Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

My question is directed to the Minister for Finance, Senator Cormann. Is the minister aware of assertions that the sale of Medibank Private will push up the cost of premiums, and can the minister advise the Senate why that assertion is wrong?

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

I thank Senator Bernardi for his question. Sadly, I am aware of such assertions. Of course they are totally dishonest and inaccurate assertions being made by the Labor Party. Let us talk about the facts. The government has decided to proceed with the sale of Medibank Private, as has been our policy for a very long time and as has been authorised by the Australian parliament since 2006.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

You're top of the class, Matthias.

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

I hear Senator Wong interjecting. In the six years of the previous Labor government the previous Labor government never moved to rescind the Medibank Private Sale Act, so presumably, as Minister for Finance, Senator Wong was entirely supportive of that measure. The reason these assertions are inaccurate is that Medibank Private operates as a commercial business in a highly competitive market. It also operates in a highly regulated market, and the setting of health insurance premiums is regulated. Given that Medibank Private operates in a commercial and competitive market with 34 health funds, Medibank will of course continue to have to be mindful of the premiums it charges members and policyholders in the context of the competition it faces from other funds. The Labor Party might not take my word for it, but this is the verdict of an ABC Fact Check, which says:

Medibank Private operates like a commercial business, with performance measured by the amount of profit it makes. A privatised Medibank Private may try to raise premiums, but it will still have to deal with strong government regulations and a highly competitive market.

Guess what—the Labor Party in government turned Medibank into a for-profit business. They then fleeced them, with special dividend after special dividend—$600 million of special dividends that this senator took out of Medibank when she was minister, and guess what? That put upward pressure on premiums—(Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I ask if the minister could advise the Senate why it makes sense to proceed with the sale of Medibank Private?

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

There is absolutely no reason why the government, in 2014, should still own and operate a private health insurance business. Private health insurance in Australia is a highly-competitive and very effective market. We have 34 health funds competing for business in order to provide services to people who want, essentially, to take out health insurance in order to facilitate access to affordable private health care. The Labor Party always jumps up and down and plays politics with this, but they actually are secretly in favour of privatisation. They are in favour of selling Medibank. Why otherwise did Labour not once move to repeal the Medibank Private Sale Act 2006 in their six years in government?

It was none other than the Labor Party that turned Medibank Private into a for-profit business. That was all part of an orderly progression toward privatisation. (Time expired)

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

Mr President, I have a further supplementary question. Could the minister please advise the Senate what the government intends to do with the proceeds of the sale of Medibank Private?

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

I thank Senator Bernardi for that supplementary question. It is a very important question. The important point here, of course, is that Medibank Private in private ownership will continue to perform a very important and very valuable service for people across Australia. Indeed, in private ownership, we believe, they will perform that service much better than they currently can while they are owned by the government. It will also help us to release capital that is currently locked up in Medibank Private so we can reinvest it in productivity-enhancing infrastructure for the future, which will help us grow the Australian economy more strongly.

Senator Wong interjecting—

The Labor Party is not interested in any of this.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

Oh, we are not interested!

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

Senator Wong is in here interjecting.

Penny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | Link to this | Hansard source

I am.

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

Senator Wong was the minister for finance who fleeced Medibank Private policyholders of $600 million in special dividends that she took out of Medibank Private because Labor was always desperate for more cash—always mismanaging the budget. (Time expired)