Pssst – wanna buy Medibank

Reports are coming out that the federal government is preparing for the sale of Medibank.

THE Rudd Government is opening the way for the possible sale of Medibank Private with the Labor Party set to delete from its policy platform a clause opposing the sale of the health fund.

The story goes that there is a change in wording proposed at the next month’s Labor national conference where the words “Labor is opposed to the sale of Medibank Private” is to be dropped. Is this because the want to sell more of the family silver to reduce the deficit, or is it a change in ideology? Not good either way if you ask me.

And this comes on top of Bligh in Queensland having a fire sale to protect (or restore) the states AAA rating.


46 Responses

  1. And with that, Australia’s journey to follow America’s failed social systems will be almost complete.

    Not happy about this in the slightest. No matter how they spin this – it’s going to be a bad stain on the current Labor leadership if it passes.

  2. Could not agree more – this is the wrong thing to do.

    I think it was Bill Maher who said in response to those who say that government should not run hospitals that “And insurance companies can do it better?”

  3. Nothing much left in the cookie jar.

    Medibank, Auspost…..Snowy Hydro………..Looks like everything else has already been pillaged already.

    Just a few of the “politically” ugly ducklings left…..!

  4. Expect plenty more of this, as we struggle to pay off debt.

    Remember we used to own a couple of airlines, a bank, a phone company, some real estate in Tokyo…?

    As we come out of recession and pay off debt, rather than chalking it up, I’d expect the federal government to sell assets like Australia Post, bits of the CSIRO, real estate, they’ll probably sell parliament house and have a lease back deal.

    It will be inevitable, might as well get used to it.

  5. It should not be inevitable.

  6. One of a number of interesting points raised by Andrew Bartlett when this was proposed by the previous government back in 2006:

    There is debate about whether the Government is entitled to cash out the value that has built up in a not for profit structure or whether it belongs to the policy holders. The Parliamentary Library has argued that while the Government owns the business, the members own the assets. It has been suggested that Medibank Private received similar advice 5 years ago although this has not been confirmed. The CPSU has asked for legal advice on whether a class action would be able to be mounted. The Government has received legal advice that contributors have no rights to assets in the fund.

    It will be interesting to hear Malcolm Turnbull’s take on this. Seriously.

  7. “And insurance companies can do it better?”

    joni, on June 9th, 2009 at 3:51 pm Said:

    Insurance companies know how to run ……………….Insurance Companies.

    Banks know how to run………………………………………..Banks.

    Mining companies know how to run…………………………….Mines.

    McDonalds Head Office knows how to run…………………………….a franchise business (the hamburgers and fries are the franchisees problem)

    Insurance companies know sweet FA about community health or hospitals.

    To say otherwise is an exercise in self delusion

  8. IATW – totally agree – and I work in insurance too (well, work may be over stating what I actually do).

  9. Boy, this government sure knows how to run the country…into the ground!

    They could always sell Tasmania to the Chinese so they can convert it into wood pulp.

    That would just about cover the interest on our debt!

  10. Oh come on scaper – tassie to the Chinese? Where would reb live? We don’t want him back on the mainland.

  11. Joni – the inevitability will be paying higher taxes to pay for debt and retain ownership. Or sell.

    Higher taxes aren’t popular and they tend to reduce consumer spending, and the government wants consumer spending and popularity.

    It’s a simple equation, and there will be some annoying choices to be made.

    Some will be far more annoying than whether or not to sell a health insurance company.

  12. Crapperville for reb!

  13. Lindsey Tanner on Medibank Private:

    “Importantly, this conversion will mean that Medibank Private will continue to be held in public hands.”

  14. He could be co-queen with me!

  15. Knock it into shape for sale, in 2 years.

  16. Found a link:

    The Government has announced its plan to sell off Medibank Private, but it’s made no decision about whether to sell it to another company or float it on the stockmarket.

    Whoops..the year was 2006.

    NICK MINCHIN: As the Finance Minister and Shareholder Minister in Medibank Private, can I confirm the Government’s decision to seek parliamentary authority to sell that Government business, Medibank Private.

  17. I’d have to kill myslef before I’d consider a move to Crapperville.

  18. “Insurance companies know sweet FA”

    My last job was in one of Australia’s largest insurance companies after a lifelong career in the federal public service. The inefficiency that I saw was so bad that all I could think was insurance companies are a license to print money.

    I was with the same federal dept for many years and I can honestly say we were more efficient and worked a lot harder than the employees I worked with in insurance.

    Oh, and I totally agree with y’all that said Medibank should not be sold (nor should NSW Lotteries, prisons, rail etc etc. – there are just some things the govt should run).

    Rudd just continues to be Howard-lite for me and his party the Alternate Liberal Party.

  19. But reb, I’ve done the landscaping.

  20. joni…GET BACK ON TOPIC!

  21. LOL scaper…. apologies.

  22. I swore I saw a comment before on AGW…I think it’s time I went out and did some work, I’m starting to suffer from cabin fever, lol!

  23. No mate – it was me posting on the wrong thread…. appeared and disappeared as quickly as a sneeze on a plane makes everyone wear their face-masks.

  24. Speaking of Bligh…I have a ‘hunch’ that she will find offloading QLD assets to be quite difficult.

    1. Securing finance in this country.

    2. Getting a reasonable price.

    3. Buying an asset with a militant workforce.

    Just a hunch.

  25. Very true.

    I am sure I was hearing (on the ABC?) that the money gained by Bligh selling is less than the earnings over the next X years… I could be wrong.

    Maybe we need to set a % of assets limit for each government to spend – that way each government would then have a decreasing amount of assets to sell.

  26. joni, I’ve been following the developments very closely and I don’t agree with her logic for selling out.

    If the jelly back unionists did not abstain her proposal would have been defeated!

    The only union that is showing any conviction is the ETU and quite a few members of other unions are livid.

    It seems that when a union member reaches leadership all loyalties go out the window in the name of aspiring in the Labor party.

    The party machines are wrecking democracy.

  27. Scaper – that is why it is great to have people on here from all over Australia – that way we get local opinions and information.

  28. One thing I forgot to mention…Swan came out and supported Bligh and I suspect that mud will stick to the feds in next years election.

    I know that state and federal issues are separate but there is a lot of frustrated Queenslanders up here who will exercise their ire at the earliest opportunity!

  29. Absolutely – I agree.

    And remember how Robertson lead the attack on the NSW government for privatisation, and what did he do as soon as he got into cabinet? yep – start the process to privatise the prisons.

  30. Government ownership of ‘assets’ in Queensland has a long history. In the period 1915-1930, the Government owned or acquired a State Insurance Office, a Public Curator’s Office, the Golden Casket State Lottery, sawmills and joinery works, mining and fishing ventures (including a string of State Fish Shops), a hotel, a sugar mill, cold stores, plant nurseries, cattle stations and a network of butcher’s shops, That’s right QLD once had 90 plus State Butcher Shops as well as Government-owned Abattoirs

    The decision to gradually divest bought howls of protest as each ‘vital’ State agency was returned to the private sector. I don’t think there’s too many in Queensland today who would now want a return to those days. Is there anyone who sees that it is crucial that public servants should be running ports and forests, freight trains and coal loaders?

    Bligh argues that these asset sales are necessary to fund a whole range of new infrastructure projects. That she is using much of the money for new assets and she is correct. BTW, her timeline is five years and she will sell only if the price is right. (Well she would say that wouldn’t she).

    I question some of the sales, particularly the lucrative rail freight business which then cross-subsidises passenger travel but I don’t have access to the figures until the Budget is bought down. I do suspect however that the State’s finances are shaky due in no small part to the collapse in mineral prices.

    Bligh is of the Left and by and large opposed to selling off the ‘state’ but I see that she has no choice. On the other hand Rudd is from the Right and he has even less sympathy for State Ownership. The decision to prepare Medibank for sale seems taken. Tis now only a matter of time.

  31. yep – start the process to privatise the prisons.
    joni, on June 9th, 2009 at 5:29 pm Said:

    Yeh……… private prisons are a classic example.

    Since when does any business NOT want “customers” who repeatedly return.

  32. Absolutely perfect IATW! Just perfect.

  33. scaper…, on June 9th, 2009 at 5:25 pm Said:

    but there is a lot of frustrated Queenslanders up here who will exercise their ire at the earliest opportunity!

    Just like they did at the last election over Local Government amalgamations? The threats of death and destruction turned out to be all piss and wind. Now the protestors are nowhere to be found.

    It’s worth pointing out that here in QLD the LNP’s opposition to asset sales is limited only to ‘timing’. And if Rudd does go down that privatisation track does anyone think the LNP will oppose what they were going to do anyway?

    But I think it’s safe to say that Senator Steve will again try to be the people’s champion. Lol.

  34. Just to throw something into the ring..that the Howard government sold off assets when there was no need to do so.

  35. Is that a AAA rating from the same Tossers who gave Enron and Merrill Lynch AAA ratings?

    Shouldn’t be too hard to impress ’em, I say. Anna should just tell ’em she owns the Barrier Reef.

  36. Evan, on June 9th, 2009 at 8:18 pm Said:

    Is that a AAA rating from the same Tossers who gave Enron and Merrill Lynch AAA ratings?

    Indeed it is. And while their ‘judgement’ should now be completely suspect, QLD’s recent rating downgrade translates into higher borrowing costs. Not good.

    Another cause for concern is the accelerating movement towards PPPs (QLD is using same to build schools) which means a short-term gain for the Budget bottom line but at a long-term liability. Simply, it’s a false economy but the average punter doesn’t appreciate that. Also not good.

  37. It’s a bloody disgrace this privatisation push. Labor are going to cop it from me and should cop it from the public (Bligh & Rudd both).

    On the other hand, those generally on the other side of the table from me, the pro-Coalition bunch; please recall that this asset sale crap was also occurring during Howard’s era. And we can all see how much good that has done Telstra.

    And apparently the economy was booming so there wasn’t even the excuse that we need to balance the deficit. That doesn’t get Labor off the hook – it just doesn’t make the Liberals any better (at least in this regard).

  38. Speaking of sellouts – it was amusing to hear the minister for plastic bags trying to explain how he “hasn’t ” shafted everyone with his out of the blue changes to the solar rebate scheme !

  39. Personally, I think the solar rebate thing is a beat-up. Yes, the rebate as it stands could have lasted *gasp* another three weeks, but that is all. It was already presented to the public that it would change, the only thing being it won’t last until June 30.

    Less than completely open, yes. A shafting of major proportions, not really.

  40. Tom

    You mention higher taxes to pay for debt and retain ownership or sell the asset.

    We may not pay higher taxes if the assets are sold, but we will certainly pay higher costs and fees to ensure the asset sold returns what Private Enterprise consider an acceptable return for their investment, along with the massive increase in executive salaries that comes with the privatisation of government assets.

    This is exactly what has happened in QLD qith the privatisation of the retail arm of electricity and now a further 15% increase this year.

    I do not believe for one minute that the assets privatised have contributed in any way to the overall well being of our population. They have however lined the pockets of management and their shareholders, resulted in increased charges or conversly the introduction of a massive range of new fees and charges combined with poor customer service, the outsourcing of hundreds of thousands of full time positions to avoid annual leave, sick leave and superannuation contributions, closure of offices and service centres in country areas resulting in further centralisation of our population.

    I honestly fail to see how the sale of an asset which benefits 20,000,000 people and then reduces to benefit management and the rich people who can afford to buy shares, so now benefiting around 300,000 people or around 1.5% of the population is agood thing, other than to those who believe that capitalism is the only way to go.

    Interestingly the places that are considered the most liveable cities are in countries that still have a social base to the governments.

    Throw ideology out the window and do some real investigation into the pros and cons for the whole community rather than ideological sell off of assets simply because number crunchers think it is a good idea.

  41. From what I can gather there was $150M allowed for in the rebate allotment but so far there has been almost $750M paid out.

    Meanwhile the government is handing out money to private schools that in my opinion should not receive it.,25197,25613558-601,00.html

  42. But reb, I’ve done the landscaping.

    Golden carved chairs with swans on them?

    Whatever you do scaper, please do not consider a career in interior design.

  43. Shane – “the outsourcing of hundreds of thousands of full time positions to avoid annual leave, sick leave and superannuation contributions”

    You should justify this. I think publicly owned organisations carry a lot of inefficiency. So if you mean that the workforce is structured more flexibly to meet peaks and troughs, then say so.

    This flexibility is not driven by the need to save a few bob on sick leave, it is the result of the chronic inefficiency in some public organisations.

    Publicly owned assets will be sold to pay off debt. That is what happened when Qantas, Commonwealth Bank and Telstra were sold. It is what will happen again, but the assets aren’t as valuable.

  44. Tom

    No I MEANT outsourcing to avoid responsibility. That is exactly what has been done many many times. I was privy to discussions whihc covered this aspect.

    Structuring to meet peaks and troughs are your words. I call it greed by reducing service levels to the absolute bare minimum tolerable by the ever suffering customers and public rather than staffing a company properly.

    Regarding inefficiency, may I refer you to Telstra and the oh so wonderful efficient service provided to its customers since outsourcing and restructure to more flexibly carry the peaks and troughs.

    You really must be in management Tom because your comments always seem to be what I used to have belted in my ears by the hierachy in the CBA, who had no contact with any customers and simply crunched numbers at their desks and then rang branch managers to complain about the surveys being received and the need to cut employment costs. If they got of their laxy arseholes and actually worked in a branch serving customers then maybe customers would have been happier.

    I completely and utterly disagree with you, the flexibility is driven by greed and a minimum return required when as asset is privatised. Which is not a necessity when is is publicly owned.

    With regards to the sale of QANTAS, the CBA and Telstra it is so wonderful to see how at the top of the service scale they are regarding their customers since privatisation and the payments made to management since their sale which I have covered oh so many times before.

  45. totally agree shaneinqld.

  46. Um, have the government actually said Medibank private is up for grabs? And isn’t it pretty much a private insurer, anyway? Just askin’.

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