Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Aged Care, Disabilities and Carers) Share this | Link to this | Hansard source

My question is to the Minister for Finance and Administration. Does the minister recall saying this morning that he has received analysis backing up his claim that the privatisation of Medibank Private will result in lower premiums? Will he now make public that analysis so that Medibank’s three million members can make up their own minds? Doesn’t the minister’s claim fly in the face of past claims by the government that the not-for-profit nature of the health insurance sector was acting as a brake on premium increases?

Isn’t it the case that the board of a publicly listed Medibank Private will be required to maximise profits and returns to shareholders? Isn’t it also the case that, under the current arrangements, Medibank Private returns surplus to its members through lower premiums? Minister, isn’t the sale of Medibank Private all about the government’s ideology and nothing at all to do with reducing premiums?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I appreciate that question on what has become a topical issue. Can I say in relation to ideology that the ideological stumbling block appears to be within the Labor Party, which is ideologically opposed to private health insurance. They have been attacking the private health insurance industry—and everybody who subscribes to it—for at least 10 years. They have opposed the 30 per cent private health insurance rebate on every possible occasion. The one thing we can be sure of is that if this mob got into government they would end the 30 per cent private health insurance rebate and they would put up premiums. That has been their policy for most of the period they have been in opposition.

As to the issue of private health insurance and Medibank Private, the opposition has been campaigning against the private health insurance rebate for almost the whole period of its time in opposition. That is an absolute fact of life.

Opposition Senators:

Opposition senators interjecting—

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

You are totally opposed. You have been opposed to private health insurance. You think we should all be members of a government scheme and that individuals should not have access to private health insurance. We think they should have. We in this government have been staunch defenders of the opportunity for Australians to have private health insurance, and we have a commitment to the sale of Medibank Private, which was announced in April this year. At the time of that announcement I reported that one of the many reasons the government should not be owners of Medibank Private was that we believed, based on advice we had in our scoping study, that the efficiency dividend that could be derived from private ownership of Medibank Private would lessen the upward pressure on health insurance premiums. There is no doubt in this country and in any of the civilised world’s democracies that the upward pressure on health insurance premiums is a fact of life. We have inexorable rises in the cost of health care. We have inexorable rises in the cost of medical facilities, in medical procedures and in the technology relating to health. So there is always that upward pressure on private health insurance. As part of the package we announced—

Opposition Senators:

Opposition senators interjecting—

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

Mr President, do they want to hear the answer or not?

Paul Calvert (President) Share this | Link to this | Hansard source

Order!

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

There is constant intervention; constant interference. How can I answer their questions? The scoping study indicated in some detail the extent to which the efficiency dividend that would be derived from private ownership of Medibank Private would lessen the upward pressure on health insurance premiums. We believe that the government should not own one of the 38 private health insurance companies in this country. Indeed, the onus is on those who continue to believe that there should be government ownership of a private health insurance business. There is absolutely no basis or logic in the government owning a private health insurance business.

This is entirely analogous to the Labor government’s decisions to sell CSL, Qantas and the Commonwealth Bank, where they sensibly and with our support agreed that the government should not be a participant in those industries. We do not believe the government should own one of the players in this industry. It is a cost to taxpayers. You will recall that just two years ago taxpayers had to make an $85 million capital injection into Medibank Private to ensure its capital adequacy. These are not the responsibilities of taxpayers or governments. The government’s role is to regulate this industry without fear or favour and on a level playing field for all the 38 companies and funds that operate in this business and not to have the government own one of those funds. We are very confident that, within the general regime of the government retaining the price setting capacity, which we announced we would, there will be less upward pressure on premiums with a private Medibank Private than is currently the case.

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Aged Care, Disabilities and Carers) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I ask again, Minister: can you please table the scoping study you have referred to so that the three million members of Medibank Private can make up their own minds about the veracity of the claims you make? Does the minister also recall stating that he had received legal advice that the government was the owner of Medibank Private’s assets and therefore could sell the organisation? Given the serious doubts that have now been raised by the Parliamentary Library report, will the minister now release that legal advice so that the three million members of Medibank can be assured of their rights?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

On the first of the two-part supplementary question: no, governments of both persuasions have never released scoping studies, because they contain commercial-in-confidence material. On the second question, with regard to the legal advice on the government’s position that it is taxpayers who own the fund and the company, I am pleased to be able to table today advice from Mr Tom Bathurst QC, which strongly supports the government’s position and completely rejects the opinion of the Parliamentary Library on this matter.