Wednesday, March 31, 2010

Hu and Telstra

How can I link the Stern Hu story and Telstra? Well it is made a lot easier by the fact Julie Bishop has put her thoughts in writing.

Understandably she devotes most of her column to berating the PM for claiming to have a "special relationship" with China and then not being able to use it in this case. This sort of ignores the fact that Rudd demonstrated that despite the claims of special relationship he does more to put the interests of Australia first, and does more to address human rights than his predecessors.

The coalition's approach to bribery seemed to be that whatever happened at AWB had nothing to do with them!

You can't use a "special relationship" to argue that your citizen's should not be subject to another country's laws. The Howard Government was a master of wanting the death sentence applied by our neighbours for terrorism acts, but not for drug smuggling.

You can argue that there is a consular agreement that has been breached. That is an element of detail I don't know enough about. I do have the sense that the Australian Government figured out early that the fundamentals of the case were established.

How does this relate to Telstra? Well, we keep hearing all about a ting called "sovereign risk", and that the whole investment climate would shift in Australia if the Government continues to pursue its stated objectives of creating competition and confiscating Telstra's monopoly rents (either by price regulation or by having them competed away). Those cassandras need to get a grip and contrast the issue to REAL sovereign risk as you see in the case of China. That is truly a country as Julie Bishop says where "Companies from Australia and around the world ... would be well advised to exercise a high degree of caution in their business dealings in future."

It will be a long, long time till someone writes that about Australia. In fact, not continuing the policy for greater competition would be the real risk, as regularly evidenced by the interest paid to the area by the US trade representative and Australia's obligations under GATT and the AUS-FTA.

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