, stifle innovation, keep prices artificially high to protect the status quo (unions / employees government dividend hogs) and should be sold-off / abandoned.