There is very fuzzy thinking going on about Telstra and the proposed move to send jobs offshore.

One of the objectives of Telstra share-holders is optimisation of financial returns. Since the Government holds effective control of Telstra, any pressure by it on Telstra (or its contractors) to reverse this business initiative is tantamount to saying to Telstra shareholders that they must accept sub-optimal financial returns because the Government, as 'majority' shareholder wants it so - whatever the noble motivation. This puts Telstra Directors in an invidious position as it forces them to knowingly act in a manner detrimental to minority shareholders which contravene Director Responsibility guidelines. Detrimental because they are being forced to carry additional and unnecessary cost.

Basically the Government has two choices:
• Allow the corporation to act competitively within the law; or
• If the Government wants 'social impact' as a criterion for operational activity, then legislate for it so that all companies are operating under the same guidelines. Unless the Government is prepared to constrain all telecommunications providers (and others) in an identical manner, then it is creating an unfair and non-sustainable business environment.

The fact that Australian contractors (or any other type of workers or manufacturers) are not competitive is an issue that is not of Telstra's making not is it possible for Telstra to change the real market facts. To ask it to harm its shareholders because the Government finds the market reality unpopular or uncomfortable is economically and strategically short-sighted.

A for-profit corporation exists to deliver shareholder benefit. Along the way it must satisfy stakeholder needs up to the level, but not exceeding it , that will deliver those shareholder outcomes.