Kim Beazley (Brand, Australian Labor Party, Leader of the Opposition) Share this | Hansard source

I rise to oppose the Medibank Private Sale Bill 2006 and I declare immediately an interest: I am a policyholder with Medibank Private and, like every other one of us 3½ million, I stand to lose a very great deal by the passage of this bill and the subsequent sale. So, given that all 3½ million of us, me being one, stand to lose a very great deal, we had better make absolutely clear our personal interest in this as well as our policy interest in seeing this bill and this sale defeated.

There is no doubt at all that this government will proceed after the next election, if they win it, to sell Medibank Private. That is their intention. They have made it clear, and this is one of those rare occasions when you can actually believe it. They have given this undertaking and it will be a core promise. It will be done. And that will be very much to the detriment of people like me, who happen to be policyholders, but more particularly to all Australians who benefit from the fact that with Medibank Private in its current situation there is at least a degree of downward pressure on premiums. We do know this: that the majority of the Australian people are against the sale of Medibank Private—and with very good reason. They know that morally Medibank Private belongs to its members and they know that, as sure as night follows day, premiums will rise.

Who are the Medibank Private members? They are not an elite club of Australians. They are Middle Australia. Medibank Private members represent Middle Australia, the working mums and dads of Australia who take out private health insurance for peace of mind, to make sure they can provide for and protect themselves and their children when illness strikes or accidents happen; Middle Australia, who year after year fork out ever-increasing amounts to make sure they are covered in the hope that they never actually have to spend time in hospital.

But Middle Australia has had enough of this out-of-touch government. The thing making Middle Australia sick is premium increase after premium increase, ever-widening gaps and an out-of-touch health minister who has no understanding of their health needs, who sits and nods when private health insurers annually propose a premium increase. That is why Australians are now taking a stand and saying no to the privatisation of Medibank Private—because the privatisation of Medibank Private will push up premiums and place more pressure on Middle Australia.

Following the Telstra sale debacle, we should not be forced to endure another incompetent sell-off from the Howard government. The Howard government is out of touch and hell-bent on selling Medibank Private, whatever the consequences for policyholders, the health system and Middle Australia. So here is a rolled gold promise that you can take to the bank after the next election, when we win it: we will not sell Medibank Private. I know that there is nothing more important to Australian families than their health care. I understand the struggle of families that are trying to make ends meet, juggling the bills, accommodating interest rate rise after interest rate rise, and in the back of their mind they are wondering if their jobs and incomes are secure.

You have to ask yourself: with a majority of Australians opposed to the sale of Medibank Private and the government claiming that our economy is stronger than ever before, why is the Prime Minister trying to sell off this Australian asset? The float of Medibank Private will not commence until 2008. This government has its foot on the accelerator, ramming this legislation through the parliament in the face of controversy, in the face of conflicting legal advice, hidden scoping studies, concern expressed by the majority of Australians and concern from the Australian Medical Association.

Why the rush? The answer is ideology. It is ideology getting in the way of the national and the public interest yet again. This ideologically driven government have attempted to argue the case for the privatisation of Medibank Private on three fronts, but on each they have failed dismally. They have argued that privatisation will result in greater competition in the industry, thereby putting downward pressure on premiums; that it will enable Medibank Private to operate more efficiently; and that it will remove the government’s perceived conflict of interest by being both the regulator and the owner. They are wrong on every count.

On the first line of argument, this government has form. No-one can forget the 2001 promise by the Prime Minister that his election policies would ‘lead to reduced premiums’. No-one can forget that, since this promise was made, premiums have increased by almost 40 per cent. It is not rocket science. Floating Medibank Private on the share market will not introduce a single new health insurer in Australia—not one. There will be zero increase in competition. The only pressure that Medibank Private will be feeling is pressure to make a profit for its shareholders and, if anything, that will put upward pressure on premiums. The Australian Medical Association agrees with us. On 5 September this year, AMA President Dr Mukesh Haikerwal said:

... higher premiums would be inevitable as the new owner sought to maximise returns to shareholders.

“There is also a chance of flow-on higher premiums across the whole private health sector because of reduced competition” ...

Let me now turn to the government’s argument on efficiency. Currently, Medibank Private is the biggest private health insurer in this country, with some three million members. According to the government, publicly owned companies are inefficient, but where is the evidence for that? The government insists that a scoping study undertaken by Carnegie Wylie shows that privatisation will enable Medibank Private to improve efficiency by lowering management expenses and allowing diversification of their business. The truth is this: the details of the Carnegie Wylie scoping study are yet to see the light of day. One would think that, if it came out with those sorts of conclusions, there would be no problem at all in this government producing at least an expurgated version of it, but it does not. Under current arrangements, Medibank Private has lower administrative costs than its major competitors. Privatisation will have no impact on the fund’s current ability to expand into other insurance markets. For example, the fund already offers Medibank Private travel insurance. If you want to look at the other services, just go and have a look at their website.

On the subject of a conflict of interest, we hear the same tired line from a tired government—the claim that there is a conflict of interest on the government’s behalf by being both the regulator and owner of Medibank Private. This, I might say, would also permit the government to sell the ABC, CSIRO and Australia Post. One cannot see any particular differential in any argument on conflict of interest as you look at those three bodies; perhaps that is what the government has in mind if it wins the next election. The truth is—and this is different from the situation that applies at least to Australia Post—that the government does not currently receive dividends from Medibank Private, so there is no direct financial incentive for the government as the regulator to provide itself with any advantage over other health insurers. It has it the wrong way around. The conflict of interest arises in the event of the sale of Medibank Private. The government is currently in a position to regulate the sector so as to maximise the share price for Medibank Private at the time of sale. Make no mistake—the only driver for this privatisation is extreme Howard government ideology. The government is so obsessed with privatisation that it is fast becoming a national joke. What next—Australia Post, the CSIRO or the ABC?

Australians with private health insurance cannot afford for this government to make decisions about their health fund based on ideology. They require reform, but the truth is that this government has failed to deliver where it counts. It has failed to deal with the real cost pressures in the private health insurance sector. Private health insurers regularly report that one of the greatest pressures on insurance premiums is the increasing cost of new medical technologies. The Productivity Commission recommends a systematic assessment of cost and clinical effectiveness of new technologies to ensure we get the right technologies at the best price.

But such changes would spell reform. We know that these Liberals do not do reform. They do not do benchmarking. They do not do target setting. They do not do accountability. They govern for themselves and their ideology—they do not govern for the national interest. The longer they are in office, the more and more obvious their basic tendencies become. They do not care at all for health outcomes and lower premiums for Australian families who depend on private health insurance for peace of mind. If they did, then in the last 10 years they would have reformed the health system to ease upward pressure on health insurance premiums. But not this government—they have no eye for reform, no vision for Australia and no regard for the little guy and his family. They are just governing for themselves and not for the country. The sale of Medibank Private is bad news for Medibank Private policy holders and bad news for Middle Australia.

I would like to address one other important aspect of this debate, which highlights the arrogance of the Howard government. It is a government that is willing to push ahead with this legislation despite conflicting legal advice on an issue as fundamental as the rights of Medibank Private members—the rights of Middle Australia. The bill seeks to ensure that profits surpluses gained prior to privatisation are redistributed to the shareholders following privatisation. According to Medibank Private’s 2005 annual report, these profits are worth $653 million. Government lawyers insist that the privatisation of Medibank Private does not confer any rights to members. The government accepts this legal advice, but it will take all care and no responsibility. Should there be the prospect of a legal challenge to the sale, a clause has been included which makes Medibank Private rather than the government liable for any compensation.

Contemplate this: the government are recklessly—against at least some advice being given to them—taking advantage of the opportunity to stock their coffers with the product of this sale. If, however, the advice on which they have operated is found to be faulty, they will not carry the penalty of it, according to this legislation; Medibank Private will. In other words, Medibank Private, if they are to carry a penalty, will find that not only will they be obliged, in the way in which they charge their premiums, to make a return for the shareholders to justify that particular sale; they will also have to make sufficient to ensure that they are invulnerable financially to a successful class action against them as the result of the deprivation of members arising from this sale. It is quite an extraordinarily irresponsible position. It will be one of the major reasons why this government will need to be defeated at the next election. They are giving us plenty of ice to skate on in the arguments that we will be able to raise on that. It is all care and no responsibility, and the rights of three million policyholders simply become a distant memory—myself, as I said, among them.

Experts in the Australian Parliamentary Library have a different opinion to that of the government’s lawyers. Quite frankly, I am not concerned about who has the finer legal mind; I am concerned about Middle Australia. Middle Australia is not sitting around the kitchen table and wondering whether Blake Dawson Waldron is providing accurate legal advice. Middle Australians who are Medibank Private policyholders just expect that they come first, not ideology. Over three million Australians chose the publicly owned Medibank Private as their provider of health insurance because they thought they could trust the government to look after their interests rather than their own political interests. I suggest this is a tease for the government, which hate government: they hate the theory of government; they hate the idea of acting responsibly or accountably; they think it is all wrong that there ought to be government at all. They are natural anarchists.

The simple fact of the matter is that a large number of people had an expectation when they went into Medibank Private that they were being protected by their willingness both to take out private health insurance and to go with a government based provider. They joined with the knowledge that Medibank Private was a not-for-profit organisation, operated by the government to serve the interests of its members—millions of Aussies, not just a few at the top. Sadly, they were wrong. Three million policyholders will be bitterly disappointed with an out-of-touch Howard government that has used its majority in this parliament to pursue its extreme ideology. The sale of Medibank Private is a massive breach of trust.

Not-for-profit status means that all funds that are not immediately required for payment to members are credited to the fund and not distributed as profits. A not-for-profit model means that members come first in dealings with fund assets. This bill will change that conduct to a for-profit basis. Make no mistake: the sale will be all about profit.

Just how far does the ideological obsession extend? The bill seeks to amend the National Health Act so that Medibank Private can change its status with no obstruction—no questions, no checks, no balances. The bill proposes to exclude the requirement for a notification process to be undertaken when Medibank Private chooses to change to for-profit status. It also seeks to do away with a review by the minister for health that would otherwise assess the impact of such a change on the members of the fund, including the impact on premiums and a public interest test. If you have clauses like that in the bill, how can you have the hide to stand up and say that you are going to effect downward pressure on premiums? This undermines the effect of restrictions on not-for-profits and undermines the rights of members.

John Howard has changed. He no longer governs for the people who put him in the Lodge. For John Howard it is profits that come first, members last. The sale of Medibank Private is a massive breach of trust. The Prime Minister might be hoping that this debacle, once it has passed through this parliament, will be fixed and forgotten by next year. It will not be forgotten—we will make dead certain of that. Middle Australia will remember the upward pressure John Howard has placed on health insurance premiums. They will remember the day that another public asset went private and they were slugged with greater fees for less service.

Health is about the future, and we are all about the future. That is why there are so many differences between our two parties on health. We will make a fair dinkum commitment to Indigenous health; they will not. We will set great national goals for the health of our kids; they will not. We will reform the complex and inefficient funding of the health system related to our hospitals; they will not. We will keep Medibank Private in public hands, because we are the party of middle Australia. We are the party of Middle Australia and we are the party of the future for Middle Australia.

John Howard has changed. He has forgotten all about that. The longer he has been in office, the more that hubris has grown, the more he has decided that he and his ministers have entitlements—they can do what they like, whenever they like and they can thumb their noses at the electorate. There is a certain amount of arrogance about the way this has been presented. They know the three million members hate it. They are not going to privatise it before the election; they are going to do it afterwards. It is as though they are mocking and laughing at the Medibank Private policyholders. The Medibank Private policyholders are going to have the last laugh here. They are going to inflict some truly awful punishment on this government, and we will be overjoyed at the opportunity of seeing this legislation repealed.

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