Australian government cuts Telstra value

The federal Government has cut the estimated value of its majority stake in Telstra by 6 per cent, or around A$1.5 billion.

The Government has also assumed in its budget estimates that the sale of the remaining 51.8 per cent stake, also known as T3, will go ahead in 2006/07.

Treasurer Peter Costello has set a nominal share price of around A$3.85 based on a 90-day trading average, down from the previous estimate of A$4.13, according to a Treasury official.

The value of the Government's stake is now around A$25 billion and the move comes just five months after the Government slashed the price of its share valuation by 21 per cent from A$5.25 in December.