Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Canavan for that question. The reason that we are proceeding with the sale now is because the best advice available to us is that market conditions are right to proceed with the sale, but of course we will continue to monitor market conditions as we are progressing that sale through an orderly and methodical process.

On Sunday, I invited on behalf of the government all Australians, including Medibank Private policyholders, to preregister their interest in receiving a prospectus in the context of the sale of Medibank Private, which we expect to release later in October. The sale of Medibank Private has been longstanding coalition policy, and indeed it has been the longstanding policy of this parliament. The parliament, in 2006, passed the Medibank Private Sale Act, and that sale is being conducted consistent with the requirements in that legislation. The truth is that in 2014 there is absolutely no reason for the federal government to be involved in running private health insurance business. Medibank Private is not a government monopoly; it is a commercial business which operates in a well-functioning, well-regulated, competitive market with 33 other private health insurance funds. There is no market failure and, as such, there is no compelling reason for the government to continue to own Medibank. The sale will of course also remove a conflict, with the government as the regulator of that market and currently the largest market participant.

The final point I would make is that suggestions that somehow this would push up the cost of premiums are inaccurate because Medibank Private in private ownership will continue to have to compete for customers with other funds, which of course will limit their capacity to increase premiums, and premium changes will continue to be regulated as they are now.