Coalition may split on Telstra break-up

The federal coalition could split over the reforms to the telecommunications sector
with the Nationals saying they will support the break-up of Telstra if it's good for
regional Australia.
The Rudd government on Tuesday announced sweeping reforms to the sector which will
effectively result in Australia's largest telco having its retail and wholesale
divisions separated.
Telstra has been given a choice of voluntarily separating into two companies or
having its retail and wholesale divisions retained as part of the same company but
operated at arm's length from each other.
The government says the reforms are aimed at driving competition but they are also
about bringing Telstra back into the tent in terms of rolling out the $43 billion
national broadband network.
The Liberals say they will examine the detail of the legislation but have stated
they are opposed to the break-up of Telstra with opposition communications spokesman
Nick Minchin labelling the plan "radical and risky".
However, Nationals senator Barnaby Joyce says that if the reforms do result in
better competition outcomes, particularly for regional Australia, the party would be
likely to support the legislation.
"We are the party of regional Australia. If this results in a better outcome for
regional Australia then quite obviously it's a better than average shot that we'll
be supporting it," Senator Joyce told AAP.
"We'll be in close consultation with the Liberals about the issues and we'll discuss
the issues but we won't be tied to their position."
The support of the Nationals would give the government the numbers it needs to push
the reforms through the Senate.
The Australian Greens have backed the changes while independent Nick Xenophon was
also supportive of the reforms, although Family First's Steve Fielding is yet to
come to a formal position.
Senator Joyce said the Nationals would discuss their position in the coming days but
added that the party had always supported the structural separation of Telstra.
"We have no problem with a company in the marketplace that is too powerful being
broken into two to assist competition," he said.
Telstra's share price rebounded on Wednesday, ending the day up 13 cents, or 4.18
per cent, after close to $2 billion was wiped off the company's share value on
Tuesday.
The improvement in the stock price presented Communications Minister Stephen Conroy
with the perfect opportunity to taunt the opposition.
Using his iPhone, Senator Conroy showed the Senate a graph, downloaded via the
Telstra network, to demonstrate the rally in the telco's share price.
"For the interest of Senator Minchin, this is called an iPhone," Senator Conroy said
as he displayed the implement to the chamber.
"What you're able to check there on this piece of technology is that the Telstra
share price has rebounded."
The government has also rejected suggestions the Future Fund, which sold off a third
of its stake in Telstra three weeks ago for $2.4 billion, had been given advanced
warning of the announcement.
The opposition is demanding an investigation into the sale and whether the
government played a role.
Senator Fielding called on the Australian Securities and Investment Commission to
investigate the sale.
"It's a question not an accusation, but we need to make sure there was no form of
insider knowledge of the Rudd government's move to break up Telstra's wholesale and
retail arms," Senator Fielding said.
The fund, which operates independently of government, was set up in 2006 to help
ensure future governments can cover public sector superannuation liabilities.
Senator Conroy dismissed the claims, saying he had never discussed the reform plan
with Future Fund chairman David Murray.