Telstra stake sale signal

THE world's biggest-ever share sale is pencilled in for next year when the Australian government forces through legislation to dispose of its 51% stake in telecoms giant Telstra.

The stake is expected to be worth A$30bn (£11.7bn) and sold in a single tranche.

A sell-off has been stalled for years due to opposition in the country's upper house, the Senate. But the recent general election which returned John Howard's conservative Liberal Party with an increased majority, also delivered him control of the Senate from July next year.

But the government played down speculation of big spending on infrastructure projects in rural areas from the proceeds of the sale.

Finance Minister Nick Minchin told ABC local radio that for the sale to have a neutral impact on the budget, the proceeds would have to go toward income-earning investments or to pay down government debt.

'In determining what to do with the proceeds of a sale, we have to be very mindful that there is income earned from that investment and the money should, if you want it to be roughly neutral in its budgetary impact, go into other income earning investments or other debt reduction or a mix of both,' Minchin told ABC radio.