Mathias Cormann (WA, Liberal Party, Minister for Finance) Share this | Hansard source

I thank Senator Di Natale for that question. He is quite right: the government announced yesterday that, after careful consideration of the scoping study into the sale of Medibank Private, we have decided to proceed, subject to market conditions, with that sale in 2014-15. What we will do with the capital release from that sale, as we have said for some time now, is reinvest it into productivity-enhancing infrastructure. The Treasurer, Mr Hockey, will have some more to say about that in the context of the budget.

Let me just make some more general observations, though. The reason the government is proceeding with this sale is very simple: there is no good public policy reason for the Commonwealth to own a private health fund. Medibank Private operates as a commercial business in a well-functioning, well-regulated, competitive market with 34 health funds. There is no market failure. There is no reason for the government to continue to own a health fund.

Beyond that, there have been some assertions made by Labor and others that somehow this will push up the cost of premiums. Let me say very clearly that it will not because, after any sale, Medibank will still have to compete with other health funds for their customers. They will still be subject to the regulation that is currently in place in relation to the setting of premiums. Furthermore, there have been some strange assertions from the shadow minister for health in particular and the shadow minister for finance suggesting that somehow a sale will reduce the variety of funds in the market and reduce competition. It will actually not do that. We currently have 34 funds. After we sell Medibank Private, we will still have 34 funds and we will have one fund that will be free from the shackles of government ownership which will be able to pursue opportunities— (Time expired)