FED: Govt raises the stakes in Telstra sale plans

AAP General News (Australia)
08-21-1999
FED: Govt raises the stakes in Telstra sale plans

The federal government has raised the stakes in its bid to wholly privatise Telstra by
linking the sale to a further round of income tax cuts.

But the Australian Democrats stand firm against the sale of the government's remaining 50.1
per cent stake in the telecommunications giant.

Prime Minister JOHN HOWARD says money saved by eliminating commonwealth debt with funds
from the Telstra sale - expected to raise more than $50 billion - could be used to fund
further income tax cuts.

Tax cuts worth $13 billion are scheduled after the 10 per cent GST is introduced on July 1
2000.

But Democrats leader MEG LEES says she will not support the full sale of Telstra despite
the prospect of further tax cuts.

She says Telstra remains a valuable asset and that the government does not need to float
the remaining half to balance the books.

Labor rejects Mr HOWARD'S suggestion as simply bad economics.

AAP RTV ear/sc/rp/kbw

KEYWORD: TAX (CANBERRA)

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