John Murphy (Lowe, Australian Labor Party, Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

I begin by congratulating the member for Canberra on her very erudite and incisive contribution to the debate on this very important bill, the Medibank Private Sale Bill 2006. I want to join all my colleagues in rejecting the sale—and I use the word ‘sale’ in its broadest possible sense—of Medibank Private. This is not a sale of shares. It is both public and private theft. I say private theft in that the entire moneys and cash reserves raised in the current fund of Medibank Private are the private property of Medibank Private members. I say public theft in that the sale of Medibank Private undermines the legislative provisions of not-for-profit organisations through the unilateral demutualisation of an entity established with the sole and substantial intent of operating under statutory and other restrictions as a not-for-profit organisation. The government is saying today to the people of Australia that any not-for-profit organisation may be demutualised—turned by the stroke of a pen from a not-for-profit entity into a for-profit entity. What a disgrace!

One theme runs constantly through this government’s agenda: that mere legalism is all that is required to make what is illegal legal. At the stroke of a pen, it is licit to change a body corporate’s fundamental tenet of existence from a not-for-profit entity to a for-profit entity—just change the material laws, and it is thereby legal! Well, I say that is wrong, wrong, wrong.

The name of the entity being demutualised today is Medibank Private. What does the word ‘private’ mean to the members of this House? What does the government understand by the word ‘private’ in the context of this entity? Clearly, the Howard government has no insight into the foundations of its own Health Insurance Commission laws, particularly those governing the fundamental policy rationale that Australian citizens who can afford it should be encouraged and indeed required to take out long-term health insurance coverage early in life by allowing them to take out lower premiums spread over a longer period of time.

Equally, the government has yet again engaged in selective amnesia when it forgets a basic tenet of public health insurance policy: that the Australian taxpayer is the private contributor to the funds. You cannot sell what you do not own. Medibank Private’s money belongs to its members, not to the Howard government. I repeat: the money and the other assets of Medibank Private belong to its members, not to the Howard government nor to anyone else.

Incredibly, this government is completely conned and swayed by the so-called legal opinion of the so-called law firm Blake Dawson Waldron, which has advised the government that is a simple case of changing Medibank Private’s constitution to make it a for-profit company. I say ‘so-called law firm’ because it is abundantly clear that the rank positivism expressed by such an audacious opinion as that expressed by Blake Dawson Waldron does not deserve the title ‘legal opinion’. I say this in light of the clear absence of any policy analysis outside of the most reductionist and narrow of legal interpretations. This so-called opinion pays no regard to the other legal and policy ramifications.

Equally, this government has committed the ultimate act of bastardry by deliberately reducing the debate to a mere legality of the most perfunctory nature. Debate and what can only be loosely described as ‘analysis’ in its most primitive sense have been totally sacrificed for a shameless and naked grab for money. In grabbing this money, this government has done nothing but commit public and private theft against the members of Medibank Private and the people of Australia.

There was a time not long ago when public assets were sold and the citizens of this country understood the reasons why. Now anything remotely connected with the government that is actually private property is also being sold as if it were a government asset. At this rate the government will be selling our own residential homes back to us, saying that the land, too, is really a public asset and that we are nothing more than tenants of the Crown who never really own our land. As ridiculous and preposterous as that sounds, it is not too far from the reality unfolding here today before us with the public and private theft of Medibank Private.

It is necessary to remind ourselves of why private property is so important. I cite the encyclical Mater et Magistra, which at paragraphs 19 and 20 states:

Private ownership of property, including that of productive goods, is a natural right which the state cannot suppress, but it naturally entails a social obligation as well. It is a right which must be exercised not only for one’s own personal benefit but also for the benefit of others. As for the state, its whole raison d’etre is the realisation of the common good in the temporal order. It cannot therefore hold aloof from economic matters. On the contrary, it must do all in its power to promote the production of a sufficient supply of material goods, the use of which is necessary for the practice of virtue. It has also the duty to protect the rights of its people and particularly of its weaker members, the workers, women and children. It can never be right for the state to shirk its obligation of working actively for the betterment of the condition of the working man.

I could not put it better than that. The quotation that I have just cited enshrines the inviolability of private property—property we see today being violated by the public and private theft of assets belonging to Medibank Private members, not to the Howard government.

I condemn the government today in the passage of this bill for violating one of the fundamental tenets of our democracy: the principle of subsidiarity. It is subsidiarity that asserts that the state serves its people, not that people serve the state. It is the state that is here first establishing a rule that people who can afford private health care do so early in life, paying lower premiums and thus benefiting themselves by having privately funded health insurance for the term of their natural lives. Perhaps more importantly, the public policy latent in the existence of Medibank Private is that this accumulation of reserves benefits the common good of society in that this reserve of money facilitates access to funds for medical needs for all of its members, thus taking critical pressure off the public health system. All this good and well-founded policy is so reprehensibly being torn apart today by the demutualisation of Medibank Private. The treatment of Medibank Private in this way does all of the following. First, it undermines the common good of a privately funded health insurance system. Second, it undermines the principle duty of subsidiarity, which every government is bound to follow. Third, it undermines pre-existing and well-founded health insurance policies based upon the notion of long-term and early entry into private health insurance as one of the few ways to average out premiums. Fourth, it undermines the current statutory law, founded upon policy, that treats not-for-profit and for-profit entities as obviously very different entities. This distinction was obvious—until now. Fifth, it demutualises an entity that was never meant to be demutualised.

I say all this in the context of a prevailing ethic that is not even a thinly veiled attack on the most primitive and essential tenets of democracy and social justice—that is, private property must be allowed to exist for the benefit of the individual property owner and for the benefit of the common good. If these two benefits are denied, then truly it is the end of social justice and the end of social order.

I say again: what is next? Where is the thinking of this government going to go next? What else will it attempt to flog off in its sheer hunger for cash? Today’s bill clearly indicates that there is no boundary that this government is not prepared to cross. Indeed, the conduct of this government is truly not government at all, for it has committed the ultimate act of bastardry, as I said earlier, against the most basic obligations of subsidiarity for the benefit of its own people. Under the principle of subsidiarity, the government is supposed to perform public functions only so long as the people cannot do such themselves.

It is right and proper for the government to implement a regime of public health insurance. Equally it is right and proper for the government to implement a regime that encourages those in society who can afford private health insurance to take it out early and over a long period in order to average premiums, thus reducing the premium cost of cover for the members. It is the act of accumulating reserves as assets today to pay for the future health insurance costs tomorrow. That is good governance. It is obvious and logical to make provision whilst times are good to pay for when times are bad and sickness befalls us, as it inevitably does. It is madness, in my view, to encourage an entire nation to contribute to a Medibank Private fund under rules of mutualisation and then to demutualise it. It is simply unthinkable to do so. The action is a governmental disaster, and this is exactly what we are expected to be voting in favour of today. For these reasons, I agree with the shadow minister for health and the shadow minister for finance, who note that this bill flagrantly disregards the impact of the sale on existing members—to say nothing of the broader policy implications.

I say all this against the background of the widespread condemnation of this bill by peak health and other organisations, such as the Australian Medical Association—which rightly describes this proposed public and private theft as immoral. This bill will permit quite literally robbery to occur. This bill will only send one message to the public: that there is nothing sacred any longer. The real policy impact will be that the public will trust nothing and no-one. We will have banks that are not banks; not-for-profit organisations that can be, and are, changed by the stroke of a pen; and insurance companies that are not insurance companies. The list of how far the government will go in using its power over its four terms to undermine the very foundations of government and democracy is endless. I urge every member of this House to reconsider their position, and I am obviously referring to the government members and to those in the other house.

I condemn the government for this flagrant disregard of the needs of consumers on an endless spectrum of matters. We had the unedifying experience here a couple of weeks ago of witnessing the government appeasing Australia’s richest man and consumers being left as an afterthought in the Howard government’s unconscionable destruction of Australia’s cross-media ownership laws. Whilst satisfying the needs of free-to-air television owners in that instance, consumers have been left as an afterthought in the Howard government’s nonsensical digital TV policy and refusal to issue a fourth free-to-air television licence. Everywhere you look, the government is looking after the big end of town. Whilst looking after big business through its refusal to strengthen the Trade Practices Act or to give the Australian Competition and Consumer Commission more powers and funding, the needs of consumers have, disgracefully, been left by the wayside. Of course, the Howard government, particularly Treasurer Peter Costello, would love nothing more than to see the ACCC become a toothless tiger. Despite touching on many facets of life and different policy areas, we can see a common trend here that the government’s disdain for ordinary consumers knows no bounds. We see that in this disgraceful legislation before the House. The Howard government loves nothing more than the pursuit of radical ideological goals and is happy to destroy anything that lies in its path to achieve them, including the needs of consumers. I say today: that has to stop.

Families in my electorate of Lowe in Sydney’s inner west have a right to be provided with every detail about why the government in selling one of its few remaining public assets: Medibank Private. It smacks of poor policy to sell public assets in an attempt to superficially boosts the budget bottom line. The sale of Medibank Private, along with the sale of Telstra, will provide a bottomless pit of funds for a government heading into an election year next year. It has already curried favour with Australia’s richest man and principal media proprietor, and now we have the issue of the sale of Medibank Private. It should not be seen as a river of gold to flow into the government’s war chest in the lead-up to an election. We can continue to live in hope that, at some point in the future, the government will act in the public interest rather than out of political expediency or, dare I say it, self-interest.

Families in my electorate of Lowe have a right to be given a guarantee that the costs of private health insurance will be kept down after the sale of Medibank Private. We all know that, once something is flogged off, the only way is up for prices and premiums. Naturally the government will not give that guarantee, because it cannot. It knows only too well that the sale of Medibank Private is going to result in increased health insurance premiums. Blind Freddie can see that. A publicly owned Medibank Private has acted as the conscience of the health insurance industry, as a guard at the gate between immeasurable profits and the interests of the wider community. This is a conscience or a gatekeeper that will be lost forever following privatisation—when the profit imperative understandably and inexorably takes over. The company’s new shareholders will naturally want a large return on their investment. We saw fees skyrocket following the privatisation of Sydney airport and will see a rise following the privatisation of Medibank Private. In relation to Sydney airport, I draw attention to my questions on today’s Notice Paper and my contribution in the Main Committee earlier today. The breaches of security going on at the airport are a disgrace.

Returning to this bill, the government faces a choice: sell Medibank Private but warn the buying public that the organisation is going to deliver below-average returns indefinitely or tell the public that premiums are likely to increase as a result of the new organisation’s drive to return big dividends and capital gains to its new shareholders. That is the duty of the government: to tell the truth to those people who are going to invest in the new Medibank Private after it is privatised—to tell them that they are going to get less return for their investment in the area of health insurance—or to tell the poor, long-suffering contributors that premiums are going to go through the roof.

Is this a choice the government will make? Not likely. There are 600,000 families in my electorate of Lowe covered by health funds who will face the prospect of premium increases when they simply cannot afford them. I urge those opposite to think again: to fight the sale of Medibank Private every step of the way for families, including those in the inner west of Sydney and right across the country from Sydney to Perth, who have had a gutful of interest rate rises and health insurance premium increases.

This bill is a disgrace. As I have said in my contribution, there is just no end to which the government will not go to privatise anything to put its hand on a bit more dirty money in the run-up to the next election. I think the tide is turning. I have an informed, intelligent and educated electorate, like the member for Wills has. I think people understand that eventually you run out of luck when you start telling tales about children overboard and weapons of mass destruction and when you deny any knowledge of the bribes that were paid by the Australian Wheat Board to Saddam Hussein. I think people are waking up to that. I think they understand that last fortnight our democracy was handed over to, principally, Mr Packer—and that is a disgrace. I am sure that the good sense of the electors of Australia will take a baseball bat to this government when the election is held this time next year. (Time expired)

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