Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

My question is directed to the Minister for Finance and Administration, Senator Minchin. I refer him to press reports that he has just announced the deferral of the sale of Medibank Private. Can the minister confirm that is the case? If so, isn’t that a humiliating backflip brought about by the fact that he cannot prove the government owns Medibank Private, he cannot prove premiums will not rise following the sale and he cannot explain whether foreign ownership will be permitted if it is sold? Of course, the minister also knows that the public do not support the sale. Minister, given this is the third botched sale you have been responsible for, following the failure of your handling of the Snowy and Telstra sales, will you now abandon your ideological and arrogant obsession with selling Australians’ assets and listen to the Australian public when they say they do not want their assets sold?

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

I suspect the Australian public said they did not want Qantas and the Commonwealth Bank sold, but the Labor Party wisely and properly sold them. I thought I might get a question from behind me on this subject, so I thank Senator Evans for a very timely and appropriate question. It is the case that we announced in April this year that we were committed to selling Medibank Private. We do not see why the government should continue to hold and own one of the 38 private health insurance funds. We cannot see why taxpayers should continue to have that risk and that burden. We think the private sector can do a better job of running a health insurance business just as the private sector does a better job of running airlines and banks.

We reject this Labor scare campaign that change of ownership will force premiums up. If a health fund raises its premiums excessively in the competitive market that we have, customers can leave and go to another health fund. They have full portability. As we announced in April, we are retaining our full ministerial approval power. We also said in April that, while the government had decided to sell, we had not made a decision on the method and timing of the sale and that that would be a function of our decision on T3. We have now decided, in light of the T3 decision, that the best way to sell Medibank Private is by way of a share market float, and we have just announced that. That will ensure MPL does remain a strong and independent player in the private health insurance market. We do not want to see Medibank Private broken up, and we do not want to see any lessening of competition in this market. All Australians will be able to participate in that float. As we have said before, existing customers will receive some form of entitlement.

We took advice from our professional advisers on both MPL and Telstra about the timing of a Medibank sale. As we might have anticipated, that professional advice was very much that it was not in taxpayers’ interests to have two competing government share market floats. They did advise that holding the MPL sale even some months after T3 could affect demand for Telstra shares. The clear advice and the experience of governments, both Labor and Liberal, is that a full market float takes about nine months to organise. That means we would be looking at June next year if we were to do a float, so (a) that is still too close to the T3 sale and (b) everybody would understand that June next year is not an appropriate time for us to be contemplating a public float for a whole variety of reasons.

We have decided that Medibank Private will be sold by public float in 2008 if the government is re-elected. That will also enable the government’s broader private health insurance reforms to pass the parliament and be fully implemented before the sale occurs. Those are very good reforms to make private health insurance an even better product for consumers.

As I said, we remain committed to this sale. We will introduce the legislation in this session. We will seek the passage of the sale bill by December 2006 with the private health insurance reform package to be dealt with in the early part of next year. We have a very good package to improve the product. We have a very good package to take Medibank Private to the people—to put the private into Medibank Private. We think that taxpayers have had to bear the burden of owning this business for 30 years—they had to find the $85 million to provide the capital injection this company needed some two or three years ago. This business will be better off in the private sector, just as Qantas, CSL and the Commonwealth Bank were under the Labor Party.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I would be interested to know when the minister came to the view that suddenly the sale had to be deferred. I also want to know what the minister has to say to Australians who have watched his performance in handling the sale of Telstra, handling the sale of the Snowy and now handling the sale of Medibank. Why should Australians have any confidence in the minister, given that he has botched all three sales? This comes at a great cost to the Australian taxpayer. Isn’t the burden to the Australian taxpayer the minister’s failure to do his job properly? Why should we not come to the conclusion that the minister is driven by ideology rather than the interests of Australian taxpayers?

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

We have not sold Medibank Private and T3 yet. You will get your chance to say I botched it, if you like, but not until they have occurred.

Chris Evans (WA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

But it’s not going well, is it!

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

It is going very well thank you, Senator Evans. I said in April that we had not decided on the method or timing of this sale because we had to see what final decision was made in relation to T3. I very explicitly said back then, and in subsequent interviews, that the timing of the Medibank Private sale would be very much influenced by what we decided to do with our remaining shares in Telstra. There is no deception there; we were quite clear in our position.

The history of the Snowy is well known. We only had 13 per cent of the shares. The New South Wales government initiated this sale with their majority stake of 57 per cent. We decided, after they had initiated the sale, to tip in our 13 per cent. But as the Prime Minister clearly announced, given the public reaction to that, we decided to withdraw our 13 per cent. Victoria and New South Wales could have gone ahead and sold their 87 per cent if they so chose. (Time expired)