Entry No.02c

IT Writers Awards

THE Howard Government's hopes for a Budget surplus in 2000-01 are in doubt following suggestions of a delay in the sale of the third-generation phone spectrum that was expected to yield $2.6 billion. The phone spectrum auction, which the Government hoped would net billions of dollars and balance its books this financial year, was scheduled for late January 2001 but now appears likely to be held over until next financial year. Troubled telecommunications company One.Tel is lobbying for delay, and competitors including Telstra and Vodafone are worried the company may get what it wants. That view is supported by sources at the Australian Communications Authority, who fear a delay in the sale of the phone spectrum is likely. After extraordinarily high spectrum sales in other countries earlier this year, more recent results have been less satisfactory, and the spectrum sale in Italy generated well below expected revenue. Six months ago, the Howard Government surprised the public and financial markets with its forecast of a $2.8 billion surplus, underpinned by the projected gains from the phone spectrum sale. 

That forecast allowed the Government to drop its plans to impose a Timor levy. The 2GHz spectrum, which was projected to yield almost $2.6billion, can be used for high-speed data and multimedia services. It is understood One.Tel, whose shareholders include operations controlled by Kerry Packer and Rupert Murdoch, is seeking a delay of nine to 12 months in the sale of licences to use spectrum, taking the auction process well into next financial year. The company believes that in the current weak market for telecommunications and technology stocks, the Government will not get anywhere near its anticipated $2.6 billion for the spectrum if it goes to auction when planned. The Government's mid-year review of the 2000-01 Budget is under way, with Treasurer Peter Costello expected to unveil the revised forecasts within a fortnight. The Government's coffers were boosted last financial year by an earlier spectrum sale that generated a better-than-anticipated result, achieving $1.3 billion for consolidated revenue.

Back to Most Controversial
Top of page

Content Copyright © the author/publisher listed above

Design Copyright © Consensus Pty Ltd

This web-site uses frames, click here for the full picture