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This article explores the politics of telecommunications reform between 1967 and 1972, during which time Labor developed a new policy approach that included committing to reconstitute the Postmaster-General's Department as a relatively independent statutory authority. This represented the first serious attempt to reconcile the conflicting objectives of Australian policy: to provide affordable universal services by a government department expected to operate as a “business-like” enterprise, and ended the political consensus about how national telecommunications should be delivered. The paper contrasts Labor's policy with the Liberal-Country government's more incremental approach; and highlights a significant public policy shift that has received insufficient attention.