Telstra not secretive, says Aust finance minister

Telstra has been open about its capital expenditure and it is not for the federal government to judge the adequacy of that investment, Australian Finance Minister Nick Minchin says.

Prime Minister John Howard is trying to fend off claims he should have told all of Telstra's shareholders about a secret document he received last month outlining a string of problems within the telco giant.

The Australian Securities and Investments Commission has launched an investigation into whether Telstra broke stock market rules by handing the secret document to the government but not the rest of its 1.6 million shareholders.

The document says the telco should have spent up to A$3 billion ($3.30 billion) in recent years fixing its network and that it has borrowed billions of dollars from its reserves so it could pay dividends.

Senator Minchin said Telstra had kept the market informed about its spending.

"The previous management (of Telstra), as does the current management, briefs the government on its ... capital management plans, how much it's going to invest in the network, how much it's going to return to shareholders," he told ABC radio.

"And what they are doing is reporting to us the decisions of the board and it's not for us to really cast judgment upon that.

"Of course they kept us fully informed, as they did the whole market, of what their capital management plans were."

The minister said alarm bells were not ringing after the briefing from Telstra on August 11 because the company's chief, Sol Trujillo, had presented the government with a plan for future spending.

"He was talking about the future, he was wanting us to give him A$2.5 billion so that he could then use that to invest down the track in a future generation network," Senator Minchin said.

"So he wasn't saying the current arrangements were inadequate but that down the track he was putting a case to us that without A$2.5 billion from us, then well down the track there would be a problem."

Despite analysts saying that the bad news about Telstra appears to have been buried, Senator Minchin said the company's situation had always been made clear to the market.

"All these figures are right out in the open," he said.

"The capital expenditure programme of the company has been public knowledge on a daily basis -- everybody knows how much the company is investing.

"The current board and the previous management properly asserted that in their view that was inadequate expenditure on their network, and it is a value judgment as to whether that is under or over."

Senator Minchin expressed confidence in Mr Trujillo and said the full sale of Telstra would not be put off.

"I have full confidence in Mr Trujillo, there is no delay in the sale," he said.

He said Telstra had also been open about borrowing to pay dividends and the practice was not unusual for Australian companies.

- AAP