Agence France Presse

Canberra, March 30:

The Australian government’s push to fully privatise telecoms giant Telstra was blocked in the Senate for a second time on Tuesday, but the setback was not expected to lead to an early election despite earlier government threats to do so.

The main opposition Labor Party combined with the minor Australian Democrats, Greens and independents to defeat a bill that would have permitted privatisation of the remaining government stake in Australia’s biggest telecoms company.

Prime minister John Howard’s government sold the first 48.95 per cent of the company in two tranches, in 1997 and 1999, but always intended to sell the rest in a public float which was expected to raise more than 30 billion Australian dollars ($22 billion).

The defeated bill now becomes another potential trigger Howard could use to call an early election, as was threatened by Finance Minister Nick Minchin.

But an election is due by the end of this year anyway and, with the government now trailing a resurgent Labor opposition by 10 per centage points, political analysts see an early poll as highly unlikely. The vote barely registered in the stock exchange where Telstra Corp Ltd shares rose by four cents to 4.56 dollars in a rising market.

Communications Minister Daryl Williams lashed out at the opposition parties, describing the result as disappointing and one that would penalise both Telstra and its 1.7 million minority shareholders.“The Senate has today chosen to hamstring Telstra with its refusal to authorise full privatisation of the telecommunications carrier,” he said in a statement. The vote meant there would continue to be a conflict of interest between the government, as regulator of more than 90 telecommunications companies in Australia, while at the same time being the majority shareholder in the company, he said.Telstra would also be prevented from realising its full potential as a competitor in the global market. But regardless of the result, the government remained committed to improving and maintaining telecoms services in rural and regional Australia, he said.

Opposition communications spokesman Lindsay Tanner said Labor would ensure the Liberal-National coalition government’s support for the sale of Telstra became a key issue in the election due by the end of the year in regional and rural seats.Greens Senator Bob Brown claimed the government’s free trade deal with the United States was behind the renewed push to sell Telstra. Independents Brian Harradine and Shayne Murphy, said they had not been persuaded by the government that majority shareholding in Telstra should be taken out of public hands.