Welcome to this week’s editorial,
The announced proposal by AGL to buy Southern Phone has sent quite a few ripples through the community.
This week the Eurobodalla councillors will be looking over an provided confidential information package regarding the proposed sale that requires the agreement of the majority of the 35 Councils across the state that are shareholders. The shares, originally costing just $2, will see a return on the investment of $785,714 for each Council if they agree to sell.
It is understandable that with any take over there is staff concern and uncertainty. Council’s General Manager Catherine Dale said this week “Our key concern is making sure local people working in the Moruya office keep their jobs, and I’m reassured by the company’s statement that the Southern Phone brand, products and team will be retained.”
The proposed sale to AGL makes good sense. Formed in 2002 under the Federal Government’s Networking the Nation scheme, Southern Phone’s current constitution limits ownership to Australian local government shareholders and it can only self-generate capital.
With the advent of the NBN the need for achieving a greater share of the market has significantly increased and the Southern Phone board believe that the timing is now right for a new shareholding structure that would attract the shareholder capital required to expand.
Southern Phone is, and will remain, a major employer of the youth in our region, employed in the Moruya based call centre. The formation of Southern Phone and its location in the Eurobodalla has brought considerable return for our community by way of sponsorships, very generous annual dividend returns and by the fact that the company has employed and trained thousands in its seventeen year run to date and will continue to do so into te future.
How will the councillors vote in regards to the sale? It makes absolute sense that Southern Phone put aside its outdated Council shareholder model and open up opportunities for expansion via a capital injection from AGL. The sale will see the strengthening of Southern Phone that will provide the certainty of continuing youth employment we need in the region.
The downside will be the loss of the annual dividend in the order of $140,000 that Council have enjoyed however with their recent moves to put that dividend into the general fund to pay for infrastructure backlogs the ‘gift’ has been devalued from where it once contributed to specific community needs.
There is little doubt that the Councillors will vote to sell and there is even less doubt that they will direct the windfall to the voracious Mackay Park project with its forecast financial overruns and predicted running cost blowouts.
With Council’s recent sale of the Moruya Racecourse (for a pittance) , the continued sell off of ‘unused’ Council reserves such as Pretty Point; and their intention to sell the Batemans Bay Community Centre and Information Centre to prop up the spiralling juggernaut that is to be the “Gateway to the Bay” any celebration of the windfall from the Southern Phone sale will be shortlived.
Unless of course a right and proper Councillor moves to create a Southern Phone Legacy fund that might be developed to supporting youth employment with an annual sponsorship. Now wouldn’t that be better than tipping the $$$ into a bottomless ediface to be never thought of again?
Until next
Lei
