Andrew Murray (WA, Australian Democrats) Share this | Hansard source

What I propose to do with amendments 2, 3 and 4 on sheet 5135 revised is ask the chair to deal with them separately, but I will speak to the three together, if that is acceptable to the chamber, because they are linked in theme, although they have a different effect. Firstly, I move amendments (2) and (3):

(2)    Schedule 2, page 10 (line 11), at the end of paragraph (2)(a), add “with existing members of Medibank Private having the right of first refusal for that transfer”.

(3)   Schedule 2, page 10 (line 19), at the end of subitem (3), add “which must provide as the first method of sale the sale of Medibank Private to its existing members.

I think the minister may have misapprehended my views a little in his speech in the second reading debate. I put on record in the committee hearing, in my minority report and, indeed, in my speech in the second reading debate, that I accept the essential proposition that the library has put—but not just the library, of course; many others have put the proposition—that the government does have the right to sell Medibank Private. I think, though, in line with the others, that there is a risk with respect to possible compensation. I will quote to the minister the specific section of the library brief—which I agree with—which is on page 11 of the Bills Digest. There it says:

... it is arguable 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. It was not asserted in the Research Brief, and is not asserted here, that this means that Medibank Private is owned by its members, or that members could block the sale.

I agree with that. I agree that Medibank Private is not owned by its members. I agree that they cannot block the sale. I agree that government is entitled to sell it. But I agree with the research brief that there is the potential for a claim against the fund assets. That is entirely different to a claim against the entity or over the shares of the entity.

I made the point that I think the government has accepted that position. I know you strongly reiterated in your own speech in the second reading debate that the government does not accept that there is any risk, but the point is that the bill itself has that risk covered off in a specific clause which states that, in the event of a claim for compensation, the Commonwealth will be liable. Under questioning, the department answered, ‘That’s a standard liability clause’, but my answer to that is: ‘If there is no risk you don’t need a liability clause—it’s a circular argument—and there could be no claim in the courts for compensation if there were no entitlement to compensation.’ So I do not think the government can have it both ways. I think there is a claim for compensation.

That has led me down the path to believing that the one sure-fire way to avoid any potential class action for compensation is, of course, to sell it to the members, because you cannot claim for compensation if you end up owning it. Then I had to look at these questions: ‘Is that practical?’ and ‘Would it realise the same moneys that the government would want?’ Of course they would realise the same moneys the government would want, because you would ask them for the amount of money you wanted to sell MPL for. And if members did not take it up, you could sell the residue elsewhere.

The second issue in my mind was whether it would be a lower cost option. Yes, it certainly would. The third issue was whether it would it be fair to do so. What could be fairer than to offer an entity like Medibank Private to its members? So I think you cover off risk and so on very successfully with this route.

You have specifically said you do not accept these propositions—and I am sure you are unlikely to change your mind—but the three amendments before you are of a very different character. The first amendment I am discussing in this little dissertation is:

(2)

Schedule 2, page 10 (line 11), at the end of paragraph (2)(a), add “with existing members of Medibank Private having the right of first refusal for that transfer”.

A right of first refusal, as you know, is not an exclusive option—it just says you have the first option—and that is very consistent with my reasoning and my approach. The second amendment is a much tougher one which, in view of your views, I think you might find difficulty in supporting. It states:

(3)

Schedule 2, page 10 (line 19), at the end of subitem (3), add “which must provide as the first method of sale the sale of Medibank Private to its existing members.

It essentially says that you have to sell it to the members—and I can understand that, with your attitude, you will not want to do that. The third amendment, which hopefully you will reconsider, essentially opens up the options to a future government—whether it is a coalition government or a Labor government. It says:

it does not affect that long list you have at schedule 2, after subitem (5)—

a Medibank Private sale scheme may involve:

(a)

mutualisation of Medibank Private; or

(b)

private float of equity in Medibank Private; or

(c)

private placement of equity in Medibank Private; or

(d)

any other method the Commonwealth considers appropriate.

The difficulty that I have with the minister’s position is that he is actively saying to the public at large and to the parliament, ‘I’ll only sell this on a public float basis.’ Yet the bill is silent on the matter—I think it implies a direction in that matter. What I am specifically saying to the government is that you should be indicating an open mind. How can you be sure that in 2008 you will not in fact think mutualisation, private placement or a float might be better? I think you should have a more open mind than you are exhibiting right now as to how much money you want to raise, how you propose to sell it and at what cost and on what basis you will sell it. It is difficult to throw principles at people, but I have understood the Liberal Party to be a party that talks about choice, and I think you should leave yourself an open choice in these matters.

So I have spoken to those three items. I do not intend to speak much more on this in the debate. I have covered these matters in far more depth in my minority report and, to an extent, in my speech in the second reading debate.