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| Nothing worth buying | |
The Howard Government has stood out from the opposition over the last ten
years for several reasons. One is that they have overseen a decade of almost
unprecedented economic growth, the other is that they have always managed to
look like they had a plan. It may not have been a sexy plan, it may not have been a popular plan. But
as the Australian population slowly became rich (or at least richer), it
was comforting to think that the man who was controlling their lives (and also
taking half their income) was
planning something to do with it. But the problem with skilled persuaders is
that they often get their way. In the previous decade, The Left got their way with everything from feminism to family law. Those things
have been demonstrable failures, which made life easier for Little Johnny's
election strategists. But now Johnny has a problem. Having implemented his tax
reform agenda in the guise of the GST, his citizen disarmament agenda, and his
Voluntary Unionism agenda, and much of his privatization agenda, he just looks
a bit aimless. He tried a mandatory offshore processing solution for asylum seekers, but that
didn't get up, so he has to find a new political goal. Remember that governments have to look
like they are doing something. Like a corrupt socialist government that is
always 'moving towards communism', or still
'implementing the revolution', governments have to have new set of laws or spending initiatives to
implement, otherwise they are just not doing their job. Obviously. But the political climate won't let Little Johnny tidy up the privatization
agenda. He managed to pull a swifty over the Snowy Hydro scheme and embarrass a
pair of cash-strapped and profligate Labor Premiers, but that was just a stroke
of good luck. Howard is now faced with a serious problem: what to do with 51%
of Telstra. The share price of Telstra has been in steady decline pretty much since the
last share float. The Mums and Dads who bought Telstra shares have halved their
money in just a few short years. And they are angry. Someone must have told
them that a bloated government monopoly with 50 year
customer-be-damned culture of non-service could compete with aggressive private
companies in an age of rapid technological change. Who
would have told them that? Oh, that's right: it was the government. No wonder
they are angry. Little Johnny has several options Sell. He can sell his remaining shares in Telstra. Unfortunately to
do this he has to value them. If he values them above the current market rate
(around $3.40), no-one will buy them, and if he values them at the market rate
or below, then every brainless nong who bought T2 at $7.40 will feel ripped
off. How can Johnny value something at $7.40, and then, just a few years later,
value it at less than half that? They must be victims. Hold. Little Johnny can keep his remaining 51% until ... um .. what?
The share price is unlikely to climb in the near future, and the uncertainty
which is holding Telstra back (and probably deflating the share price) will
remain. Warehouse. He can put the shares into Peter (Smirky) Costello's much
touted 'future fund' for a rainy way - like paying superannuation for public
servants (apparently the government forgot to put money aside for this because
they thought someone else would volunteer to pay). The problem with this option
is management - who would appoint the Telstra board in this case? Who would
assess Sol Trujillo's next request for a pay rise? The board of academics appointed to run
the future fund? Little Johnny faces a severe backlash with any of these options. But there
is another option - one which has been floated (so to speak) on this forum
before: giving it away to Australian citizens. This model didn't work
well when the government still had $30 billion dollars of ALP debt to pay off, but high
taxes and restrained spending have paid that money off already. So there really is no reason now why the government can't just give an
equal number of shares to every Australian man, woman and child. The leftists who wanted to keep
it in the hands of 'the people' couldn't possibly object to this (apparently
those people are the majority aren't they?), and those few misguided souls who
think that the bloated, arrogant and inefficient juggernaut is best sold off
before it goes completely broke, can sell. Why would anyone object to true
democracy? Unless they didn't actually believe in it of course. We may be approaching a highly unusual political situation - in which the
interests of the people, and the interests of the ruling party are coincident.
Johnny can answer the call by giving around $1300 in shares to every
Australian. This won't avoid the wrath of the hard left - but nothing he does
could do this. It will avoid the wrath of the Mums and Dads who will feel that
they have been exploited by Johnny's free market pretensions by giving them
more shares. And it would be quite nice to get around $1300.00 in shares for doing
nothing (unless you count being exploited by Telstra for several decades as
payment). And this shareholder would be divesting immediately. In fact Telstra's
phone lines may run hot with people ringing their stockbrokers and shouting
'SELL! SELL! SELL!'. Better hurry. If they wait too much longer, they may not
even be able to give it away.
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