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19 With the Australian Government's shareholding in Telstra reduced to 17%, the ABS view is that the Australian Government will not be in a position "to determine general corporate policy by appointing appropriate directors, if necessary". However at the same time the ABS recognises the legislative powers that notionally reside with the Commonwealth until such time that the remaining shareholding is transferred to the Future Fund. Specifically under the current legislation, while the Australian Government's holding is 15% or greater it has the power to direct Telstra in the public interest.
20 In relation to the second issue, the ABS considers that the trust established to hold the Telstra shares until the final instalment payment in May 2008, should be recognised as a statistical unit in its own right, and that its treatment should be consistent with the treatment of other significant trusts which hold substantial assets on behalf a range of beneficiaries. Although the Australian Government has the power, under legislation to appoint and dismiss some or all of the trustees, the boards of trustees are typically not under the direction of government and are required to act in the beneficiaries' interests, and not those of the government. Accordingly, the trust is not considered to be under government control. Given that the instalment receipt holders would be private sector units, the ABS has concluded that the trust should be considered a private sector unit in the financial intermediary n.e.c. subsector of the financial corporations sector. This treatment is consistent with the treatment of other trusts established by governments to hold assets on behalf of a range of beneficiaries, such as the trusts established by governments for employee superannuation purposes.
21 The other statistical unit - ie the trustee, Telstra Sale Company Ltd, is clearly a Commonwealth-owned company. It provides trustee services and will be classified for ABS statistical purposes as a public financial corporation.
22 As to the timing of any change in the classification of Telstra from public to private sector there are three options. These are:
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