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Last Updated: Thursday, 21 August, 2003, 09:25 GMT 10:25 UK
Australia clears path for Telstra sale
Australian rural satellite phone user
The government has pledged to improve regional services
The Australian parliament has passed legislation to enable the controversial privatisation of the national phone company Telstra.

But the bill could still however fail to win approval in the Senate where the Liberal-led coalition government is in a minority.

The sale of the government's 50.1% stake in Telstra - which would be Australia's biggest ever privatisation - is expected to raise about A$35bn ($23bn; 14.5bn) .

Proponents of the sale say it would make the company more competitive, and remove the conflict between the government as regulator and owner.

There have been huge improvements in communications in country Australia. It's not perfect but there is a mile of difference to what it was say 10 years ago
Prime Minister John Howard
But the opposition Labor party says a full privatisation would create an unregulated monopoly with little care for smaller regional areas.

Parliament passed the legislation on Thursday with 78 votes to 59, but the government still needs four extra votes in the Senate for the bill to win passage.

The government has said Telstra's sale would not proceed until market conditions were right and regional telecommunication services nationwide are adequate.

Political tactic

"There have been huge improvements in communications in country Australia. It's not perfect but there is a mile of difference to what it was say 10 years ago," Prime Minister John Howard told ABC radio on Thursday.

The legislation is likely to come before the Senate by the end of the year.

The sale is also being seen by some as a political tactic designed to trigger a possible early election.

Under Australia's constitution, if the Senate rejects a bill twice it gives the government the option of calling an early election - and it can then hold a joint sitting of both houses of parliament to push through the disputed legislation.


SEE ALSO:
Australian telecom sell-off fiasco
04 Nov 02  |  Business
PCCW ditches mobile ambitions
01 Jul 02  |  Business
Australia sells Sydney Airport
25 Jun 02  |  Business
Australia budgets for defence
14 May 02  |  Business


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