David Hawker (Speaker) Share this | Link to this | Hansard source

I have received a letter from the honourable member for Lalor proposing that a definite matter of public importance be submitted to the House for discussion, namely:

The Government’s decision to postpone the sale of Medibank Private until after the next election.

I call upon those members who approve of the proposed discussion to rise in their places.

More than the number of members required by the standing orders having risen in their places—

Julia Gillard (Lalor, Australian Labor Party, Shadow Minister for Health and Manager of Opposition Business in the House) Share this | Link to this | Hansard source

It is a pleasure to rise in this matter of public importance debate. Particularly after a question time that saw four Labor members excluded and 13 others warned, I am happy to join with my colleagues and debate this important issue. There are those on this side of the House who almost hanker for the days when the minister for health played the role of the enforcing bullyboy in this parliament. Now he has moved from that stage of his political career to a stage where we have seen him today, gibbering on in question time a bit like what we expect from the member for O’Connor, making no sense at all and gibbering on about socialists when he should be addressing the important issue of the sale of Medibank Private. But in his incomprehensible contribution today he did manage to say one thing that is important for the House and the Australian public to know. That is that the intention of this government remains to sell Medibank Private. No-one should be fooled about that; as well as the extreme industrial relations laws and other government proposals, the next election will be about whether or not the community wants Medibank Private sold.

It is interesting to go back just a few short months, to 26 April, when the minister for finance and the minister for health, full of swagger and arrogance and masters of the universe at that stage, were out there to tell us what was going to happen with Medibank Private. It was all full steam ahead then. These men were on a mission, and they knew exactly what they were doing. In the course of outlining their intentions for Medibank Private, they were telling us how quickly it was going to be sold. I directly quote the minister for finance, who said during this press conference where they were puffed up with how clever they were at selling Medibank Private:

... the legislation will be introduced into the budget session.

This was a press conference in April; they were going to introduce the legislation to sell Medibank Private in the budget session. The minister for finance, Senator Minchin, goes on:

We would hope to complete a sale in financial year 2006/07. We have not made a decision yet on the method of sale. Broadly speaking, the options open to us are a trade sale or a public offering.

So there they were in April, ready to sell. They were going to put the legislation through in the budget session, fully on notice that they might float it or they might go down a trade sale route. Of course this is a government that actually knew in April that it wanted to sell the rest of Telstra. That was not a mystery to the government; that is not something that has just come upon it in a blinding flash. This is a government that knew it wanted to sell Telstra and knew it wanted to sell Medibank Private, and it was full steam ahead. It was going to sell. Yet today we have got leaked out on the front page of the Fin Reviewthe cowardly way you get a story out: give it to one newspaper and let it float out into the ether—

Kim Beazley (Brand, Australian Labor Party, Leader of the Opposition) Share this | Link to this | Hansard source

Make sure it’s the Fin Review, though.

Julia Gillard (Lalor, Australian Labor Party, Shadow Minister for Health and Manager of Opposition Business in the House) Share this | Link to this | Hansard source

And make sure it is the Fin Review. And then finally they are forced to confirm, not by way of proud announcement and not by way of press conference with two ministers, TV cameras and a transcript. No, they just let it be known in quiet voices that actually they have deferred the sale until after the next election.

You might well be asking yourself what has changed since 26 April. And the answer is quite clear, because every day in every way the sale of Medibank Private has fallen apart in front of this government’s eyes. It has been almost the most ham-fisted attempt to get anything done that we have seen from this government to date, and there is a pretty high bar given some of the incompetent displays this government have engaged in. The first problem this government had was that they ran into legal difficulties about who owned Medibank Private. They did not even know, at the end of the day, whether it was clearly theirs to sell. The Labor Party had raised with the library the question of the legality of selling Medibank Private, and on a Friday the library released this parliamentary research brief entitled The proposed sale of Medibank Private; historical, legal and policy perspectives. This research brief comprehensively went through the arguments as to who owns Medibank Private and who is entitled to sell it and concluded that the government was in difficulties.

The government was in difficulties in selling all of the Medibank Private fund because the members of Medibank Private had an interest in that fund. So the first big problem for the government is this research brief that says, ‘Well, maybe it isn’t the government’s to sell.’ That happened on a Friday, and I do not think it should be a mystery to anyone in this place or beyond that by the Sunday the Treasurer was on national television musing about whether it would be best to float Medibank Private and whether it would be best to give some shares to policyholders. He said on the Laurie Oakes show on Channel 9:

Laurie, I think this could be an area where we could achieve some other policy goals, and I would actually like to see us very carefully examine the possibility of offering Medibank to the public, particularly to policyholders.

So the government runs into legal difficulties selling Medibank Private and it thinks, ‘How can we patch over that? How can we pretend to Medibank Private policyholders that they are actually going to get something out of this?’ It has got the Treasurer out there saying, ‘I would quite like to float it and I would quite like to give some shares away to policy owners.’ Then the minister for finance, the minister for health and the Prime Minister say the same thing quite quickly.

So if it had just been a debate about whether they were going to rip policyholders off, they might have kept going with the sale. But that was not the only hurdle they encountered or the only problem that this government have encountered with the sale of Medibank Private. The second main problem they encountered was that their claim that the sale of Medibank Private was going to put downwards pressure on private health insurance premiums was increasingly becoming a laughing stock. That claim was viewed as increasingly laughable by anybody in the health sector who knew anything about the private health insurance market, and by Australians beyond that.

Of course, the nails in that coffin, putting to bed this absurd claim that somehow Medibank Private’s sale was going to be good news for private health insurance premiums, came from all sources. Most particularly, they came from noted economic commentator Terry McCrann, who basically said that, if you had an economics degree of any sort, you would see through this argument in one second flat. He said:

There’s also a particular problem with a float over a trade sale.

He was talking about the government’s preferred method of selling at that stage. He went on:

That would mean a company listed on the stock exchange which would have to make a profit for shareholders.In contrast the entire private health insurance sector is today at least nominally non-profit.So what does the introduction of a profit-based player in the private health insurance sector mean?They all switch to profit-making? Or Medibank Privatised can’t compete?

So there you have it in the words of a noted economic commentator—someone who has been quoted time after time with approval by the Prime Minister—who is basically saying that privatising Medibank Private, particularly by way of float, is going to introduce a profit motive not only into Medibank Private itself but possibly more broadly across the private health insurance sector, and that is going to be bad news for premiums.

Of course, the voice of Terry McCrann is joined by others, including the AMA. I quote the President of the AMA, who said, ‘Higher premiums would be inevitable,’ as the new owner sought to maximise returns to shareholders. Even the Minister for Health and Ageing, who is at the table, when asked on the weekend that has just gone by, basically said with a shrug of his shoulders, ‘Well, you know, of course, if I had to put up Medibank Private premiums and give approval for that, of course I’d do that.’ Up those prices would go.

Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

Mr Abbott interjecting

Julia Gillard (Lalor, Australian Labor Party, Shadow Minister for Health and Manager of Opposition Business in the House) Share this | Link to this | Hansard source

He is saying that is what he would do when it is in government ownership. Maybe, Minister, it is your dereliction of duty that is part of the problem. Then, of course, the minister for finance—

Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

Mr Abbott interjecting

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

The minister will have an opportunity to reply.

Julia Gillard (Lalor, Australian Labor Party, Shadow Minister for Health and Manager of Opposition Business in the House) Share this | Link to this | Hansard source

It is his dereliction of duty that I am coming to right now. Then, of course, the Minister for Finance and Administration issued a clarification on the weekend. He had to say to the Australian community: ‘When I was wandering around saying that selling Medibank Private’s going to put downward pressure on premiums, I didn’t want anyone to actually believe premiums were going to go down. If you thought that, I’m sorry, because it’s not what I meant; they are going to go up.’

This is the state of the government’s case about what the sale of Medibank Private would mean for premiums. Everybody knows that the case they were putting was laughable and that the pressure from the Medibank Private sale on premiums would be to put premiums up for Australian families.

Finally, the political case for selling Medibank Private fell apart. There we have it: the legal case fell apart, the case about premiums fell apart and then finally the political case for selling Medibank Private fell apart when the government got the news through today’s newspapers that Australians did not want Medibank Private sold. In case there were any doubts in anybody’s mind, there it was on the front page of today’s newspaper: 63 per cent of Australians did not want Medibank Private sold. So incompetent has this government’s argument for the sale of Medibank Private been that nearly half of coalition voters did not want it sold. Even half of the people who, day after day, think the government is doing a good job did not want it sold. Even more disproportionately, other Australians did not want it sold. So the case for selling Medibank Private fell apart.

But what do the government do? They do not do the right thing. The right thing would have been to walk out today to a press conference with the cameras and say: ‘On 26 April, we got it wrong. Selling Medibank Private’s wrong. We will keep Medibank Private in government ownership.’ That is what they should have done. But of course that is not what they have done. What they have done is to put off the sale until after the next election in the hope that they can hide it behind that election, in the hope that people will vote at the next election having forgotten about this issue. The day after the election, there they will be, actioning the sale of Medibank Private. So no-one should be confused about this: the return of the Howard government means the sale of Medibank Private.

But the return of the Howard government could mean the sale of so much more. We had the minister for health on radio this morning. I thought he was coming out with some sort of red herring—but, if this is a red herring, it is a big one. He was out there today saying, ‘Why don’t we contemplate private management for public hospitals?’ But then he went beyond that and spoke about basically having public hospitals for profit and in the hands of the private sector. If you have a public hospital that is for profit and in the hands of the private sector, most people would call that a private hospital. Let me give you a flash. Let me give you a tip. Most people would call that a private hospital and most people would say that is about selling public hospitals to the private sector.

Let me quote the minister. Mr Abbott would not say if the plan was the first step to complete hospital privatisation or confirm whether the government expected hospitals under the plan to be run at a profit. But he said: ‘Obviously, if you are a private business, you want to make a profit. But how a private sector manager runs a public hospital would be very much up to the relevant state government to determine.’ So, next election, if this government is returned, sell Medibank Private and put a for sale sign outside every public hospital in this country. That is what this minister wants to do, and do not make any mistake about it.

It will not stop there. We know that this is a government that, despite its rhetoric, has always wanted to do something to Medicare—to get rid of it, to abolish it, to confine it—and that is the other part of this agenda: sell Medibank Private and put a for sale sign on every public hospital. Then the next step, verified by none other than Wilson Tuckey, the federal member for O’Connor, would be the privatisation of Medicare. He said:

While selling Medibank Private will achieve a reduction in private health insurance costs, the real need is to include the services of the Health Insurance Commission or Medicare as we know it in the privatisation package.

This is a government that laughs uproariously at the stupid joke that it is the best friend Medicare ever had. Well, with friends like this, who needs enemies? A for sale sign on Medibank Private, a for sale sign on public hospitals and a for sale sign on Medicare—they are the health plans of this government if it wins the next election. (Time expired)

Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

The sale of Medibank Private is an important topic and I will do my best to do it justice, even though it certainly has not had justice done to it to by the member for Lalor. Let no-one be under any doubt: this government is perfectly upfront and open about its desire to sell Medibank Private. Yes, members opposite can campaign from now until the next election on this issue, if they wish, and we will meet them every step of the way, because this government believes that privatisation is, generally speaking, a good thing where we have government owned enterprises engaging in business in a competitive market. That is why this government believes that Medibank Private ought to be sold; that is why this government believes that Telstra ought to be sold. That is why this government supported members opposite when they were in government when they thought that the Commonwealth Bank should be sold; when they thought that Qantas should be sold; when they thought that TAA, as it then was, should be sold; when they thought that CSL should be sold; and when they thought that Defence Industry should be sold. We supported them because these were all government business entities operating in competitive markets.

Our principle has been absolutely crystal clear from the late 1980s to the present time. We will stand on this principle and on this practice from now right through to the next election and, if we are lucky enough to be returned, we will happily keep standing on this principle for as long as there is breath in this government’s body. There is no deceit, no subterfuge and no confusion. This government believes that Medibank Private should be sold. We think that selling Medibank Private would be good for policyholders, good for taxpayers and good for the health sector generally. That is what we believe.

I am disappointed that the advice we have had from our financial advisers is that it would be best not to sell Medibank Private in close proximity to the sale of Telstra, and that is why we cannot do so until the second half of next year. But, as there will be an election then, we will be precluded from going ahead with this by the caretaker conventions, and that is why it now will not happen until 2008. But let everyone be in no doubt: if this government is returned, there will be a sale of Medibank Private early in 2008. Let there be no doubt about that whatsoever.

I accept that privatisation is often not popular but, unlike members opposite, sheer gutless populism is not the stock in trade of this government. We are prepared to do what we think is right. We accept that the general public might not immediately agree with us, but the fact is that we know, in the end, the public expects governments to make decisions based upon principles, not on sheer gutless populism, which is what we increasingly get from members opposite.

Let me do my best to address some of the specific criticisms that were made by the member for Lalor in her MPI address. She suggests that there was something deceptive about the government’s April announcement that we intended to go ahead with the sale of Medibank Private. I was there with Senator Minchin. This morning I have had drawn to my attention aspects of the transcript, and it was always made crystal clear by Senator Minchin that the government’s first priority was the sale of Telstra and that the sale of Medibank Private was contingent upon the government’s arrangements to sell Telstra, which was our first and foremost priority. We knew we wanted to sell Telstra back then, but no final decision had been made. It is only in the last few weeks and days that we have had advice from our financial advisers that the best and fairest deal for taxpayers and for those who are contemplating buying shares in what are currently government owned or government part-owned entities would be to keep a reasonable distance between these two floats.

The member for Lalor claimed that there was some kind of reprehensible or incompetent confusion as to who owned Medibank Private. There has never been any confusion in the government’s mind. We had clear legal advice from start to finish that we were perfectly entitled to sell Medibank Private and that the government clearly owned Medibank Private. I accept that members opposite, in running the kind of interference that they normally run, sought legal advice of their own. The instant they got that Parliamentary Library advice, we sought through a distinguished city law firm a QC’s advice, which confirmed the original advice that the government had.

The next claim from the member for Lalor is that the government’s strong belief that premiums would be under less pressure in a privatised Medibank Private than is currently the case is laughable. She says, ‘A privatised Medibank Private would inevitably rip the public off through unconscionable increases in premiums.’ The logic of the member for Lalor and some of the people whom she cited was that a private business is always going to be more expensive for purchasers than a government owned business because a government owned business does not have to satisfy, in her mind, the evil profit motive; it does not have to satisfy the need to provide a rate of return on shares. If that is the case, we should nationalise every private business in this country because every private business, according to the member for Lalor’s logic, is ripping off its customers because it is demanding a profit. Would it not be so much better if they were all in government ownership or run by charities or community groups of some sort so that we could dispense with the evil profit motive?

I certainly think there is a place for charities and community based businesses to operate in our market; but there is nothing wrong with the profit motive. The reason why the private sector is so consistently better than government operations at producing goods and services is that the efficiencies that the private sector is capable of enable it to make a profit and deliver the goods and to still do it significantly cheaper than government owned enterprises.

The logic of the member for Lalor, at the very least, would have the Commonwealth Bank renationalised, and then, because the Commonwealth Bank was renationalised, it would have lower interest rates and lower charges than the other banks, so we should nationalise them. Then we would nationalise Qantas and, because it would be so much cheaper to fly in a nationalised Qantas, the opposition would say, ‘Let’s nationalise Virgin and all the other companies currently providing aviation services.’

I know the member for Lalor gets upset when it is said by members of the government that Labor are still socialists at heart, but the truth is that, on the logic that she has put forward today, they must be socialists at heart because, by definition, once the profit motive is involved prices go sky-high. That is the logic that she gave us this afternoon. Of course it is not true, and if it were true—

Julia Gillard (Lalor, Australian Labor Party, Shadow Minister for Health and Manager of Opposition Business in the House) Share this | Link to this | Hansard source

He’s calling Terry McCrann a socialist.

Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

And the AMA.

Tony Abbott (Warringah, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

Now we have this confected hilarity and manufactured conversation—the kind of organised discourtesy which has come to characterise this opposition, and there were some grotesque examples of it today with gross discourtesy and juvenile behaviour. Members opposite really should be ashamed of themselves for the sort of behaviour we have seen from them in the parliament this week. The idea that these people, with this constant caterwauling, are capable of being credible ministers and providing a responsible government for this country is really bizarre.

The member for Lalor keeps saying to me: ‘Can you guarantee that premiums will not rise if Medibank Private is privatised?’ Let me put this to her: can she guarantee that premiums will not rise if Medibank Private is not privatised? Can she guarantee that a government owned Medibank Private will never raise its premiums? Of course she cannot give that guarantee. It is a ludicrous guarantee to seek—and, if it is ludicrous to seek such a guarantee about a government owned Medibank Private, it is equally ludicrous to seek a guarantee about a privatised Medibank Private. This is typical of the kind of cheap, gutless populism which we are increasingly getting from members opposite.

There are certainly some instances where privatisation does not make sense. If we are talking about a quasi-monopoly or, in fact, a monopoly of an essential service, privatisation does not make sense, which is why this government did not go ahead with the privatisation of the Snowy Hydro even though Labor governments in Victoria and New South Wales wanted to pursue it. So this government certainly is not an obsessive privatiser; but where you have a government owned business enterprise operating in a competitive market it makes sense to privatise it. That is why the former government privatised Qantas—and that has been good for Qantas and good for the airline industry. That is why the former government privatised the Commonwealth Bank—and that has been good for the Commonwealth Bank and good for the customers of banks. All we are doing is simply following the kind of responsible economic approach which members opposite used to follow in the days when they had some decent leaders like Bob Hawke and Paul Keating. We believe in privatisation not as a universal rule but as something which generally makes sense when you are talking about government owned enterprises engaging in business in competitive markets.

I will not read onto the record again the quotes from people like Mark Fitzgibbon, the head of NIB, the fourth largest private health insurer. I will not read onto the record again quotes from Francis Sullivan, the head of Catholic Health Australia—and the real author of Medicare Gold, I suspect—which the member for Lalor was happy to plagiarise. If he was good enough to write Labor’s policy for the last election, why isn’t he good enough to be taken seriously now on the subject of Medibank Private?

If anyone is under any doubt about the ability of a health fund in private ownership to give decent premiums and decent services, the second or third biggest fund is BUPA, a for-profit fund. No serious examination of the products, services and premiums offered by BUPA in its various guises would not confirm that it is operating just as well as the other funds.

What we have really seen from the opposition in this instance is entirely true to form. What we know is that, since 1996, this opposition have been almost chronically incapable of adopting any policy that is unpopular or that seriously offends any of their constituents. If it offends anyone, they are against it. In all of this, we have further confirmation of the judgement on the current Leader of the Opposition by the former Leader of the Opposition. Let us not forget that the current Leader of the Opposition has never won a contested ballot inside the Australian Labor Party. The last time members opposite had a choice between Beazley and Latham, they chose Latham. Whatever faults the former Leader of the Opposition might have had—and he sure did have a few—he had the current Leader of the Opposition to rights. I quote the former Leader of the Opposition:

The Beazley culture is scab-lifting—see an issue, a public sore, and try to lift the scab without offering your own remedy.

…            …            …

Under Beazley, opportunism always knocks—milking the issue in the media, maximising the public’s angst and then moving on to the next opportunity.

What we have seen today is more political and policy bankruptcy from an opposition utterly wedded to cheap, gutless populism. It is unworthy of this chamber and it is proof positive that members opposite do not deserve to transfer to this side of the House. (Time expired)

Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

The word ‘vandal’ comes to mind in this debate. The Liberals are institutional vandals. The Prime Minister and his willing henchmen will destroy any institution the public holds dear. The pathetic attempt by the Minister for Health and Ageing to deal with the matter of public importance demonstrated that aptly today. He could not even mount an argument to defend this decision, except to say that the government believes in privatisation. Those opposite believe in vandalising the institutions we as Australians hold dear—and that is the entire argument they have for selling off this Australian icon. The argument is very thin on the ground.

Let us talk about cheap populism for a minute. I think it was only a few weeks ago that Alan Jones got on the radio and said, ‘Snowy Hydro—don’t go there.’ Zippity doo da! The Prime Minister was in here: ‘We’re no longer selling Snowy Hydro.’ Cheap populism at its best. It was good then; let us think about it now. The populism is saying, ‘Do not sell this Australian icon.’

And why? What is the rationale? Where is the analysis for destroying this icon? It is simply an article of Liberal faith. It is simply their faith. Today’s MPI again deals with the Liberals’ desire to sell off a vital Australian institution. This time it is Medibank Private. When asked why he sought to sell off this government controlled, not-for-profit entity, the minister for health glibly said, ‘The government is instinctively in favour of privatisation.’ And he repeated it for the 15 minutes in which he spoke before I rose to speak today. He said nothing else!

What can those opposite sell off next? We have to ask ourselves what they are going to sell next, when the last of Telstra goes and Medibank Private falls under the hammer. That is what they are institutionally interested in. That is what their faith says. That is their ideology.

Schoolkids ask the best questions. When they come to visit in Canberra, they inevitably ask the question ‘What attracted you to one side of politics over the other?’ For me, it is a simple question to answer: ‘Labor believes in government and the Liberals do not.’ Why sign up to a mob of people who have no desire to govern. They want the free market to reign. Today we are being told that it is not just the free market; it is their financial advisers who are making the decisions now. The government does not make the decisions; their financial advisers do.

I thought we were here for the social good. If that makes me an old institutionalised socialist—and I am not sure I ever have been—the people in Victoria and from my factional politics would probably disagree on that one. But I thought that was why we were all here—for social policy, to create a better society for Australians, to govern.

Those opposite have no desire to govern. Selling off Medibank Private—taking government out of that field—again demonstrates that they do not want to govern. They do not want to have a say in this vital market within our institutions—within our social fabric and, indeed, within our economic fabric. Today we see again the desire by government not to govern—to sell off an asset because that is what they do. The sale, according to the minister for health and the minister for finance, would put downward pressure on premiums and create greater competition in the health insurance sector.

We have heard a lot about that. Way back before the 2001 election, the former minister for health, a man who used to occupy my seat in this place, claimed that the government’s policy would put downward pressure on premiums. That was the policy going into that election. We have not seen any of that. We have seen premiums rise since the introduction of that policy following the 2001 election—and rise by 40 per cent, well over the inflationary rate of the time.

This impacts heavily across the board. Over 42 per cent of Australians have private health insurance. In my electorate of Chisholm, as one particular lobby group is very wont to tell me, 52,803 people, or 62 per cent of my constituents, have private health insurance. I and my family are among them. Mind you, since my son was born and has had 12 surgical procedures, I am actually making money on my private health insurance, so I am all in favour of it at this personal point in time.

My constituents pride themselves on looking after themselves. They pride themselves on the fact that they can find, on average, $4,200 each year to keep up a basic cover, including hospital cover. If you take off the 30 per cent rebate, the figure for hospital cover may be about $3,000.

That is a fair whack out of anyone’s take-home pay, especially considering the ageing demographic of my electorate. Many people are self-funded retirees or pensioners, but they still maintain their private health insurance—and they proudly maintain that health insurance, because they say that they are looking after themselves. They are ensuring that, as they get older and their health needs become greater, they will be able to support themselves and will not be a burden on their families or society. They find that money somehow. They are on fixed incomes and it is very difficult. Every time prices go up, they feel it acutely—and prices have gone up and up.

Some time ago, I asked a previous minister for health about giving the guarantee of rises. Yes, the minister actually has to guarantee rises; they do not automatically happen. Companies do not decide to do it; they have to get government approval. At one stage, I asked a question on notice and got back a great answer. I asked, ‘Do you ensure that the private health insurance providers guarantee ongoing coverage so that the current provisions they provide will still be provided after they give the rises?’ No, they do not guarantee ongoing coverage. On average, the government gives them an eight per cent rise each year and asks for nothing in return. It is just that the market dictates it! It is more than inflation.

Through this debate, we know that premiums will go up. It is not a matter of institutional knowledge or an article of faith; it has happened. It is the track record. This minister—this government—has again come out on record saying, ‘If they ask for increases, I’ll give them to them. There is nothing that will stop me.’

In my electorate there will be a disproportionate pressure—on the people within Chisholm who have taken out private health insurance year in and year out. The families in my electorate—where housing prices are fairly high and where mortgage increases cut deep into family reserves—are struggling to keep up payments on their health insurance. The mums I talk to in the playground when I go to get my kids after school are often faced with these choices. We have conversations on these matters as we stand around the playground.

Recently we had a debate about whether you keep private health insurance or get rid of it. Four thousand bucks goes a long way on your housing payment. Do you do that? But, as one mum said to me: ‘The first one has just got braces. London to a brick the next three are going to get them. Can I afford, out of our pockets, to pay for four kids having braces if I don’t have insurance cover?’ And that is extras as well. The cost is even greater than the $4,000 if you take out extras for dental cover on braces. People think about it. They know how it impacts on them. Again, this government does not care. Those opposite absolutely do not care about the pressure that this will put onto families at home.

But somehow they have gone cold on the sale. We have heard: ‘It is going to happen. Understand that. But it is not going to happen until after the next election, so you cannot completely beat us up with a baseball bat between now and then—but we will sell.’ Why have they gone cold? We have heard it is because of their financial advisers; or is it because 63 per cent of Australians say, ‘Don’t sell Medibank Private,’ or because they might be listening to people like Terry McCrann, who is not exactly a known supporter of this side of the House? He has powerfully made the simple point that, if you privatise something with a profit motive, the pressure has to go onto making those profits. Directors have duties to shareholders. Their duties state quite categorically—and, if you need any lessons on this, go and read some Hardie’s transcript—that directors have a responsibility to return a profit to shareholders. To create that profit, prices will inevitably have to go up. They just will.

I actually have an economics degree, so maybe I can come to this debate and say, ‘Yes, that is actually how it works in the market.’ The AMA has said prices will go up. Dr Nicholas Tonti-Filippini has said they will go up. This is a man who the minister relies on constantly. Nicholas Tonti-Filippini, who advises the minister on ethical issues, is opposed to the sale of Medibank Private and is a fairly heavy user of the system because he suffers from quite ill health. He says:

It is some form of right-wing idealism.

That is all it is; it is just some right-wing idealism. There is nothing to the basis of this sale. It is just their article of faith. Premiums will go up and families will be hurt. More importantly, the people they say they look after and we do not—self-funded retirees and pensioners—will be hurt. They are the ones who are probably in Medibank Private because they believed Fraser when he introduced it in 1975 and said that it was there to keep rates down. They probably believed him because they thought government owned institutions were actually there to help. We say: do not sell it, because it will only hurt the community we represent.

Mrs Bronwyn Bishop (Mackellar, Liberal Party) Share this | Link to this | Hansard source

I am very pleased that, in the last few minutes of her time, the member opposite returned to the subject of this matter of public importance, and that is the question of the government’s decision to postpone the sale of Medibank Private until after the next election. In the rest of her contribution, she seemed to start by telling us that we should not have any private health insurance—that it is a bad thing—and then reconsidered that and said there were people who thought it was a good thing because they could afford to have things that they otherwise could not afford. So it was a fairly confused contribution which did not really add very much.

The member for Lalor, who introduced the matter of public importance, was at pains to say that government owned institutions perform better than privately owned institutions, which is patently untrue. If there is one thing that I think we all should have learned from seeing the privatisation of various entities such as Qantas, the Commonwealth Bank and the variety of government owned institutions that the former Labor Party government privatised, it is that the principle of good commercial practice gives good outcomes.

From my point of view and the government’s point of view, the principles of free enterprise tell you what the business of government is, and the business of government is to do those things which the private sector either cannot or will not do and to provide for those who cannot provide for themselves. That is the business of government. The member opposite tried to say that the business of government is to make social policy and that is it. If we did that and we did not have an economic framework within which to operate, we could not afford to do those things. I was interested when the member for Chisholm said that she had an economics degree and that made her competent to make that observation. Perhaps she studied an economics degree in one of those quaint social contexts rather than in one where it is called hard economics.

I think it is important to look at the statement that the minister made in answering the speech of the member for Lalor. He very clearly said that the sale of Telstra, which is an $8 billion sale, is a priority for the government in terms of getting a satisfactory outcome. In addition, the advice that has been given to government, which it was quite prudent of government to seek, is that it would not be a sensible measure to sell Medibank Private at the same time—that is, competing for the funds of would-be shareholders. So the decision was made that the sale should be postponed until the Telstra T3 sale is complete. The simple time frame of an election due in 2007 makes the best timetable for the sale of Medibank Private to be 2008. That is a perfectly logical and sensible decision to have taken.

In the course of some of the contributions from the other side, we had a diatribe against any private ownership and the wickedness of selling a publicly owned institution, despite the fact that, as has been pointed out almost ad nauseam, there was no compunction when Mr Beazley was Minister for Finance about privatising a large number of publicly held firms, including Qantas and the Commonwealth Bank. They were, in their terms, quite iconic; yet both those firms have gained magnificently from that privatisation in terms of how they are run and in terms of profitability.

There also seems to be this quaint notion that, if something is owned by the government or is a so-called not-for-profit entity, it must necessarily be interested in making losses. I find that a very quaint observation. The fact of the matter is, whether an entity is privately owned, commercially owned or non-commercially owned—being charitable, religious or community owned—it is interested in making surpluses. It is just that, when it is a commercial entity, those surpluses are called profits.

In our current competitive private health insurance industry, we have 38 competing funds, of which five are commercial or for-profit funds. Is the member opposite seriously arguing that all the rises in private health insurance, which occur from time to time, have occurred or have in part occurred because five of those funds are commercially run firms that make profits? Of course not. The fact of the matter is that health is a very expensive entity to deliver. The cost comes very much from the fact that more and more expensive procedures are being delivered more and more widely. That is the business of government: to make sure that we can run an economy in this country and run it in such a way that people who need those expensive procedures can have access to them.

This government is interested in improving the delivery of health services all the time. The press release of 26 April this year that announced that the government would sell Medibank Private also said that the government was looking at further developments in the delivery of new products through private health insurance that would enable people to have better management of certain types of chronic disease, better manage people at risk of getting chronic disease, or better manage people who would benefit from preventative procedures which could be covered by private health insurance and who, if the procedures were not done, would end up in hospital, where they would be covered under their private health insurance for that stay. In other words, the government is looking to sell Medibank Private because that institution does not need to be government run and can be better run in the private sector—or at least have good commercial practice—so that it can change those things that are covered by private health insurance to enable people to have better management of chronic disease or it can better manage people who are at risk of chronic disease.

Rather than this debate being about an ideological stance of the Labor members opposite—that public ownership is always better than private ownership and therefore nationalisation, presumably, as the minister argued earlier, is the natural extension of that argument—what we are looking at here from the government’s point of view is allowing the general public, because it would be a float and not a trade sale, to purchase shares in a floated Medibank Private, and that would put it in line with the five already existing commercially run health funds. Incidentally, I might add, there is absolutely no evidence at all that the five commercially run for-profit health funds charge premiums that are higher than those of the other health funds. There is no evidence of that at all, and there is no evidence at all that a privately owned Medibank Private would behave any differently from the already operating five for-profit firms.

In announcing that the sale will take place, the government is putting its mind to looking at what is the best method of delivering healthcare for individuals. Specifically, it mentioned a disease management program where clinically diagnosed chronic disease could be managed in order to prevent hospitalisation. That item could be covered by private health insurance. I have already mentioned programs for chronic disease, together with people who are at risk of developing such disease. Diabetes and asthma come readily to mind as in that category of disease.

In concluding this debate I simply say that the evidence is that, where privatisation has taken place in a competitive market—not privatising a monopoly—the outcome is always seen to be beneficial for the economy as a whole. A well-managed economy enables us to make good policy for the delivery of such things as expensive health procedures that are needed by individuals to give them a better quality and longevity of life. I believe that is the duty of government to the people of Australia. (Time expired)

Ian Causley (Page, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The discussion is now concluded.