Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I suspect the Australian public said they did not want Qantas and the Commonwealth Bank sold, but the Labor Party wisely and properly sold them. I thought I might get a question from behind me on this subject, so I thank Senator Evans for a very timely and appropriate question. It is the case that we announced in April this year that we were committed to selling Medibank Private. We do not see why the government should continue to hold and own one of the 38 private health insurance funds. We cannot see why taxpayers should continue to have that risk and that burden. We think the private sector can do a better job of running a health insurance business just as the private sector does a better job of running airlines and banks.

We reject this Labor scare campaign that change of ownership will force premiums up. If a health fund raises its premiums excessively in the competitive market that we have, customers can leave and go to another health fund. They have full portability. As we announced in April, we are retaining our full ministerial approval power. We also said in April that, while the government had decided to sell, we had not made a decision on the method and timing of the sale and that that would be a function of our decision on T3. We have now decided, in light of the T3 decision, that the best way to sell Medibank Private is by way of a share market float, and we have just announced that. That will ensure MPL does remain a strong and independent player in the private health insurance market. We do not want to see Medibank Private broken up, and we do not want to see any lessening of competition in this market. All Australians will be able to participate in that float. As we have said before, existing customers will receive some form of entitlement.

We took advice from our professional advisers on both MPL and Telstra about the timing of a Medibank sale. As we might have anticipated, that professional advice was very much that it was not in taxpayers’ interests to have two competing government share market floats. They did advise that holding the MPL sale even some months after T3 could affect demand for Telstra shares. The clear advice and the experience of governments, both Labor and Liberal, is that a full market float takes about nine months to organise. That means we would be looking at June next year if we were to do a float, so (a) that is still too close to the T3 sale and (b) everybody would understand that June next year is not an appropriate time for us to be contemplating a public float for a whole variety of reasons.

We have decided that Medibank Private will be sold by public float in 2008 if the government is re-elected. That will also enable the government’s broader private health insurance reforms to pass the parliament and be fully implemented before the sale occurs. Those are very good reforms to make private health insurance an even better product for consumers.

As I said, we remain committed to this sale. We will introduce the legislation in this session. We will seek the passage of the sale bill by December 2006 with the private health insurance reform package to be dealt with in the early part of next year. We have a very good package to improve the product. We have a very good package to take Medibank Private to the people—to put the private into Medibank Private. We think that taxpayers have had to bear the burden of owning this business for 30 years—they had to find the $85 million to provide the capital injection this company needed some two or three years ago. This business will be better off in the private sector, just as Qantas, CSL and the Commonwealth Bank were under the Labor Party.