Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Primary Industries, Resources, Forestry and Tourism) Share this | Hansard source

I welcome the opportunity to contribute to this debate on the Medibank Private Sale Bill 2006 and the proposed sale of Medibank Private. Unfortunately, this debate is not as comprehensive as it should be. I say that because, unfortunately, the government has withheld an important scoping study on the sale. It has refused to publicly disclose the information so that it can be part of the discussion before the House this afternoon.

That is an example of what is a growing and worsening trend in the operation of the Howard government. The record will show across a series of debates in the last 12 to 18 months a growing and disturbing trend in the House, aimed at stifling debate and limiting the value and effectiveness of bills which very seriously will have a potential major impact on the Australian community. It also reflects an arrogance by the government. If you look at the debates that occur in the House, which includes the Main Committee, you find that the opposition is completely dominating debates in the number of members speaking.

Obviously we have a far smaller representation at the moment, but we are trying to make sure that there is proper accountability and scrutiny of legislation. At question time, questions are not answered. It is the same with questions on notice, some of which are requested by constituents who are trying to get details of what the government is doing. All too often now we get answers back which tell us nothing. I can refer to one answer from the Minister for Small Business and Tourism in the last couple of days, which relates to the removal of the executive officer of Tourism Australia. A considerable amount of taxpayers’ money has been paid out, but when I questioned the government on the terms and conditions of the severance package the answer given by the minister was that they are ‘confidential to government’. There is also an agreement in place that prevents the departing head of Tourism Australia from revealing that information.

I find this alarming—I think that taxpayers expect some accountability. We have a proposal here for the sale of a major public asset, Medibank Private, which came into operation in 1976. Medibank Private represents the outcome of taxpayer investment over many years, which has been of benefit to all Australians. Yet we have a government that arrogantly says: ‘The debate’s coming on. We’re not prepared to make available for public scrutiny or the scrutiny of this House the scoping study which goes to the centre of the debate on the sale of Medibank Private.’ I think the Australian community has to understand that, more and more, there is an arrogance by this government which holds in contempt not only the House but also the Australian people. It is time for the Howard government to be held accountable for its actions.

That is why in this debate we have to get the Australian community to focus on what is at stake. Medibank Private is Australia’s largest not-for-profit health insurance provider, and it provides health insurance for some three million Australians. That number represents a considerable proportion of Australians. Represented in that number are many constituents in my electorate of Batman, in the northern suburbs of Melbourne, where over 35 per cent of residents have private health insurance. Many of these Australian families are signed up to Medibank Private, as I have been since 1976, when Medibank Private first came into operation. I declare my membership of Medibank Private, as I should as part of this debate, and I am proud to do so, having seen the demise of Medibank by the election of the Fraser government in December 1975. At least there was the creation of Medibank Private. I automatically joined Medibank Private in support of the need for private health insurance in Australia and a requirement to act in support of the public provider.

Having said that, Medibank Private is important not just to me and my family but to many constituents of Batman and to over three million Australians. It is an institution that many Australians cherish. They understand its importance in providing access to quality health insurance. Interestingly, a recent ACNielsen poll found that 63 per cent of people are against the sale of Medibank Private. Again it is the arrogance of government: ‘We know better than 63 per cent of Australians and the three million Australians who depend on this public provider.’

If legislated, the bill will amend the National Health Act to allow the government to sell its 85 million shares in Medibank Private. The bill will place foreign ownership and Australian identity restrictions on directors and national officers for a period of five years. What will happen at the end of five years? The bill will allow pre-privatisation profits to be redistributed to shareholders, following the privatisation. Obviously that is about the government trying to buy a bit of political mileage in the Australian community, and similarly with the foreign ownership and Australian identity restrictions for directors and national officers for a period of five years.

The changes will mean that the status of the fund goes from not-for-profit to for-profit. It will also ensure that the fund is liable for any compensation claims that arise from the sale, not the Commonwealth. Again this is the government wiping its hands of its responsibilities. It is running away from the potential legal liabilities that might arise from its decisions.

I believe that these are significant amendments and they should not be underestimated. The government has claimed that they are necessary to enable the fund to become more competitive and allow for downward pressure to be placed on premiums. It is also claimed that they will enable the fund to become more efficient by reducing management costs and that they will allow it to pursue new areas of business. The Minister for Finance and Administration, Senator Minchin, the architect of this sale, claims that these amendments will remove the government’s conflict of interest in being the main shareholder of the fund and, subsequently, the largest player in the industry—the medical or health industry—whilst also being the industry regulator. They are substantial claims, and one would think that the argument for them is backed by substantial reasoning.

Medibank Private is supported by three million Australians. A recent poll on whether or not Medibank Private should be sold found that 63 per cent of the Australian population surveyed were against the sale. Yet, once again, we are standing here in the House debating a significant bill which will continue the government’s agenda of privatisation.

The Medibank Private Sale Bill 2006 represents the sell-off by the government of another publicly funded institution without any details of the rationale behind the decision. Surely a government with a major sale such as this should be required to justify its decision and also to make available for public consideration the details which led to its decision. In the end, when you think about it, it is taxpayers’ money that funded consideration of this sale and the determination of the final policy position.

That leaves the House debating a bill that it can only half debate because the Howard government has failed once again to clarify how its claimed improvements can be achieved. If the government wants to make claims of what will occur as a result of the sale—new business opportunities, lower premiums and other claims—I simply say: put the substance of them on the table.

With that in mind I ask the House: why does the government continue to throw doubt on its own legislation by stifling debate? In essence, what has the Howard government got to hide yet again? Perhaps valid reasons are highlighted in its modelling, which it conducted as part of the scoping study for the sale. We do not know because the government will not make the scoping study available. The truth is that this study and the results that have been publicly disclosed have left the rest of us, especially Medibank Private members and the Australian community at large, wondering what the government is hiding. That is the only conclusion you can reach. What is the government hiding with this scoping study? People are guessing why a government would purposely conceal a vital document that is driving its decision-making processes. Why is this document not being made available for them to consider?

We all know that the Howard government have long had Medibank Private in their sights. The fund has formally been on its asset sale program since 2002, when the first scoping study was commissioned. So it is not new. The government have been about this end objective for a considerable period of time. It is not what they said prior to the 1996 election. Whether it is ‘never, ever’ or ‘not at this particular time’, any undertakings and commitments are a movable feast with the Howard government.

I believe that it would indeed be an error if the sale of Medibank Private could not be justified economically, lawful or morally and its privatisation were just an inane reaction by the Howard government to any government owned business. Is Australia Post next? That is the only conclusion one can reach. Where will the community service obligation go if Australia Post is next on the chopping block? Where will rural, regional and remote Australia be without access to Australia Post’s services? There is not much left, and this government has an agenda about selling all government institutions. I suggest to the House that Australia Post will be next. Maybe we will get an answer to that as a result of this debate.

That takes me to what the Minister for Health and Ageing has said. Recently, he said, ‘The government is instinctively in favour of privatisation.’ Will we sell the private health insurance provider, with a membership of three million Australians, simply because it is and article of faith for the Liberal Party to sell any government business that operates in a competitive environment? You would have to apply the same conclusion to a publicly owned institution such as Australia Post. There is no difference in the mind of this government. Effectively, it means that the government will apply this rule to everything. So you ask yourself: where will it end? Will anything stand in the way of such an approach driven by ideology? It is just like its approach to industrial relations: kick low-paid workers, especially women and young people, in the guts because it suits its ideology. The same applies to the sale of Medibank Private.

I want to refer to the comments of the minister for health again. It would seem that the sale of Medibank Private is not the desire of the Australian people. In August this year, the minister stated that he accepted privatisation was not often popular and that the Australian public might not immediately agree with the Howard government that this sale is in their best interests. He has reaffirmed time and time again that the sale of Medibank Private is firmly on the government’s agenda, although it could not be completed until 2008 due to next year’s election and the remaining sale of Telstra. Yes, another institution is on the chopping block—one that goes to the future capacity of this nation to roll out broadband. But the privatisation hammer—the ideology of the Howard government—prevails yet again.

The bare bones rationale that the government has provided is that it has received financial advice—which will not be shared with anyone—which indicates that the sale makes common sense. If that is the case, make the advice available. In the absence of any further reasoning provided by the government, we can only be left to think that the government is no longer making decisions about how it governs the nation. It is left to the financial advisers—the secret men and women in the back rooms around Parliament House.

This raises an interesting question about the morality of the sale. Much has been made in the media of the legality of the sale, following a Bills Digest from the Parliamentary Library. It suggests that current members have a greater claim in the sale than previously assumed by the government. This came in the form of a claim by members for compensation. I praise the library’s courage in making this advice available. We must always defend the integrity and independence of the library. As far as I am concerned, that is a fundamental requirement of all members of this House, irrespective of their political persuasion. This advice clearly proves why the library is doing a great and valuable service for the Australian community.

I say that because this is an interesting aspect of the bill. It is about its significance, and it is about members’ moral and legal rights. The Australian Medical Association released a media statement following the announcement of the sale stating that it:

... doubts the morality of the sale given that much of the value of Medibank Private is in its financial reserves which were not contributed by the government but rather, extracted from the members in compliance with regulatory requirements. This does not imply any criticism of the regulatory requirements. Reserves are necessary for proper prudential management of private health funds.

I thoroughly agree with that objective statement by the Australian Medical Association. If the government no longer wants to be involved as an operator of Medibank Private, a private health fund, there is a very strong view amongst members that there is a case for considering mutualising Medibank Private and retaining the equity with those who have contributed, namely the members. The three million members are entitled to have their views considered.

In the light of this and similar arguments, the Howard government has now distanced itself from its original viewpoint that reflected the unambiguous conclusions of its legal advice that rejected any suggestion that the members of Medibank Private could be entitled to compensation upon any sale. Alternatively, the government has now committed itself to including some entitlement for existing members in the eventual sale plan. Hence, I disclose my membership of Medibank Private, as I should, as part of this debate. This is an important shift in the government’s position on the issue. It makes me wonder: if this bill could be properly debated, if all the relevant information that has guided the government’s decision-making process were to be laid out in the open, what sort of bill would actually be passed by the House?

Unfortunately that does not appear to be what will happen today. It is a common ploy, for any decision that could be unpopular, to feign consideration over a period of time in an endeavour to allow resentment to settle while also allowing for the market to be quietly tested. That is what is going on at the moment. And this is why, perhaps, we could only half debate the bill today—because the government, if it came clean on its agenda behind the privatisation of Medibank, would be exposed for not acting in the best interests of the Australian public and especially not acting in the best interests of its three million members and the many families that depend on Medibank Private.

Before I conclude, standing alongside my colleagues in opposition to this bill, I would like to raise one more interesting point. The bill will see the status of the fund change from not-for-profit—and apparently quite easily, according to the government’s legal advice, through a change in a provision of Medibank Private’s constitution that will make it a for-profit company. Effectively, this means that an organisation has the potential to establish itself as not-for-profit, register as such and hold itself out to members as an organisation which is subject to the applicable restrictions under the National Health Act. There is the potential for its assets to be managed with priority given to member’s interests, establishing reserves on that basis over a period of years, and then, without reference to members, for the organisation to unilaterally change its status and freely distribute its reserves as profits. That is an interesting legal conundrum. Is this the precedent that we want for the future of the legal system in Australia, in passing this bill? The implications of the legislation are serious.

A privatised Medibank Private would mean that a much greater proportion of the sector would suddenly, overnight, be for-profit and would mean that the sector would be much more commercially orientated. This could have the disastrous effect of forcing the not-for-profits to become more commercially driven in order to compete. This, in turn, could increase the pressure on the government for more commercially orientated and less community orientated regulatory reform. Once again, these are serious issues associated with the bill that need to be debated openly and thoroughly.

The sale of Medibank Private, as we appreciate on this side, for ideological reasons on the other side, has been coming for about four years—if not more, secretly. Why does it therefore have to be pushed through the House of Representatives without any clear rationale? There is no good reason for that approach to legislative change in Australia. The lack of reasoning that has stifled debate casts doubt on the merits of the bill and, for that reason, the opposition is justified in opposing this bill.

I will also say, in conclusion, that the time has come for the Howard government to have a look at its operation in the House. We are the representatives of the Australian people, who are supposed to properly consider legislation before the House and seek accountability. This is a prime example of the Howard government’s arrogance. A scoping study was prepared at expense to the Australian taxpayer, yet it is locked up in the cabinet vault. The Australian taxpayers own that scoping study. I call upon the Howard government to make that scoping study available to enable a proper debate. If it does not, one can only conclude that this is about secrecy and arrogance in government and a clear decision yet again by the Howard government to hold the Australian public at large in contempt and to treat the three million Australians who are members of Medibank Private with utter contempt. That is the only conclusion one can reach—but, then again, that is part and parcel of the nature of the Howard government in 2006. And that is why the Australian community is, more and more, growing sick and tired of its arrogance and contempt and the fact that it is driven by one thing: not good policy, but a mere requirement to occupy the Treasury benches so as to distribute the perks of government to its mates. The opposition is correct. The sale of Medibank Private is wrong. (Time expired)

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