Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I continue speaking today about my very strong opposition to the Medibank Private Sale Bill 2006 and the sale of Medibank Private. I very strongly oppose the sale for a variety of reasons, but my main concern is that premiums will undoubtedly rise once the sale goes through. That is a concern that many locals have expressed to me, particularly the many pensioners who live in the electorate of Richmond.

As I have already said, as a precursor to the sale of Medibank Private we saw the closure of the Medibank Private office at the Centro Tweed Shopping Centre, Tweed Heads, just before Christmas. The distress that caused throughout the community was quite extreme. I would like to give just one example: Mr Derek Andrews, who is 77 years old and is a local from Kingscliff, was doubly disappointed when he tried to pay his Medibank Private premium at the Tweed Heads office. He went there and found that not only had the health fund office closed down but the nearest office was on the Gold Coast and that that office does not accept cash. So Mr Andrews, a pensioner, had to battle through the traffic to get to the Medibank Private office at the Pines Shopping Centre, Elanora, in Queensland. He was then forced to convert his annual premium of $1,575.60, which is a lot of money, from cash to two money orders. So there we have it: Mr Andrews goes to the Medibank Private office at Tweed Heads, finds that it is closed, battles through the traffic to get to the Gold Coast and is then told that it is a cashless office. He then had to get money orders, which meant he had to find the nearest post office and then had to spend another $6 on top of the premium to get the money orders. This has caused huge distress to Mr Andrews and to many other people who were not aware that this office was to be closed.

What is most annoying is that, between the Gold Coast and Lismore, there is no Medibank Private office, and we are certainly going to see a lot more closures right across Australia when it is sold. The closure of the Tweed Heads office was certainly an indication that Medibank Private was going to be up for sale. It is unfair, particularly to the people in the electorate of Richmond, because we now have four Medibank Private offices on the Gold Coast and one down in Lismore. But for a very large number of pensioners it will be very difficult, particularly for Mr Andrews.

It is not just this side of the House that is opposed to the sale of Medibank Private; it is not just the Labor Party. We are hearing from the Independents, the Greens and the Democrats as well. But there are many others in the community who have declared their opposition to the sale, and the list includes the Doctors Reform Society, the Community and Public Sector Union, the Health Services Union and the Save Medibank Alliance, a group that includes Professor John Deeble, one of the founders of the original Medibank, and Ray Williams, a former general manager of Medibank Private. Even the Australian Medical Association is opposed to the sale. So all these different groups are telling the government that it should not proceed with the sale of Medibank Private.

The Australian Medical Association made a submission to the Australian Competition and Consumer Commission on the proposed sale of Medibank Private. They raised serious concerns about higher premiums for Medibank Private customers and reduced competition in the private insurance sector. The President of the AMA said that higher premiums would be inevitable as the new owners sought to maximise returns to shareholders. He went on to say:

There is also a chance of flow-on higher premiums across the whole private health sector because of reduced competition. But the extent of the rises would depend on whether the new owner is a new or an existing player in the sector.

Of course, the AMA is looking at this from the proper perspective—that is, the health care interests of the people of this nation, and the health care interests of the members of Medibank Private particularly. Even Mr Russell Schneider, from the Australian Health Insurance Association, who represents private health insurance funds other than Medibank Private, has raised concerns about the proposed sale. He does not accept this government’s view that the sale will be good for the private health insurance sector. He said:

Health funds need to be concerned for the well-being of their members, not their shareholders.

And that is the change we will see when Medibank Private is sold: the focus will be on the shareholders. He further said:

It is certainly not in the interests of the members, nor is it in the interests of health care for the people of this nation to sell Medibank Private.

Two main arguments in favour of the sale have been put forward by the government. The first relates to competition and the second relates to a conflict of interest from being an owner and a regulator. I will look firstly at the competition argument put forth by the government. The Parliamentary Library research brief examining the government’s competition based arguments for the sale found that there was:

... little evidence to support assertions that a privatised Medibank Private would be more efficient, competitive and less expensive for consumers.

So a publicly listed Medibank Private would not have any more freedom under the act and regulations than it has under its current ownership arrangements. In its 1996 submission to the Productivity Commission’s inquiry into private health insurance, Medibank Private said:

A situation where a for-profit ‘middleman’ (health insurers) is also involved [in addition to private for-profit healthcare providers] will unnecessarily escalate the premium (price) for private health insurance.

The government says that a privately owned Medibank Private would have lower management expenses than it achieves under the current ownership arrangements. The thing is, there is nothing that a privatised Medibank Private could do to achieve such efficiencies that it cannot do under its current ownership status. In any case, if we are looking at a reduction in management expenses, whether that be rent, staff, salaries or marketing costs, that will ultimately mean a reduction in the number of offices and the number of staff. So we will see services fall as premiums rise. This is undoubtedly what everyone is aware of. As I say, locals whom I speak to are aware of that and we are hearing from many different medical associations and other bodies that are aware of that—it seems that everyone in the community is aware of what the reality of the sale of Medibank Private will mean except for those in the Howard government who are not prepared to listen to what people are saying about this.

The other argument made by the government is that selling Medibank Private will remove the government’s conflict of interest in being both industry regulator and owner of the main health fund. Medibank Private receives no obvious regulatory advantage over other health benefits organisations. Indeed Medibank Private was separated off from the Health Insurance Commission by this government in 1997. The health minister at that time said in his second reading speech:

... the separation of Medibank Private from the Health Insurance Commission, HIC, and the creation of a new Medibank Private corporation. Through the separation, the government will ensure that Medibank Private cannot be perceived to have any competitive advantage over other private health funds through its association with Medicare or other government program functions of the HIC. It reinforces the government’s commitment to the principle of competitive neutrality.

Yet, we have heard from the government that Medibank Private has to be sold because it has an unfair competitive advantage. In 2003, the government sufficiently addressed the conflict of interest issue when it decided to make the Minister for Finance and Administration the sole Commonwealth shareholder of Medibank Private. This, according to a joint press release issued by the Minister for Health and Ageing and the Minister for Finance and Administration on 17 June 2003, was to ‘provide a clear distinction between the Commonwealth’s roles as industry regulator and business owner’.

There is also a question of legality. No doubt the House is very aware that the Parliamentary Library has produced a research brief which has raised serious issues about the proposed sale of Medibank Private. The government got some legal advice but, to the absolute credit of the Parliamentary Library team, the Bills Digest did not shy away from their research findings and raised some very serious concerns about the accuracy of the legal advice the government has received on this matter. As expressed in the research brief, it is arguable that members of Medibank Private would be entitled to compensation if the terms of the sale do not adequately account for their right to the benefit of fund assets. Whilst denying that the warnings contained in the research brief were credible in respect of compensation to members of Medibank Private, the government simultaneously took steps to protect itself against just such an event occurring.

The bill contains a provision to ensure that the fund, not the Commonwealth, is liable for any compensation claims that arise from the sale. The bill allows for pre-privatisation profits ‘surpluses’ to be re-distributed to shareholders following privatisation. It also acknowledges the prospect of a legal challenge to the sale and has included a clause which makes Medibank Private rather than the Commonwealth liable for any compensation which might arise from such action. It seems that law and justice are not always the same thing and, indeed, nor are legality and morality on many occasions. It seems absurd that the government is moving the onus onto Medibank Private, obviously aware that some major legal issues will come about from the sale of Medibank Private.

The last issue I want to raise concerning this ideologically driven legislation—and I believe it is a very important issue to raise—is that the bill now contains safeguards directed at securing the Australian character of Medibank Private and at ensuring diversified ownership. It should be noted, however, that these provisions will expire five years after Medibank Private is sold. In five years time, there will be no limit on how much of Medibank Private can be owned, controlled and operated by one person or company. Further, after five years there will be no restrictions on foreign ownership of Medibank Private. After five years there will be no requirement that central management and control is exercised in Australia, no requirement that there is a substantial business and operational presence in Australia and no requirement that directors are Australian or that Medibank Private remains incorporated in Australia. This means, yet again, that one more of Australia’s national companies can be owned and controlled by foreign investors.

This part of the legislation distresses people. Everyone can see exactly where the sale is leading. We will see premiums rise, services fall and, after five years, Medibank Private being taken over by a foreign company. It is of particular concern to many locals in my area that this is a foregone conclusion, that this will be the end result should the sale of Medibank Private go through.

The government decision to sell Medibank Private is based upon an ideologically driven privatisation agenda and without regard for the implications of this sale on the affordability of private health insurance for Medibank members right across the nation. The government is totally disregarding the arguments put forward about the sale. The government has not provided any evidence that members of Medibank Private or, indeed, private health insurance holders generally will be any better off as a result of this sale. The reality is that they will not be better off; they will be worse off.

The government obviously does not care about the thousands of people in the Richmond electorate who will be adversely affected, particularly many elderly residents—those on pensions and fixed incomes—who are very distressed about this. They will not be able to afford the increases in premiums. This sale does not just affect people in Richmond; it affects people right across Australia. Three million members of Medibank Private will be adversely affected.

The reality will be that premiums will rise and services will fall. We will see more closures of Medibank Private offices. We saw the closure of an office in Tweed Heads as a precursor to this proposed sale. Obviously the government do not care about that either because they are hell-bent on flogging off our national assets. The stark reality of doing that is to make things harder for Australian families and workers who are already under huge pressure. We have seen a massive increase in the cost of living, with increases in interest rates and speculation about further interest rate rises. In my electorate this causes great distress to families, particularly pensioners who are on fixed incomes. On top of all of this, we are going to see increases in premiums for private health insurance.

This government just walks away from Australian families and the demands placed upon them, because it does not care. It is not interested in helping them out. Everyday it seems that there is another struggle. As I said, we are seeing the cost of living going up and prices going through the roof. This is causing great concern to people. But the government is hell-bent on flogging off whatever it can and on driving its own ideological agenda. It is doing its own thing and not listening to the concerns of anyone who is struggling. (Time expired)

Kelvin Thomson (Wills, Australian Labor Party, Shadow Minister for Public Accountability and Human Services) Share this | Link to this | Hansard source

It was Norman Lindsay who popularised the expression ‘the magic pudding’ with his book of the same name. Medibank Private is a magic pudding which would make Norman Lindsay proud. The government says: ‘We’ll sell it. It would be a fine thing to buy it.’ In the next few years it intends to spend $52 million of taxpayers’ money to increase consumer awareness of the incentives and benefits associated with private health insurance. This will include a general marketing campaign, jointly funded with industry, to provide consumers with relevant information about private health care and its associated insurance products. So, again, we have more taxpayers’ dollars in the form of government advertising to suggest that it will be a fine thing for shareholders to be buying into Medibank Private. But then it says, ‘But premiums won’t go up, so the fund members will be okay.’ Let us see: premiums will not go up, but it will be a good buy for investors—truly a magic pudding. Norman Lindsay would be mightily impressed.

Senator Minchin says the government is not doing this for the money. He says that a privatised Medibank Private will perform better. It will be more efficient. Freed of the constraints of government ownership, public ownership, it will be a better outfit. If the government is not doing it for the money, why doesn’t it just hand it over to the fund members? Frankly, it is all about the money, and most privatisations are all about the money. They are about this government—or, if you want to take the broader view, this generation—getting its hands on the money. It is a bit like kids who ask their parents for their inheritance in advance. Frankly, it is a fraud on the work of previous generations, in this case those who built up Medibank Private, and it is a fraud on future generations, as this generation grabs the inheritance and effectively spends it now. Those opposite in the Liberal Party talk a lot about debt as a fraud on future generations, placing burdens on our children and grandchildren, but asset sales and privatisations are exactly of the same character: taking the money, taking the asset, and spending it now.

Medibank Private was created in 1976 by the Fraser government. It was said to contribute to an efficient, competitive and viable private health insurance industry. There are three million Medibank Private members, which is almost 30 per cent of the entire private health insurance market—a very large slice indeed. Labor oppose the sale of Medibank Private. We do not accept the primary argument from the Howard government that selling Medibank Private will increase competition in the private health insurance sector and therefore put, as Senator Minchin said, less upward pressure on premiums. The day after Medibank Private is sold, there will be exactly the same number of private health insurers in Australia. There will be no increase in competition.

The AMA, the Australian Medical Association, has warned that premiums will increase if Medibank Private is sold. The economic commentator Terry McCrann, no fan of this side of politics, has said that premiums will go up because Medibank Private shareholders will expect a dividend on their investment. Indeed. And we have a Minister for Health and Ageing who has expressed a predisposition to rubber-stamp premium increase requests from the private health insurance industry. As recently as 9 September this year, he said, ‘I certainly won’t hesitate to approve increases.’

The government has raised expectations that it will give Medibank Private members some special rights in the float, but there is no clear commitment as to how they are going to be treated. So, in debating the Medibank Private Sale Bill 2006, we in this House are in the dark on a fundamental matter: how the existing fund members of Medibank Private are going to be treated. I would not support the legislation in any event, because I have a clear view about the virtue of having a government player in this private health insurance field. But other members, who might not necessarily share that view, are nevertheless put in the invidious position that they are expected to vote on this bill without knowing what the government has in mind in relation to the treatment of existing Medibank Private fund members.

Quite a lot of reference has been made to the work of the Parliamentary Library in commenting on some of the legal aspects of the proposed sale, and I intend to also draw extensively from their material in some of my remarks on this bill. On 1 September, the Parliamentary Library released the research brief titled The proposed sale of Medibank Private: historical, legal and policy perspectives. One of the issues that that paper canvassed was of members’ rights in the Medibank Private fund. One conclusion the paper reached was that it was arguable that members had the right to the benefit of the existing surplus assets of the fund and that a sale of Medibank Private, if it were to adversely affect those rights, could give rise to a claim against the Commonwealth for compensation. The research brief did not suggest that the members owned the fund or that they could in some way block the sale, but it suggested that members might be able to mount an action in the form of a claim for compensation.

This of course raised questions about whether the Commonwealth was the sole owner or Medibank Private’s 2.8 million members also had ownership rights. From a moral rather than a legal perspective, concerns were also expressed by the Australian Medical Association, which called for the fund to be mutualised. The AMA said it doubted:

... 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.

The AMA said it was not implying any criticism of the regulatory requirements: it is the case that reserves are necessary for proper prudential management of private health funds. It said that, if the government does not wish to be involved any longer as the operator of a private health fund, ‘there is a strong case for mutualising Medibank Private and retaining the equity with sthose who have contributed to it, namely the members’.

In response to this, the government said, ‘We have advice from the law firm Blake Dawson Waldron which contradicts the conclusions of the Parliamentary Library paper.’ The Blake Dawson Waldron advice rejected any suggestion that the members of Medibank Private could be entitled to compensation on sale or that the members have rights in excess of those of, for instance, purchasers of car or house insurance. Notwithstanding that position, the government has now committed itself to including some entitlements for existing members in the eventual sale plan. This may be in the form of a special entitlement to or discount on shares in the initial public offering. The government appears to recognise that these expressed legal conclusions may not be absolute, and it has also put in the bill a number of safety net clauses, including one which allows an express right to compensation for members in the event that, effectively, the Blake Dawson Waldron advice is wrong. So the issue of members’ rights remains a live one.

In essence, the problem with the position that has been adopted by the government is that it is conceptualising the issues narrowly. It characterises the status of members of Medibank Private as equivalent to those of purchasers of contracts of insurance. This approach overlooks aspects of the legislative regime which support a different view. Successive parliaments have fostered a regime for private health insurance in Australia that gives to members of private health insurance funds a status higher than that acknowledged by the Blake Dawson Waldron advice. According to their advice, membership of Medibank Private gives a member a contractual relationship which can be terminated on two months notice at the discretion of Medibank Private Ltd.

It is worth thinking about exactly what this proposition means. If you have been a member of Medibank Private for many years, paid your contributions as they became due and acted within the rules of Medibank Private, according to the Blake Dawson Waldron advice you could have your membership terminated arbitrarily on a couple of months notice, provided they give a reason for doing so. This proposition is alarming for members of Medibank Private, and it certainly calls up the issue of the integrity of the government’s Lifetime Health Cover program. Medibank Private’s own website says:

This Federal Government initiative rewards those who take out hospital cover early in life and maintain it, by allowing them to pay lower premiums throughout their life compared with others who take out hospital cover when they’re older, or who allow their cover to lapse for long periods.

If what Blake Dawson Waldron is saying is true then Medibank Private members could effectively have their membership terminated on a whim. They would have no continuity of membership, and lifetime health cover would be rendered meaningless.

The fact is that, as a condition of their registration, private health insurers are subject to a number of requirements. Included amongst those is the principle of community rating. That principle has been described by many people, including coalition health ministers, as a keystone of the Australian private health insurance system. It means that an organisation must ensure that its constitution, rules and actions are at all times consistent with the principles of community rating. That means that you cannot discriminate against any fund member or applicant for fund membership on the basis that they are suffering from a chronic disease, illness or other medical condition or from a disease, illness or medical condition of a particular kind and that you cannot discriminate on the basis of gender, race, sexual orientation, religious belief and so on.

The clear intent of community rating is to ensure free, fair and continuing access to health insurance. It is difficult to conceive of a situation in which a private health insurance company like Medibank Private, purporting to terminate membership without good reason, could convince an arbiter that it was not in breach of the community rating principle. So, far from being liable to have their memberships terminated on two months notice at Medibank Private’s discretion, members of this fund are entitled to retain their status as long as they pay their dues and comply with the law and the lawful fund rules. As the Parliamentary Library suggests, the Medibank Private rule concerning two months notice would be likely to be read down to mean that members who were not financial be given two months to remedy the situation, as is required under the act.

As to Medibank Private’s present not-for-profit status, the Blake Dawson Waldron advice suggests that all you need to do is to have Medibank Private Ltd change the provisions in its constitution and everything would be fine: it could move from being a not-for-profit company to being a for-profit company. Again, the idea that a not-for-profit company which is being managed in the interests of members and which establishes reserves on that basis over a period of years can, without reference to members, unilaterally change its status and freely distribute its reserves as profit, in my book undermines the purposes of the act. To say the least, I think the position is far more complex than the Blake Dawson Waldron advice contends.

On the current wording of the act it is arguable that an organisation established as a not-for-profit organisation could alter that status by changing its constitution, but it would be in breach of the act if it distributed profits. A change of status could only come about by winding up the organisation and establishing a new organisation that was for profit—and that would hardly be a surprising result, given the ethical considerations involved.

Another area of the Blake Dawson Waldron advice which the Parliamentary Library has contested is the idea that the rights of members are not enforceable, apart from the right to be paid health benefits under the rules. Blake Dawson Waldron suggested that there is no procedure under which a member could compel Medibank Private to apply any fund assets in a particular way and that therefore they could simply sit on any surplus and contributors would have no recourse. The library says:

These conclusions are, to say the least, debatable. If Medibank Private Limited indefinitely ‘sat on’ surplus profits, it would almost certainly be in breach of the requirement in section 73AAC of the National Health Act that priority be given to the members’ interests in the management of fund assets ...

So it cannot be said with any certainty that members could not enforce their rights under this section of the act. These are very significant conclusions and they certainly cast a great deal of doubt over the Blake Dawson Waldron advice and over the government’s belief that, legally, it is entitled to do a deal with Medibank Private however it pleases.

It is worth pointing out to the House as well that the plans of the government for Medibank Private are sharply at odds with the way in which it dealt with the privatisation of the Australian Wheat Board—AWB. After the election of the Howard government in 1996, it decided that AWB needed to be privatised, but it came up with a new twist to privatisation, which was effectively handing it over to wheat growers. In the case of the Wheat Board, they gave grain growers power over the public utility and effectively gave them that public utility. In July 1999, they gave the 67,500 grain grower members of the wheat industry fund A-class and B-class shares. The 67,500 members were given 241 million shares, which represented 90 per cent of the control of AWB, and they were given shares in a government authority on the basis of the size of their holdings. This turned out to be worth some $800 million to them. So Medibank Private fund members ought to be taking note of this. If the Howard government really believes that a privatised Medibank Private will perform better, and is not doing it for the money, why does it not hand over Medibank Private to the fund members the way it did with AWB?

Labor’s position on this is clear. Our position is that we do not want Medibank Private sold. This is something we will be campaigning on up to the next election. We think the government’s claims to be a friend of Medibank Private and a friend of the health interests of Australians are laughable. They make this claim in the parliament but they laugh behind their hands when they are doing it. We know that Medibank Private is a dominant force in Australia’s private health insurance market and that the risks are that this sale will lead to increased premiums and be to the disadvantage of Medibank Private fund members and to the disadvantage of Australians generally. We will be campaigning strongly on this issue.

Senator Minchin claims he has a new study on the legalities. He does not trust it enough to put it out in the public domain. We note that premiums have gone up almost 40 per cent since 2001 when the government said it was going to crack down on premiums. We are concerned that this legislation will not be in the best interests of Australians and we will vote against it. (Time expired)

Michael Hatton (Blaxland, Australian Labor Party) Share this | Link to this | Hansard source

I have got a question for you, Mr Deputy Speaker. Do you trust the advice of the Parliamentary Library or do you trust the advice bought by the federal government from a private legal firm? That is the fundamental question with regard to the Medibank Private Sale Bill 2006. The answer to the first part of the question is probably yes, and the commonality among other members of this House would be to trust the advice given by the library on an independent basis rather than to trust advice that was sought for a particular end and therefore tailored to that direct end, like the advice from Blake Dawson Waldron. Why would they have been asked to do it otherwise? The government want to sell off Medibank Private. They have asked for this particular advice. They have gone off to ask for some more now that the Parliamentary Library has strongly rebutted that advice. It is a simple question: who do you trust? Do you trust an independent library source or do you trust the federal government of Australia in the guise of John Howard, the member for Bennelong, given their past sorry record for more than 10 long drab years?

My answer to that would have to be that I trust the Parliamentary Library. I trust it today, as I trusted it yesterday. It is not without sin. It is not the case that it is impossible for it to make mistakes, but the fundamental driving force of the Parliamentary Library from its inception has been its independence. Despite the fact that this government has attempted to trammel that independence, to ride it and smash it into the ground, we still have an independent library, thankfully, for all members—members of the government as well as members of the opposition; members of the major parties as well as members of the smaller parties—and it is a resource for the Australian people as a whole.

I congratulate the people who gave this advice, who stood up for the advice that they gave in the legislative brief and who then had the courage to back it up after the full weight of the government was backing the private lawyers. Jerome Davidson in the Laws and Bills Digest Section and Luke Buckmaster in the Social Policy Section had the courage to back their independent advice. I am interested in the fact that they were willing to do that because it often does take courage to do these things against a government that will willingly crush institutions that it has control of, as it has fundamentally changed the approach in the Australian Public Service, where people are extremely wary of the arguments that they put forward.

We know the disgraceful way in which the government have dealt in the past with the members of the Australian defence forces and the way in which they compromise them in undertaking their role and the damage done to the relationship between government and those forces. We know the damage that has been done in a variety of government departments because the government have acted in a way that no other government of the Commonwealth of Australia has had the hide to do. The government demand partisanship of the Australian Public Service and silence of our library. Thankfully, these two officers of the Parliamentary Library have stood up for their original advice. They stood up for it not only for all those people in this parliament who would want to defend Medibank Private but also for all the owners of Medibank Private. And they have stood up for something else: the principle that it is right to fight for a truthful position come what may.

As a member of the Australian Labor in this parliament and as a fund member, I am utterly opposed to the sale of Medibank Private. I am a member of Medibank Private for one single fundamental reason: it has the name ‘Medibank’ at the start of it. And guess what? The vast majority of Australians in our biggest private health fund are in that fund because it has ‘Medibank’ in front of it. The reason they are still there relates fundamentally to an attachment to the fact that a Labor government had the courage to bring in the original Medibank to provide medical services and medical insurance to the Australian people as a whole to cover what had not been covered before. There is still an absolute guarantee within the word ‘Medibank’ in the hearts and minds of the Australian people that this is about being given a fair go in access to health. Given that it is a private health fund, it is still controlled by the government at this point in time. A lot of people maintain their position, firstly, because of an emotional attachment to it and, secondly, because of a recognition of the fact that it is the institution that started out as the full Medibank before it was split into Medicare and Medibank Private. There is another fundamental thing: they know that health insurance undergirded by government regulation and government ownership is not about to do them down, or should not be about to do them down. But with this heinous government running the show you know that you have to be extremely careful about such feelings.

What are we facing here? As a member of Medibank Private and also as a member of this parliament, I know that we are facing one of the greatest betrayals in Australia’s history, because this fund serves an absolute purpose. This is not about flogging off a bank, and it is not about flogging off an airline; this is about health, which is one of the core concerns of the Commonwealth government of Australia. Our health insurance system is the underpinning of certainty for Australians in terms of their access to our hospitals beyond free access to Medicare. In terms of private access—paying more yourself for particular referrals—this is the guarantee. The larger guarantee is this: Medibank Private is the greatest and most popular of the funds because of its association in the past with Medibank and also because of its continuing government ownership and the guarantee thereby that it is the ballast in the system. If you have a ship at sea and you want it to be seaworthy, you fill it full of ballast so that it will be able to run on those seas and not be blown over by the merest gale or the merest whiff of wind. It can survive difficult times and circumstances, high seas and high winds. If Medibank Private is sold, that ballast gets completely washed out of the Australian health system.

We have a bit of an idea of what might have happened here. The first thing is that people in the library originally provided the legislative brief about this matter—and they did it well, to the best of their ability. The government have deliberately gone out and bought advice to try to undermine that and to try to scurrilously put them in a position of having to argue not just about their capacity but about their whole view of this matter. The rebuttal here is a case of great courage; it is also a case of being absolutely right. In terms of this part of the argument, I conclude by referring to the question I asked you at the beginning, Mr Deputy Speaker, which was: would you trust the library or would you trust the advice given by a paid group of legal informants, where the government set out the parameters of what they wanted? I think it is conclusive, at least for those members on our side, and I think it should be conclusive for everyone who has access to the Parliamentary Library, given the fact that it has acted in an independent manner and can still do so. You would trust the library before you would ever trust the government or the advice they had bought on condition that it served their purposes. That is item 1.

I now turn to item 2. Let us look at the argument that the government have put about the benefits arising from this potential sale. What we have here in this sale bill is how to set up Medibank Private in order for it to be sold in the future. How do you take a government owned entity and transpose it into something that is not as it is now but something that could be structured in such a way that down the track you can flog it off? There are a range of measures in this bill to achieve that: the foreign ownership and Australian identity restrictions on directors and the national office for a period of five years, the change of the fund from not-for-profit to for-profit and allowing preprivatisation profits to be redistributed to shareholders following the privatisation, and ensuring the fund is liable for any compensation claims that arise from the sale, not the Commonwealth. What are the last two points in this bill about? They are about the government trying to cover themselves for the fact that they have so pilloried the Parliamentary Library in terms of the advice they have given—they actually know the library is right. With whatever advice Senator Minchin has come up with, the bill tries to cover off the legal advice given by the Parliamentary Library.

I will move on to the transition from a not-for-profit organisation to a for-profit organisation. Given the beneficial interest that members have in Medibank Private—because they have continued to contribute; they have forgone getting a dividend because it is a not-for-profit organisation—the core of the Blake Dawson Waldron advice was that they did not have continuing membership because it could be terminated at two months notice. The library has quite brilliantly dealt with this and the fact that this is completely wrong. The members do have a continuing interest in it. And that continuing interest goes to what happens if the government is successful in changing the way in which this is constructed—and then, after they have done that, whether or not people could benefit in a particular way. The library argued—and they have been largely pilloried by the government, which has quite deliberately misinterpreted what was said—that members could not stop the sale. The library also said that members cannot just extract a beneficial interest directly, but the likelihood is that there could be action for compensation with regard to it.

The best example I can think of, in my practical experience, given that I was a member of the NRMA, is the NRMA and their move to demutualisation. The government is not dealing here with a mutualised entity. There has been an argument—and I think it is quite right—about the move out of government control and ownership of Medibank Private: that there is a way of doing it without flogging it off in a private sale and taking a partial monopoly situation and turning that into a completely private monopoly with other companies being able to buy it up and incorporate it, which would then result in losing the ballast in the system.

There is a fundamental proposition here in terms of what the members face. There is no proposal from the government to mutualise the fund and say that the existing members, who have contributed to it voluntarily, should then become effective part-owners of it. There is a danger, even if you took that approach, that the government could then say, ‘We’ll now do what the NRMA did—demutualise and make it a private company.’ In either case, going for a direct sale or through the mutualisation route, the end product is pretty simple.

NRMA members were made a series of promises over a significant period that, if they gave up the nature of the NRMA as a mutual fund and if they allowed the executive of the organisation to change its mutual character and turn the company into something else, their effective investment would be protected; they would still get the services they had enjoyed and they would be protected from increases in costs. There would be a division between the insurance group and the road services group but both would be able to continue to run—and continue to run effectively.

When the shares were distributed, based on how long people had been members, some people kept their shares and other people sold them. Some of those who sold them—including me—did so on the basis of a simple proposition: they knew that the cost of the road service was going to increase dramatically. And it has increased well beyond the level of inflation. The cost to direct members has skyrocketed. Every single person in the NRMA in New South Wales knows that the demutualisation led to dramatically increased costs. Yet, what is the government arguing about the sale of Medibank Private? Against all of the evidence, it has the absolute temerity to say, ‘If we sell this we’ll be able to ensure that there’ll be a downward pressure on costs.’ Where have you heard this before? Where has the government come up with the argument that there would be downward pressure on costs? It has come up with that argument in just about every step it has taken in the medical insurance area.

When the government introduced a 30 per cent rebate it said there would be downward pressure on medical costs. What has happened in the interim? Anyone who is paying the premiums for Medibank Private or other funds knows that the cost of premiums has continued to rise, despite the fact that the 30 per cent kickback to people has been put into place. It has not properly addressed the aspect of cost. If you take Medibank Private—the great government ballast, regulated and controlled by government—out of this system then there will be no effective control in private health insurance in Australia, and the experience of the NRMA will be the experience of everybody who is a member of Medibank Private.

So as a federal member of parliament and member of the Labor Party, and as a member of Medibank Private—on those two grounds—I strongly oppose this bill and the fact that this rotten government would go and dud every single one of those members without compensation. Members of this government are without the merest recourse to a partial sense of conscience about what they are doing. It is an ideologically driven show and they are driven for their own private purposes.

The government will achieve one other great single goal that they announced in 1996 in their National Commission of Audit. The National Commission of Audit, like Black Dawson Waldron, was commissioned by the government to produce a document to particular effect. It was given a set of riding instructions and told to produce some results. The results produced by the National Commission of Audit were very simple. The fundamental line was that the Commonwealth government of Australia should not provide a single direct service to any Australian person. The only activity that was valid was that the Commonwealth government should audit and benchmark programs provided by others.

Guess what: if they flog off Medibank Private, they will not have a government service delivered to millions of Australians to worry about anymore. They will not only get the money for it but also achieve one of their other fundamental goals: to get out of the job of being in government at all. If that is the case, and I think it is true, why don’t they just get out of the way and let us take over and run the place? What they have done is run away from their responsibilities for more than 10 full years.

The rejoinders that we have had from members of the government are that Labor sold the Commonwealth Bank, Labor sold Qantas and Labor did all of these things. There have only been two areas that Labor has said are not insignificant areas but significant ones in terms of the good of the Commonwealth that Labor not only draws a line in the sand on but actually digs an extraordinarily deep trench around. There are only two. One is Telstra, which this government has successfully flogged 49 per cent of and is now in the process of selling off the other 51 per cent of, part of it into a holding pattern until it can flog the rest and part of it already in the T3 sale. This is a complete and utter disgrace. It turns a government monopoly into a completely private monopoly and destroys our capacity to deliver to the Australian people the infrastructure we need.

The other thing we have dug a giant ditch on is the sale of Medibank Private, because we will not betray all of those members who have invested in that organisation and who trust that a Commonwealth government owned, run and regulated private insurer will ensure that there is a fundamental ballast in this system, that the ship of state will continue to ride the seas whether they are low or high and that the ship of state will guide them to their safe harbour in health affairs. This government would scuttle that ship of state by scuttling Medibank Private. I am utterly opposed to the effect of this bill. (Time expired)

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

I rise to oppose the Medibank Private Sale Bill 2006 and I declare immediately an interest: I am a policyholder with Medibank Private and, like every other one of us 3½ million, I stand to lose a very great deal by the passage of this bill and the subsequent sale. So, given that all 3½ million of us, me being one, stand to lose a very great deal, we had better make absolutely clear our personal interest in this as well as our policy interest in seeing this bill and this sale defeated.

There is no doubt at all that this government will proceed after the next election, if they win it, to sell Medibank Private. That is their intention. They have made it clear, and this is one of those rare occasions when you can actually believe it. They have given this undertaking and it will be a core promise. It will be done. And that will be very much to the detriment of people like me, who happen to be policyholders, but more particularly to all Australians who benefit from the fact that with Medibank Private in its current situation there is at least a degree of downward pressure on premiums. We do know this: that the majority of the Australian people are against the sale of Medibank Private—and with very good reason. They know that morally Medibank Private belongs to its members and they know that, as sure as night follows day, premiums will rise.

Who are the Medibank Private members? They are not an elite club of Australians. They are Middle Australia. Medibank Private members represent Middle Australia, the working mums and dads of Australia who take out private health insurance for peace of mind, to make sure they can provide for and protect themselves and their children when illness strikes or accidents happen; Middle Australia, who year after year fork out ever-increasing amounts to make sure they are covered in the hope that they never actually have to spend time in hospital.

But Middle Australia has had enough of this out-of-touch government. The thing making Middle Australia sick is premium increase after premium increase, ever-widening gaps and an out-of-touch health minister who has no understanding of their health needs, who sits and nods when private health insurers annually propose a premium increase. That is why Australians are now taking a stand and saying no to the privatisation of Medibank Private—because the privatisation of Medibank Private will push up premiums and place more pressure on Middle Australia.

Following the Telstra sale debacle, we should not be forced to endure another incompetent sell-off from the Howard government. The Howard government is out of touch and hell-bent on selling Medibank Private, whatever the consequences for policyholders, the health system and Middle Australia. So here is a rolled gold promise that you can take to the bank after the next election, when we win it: we will not sell Medibank Private. I know that there is nothing more important to Australian families than their health care. I understand the struggle of families that are trying to make ends meet, juggling the bills, accommodating interest rate rise after interest rate rise, and in the back of their mind they are wondering if their jobs and incomes are secure.

You have to ask yourself: with a majority of Australians opposed to the sale of Medibank Private and the government claiming that our economy is stronger than ever before, why is the Prime Minister trying to sell off this Australian asset? The float of Medibank Private will not commence until 2008. This government has its foot on the accelerator, ramming this legislation through the parliament in the face of controversy, in the face of conflicting legal advice, hidden scoping studies, concern expressed by the majority of Australians and concern from the Australian Medical Association.

Why the rush? The answer is ideology. It is ideology getting in the way of the national and the public interest yet again. This ideologically driven government have attempted to argue the case for the privatisation of Medibank Private on three fronts, but on each they have failed dismally. They have argued that privatisation will result in greater competition in the industry, thereby putting downward pressure on premiums; that it will enable Medibank Private to operate more efficiently; and that it will remove the government’s perceived conflict of interest by being both the regulator and the owner. They are wrong on every count.

On the first line of argument, this government has form. No-one can forget the 2001 promise by the Prime Minister that his election policies would ‘lead to reduced premiums’. No-one can forget that, since this promise was made, premiums have increased by almost 40 per cent. It is not rocket science. Floating Medibank Private on the share market will not introduce a single new health insurer in Australia—not one. There will be zero increase in competition. The only pressure that Medibank Private will be feeling is pressure to make a profit for its shareholders and, if anything, that will put upward pressure on premiums. The Australian Medical Association agrees with us. On 5 September this year, AMA President Dr Mukesh Haikerwal said:

... higher premiums would be inevitable as the new owner sought to maximise returns to shareholders.

“There is also a chance of flow-on higher premiums across the whole private health sector because of reduced competition” ...

Let me now turn to the government’s argument on efficiency. Currently, Medibank Private is the biggest private health insurer in this country, with some three million members. According to the government, publicly owned companies are inefficient, but where is the evidence for that? The government insists that a scoping study undertaken by Carnegie Wylie shows that privatisation will enable Medibank Private to improve efficiency by lowering management expenses and allowing diversification of their business. The truth is this: the details of the Carnegie Wylie scoping study are yet to see the light of day. One would think that, if it came out with those sorts of conclusions, there would be no problem at all in this government producing at least an expurgated version of it, but it does not. Under current arrangements, Medibank Private has lower administrative costs than its major competitors. Privatisation will have no impact on the fund’s current ability to expand into other insurance markets. For example, the fund already offers Medibank Private travel insurance. If you want to look at the other services, just go and have a look at their website.

On the subject of a conflict of interest, we hear the same tired line from a tired government—the claim that there is a conflict of interest on the government’s behalf by being both the regulator and owner of Medibank Private. This, I might say, would also permit the government to sell the ABC, CSIRO and Australia Post. One cannot see any particular differential in any argument on conflict of interest as you look at those three bodies; perhaps that is what the government has in mind if it wins the next election. The truth is—and this is different from the situation that applies at least to Australia Post—that the government does not currently receive dividends from Medibank Private, so there is no direct financial incentive for the government as the regulator to provide itself with any advantage over other health insurers. It has it the wrong way around. The conflict of interest arises in the event of the sale of Medibank Private. The government is currently in a position to regulate the sector so as to maximise the share price for Medibank Private at the time of sale. Make no mistake—the only driver for this privatisation is extreme Howard government ideology. The government is so obsessed with privatisation that it is fast becoming a national joke. What next—Australia Post, the CSIRO or the ABC?

Australians with private health insurance cannot afford for this government to make decisions about their health fund based on ideology. They require reform, but the truth is that this government has failed to deliver where it counts. It has failed to deal with the real cost pressures in the private health insurance sector. Private health insurers regularly report that one of the greatest pressures on insurance premiums is the increasing cost of new medical technologies. The Productivity Commission recommends a systematic assessment of cost and clinical effectiveness of new technologies to ensure we get the right technologies at the best price.

But such changes would spell reform. We know that these Liberals do not do reform. They do not do benchmarking. They do not do target setting. They do not do accountability. They govern for themselves and their ideology—they do not govern for the national interest. The longer they are in office, the more and more obvious their basic tendencies become. They do not care at all for health outcomes and lower premiums for Australian families who depend on private health insurance for peace of mind. If they did, then in the last 10 years they would have reformed the health system to ease upward pressure on health insurance premiums. But not this government—they have no eye for reform, no vision for Australia and no regard for the little guy and his family. They are just governing for themselves and not for the country. The sale of Medibank Private is bad news for Medibank Private policy holders and bad news for Middle Australia.

I would like to address one other important aspect of this debate, which highlights the arrogance of the Howard government. It is a government that is willing to push ahead with this legislation despite conflicting legal advice on an issue as fundamental as the rights of Medibank Private members—the rights of Middle Australia. The bill seeks to ensure that profits surpluses gained prior to privatisation are redistributed to the shareholders following privatisation. According to Medibank Private’s 2005 annual report, these profits are worth $653 million. Government lawyers insist that the privatisation of Medibank Private does not confer any rights to members. The government accepts this legal advice, but it will take all care and no responsibility. Should there be the prospect of a legal challenge to the sale, a clause has been included which makes Medibank Private rather than the government liable for any compensation.

Contemplate this: the government are recklessly—against at least some advice being given to them—taking advantage of the opportunity to stock their coffers with the product of this sale. If, however, the advice on which they have operated is found to be faulty, they will not carry the penalty of it, according to this legislation; Medibank Private will. In other words, Medibank Private, if they are to carry a penalty, will find that not only will they be obliged, in the way in which they charge their premiums, to make a return for the shareholders to justify that particular sale; they will also have to make sufficient to ensure that they are invulnerable financially to a successful class action against them as the result of the deprivation of members arising from this sale. It is quite an extraordinarily irresponsible position. It will be one of the major reasons why this government will need to be defeated at the next election. They are giving us plenty of ice to skate on in the arguments that we will be able to raise on that. It is all care and no responsibility, and the rights of three million policyholders simply become a distant memory—myself, as I said, among them.

Experts in the Australian Parliamentary Library have a different opinion to that of the government’s lawyers. Quite frankly, I am not concerned about who has the finer legal mind; I am concerned about Middle Australia. Middle Australia is not sitting around the kitchen table and wondering whether Blake Dawson Waldron is providing accurate legal advice. Middle Australians who are Medibank Private policyholders just expect that they come first, not ideology. Over three million Australians chose the publicly owned Medibank Private as their provider of health insurance because they thought they could trust the government to look after their interests rather than their own political interests. I suggest this is a tease for the government, which hate government: they hate the theory of government; they hate the idea of acting responsibly or accountably; they think it is all wrong that there ought to be government at all. They are natural anarchists.

The simple fact of the matter is that a large number of people had an expectation when they went into Medibank Private that they were being protected by their willingness both to take out private health insurance and to go with a government based provider. They joined with the knowledge that Medibank Private was a not-for-profit organisation, operated by the government to serve the interests of its members—millions of Aussies, not just a few at the top. Sadly, they were wrong. Three million policyholders will be bitterly disappointed with an out-of-touch Howard government that has used its majority in this parliament to pursue its extreme ideology. The sale of Medibank Private is a massive breach of trust.

Not-for-profit status means that all funds that are not immediately required for payment to members are credited to the fund and not distributed as profits. A not-for-profit model means that members come first in dealings with fund assets. This bill will change that conduct to a for-profit basis. Make no mistake: the sale will be all about profit.

Just how far does the ideological obsession extend? The bill seeks to amend the National Health Act so that Medibank Private can change its status with no obstruction—no questions, no checks, no balances. The bill proposes to exclude the requirement for a notification process to be undertaken when Medibank Private chooses to change to for-profit status. It also seeks to do away with a review by the minister for health that would otherwise assess the impact of such a change on the members of the fund, including the impact on premiums and a public interest test. If you have clauses like that in the bill, how can you have the hide to stand up and say that you are going to effect downward pressure on premiums? This undermines the effect of restrictions on not-for-profits and undermines the rights of members.

John Howard has changed. He no longer governs for the people who put him in the Lodge. For John Howard it is profits that come first, members last. The sale of Medibank Private is a massive breach of trust. The Prime Minister might be hoping that this debacle, once it has passed through this parliament, will be fixed and forgotten by next year. It will not be forgotten—we will make dead certain of that. Middle Australia will remember the upward pressure John Howard has placed on health insurance premiums. They will remember the day that another public asset went private and they were slugged with greater fees for less service.

Health is about the future, and we are all about the future. That is why there are so many differences between our two parties on health. We will make a fair dinkum commitment to Indigenous health; they will not. We will set great national goals for the health of our kids; they will not. We will reform the complex and inefficient funding of the health system related to our hospitals; they will not. We will keep Medibank Private in public hands, because we are the party of middle Australia. We are the party of Middle Australia and we are the party of the future for Middle Australia.

John Howard has changed. He has forgotten all about that. The longer he has been in office, the more that hubris has grown, the more he has decided that he and his ministers have entitlements—they can do what they like, whenever they like and they can thumb their noses at the electorate. There is a certain amount of arrogance about the way this has been presented. They know the three million members hate it. They are not going to privatise it before the election; they are going to do it afterwards. It is as though they are mocking and laughing at the Medibank Private policyholders. The Medibank Private policyholders are going to have the last laugh here. They are going to inflict some truly awful punishment on this government, and we will be overjoyed at the opportunity of seeing this legislation repealed.

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I begin my comments by noting with some irony the arrogance of this government and the level of importance that it puts on this debate. There is not one government speaker listed to participate in this debate today—not one government member’s name appears on the speakers list. We think this is a pretty important debate—in fact, we think it has a high level of importance. We have had the Leader of the Opposition come in and join in this debate, and we have not one name of a government member on the speakers list. That in itself says a lot about the arrogance of this government in terms of its attitude towards its proposed sale of Medibank Private.

It is my privilege to rise today to speak on the Medibank Private Sale Bill 2006. Medibank Private is the biggest private health insurer in Australia, with almost three million members and a market share of almost 30 per cent. The bill will amend the National Health Act to allow the government to sell its shares in Medibank Private. The bill puts in place foreign ownership and Australian identity restrictions on directors and its national office, but only for a period of five years. After five years Medibank Private could go offshore. That would be a sad day indeed. The bill changes the status of Medibank Private from not-for-profit to for-profit. It allows the preprivatisation profits to be redistributed to shareholders following that privatisation. That means the profits it has accumulated as a not-for-profit organisation will suddenly become real profits for shareholders. It is extremely interesting that this bill includes provisions for compensation for which the fund might be liable in the event that any legal action is taken against the sale. I will come back to this issue during the course of my speech in this debate.

The one thing we need to keep in mind when debating this issue is that the Prime Minister has always wanted to sell Medibank Private. When the government came into office, one of the first things it did was to remove Medibank Private offices from their collocation with Medicare offices. What justification was there for that? We never heard any. It could only be to put financial pressure on Medibank Private and start preparing for its eventual sale. The government has been commissioning scoping studies on the potential sale of Medibank Private since it came into office. The Prime Minister has always wanted to sell Medibank Private and, frankly, I truly believe he has always wanted to dismantle Medicare. Let us not forget that the Prime Minister voted against the creation of Medibank, the first universal health insurance system in Australia, and he voted against the creation of Medicare. No matter what he says about the government being the best friend Medicare has ever had, we the Australian community have everything to fear from the attitude of this government and the Prime Minister to health insurance in this country and the Prime Minister’s history on it.

Now the government has come clean and announced that it will sell Medibank Private if it wins the next election. The government is trying to convince the public that there are good reasons for selling Medibank Private. There is little evidence to back up any of those arguments—and I would like to discuss those now. The government argues that the sale will reduce premiums. There is absolutely no evidence of this. Premiums are principally driven by health costs. The government claims that the sale will make Medibank Private more competitive. Again, there is no evidence for this. In fact, expert advice from the Parliamentary Library, through its Bills Digest, highlights the lack of evidence. It states:

The Government argues that the sale of Medibank Private will lead to reduced management costs and allow the fund to pursue new areas of business but it is unclear how these improvements will be realised. The proposition is based on the conclusions of a scoping study undertaken by Carnegie Wiley, however detailed information from the study has not been provided. This means that there is very little publicly available information to support such claims.

There would appear to be nothing, from a regulatory point of view (apart from being able to distribute profits to shareholders), to show that the ‘new’ Medibank Private will be able to do to improve its operations that the current organisation cannot. A privatised Medibank Private would be free from the governance burden that applies to GBEs but it is not clear whether this would significantly reduce the organisation’s management expenses. A publicly listed Medibank Private could potentially improve operational efficiency through the use of additional capital to invest in improved information technology systems or organisational restructuring. However, it is not clear that any reduction in management costs would be greater than the potential increase in costs associated with Medibank Private’s new responsibility to distribute profits to shareholders.

There is no evidence that changing Medibank Private from a publicly owned, not-for-profit organisation to a shareholder, for-profit organisation would automatically make it more competitive in the market. The government say their claim about Medibank Private being more competitive if it were sold is based on modelling conducted as part of the scoping study. Yesterday the minister finally released the CRA International paper. It suggests that private health insurance premiums will go up as a result of the ageing of the Australian population, the increasing cost per day of hospital care and the increase in the number and value of ancillary claims. CRA notes that there are a number of ways in which a privatised Medibank Private could achieve lower premiums. However, it states that all the opportunities open to Medibank Private to achieve available efficiency improvements are already available. In other words, a publicly owned Medibank Private could easily pursue any of the efficiency improvements suggested in the report.

The day after Medibank is sold there will be the same number of private health insurers. Medibank Private is currently as competitive as all other private insurers in terms of management costs and efficiencies. So why would the sale of Medibank Private automatically put downward pressure on premiums? Clearly, the government’s argument is flawed.

I now turn to another claim made by the government, which is that, if the sale goes ahead, the three million members of the fund will not have to be compensated. Once again, the Parliamentary Library, which is an independent and authoritative voice, has examined this issue. In early September the library stated that there were legal doubts about the ability of the government to sell Medibank Private without compensating members. Only a few days later the Minister for Finance and Administration stated he had legal advice that the library was wrong. The Parliamentary Library has now examined this issue further and has provided a complete rebuttal of the government’s legal advice. The Parliamentary Library states that the issues are extremely complex but that members of Medibank Private could be entitled to compensation if the terms of any sale do not adequately account for their right to the benefit of fund assets.

In fact, the government must not trust its own legal advice, because it has committed itself to including some entitlement for existing members in the eventual sale plan. On one hand the government is saying that members will not have to be compensated, yet on the other hand it is including compensation in the bill. It just goes to show how untrustworthy this government is and how much we have to doubt the very word of this government.

The Australian Medical Association also has something to say about the morality of this issue. It says in a media release of 5 September:

• The AMA, while not wishing to comment on the legality of the situation, 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.
• If the Government no longer wishes to be involved as an operator of a private health fund, there is a strong case for mutualising Medibank Private and retaining the equity with those who have contributed it, namely the members.

I could not agree more. I believe it is extremely unethical to allow the current profits made by members to be turned over to shareholders. I am one of those members. I am, as I am sure everybody in this country has been at some point in history, an original Medicare member. I was an original Medibank member before that and I am a policyholder with Medibank Private. So I am one of those people, along with the Leader of the Opposition and many others, who have a personal slant on this as well as a public policy slant.

The arguments that I have outlined clearly show that there is no evidence to support the claims made by the government about the sale of Medibank Private. The government is driven to sell it off by its ideological obsession with privatisation. The government is not interested at all in the best interests of Medibank Private members, or of any other private health insurance members for that matter. It just wants to sell it off with any other asset it can find, such as Telstra.

I am very pleased to be on the side of the House that strongly opposes this bill. We oppose it absolutely. Over the past 10 years the government has shown that it cannot be trusted on these issues. It will say anything it can to achieve the outcome of privatisation in this particular instance.

I conclude my comments where I began. I am extremely disappointed, but I do not know why I should be as we have seen it happen before. This is a really important debate. This is a fundamental debate about health issues in this country, about private health insurance and about the future of Medibank Private; yet, as I have said, while today’s speakers list, which I have in my hand, has quite a number of names of people on this side of the House who wish and need to make their point on behalf of their communities, not one government member’s name appears on this sheet. That in itself, I believe, says a great deal about government members’ arrogant attitude. They do not believe they need to come in here and debate this issue, justify their actions and outline their belief in this on behalf of every voter and every Medibank Private member in their electorates—not one word. I think that tells the story. In the meantime we are taking our responsibilities very seriously. On behalf of all my community, I very strongly oppose this sale; I very strongly oppose the government’s attitude towards it. Let us hope that maybe one day we might see some common sense from the government—but we wouldn’t want to be holding our breath, would we?

John Murphy (Lowe, Australian Labor Party, Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I begin by congratulating the member for Canberra on her very erudite and incisive contribution to the debate on this very important bill, the Medibank Private Sale Bill 2006. I want to join all my colleagues in rejecting the sale—and I use the word ‘sale’ in its broadest possible sense—of Medibank Private. This is not a sale of shares. It is both public and private theft. I say private theft in that the entire moneys and cash reserves raised in the current fund of Medibank Private are the private property of Medibank Private members. I say public theft in that the sale of Medibank Private undermines the legislative provisions of not-for-profit organisations through the unilateral demutualisation of an entity established with the sole and substantial intent of operating under statutory and other restrictions as a not-for-profit organisation. The government is saying today to the people of Australia that any not-for-profit organisation may be demutualised—turned by the stroke of a pen from a not-for-profit entity into a for-profit entity. What a disgrace!

One theme runs constantly through this government’s agenda: that mere legalism is all that is required to make what is illegal legal. At the stroke of a pen, it is licit to change a body corporate’s fundamental tenet of existence from a not-for-profit entity to a for-profit entity—just change the material laws, and it is thereby legal! Well, I say that is wrong, wrong, wrong.

The name of the entity being demutualised today is Medibank Private. What does the word ‘private’ mean to the members of this House? What does the government understand by the word ‘private’ in the context of this entity? Clearly, the Howard government has no insight into the foundations of its own Health Insurance Commission laws, particularly those governing the fundamental policy rationale that Australian citizens who can afford it should be encouraged and indeed required to take out long-term health insurance coverage early in life by allowing them to take out lower premiums spread over a longer period of time.

Equally, the government has yet again engaged in selective amnesia when it forgets a basic tenet of public health insurance policy: that the Australian taxpayer is the private contributor to the funds. You cannot sell what you do not own. Medibank Private’s money belongs to its members, not to the Howard government. I repeat: the money and the other assets of Medibank Private belong to its members, not to the Howard government nor to anyone else.

Incredibly, this government is completely conned and swayed by the so-called legal opinion of the so-called law firm Blake Dawson Waldron, which has advised the government that is a simple case of changing Medibank Private’s constitution to make it a for-profit company. I say ‘so-called law firm’ because it is abundantly clear that the rank positivism expressed by such an audacious opinion as that expressed by Blake Dawson Waldron does not deserve the title ‘legal opinion’. I say this in light of the clear absence of any policy analysis outside of the most reductionist and narrow of legal interpretations. This so-called opinion pays no regard to the other legal and policy ramifications.

Equally, this government has committed the ultimate act of bastardry by deliberately reducing the debate to a mere legality of the most perfunctory nature. Debate and what can only be loosely described as ‘analysis’ in its most primitive sense have been totally sacrificed for a shameless and naked grab for money. In grabbing this money, this government has done nothing but commit public and private theft against the members of Medibank Private and the people of Australia.

There was a time not long ago when public assets were sold and the citizens of this country understood the reasons why. Now anything remotely connected with the government that is actually private property is also being sold as if it were a government asset. At this rate the government will be selling our own residential homes back to us, saying that the land, too, is really a public asset and that we are nothing more than tenants of the Crown who never really own our land. As ridiculous and preposterous as that sounds, it is not too far from the reality unfolding here today before us with the public and private theft of Medibank Private.

It is necessary to remind ourselves of why private property is so important. I cite the encyclical Mater et Magistra, which at paragraphs 19 and 20 states:

Private ownership of property, including that of productive goods, is a natural right which the state cannot suppress, but it naturally entails a social obligation as well. It is a right which must be exercised not only for one’s own personal benefit but also for the benefit of others. As for the state, its whole raison d’etre is the realisation of the common good in the temporal order. It cannot therefore hold aloof from economic matters. On the contrary, it must do all in its power to promote the production of a sufficient supply of material goods, the use of which is necessary for the practice of virtue. It has also the duty to protect the rights of its people and particularly of its weaker members, the workers, women and children. It can never be right for the state to shirk its obligation of working actively for the betterment of the condition of the working man.

I could not put it better than that. The quotation that I have just cited enshrines the inviolability of private property—property we see today being violated by the public and private theft of assets belonging to Medibank Private members, not to the Howard government.

I condemn the government today in the passage of this bill for violating one of the fundamental tenets of our democracy: the principle of subsidiarity. It is subsidiarity that asserts that the state serves its people, not that people serve the state. It is the state that is here first establishing a rule that people who can afford private health care do so early in life, paying lower premiums and thus benefiting themselves by having privately funded health insurance for the term of their natural lives. Perhaps more importantly, the public policy latent in the existence of Medibank Private is that this accumulation of reserves benefits the common good of society in that this reserve of money facilitates access to funds for medical needs for all of its members, thus taking critical pressure off the public health system. All this good and well-founded policy is so reprehensibly being torn apart today by the demutualisation of Medibank Private. The treatment of Medibank Private in this way does all of the following. First, it undermines the common good of a privately funded health insurance system. Second, it undermines the principle duty of subsidiarity, which every government is bound to follow. Third, it undermines pre-existing and well-founded health insurance policies based upon the notion of long-term and early entry into private health insurance as one of the few ways to average out premiums. Fourth, it undermines the current statutory law, founded upon policy, that treats not-for-profit and for-profit entities as obviously very different entities. This distinction was obvious—until now. Fifth, it demutualises an entity that was never meant to be demutualised.

I say all this in the context of a prevailing ethic that is not even a thinly veiled attack on the most primitive and essential tenets of democracy and social justice—that is, private property must be allowed to exist for the benefit of the individual property owner and for the benefit of the common good. If these two benefits are denied, then truly it is the end of social justice and the end of social order.

I say again: what is next? Where is the thinking of this government going to go next? What else will it attempt to flog off in its sheer hunger for cash? Today’s bill clearly indicates that there is no boundary that this government is not prepared to cross. Indeed, the conduct of this government is truly not government at all, for it has committed the ultimate act of bastardry, as I said earlier, against the most basic obligations of subsidiarity for the benefit of its own people. Under the principle of subsidiarity, the government is supposed to perform public functions only so long as the people cannot do such themselves.

It is right and proper for the government to implement a regime of public health insurance. Equally it is right and proper for the government to implement a regime that encourages those in society who can afford private health insurance to take it out early and over a long period in order to average premiums, thus reducing the premium cost of cover for the members. It is the act of accumulating reserves as assets today to pay for the future health insurance costs tomorrow. That is good governance. It is obvious and logical to make provision whilst times are good to pay for when times are bad and sickness befalls us, as it inevitably does. It is madness, in my view, to encourage an entire nation to contribute to a Medibank Private fund under rules of mutualisation and then to demutualise it. It is simply unthinkable to do so. The action is a governmental disaster, and this is exactly what we are expected to be voting in favour of today. For these reasons, I agree with the shadow minister for health and the shadow minister for finance, who note that this bill flagrantly disregards the impact of the sale on existing members—to say nothing of the broader policy implications.

I say all this against the background of the widespread condemnation of this bill by peak health and other organisations, such as the Australian Medical Association—which rightly describes this proposed public and private theft as immoral. This bill will permit quite literally robbery to occur. This bill will only send one message to the public: that there is nothing sacred any longer. The real policy impact will be that the public will trust nothing and no-one. We will have banks that are not banks; not-for-profit organisations that can be, and are, changed by the stroke of a pen; and insurance companies that are not insurance companies. The list of how far the government will go in using its power over its four terms to undermine the very foundations of government and democracy is endless. I urge every member of this House to reconsider their position, and I am obviously referring to the government members and to those in the other house.

I condemn the government for this flagrant disregard of the needs of consumers on an endless spectrum of matters. We had the unedifying experience here a couple of weeks ago of witnessing the government appeasing Australia’s richest man and consumers being left as an afterthought in the Howard government’s unconscionable destruction of Australia’s cross-media ownership laws. Whilst satisfying the needs of free-to-air television owners in that instance, consumers have been left as an afterthought in the Howard government’s nonsensical digital TV policy and refusal to issue a fourth free-to-air television licence. Everywhere you look, the government is looking after the big end of town. Whilst looking after big business through its refusal to strengthen the Trade Practices Act or to give the Australian Competition and Consumer Commission more powers and funding, the needs of consumers have, disgracefully, been left by the wayside. Of course, the Howard government, particularly Treasurer Peter Costello, would love nothing more than to see the ACCC become a toothless tiger. Despite touching on many facets of life and different policy areas, we can see a common trend here that the government’s disdain for ordinary consumers knows no bounds. We see that in this disgraceful legislation before the House. The Howard government loves nothing more than the pursuit of radical ideological goals and is happy to destroy anything that lies in its path to achieve them, including the needs of consumers. I say today: that has to stop.

Families in my electorate of Lowe in Sydney’s inner west have a right to be provided with every detail about why the government in selling one of its few remaining public assets: Medibank Private. It smacks of poor policy to sell public assets in an attempt to superficially boosts the budget bottom line. The sale of Medibank Private, along with the sale of Telstra, will provide a bottomless pit of funds for a government heading into an election year next year. It has already curried favour with Australia’s richest man and principal media proprietor, and now we have the issue of the sale of Medibank Private. It should not be seen as a river of gold to flow into the government’s war chest in the lead-up to an election. We can continue to live in hope that, at some point in the future, the government will act in the public interest rather than out of political expediency or, dare I say it, self-interest.

Families in my electorate of Lowe have a right to be given a guarantee that the costs of private health insurance will be kept down after the sale of Medibank Private. We all know that, once something is flogged off, the only way is up for prices and premiums. Naturally the government will not give that guarantee, because it cannot. It knows only too well that the sale of Medibank Private is going to result in increased health insurance premiums. Blind Freddie can see that. A publicly owned Medibank Private has acted as the conscience of the health insurance industry, as a guard at the gate between immeasurable profits and the interests of the wider community. This is a conscience or a gatekeeper that will be lost forever following privatisation—when the profit imperative understandably and inexorably takes over. The company’s new shareholders will naturally want a large return on their investment. We saw fees skyrocket following the privatisation of Sydney airport and will see a rise following the privatisation of Medibank Private. In relation to Sydney airport, I draw attention to my questions on today’s Notice Paper and my contribution in the Main Committee earlier today. The breaches of security going on at the airport are a disgrace.

Returning to this bill, the government faces a choice: sell Medibank Private but warn the buying public that the organisation is going to deliver below-average returns indefinitely or tell the public that premiums are likely to increase as a result of the new organisation’s drive to return big dividends and capital gains to its new shareholders. That is the duty of the government: to tell the truth to those people who are going to invest in the new Medibank Private after it is privatised—to tell them that they are going to get less return for their investment in the area of health insurance—or to tell the poor, long-suffering contributors that premiums are going to go through the roof.

Is this a choice the government will make? Not likely. There are 600,000 families in my electorate of Lowe covered by health funds who will face the prospect of premium increases when they simply cannot afford them. I urge those opposite to think again: to fight the sale of Medibank Private every step of the way for families, including those in the inner west of Sydney and right across the country from Sydney to Perth, who have had a gutful of interest rate rises and health insurance premium increases.

This bill is a disgrace. As I have said in my contribution, there is just no end to which the government will not go to privatise anything to put its hand on a bit more dirty money in the run-up to the next election. I think the tide is turning. I have an informed, intelligent and educated electorate, like the member for Wills has. I think people understand that eventually you run out of luck when you start telling tales about children overboard and weapons of mass destruction and when you deny any knowledge of the bribes that were paid by the Australian Wheat Board to Saddam Hussein. I think people are waking up to that. I think they understand that last fortnight our democracy was handed over to, principally, Mr Packer—and that is a disgrace. I am sure that the good sense of the electors of Australia will take a baseball bat to this government when the election is held this time next year. (Time expired)

Steve Gibbons (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Before I start my contribution, I would like to indicate that I am a policy holder with Medibank Private. The purpose of the Medibank Private Sale Bill 2006 is to amend the National Health Act to allow the government to sell its shares in Medibank Private. The bill also puts into place foreign ownership and Australian identity restrictions on Medibank’s directors and national office for a period of five years. It changes the status of the fund from not-for-profit to for-profit, allows preprivatisation profits to be redistributed to shareholders following the privatisation and ensures the fund, not the Commonwealth, is liable for any compensation claims that arise from the sale.

Labor opposes the bill on the basis that the government’s decision to sell Medibank Private is based purely on an ideological agenda—an ideology that leads to a blinding belief that private ownership is better, that the free market is more efficient and that it will act in the community’s best interests even when there is conclusive evidence to the contrary; an ideology that means that government is unable or unwilling to see that the sale of Medibank will have adverse implications for existing members and for the affordability of private health insurance.

So, despite concerns being expressed publicly by health economists, former health insurance commissioners, business commentators, the AMA and the majority of the public, the government continues to push ahead because, to quote the Minister for Health and Ageing, ‘The government is instinctively in favour of privatisation.’ Clearly the general public does not swallow the government’s shallow arguments for selling Medibank. A Fairfax ACNielsen poll published in early September demonstrated that 63 per cent of those polled opposed the sale while just 17 per cent supported the government’s plan. Even 46 per cent of coalition voters do not support it. As for the government’s special adviser on various important policy issues, Mr Alan Jones, he described the sale on his radio program on 4 September as ‘financially unjust’ and ‘politically reckless’.

The government says that the sale will allow Medibank to be more competitive, therefore putting downward pressure on premiums. The economic modelling that supposedly supports this argument and was carried out as part of a scoping study has not been made available for public scrutiny. While a number of economists and business commentators have publicly debunked the government’s assertion, there appear to be no objective measures available to back the government’s claim.

For example, Professor Jeff Richardson, director of the Centre of Health Economics at Monash University, said on the ABC’s AM program earlier this year that ownership does not determine the cost of membership. Asked if he would expect Medibank Private to be more efficient if it were sold off, he responded:

No, there’s no evidence of that either. It really is almost totally irrelevant. Their expenses are comparable with the expenses of other health funds.

The Parliamentary Library research brief also found that there is little evidence to support assertions that a privatised Medibank Private would be more efficient, more competitive and less expensive for consumers. There is, in fact, a very logical argument that suggests the change from a non-profit to a for-profit organisation would add a cost or profit impost that will add to premium charges. The management of Medibank Private itself expressed it best to a 1996 Productivity Commission inquiry when it admitted that the interests of members are best served when the funds view their members as shareholders for whom the delivery of lower prices is a dividend.

The reality is that for-profit insurers need to provide a profit for investors. While it may be the intention of the government to encourage policy holders to become shareholders, many will not. We only need to look at what the effect on premiums has been as the government has fattened the cow in preparing Medibank Private for sale. In order to increase Medibank’s profit from $10 million in 2003 to $130 million in 2005, premiums were increased by 8.9 per cent in 2004 and by 7.94 per cent in 2005—over twice the rate of CPI increases.

A further reason Labor opposes this bill is that the legislative changes proposed by the government provide no assurance or protection for Medibank Private members against further significant premium increases. Premiums have increased by more than 40 per cent over the past five years—a rate double that of the consumer price index, higher than wages growth and higher than the indexation of grants to help fund services under the Commonwealth-state health care agreements. Respected economic commentator Terry McCrann rightfully asked in his Melbourne Herald Sun article of 6 October:

Why should we hand this sort of money-generation to the private sector? Should heath insurance make lush profits anyway? Aren’t they supposed to be non-profit?

And if Medibank is privatised, who would then keep the (private) bastards honest? As Medibank is claiming its higher profit came with a reduction in premium rate growth?

Terry McCrann, who is not renowned for his radical views, is asking these questions of this government’s proposal.

Medibank Private is Australia’s largest non-profit and only national private health insurer. It is the only private health fund to have a significant market share in every state and territory. Because of its size and market position, Medibank Private has been able to put downward pressure on costs by negotiating with private hospital owners and passing on these savings to its members.

There are at least three other factors which are likely to contribute to premium increases under the government’s proposal to privatise Medibank. Firstly, while there is no evidence to support the government’s assertion of downward pressure on premiums, let us look at one market-driven outcome which appears to be common to government-owned enterprises that have been privatised. The Australian Wheat Board—which could be a good or bad example—soon after privatisation moved to paying its various executive staff market based salaries and performance bonuses. The result was that, by 2005, the salary packages for AWB executives had rapidly adjusted to the market and ranged from $450,000 to $1.5 million per year. There are numerous other examples, including Qantas, the Commonwealth Bank and, of course, not forgetting Telstra’s $10 million man. That was a case even the Treasurer had difficulty defending—a case where there was clearly no evidence of the correlation between exorbitant salaries for executives and returns to shareholders, let alone customer value.

The second factor is that the government has argued that privatisation will lead to increased competition. Should privatisation proceed, on the day following privatisation, there will be exactly the same number of private health funds, which currently stands at 38. There is a real possibility, however, that the exact opposite will occur.

As noted in the Parliamentary Library’s research brief, ratings agency Standard & Poor’s have recently argued that any sale of Medibank Private is likely to materially affect the competitive dynamics of the industry. While Standard & Poor’s did not specify the precise nature of the effect on competitive dynamics, it appears to see the main impetus for change in the possibility that the sale may lead to rationalisation and greater concentration within the industry. That is not exactly a resounding endorsement of the government’s increased competition argument.

The third factor is that the government’s proposal will change Medibank Private’s objectives essentially from working in the best interests of the members to working in the best interests of the shareholders. By its very nature, this cannot be in the best interests of the members. I have already acknowledged that, while there may be an overlap of membership and shareholders, they are different. There has been public speculation that Medibank Private has a market value of somewhere between $1.5 billion and $3 billion. Assuming the market would demand a return on investment of seven per cent, this would translate into an annual dividend payment of between $105 million and $210 million. Not only does this dividend payment have a potential impact on premiums; it also represents a huge amount of money that would be funnelled out to shareholders rather than be used to improve services or maintain premiums at a low level.

The proposed change in favour of shareholders over members also has implications for older Australians and those with chronic illnesses. While regulations will remain to protect against discrimination, how long will it take for a privatised Medibank to identify those who represent the greatest risk and therefore the greatest cost? This concern is clearly reflected in comments from former Health Insurance Commissioner Ray Williams, Professor John Deeble and Dr Robert Maher released on 5 September. In addition to calling the sale ‘irrational’ they warned that, as soon as a large share of the market is held by private shareholders, there will be pressure on the government to deregulate the industry or remove government price control or to reduce or eradicate the community rating obligation. The government will attempt to dismiss this as preposterous.

But let us look for a moment at Telstra, which is not yet fully privatised and also subject to government service regulations. Telstra has clearly become much more focused on what is and what is not profitable. For example, thousands of public telephones have been removed or earmarked for removal, not because they are not needed but because they are not profitable. We need to look at the rights of existing Medibank Private members. There has been considerable debate about the rights and entitlements of existing members in relation to the proceeds of the proposed sale of Medibank Private. Public comments, again, include those of economics commentator Terry McCrann on 6 October 2006:

I suggest there are two components to the value of Medibank and that the government clearly owns only one of them.

And further:

… but there is at least an argument that the profit and its sale multiple are owned by the members who have overpaid for their health insurance.

Other parties, including the Australian Medical Association, argue the case for members’ rights from a moral perspective rather than a legal perspective. The AMA, while not wishing to comment on the legality of the situation, doubts the morality of the sale, given that much of the value of Medibank Private is in its financial reserves, which were not contributed to by government but rather extracted from the members in compliance with regulatory requirements, and that there is a strong case for mutualising Medibank Private and retaining the equity within those left contributing to it, namely, the members.

The government has sought to obtain definitive legal advice about ownership and members’ rights, which was done through solicitors Blake Dawson Waldron. It would seem clear that considerable uncertainty remains. This is perhaps evidenced by the government’s undertaking to provide some type of share entitlement for existing members, but in what form still remains unclear.

The government also proposes to change Medibank Private rules so that section 78 of the National Health Act does not apply. This change simply allows the Minister for Health and Ageing to abrogate his responsibility under the National Health Act to consider whether the proposed changes impose an unreasonable or inequitable condition affecting the rights of any contributors, which is precisely what the privatisation of Medibank Private will do.

We also have to look at the government’s proposal regarding the potential privatisation of public hospitals. The privatisation of Medibank is just one element of the ideological mindset of the government and the minister for health. For example, what would be the consequences if Medibank Private were sold to the same private organisation that, under the government’s proposals, seeks to win contracts to manage our public hospitals? What would be the consequence of an insurer also being in a position to influence or determine patient care in public hospitals? The old saying, ‘It would be like giving Dracula the keys to the blood bank,’ would be very close to the mark. Again, this would seem to fit precisely with the Howard government’s blind obsession with privatisation, without the slightest regard for the views of the people they are supposed to represent and, equally, with no regard for any adverse consequences of their actions.

The minister for health delivered a speech to the Menzies Research Centre on 9 September 2006, during which he advocated that state governments should outsource the management of public hospitals, allowing the private companies to run these hospitals for a profit. The minister has been quoted in the press as saying: ‘Obviously, if you are a private business, you want to make a profit.’

Such a proposal is another example of the minister and the government being blinded by ideology and of their unwillingness or inability to acknowledge and therefore learn from past mistakes. Unfortunately, we are talking about essential community assets. The sick, the elderly and those who cannot afford private health insurance will suffer as a result of the government’s ideological superiority and refusal to acknowledge the facts. Most Australian states have experimented with private management of public health services and individual departments within public health organisations, using a variety of structures and agreements. Some have been quite successful. There are, however, a number of highly critical reports, including the state Auditor-General reports, and several examples of states reversing such arrangements.

For example, in a report on the Joondalup Hospital, the Western Australian Auditor-General found (1) the process failed to establish that the public-private arrangements would deliver a net potential benefit over a public sector alternative and (2) the Metropolitan Health Services Board claims that bed block at inner city hospitals resulted from Joondalup’s reluctance to accept patient transfers due to financial arrangements. As for the ideological argument that private is better, a comparison of Joondalup Hospital with benchmark hospitals found patient satisfaction inferior—particularly relating to the availability of staff, continuity of care and patients being kept informed.

In relation to the Port Macquarie hospital, the New South Wales Auditor-General reported that the government would pay twice for the cost of the capital construction in the annual availability fee and through fee-for-service payments but would own neither the land nor the buildings. In South Australia, Modbury Hospital management was outsourced by the then Liberal government in 1995, essentially to increase efficiency. The experiment obviously has not worked. However, the current state government is currently negotiating to terminate the contract with Healthscope, which is not scheduled to expire until 2010. The South Australian Minister for Health is reported as saying in March this year:

I think one of the ways that Healthscope is able to make a profit or keep the thing running is by squeezing services that a public system would give higher priority to.

It is not surprising then that the proposal of the federal Minister for Health and Ageing was met with negative responses from a number of state premiers and state health ministers.

Labor acknowledge that private hospitals are a significant and essential component of the hospital system in Australia. We believe, however, that it is the public hospital system that faces the task of dealing with the vast majority of acute and complex cases and emergency episodes of care. Labor also believe that the role of private hospitals is and should be complementary rather than competitive or adversarial.

In conclusion, I believe this bill has nothing whatsoever to do with good public policy, nothing whatsoever to do with maintaining or improving the way our current world-class health system provides its range of treatments and services to the people of Australia and everything to do with the manic obsession of this government and this Prime Minister with privatisation at any cost and to hell with the consequences. That is why I strongly oppose this bill.