PM says Cabinet to discuss Telstra sale this week

25 Aug 2006
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Australia

's Federal Cabinet will discuss this week the future of the government's majority stake in Telstra, the prime minister said.

The government managed to pass legislation to sell its 51.8% stake in the company through the Senate by a narrow margin in September last year.

The sale was then expected to make A$30 billion ($23 billion) in Australia 's largest ever privatization, but the share price has since slumped.

Prime Minister John Howard said one option under consideration was placing the shares in the government's Future Fund, which was established to finance future federal debts including civil servants' pensions.

'We certainly wish to go ahead with the sale. Just when, of course, is another matter,' Howard told Australian Broadcasting radio. 'We are going to talk about it this week.

Government lawmakers including Steven Ciobo, Peter Lindsay and Don Randall have all voiced support for placing the Telstra shares in the Future Fund.

'It would be beneficial, I believe, to look very seriously at putting the balance into the Future Fund so it can be sold down over time and yield the best possible result for taxpayers,' Ciobo said.

Randall said he believed there was a community view that Telstra's share price had gone so low now it was silly to be floating it.

The center-right coalition government's window to make the sale would close if the center-left Labor Party opposition wins elections due late next year.

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