Michael Johnson (Ryan, Liberal Party) Share this | Hansard source

As always in the House of Representatives of the Australian parliament, I am pleased to speak on a government bill, to support it very strongly and to commend it to the parliament on behalf of the Ryan electorate, which I very proudly represent.

I support the Medibank Private Sale Bill 2006 because it is good policy and because it is in the national interest. The government should not be in the business of owning many assets, and amongst those are health insurance related companies and organisations. I know that the overwhelming majority of Ryan constituents believe that socialism is dead, but clearly the Australian Labor Party of 2006 still believes that socialism exists and that the federal government should own a whole range of assets. We do not believe in that approach. We think it is in the interests of the country and in the interests of the consumers that key assets are sold because then they will deliver better services and better prices to the people of Australia and the consumers.

I would like to take this opportunity to give the reasons why I think it is important for this health insurance asset that is under the government’s management at the moment to be sold. As I said, it is important that the people of Ryan, whom I represent, are aware of the reasons why it should be sold. An integral part of the Howard government’s commitment to health care is its promotion of private health insurance. The Howard government is very committed to assisting Australians with the cost of private health insurance and to ensuring that they are given the greatest choice in relation to their health care.

Australians might be interested to know that in 1996 fewer than 34 per cent of Australians had private health cover. Today, more than 10 million Australians, or 43 per cent of the population, are covered by private health insurance. This take-up in private health insurance is a very direct consequence of the Howard government’s initiatives to encourage the Australian people to take an interest in their own health care and to be supported by the Howard government in so doing.

In 1999 the Howard government introduced the 30 per cent rebate on private health insurance premiums, worth almost $1,000 a year to the typical Australian family. That was overwhelmingly received by the Australian people and, notwithstanding that, overwhelmingly rejected by the Australian Labor Party. I am sure that the people of Ryan would also be interested to know that more than 55 per cent of all hospital procedures are now done in private hospitals. I know that many of my constituents will have taken advantage of the wonderful services and professionalism at the Wesley Hospital in Toowong, which is in my electorate.

The government has also recently announced some of the biggest changes to health insurance legislation since the early 1990s. Currently in the community consultation stages, these include continuing to make private health cover more affordable, improving customer access to information about health insurance products, streamlining regulation of the industry while maintaining the benefits of competition and, of course, strong governance and prudential oversight. These changes will continue to expand hospital cover to include outpatient and out-of-hospital services, as well as chronic care management for conditions such as diabetes and asthma.

Part of the Howard government’s commitment to private health insurance and the health sector in general is reflected in this piece of legislation, and the heart of it is the sale of Medibank Private. As I said, we do not believe in socialism in 2006. In the 21st century the days of socialism have long gone. Even communist countries such as China and the former Soviet Union, today Russia, are not interested in socialism. They are in the business of privatising many of their state owned enterprises and organisations. Yet here we have the Australian Labor Party and the alternative prime minister, Mr Beazley, seeking to put forward to the Australian people the retention of Medibank Private.

If you go back a little in time, the primary reason for the establishment of Medibank Private by the Fraser government, in October 1976, was the need to promote competition in the arena of private health insurance. Three decades later, Medibank Private is now the largest health insurer in our country. Over that time Medibank Private has been instrumental in transforming the private health insurance industry to be more competitive and more inclusive. There are now some 38 funds which offer private health insurance operating across Australia and, while there is no denying that a government owned Medibank Private has in previous years played an important role, the government certainly feels that it is time for this legislation to pass the parliament and time to give Australian people the opportunity to have a stake in what will be a very successful organisation. The Howard government believes that the health interests of the Australian people are not best served by the government being both a regulator and an owner in the private health insurance industry.

In selling Medibank Private, the government is ensuring the private health insurance market can become even more competitive, thereby helping to keep a lid on premium increases. Notwithstanding some of the rhetoric of the opposition, we do believe that in health, no less than in telecommunications, the market forces in operation will be the best mechanism for keeping premium increases to a minimum. Selling Medibank Private will essentially unshackle its operations, allowing it to apply full commercial practice and discipline to its operations to ensure that it is a dynamic and efficient organisation providing the best possible products and solutions for its members. The government should not be in the business of, effectively, running a health insurance company. This was aptly stated in the editorial of the Australian Financial Review on Friday, 28 April 2006:

It’s a good thing if Medibank Private is taken off the government’s hands; Labor’s opposition to the sale is mystifying. Canberra never had any business running an insurance company.

That very neatly sums up the position that this should not be in government’s hands, and the Labor Party’s position is mystifying indeed.

The Howard government recognises that medical research as well plays an important part in the health sector, and its policies and budget priorities have contributed strongly to ensuring that all kinds of wonderful medical research and scientific research can take place to assist Australians in the management of their health as well as to find cures for the terrible illnesses from which some of our fellow Australians suffer. I want to touch on that because one of Australia’s very distinguished scientists, Professor Ian Frazer, who is of course the Australian of the Year and is also a Ryan resident, is in the parliament today to support the Kids in the House program. This is run by a very important organisation in this country which promotes awareness of diabetes in Australia. In the parliament this morning I had the great pleasure of meeting many of those young Australians who suffer from diabetes, together with their parents, including Jesse Goss from my electorate and her dad, Peter Goss.

It is important that this government focus on policies that affect the economy in a very positive fashion and that affect, within the economy, the health sector. We know that our capacity to fund research is greater when the economy is prosperous and dynamic and, indeed, that is what the government are ensuring under the leadership of the Prime Minister and the Treasurer and their cabinet colleagues. Without a strong and prosperous economy there simply is not the capacity to fund much of the vital research that we so desperately want to fund and to find breakthroughs with.

Some $500 million from the sale of Medibank Private will be committed to the National Health and Medical Research Council over four years, and there will be some $170 million over nine years for new research fellowships. These fellowships will attract top researchers to Australia and keep them here. That is amongst the reasons why it is very important that this sale proceeds smoothly and efficiently when it does go to the market—because the funds that the government is able to generate from the sale will go to very important research, including, as I mentioned, half a billion dollars to the NHMRC.

The government has decided that the sale of Medibank Private will take place as a sharemarket float as opposed to a trade sale. Floating the company will give all Australians an opportunity to own part of Medibank Private and will also allow existing customers to be recognised through an entitlement in the public offer. Allowing Medibank Private to be listed on the stock exchange will enable Medibank to raise capital, expand and offer more services to its customers. The government decided against selling Medibank Private by trade sale because such a sale could be seen to be the mechanism by which Medibank Private’s competitors get involved and that is certainly not desirable. That would, of course, have had a great impact on reducing competition rather than promoting it.

As members will know, the government has decided that the most appropriate time for the sale is probably some time in 2008—we hope to be re-elected in 2007—when that transaction will be put to the Australian people via a sharemarket float. I have heard previous speakers from the opposition say that this is all very devious and mischievous and that, should a Labor government come into office next year, it would automatically knock that policy off the agenda—a Beazley government will not be selling Medibank Private. I say to the Australian people that members of the Labor Party have form on this. We all know that while they were in office they had no hesitation in selling some of Australia’s key government owned assets. High on the list were Qantas, the Commonwealth Bank and the CSL, yet today they oppose the sale of Telstra and, with this bill, Medibank Private. Their form certainly suggests that philosophically they have no problem in selling government owned enterprises when it is politically convenient to them. Of course, in opposition all they will do is oppose a government initiative which is really in the national interest.

As I said earlier, socialism is dead and I know that the overwhelming majority of the Ryan electorate does not subscribe to the philosophy of socialism in the 21st century. The Australian economy exists in a very globalised world. We are very much a modern, dynamic economy and it is vital that we continue to pursue philosophies and policies that reflect that. We do not live in the past. As a nation beginning its journey into the future, there may have been a case for significant organisations, such as an airline or a bank, to be held in the hands of the Commonwealth, but that case cannot be made today. It is important that this bill succeeds in both of the houses of parliament and that in 2008 it is put to the Australian people for them to have the opportunity to take a financial stake in what will be a very successful company.

Quite often one comes across little gems in our vocation. I came across one in the form of a speech by the current Leader of the Opposition when he was Minister for Finance to the Life Insurance Federation of Australia at the Hyatt Hotel in Perth on 7 July 1994. I certainly commend that speech to my colleagues in the coalition and to those opposite as well. As finance minister—the Leader of the Opposition as he is today—he made a very compelling case for privatisation and outlined circumstances where the Commonwealth should rid itself of key assets. I will read it into Hansard because I know that the people of the electorate of Ryan, whom I represent here, will be very interested in this because it gives an insight into the Leader of the Opposition’s thinking and his approach to policy and government. If at the next election the Australian people decide to vote for the Labor Party, they ought to know what they might get. Of course, as the member for Ryan, I encourage them not to do that because that would be to the detriment of the national interest. I regret that time will not allow me to read all of his speech—it is quite compelling—but this is what the Leader of the Opposition, the member for Brand, said as finance minister to the Life Insurance Federation of Australia in July 1994 at the Hyatt Hotel:

I want to start by putting the privatisation program into context, because as a relative newcomer as Finance Minister, it comes as a surprise to me that so little is known about the rationale that underlies asset sales, especially given that we have had an asset sales program for almost seven years now.

Possibly it is the media’s fascination with the dollars that are generated by asset sales that makes it appear that the budgetary bottom line is the Government’s first and last objective in pursuing privatisation.

But there are broader benefits to be gained from moving the ownership of assets into the private sector, most notably in achieving greater efficiency, stronger performance and improved competitiveness in some of our key national enterprises. But I will spell this out in further detail later.

He went on to give several very compelling reasons for the sale of assets. He talks about the Commonwealth Bank, the sale of Qantas and matters of timing and gives reasons, including competition and benefits for the national budget. It really is a very good speech and one could have been forgiven for thinking that it was made by a federal Liberal minister. I commend that speech to my colleagues.

It is interesting to note that in the 1994 quote he said that the asset sales program has been going on ‘for almost seven years now’. So since the Hawke Labor government came to office in 1983 they had been in the process of selling assets. Let us have none of this rhetoric from members of the opposition that they do not believe in privatisation. Today they stand vigorously opposed to the sale of Telstra and Medibank Private but, if they were in government, they would do the same. I think the double standard really brings them into complete political contempt.

I highlight that to anyone who might be listening to this speech, and, of course, to those in my Ryan electorate because they are very much interested in government policies and in the alternative policies of an alternative Prime Minister. I commend the transaction and the bill to the parliament.

See this speech in context