Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Aged Care, Disabilities and Carers) Share this | Hansard source

I move:

That the Senate—

(a)

notes that:

(i)

the Government is divided over the sale of Medibank Private,

(ii)

the public is concerned about the consequences of the sale of Medibank Private and its impact on the affordability of private health insurance, and

(iii)

despite government promises to keep private health insurance premiums low, they have risen by almost 40 per cent since 2001; and

(b)

calls on the Government to abandon plans to sell-off Medibank Private.

It is timely in this week of confusion and chaos in the coalition parties that we have the opportunity in the chamber today to debate this motion about the future of Medibank Private. As you would be aware, I am sure, Mr Deputy President, Medibank Private is the only national private health insurer in Australia. It is owned by the Australian government and therefore the Australian people.

The first point in the motion is:

the Government is divided over the sale of Medibank Private …

Any casual observer of this week’s media would be able to see the division in the government about how the government might dispose of Medibank Private. On the one hand, you have a group proposing that Medibank Private should be sold to a series of other operators, including potentially of course operators who are not Australian. On the other hand, you have a group suggesting that Medibank Private should be floated on the stock market. We have two completely different points of view from the government members as to what they think might be the best way to proceed with the sale of Medibank Private. Which group they belong to, of course, depends on which ideological faction they are from. It is ideology, not sensible policy on private health insurance, that is driving the privatisation of Medibank Private.

There are two groups of people in the Liberal and National parties debating whether it should be sold as an entity to other private health insurance providers or floated on the stock market. There is confusion and chaos amongst the Liberal and National parties about how to dispose of the entity, but there is no evident confusion on the government benches about whether Medibank Private should be sold. They seem to be as one on that issue. It is not a question of whether Medibank Private should be sold; it is certainly the question of how to sell it that is causing them all this trouble.

The pursuit of this sale is evidence that the government has no care about the effect it would have on the three million members of Medibank Private. There is no care for the effect on the economy and there is no care for the effect on other private health insurance providers or in fact on the whole private health insurance sector if this sale goes ahead. With some of the murmurings I have heard from Senator Joyce, I do not hold out a lot of hope for the government negotiating a reasonable way forward. He too is focused on how to sell the entity, not whether to sell the entity. We have a clear distinction between the government and the opposition on this issue. The government is saying we should be able to sell Medibank Private and, here in the Labor Party, we are saying that that is not the way to go.

The second point in the motion we are debating this afternoon is:

the public is concerned about the consequences of the sale of Medibank Private and its impact on the affordability of private health insurance …

Yes, the public is concerned. On Monday, in a question in question time, I provided Senator Minchin with the opportunity to explain the basis for his claims that privatisation will result in lower premiums. I have to say, his answers were less than comforting. He said:

… based on advice we had in our scoping study—

and I will come back to that—

… the efficiency dividend that could be derived from the private ownership of Medibank Private would lessen the upward pressure on health insurance premiums.

He says to the media in the public arena that selling Medibank Private would result in lower premiums, but here in the chamber where someone is going to write it down, where someone is going to hold him to his word, he slightly changes the message. The message now is ‘lessen the upward pressure on health premiums’. Senator Minchin, that is not good enough. He went on to say:

The scoping study indicated in some detail the extent to which the efficiency dividend that would be derived from private ownership of Medibank Private would lessen the upward pressure on health insurance premiums.

He has taken the opportunity to say it twice.

We have given Senator Minchin the opportunity to share the background. What is the rationale behind his ability to make those slightly different statements? How can he say that it is going to either put pressure downwards on premiums or at least stop them going up too high? This is the scoping study. I have asked Senator Minchin twice in this chamber to provide us with a copy of the scoping study so we can have a look at the rationale that supports the premise that he is prosecuting.

Unfortunately for the three million members of Medibank Private and unfortunately for the private health insurance sector, Senator Minchin has done what this government is turning into an art form: saying that commercial-in-confidence decisions would preclude him from being able to provide that scoping study to the chamber. But I ask again. It is only fair for this community to understand the principles that drive this government to be able to make those sorts of comments. It is only fair that we have a copy of the scoping study that would indicate that premiums will go down.

But he would not explain the rationale or the logic behind his statement that privatisation will lower premiums, because there is in fact no logic behind that statement. The logic is clear. The board of a publicly listed Medibank Private is required by law to maximise the profits and returns to its shareholders. That would be the role of a board member and that is what they have to do by law. Profits and returns to shareholders are the first motivation of a private company, and Medibank Private would be in that category.

Contrast that, though, with the current situation where the not-for-profit nature of Medibank Private means that any surpluses are returned to its members via lower premiums. It is only commonsense, therefore, that a privatised Medibank Private will have to return to shareholders the profit that is currently going to lowering premiums. It is commonsense that Australians understand and that is why they are concerned about the privatisation of this entity.

You do not have to just rely on the Labor Party to put out that sort of commonsense. The Australian Medical Association have also made a submission to the Australian Competition and Consumer Commission on the proposed sale of Medibank Private. They have raised serious concerns about higher premiums for Medibank Private customers and reduced competition in the private insurance sector. Dr Mukesh Haikerwal said that higher premiums would be inevitable as the new owners sought to maximise returns to shareholders. So the AMA get it; they know what is going to happen. The Labor Party get it; we know what is going to happen. It is now incumbent upon the government to come clean and explain the logic and the rationale behind the premise that allows the government to say that privatising Medibank Private will lead to reduced premiums. I would suggest that the way forward is to provide this Senate with a copy of the scoping study as requested in this chamber. Dr Haikerwal went on to say:

There is also a chance of flow-on higher premiums across the whole private health sector because of reduced competition. But the extent of the rises would depend on whether the new owner is a new or an existing player in the sector.

This goes back to the question: how are the government proposing to sell it? Have they worked that out? What impact will that have on other private health insurers? Does the scoping study actually go to the question? I would like to know the answer to that. I think that the three million people who are members of Medibank Private have a right to know what the impact will be on their private health insurance provider, and all other private health insurance members have a right to know what is going to happen in terms of competition in the private health insurance sector if Medibank Private is sold. There will be some commercial-in-confidence elements in that scoping study—I recognise that—but surely it is incumbent upon the government to provide the Senate and the community of Australia with the principles that underpin their belief that premiums will go down.

There is also a question of legality. You would be aware, Mr Acting Deputy President, that the Parliamentary Library has produced a research brief which has raised a number of serious issues about the proposed sale of Medibank Private. Two of their conclusions are important for the community to understand. The research brief says:

• while the government clearly ‘owns’ Medibank Private Limited (the managing organisation of the Medibank Private fund) the fund itself is best characterised as a government controlled not-for-profit entity (not strictly owned by either the Commonwealth or the fund members)

Another conclusion of the paper, which I think is important for us to understand, is:

• members of the fund nevertheless have certain rights to the benefit of the fund and associated assets and these rights need to be considered in any scheme for the sale of Medibank Private

The government has been quick to commission some legal advice, and Senator Minchin with a great flourish on Monday happily tabled that advice in the Senate. That advice disputes the position of the Parliamentary Library. This chamber—those of us here—is not in a position to make a judgement over which advice is correct.