Senator the Hon Mathias Cormann
Minister for Finance
Date: Thursday, 27 March 2014
MATHIAS CORMANN: Good morning everyone. Nine days to go until the Western Australian Senate by-election. That means nine more days in which Labor can drop its support for anti-West Australian taxes like the carbon tax and the mining tax. The carbon tax and the mining tax undermine Western Australia. They undermine confidence. They undermine investment. They undermine jobs growth in Western Australia. It is high time, in the shadow of this election, that Bill Shorten and the Labor Party drop their support for these anti-West Australian taxes.
If I might just also make some comments in relation to the sale of Medibank. I saw some reports this morning that the Shadow Minister for Finance wants the Government to draw half a billion dollars a year in dividends out of Medibank Private. Well what that shows is why Labor made such a mess of the Budget in government. Medibank Private had a very successful year last year. They made a big profit last year of $233 million, which was up 84 per cent on the previous year. Yet the Shadow Minister for Finance wants the Government to hit Medibank with more than double that in a dividend payout to the Government every single year. That is not sustainable and that actually would push up premiums for Medibank Private policyholders. So that is just a ridiculous proposition and something of course that the Government would not support.
JOURNALIST: MBF, NIB, Manchester Unity all offered either cash or shares to policy holders with mergers, takeovers. Why isn’t that being offered to those three million people who are involved with Medibank Private?
MATHIAS CORMANN: Well what I said yesterday is that the precise structure of the sale including in relation to any incentives to policyholders will be decided closer to the sale. I was asked the specific question yesterday whether Medibank policyholders had shares in Medibank and they do not.
JOURNALIST: So it is fair then that they, despite the fact that they have been heavily involved in this organisation that they are not being offered any compensation whatsoever?
MATHIAS CORMANN: Any policy holder of Medibank has a contractual relationship with Medibank purchasing private health insurance. When you purchase private health insurance you don’t buy a share, you buy private health insurance. But having said that, as we put the detail together in relation to the exact structure of the sale, closer to the sale, we will be making judgements in relation to all sorts of issues like this.
JOURNALIST: Did Senator Brandis get rolled in Cabinet?
MATHIAS CORMANN: I don’t comment about what happens in Cabinet.
JOURNALIST: What about companies that Medibank owns like AHM?
MATHIAS CORMANN: We are proceeding with the sale of 100 percent of Medibank through an Initial Public Offering in the 2014-15 financial year, subject to market conditions.
JOURNALIST: Is the Racial Discrimination Act in its exposure draft form, why is that weaker than what is originally wanted?
MATHIAS CORMANN: I am not going to comment about discussions in Cabinet.
JOURNALIST: Do you think you have got the right balance with the draft?
MATHIAS CORMANN: There is a process underway now. Let’s let the process take its course. I think it is a good process. We made some very clear commitments in the lead up to the last election which we are now delivering on and that is the appropriate way to go.
JOURNALIST: There’s reports this morning that the $4 billion from the sale of Medibank Private will go to transport. Why isn’t it being put to health?
MATHIAS CORMANN: What we have said, firstly we haven’t actually put a number on what we expect the sale to achieve.
JOURNALIST: It’s above estimates, the funding from that, what’s...
MATHIAS CORMANN: You have asked the question I am very happy to answer it. So we haven’t put a number on it. We would like to maximise the net proceeds from the sale of Medibank on behalf of taxpayers and the market will determine ultimately what the value of Medibank is. What we have said for some time now is that it is our intention to recycle the capital that is freed up from the sale of Medibank, by investing it in productivity enhancing infrastructure. Now that is part of our plan to build a stronger economy and create more jobs, which in turn will help to grow revenue for Government, which we can then invest in additional services including in health.
JOURNALIST: Regarding Knights and Dames, John Howard has said not even he would have done this, it is so old fashioned. Why is Tony Abbott opting for something so old fashioned that John Howard wouldn’t go there?
MATHIAS CORMANN: I think it is a great initiative of the Prime Minister. It is a wonderful opportunity to recognise extraordinary and pre-eminent contributions by great Australians. I think it is a great initiative by the Prime Minister.
JOURNALIST: Malcolm Turnbull was mocking it last night. Are you sure the Government is at one on this idea?
MATHIAS CORMANN: I don’t agree with that characterisation at all.
JOURNALIST: Just finally, there has been a number of Labor MPs including Senator Pratt who have been skipping Parliament to campaign. Will you as Finance Minister be checking if that’s allowed under the entitlement system? And can they claim taxpayer dollars to go and campaign there?
MATHIAS CORMANN: I have noticed that Senator Pratt wasn’t in the Parliament for the last two weeks. I can only assume what she is doing. I can only assume what she is doing. I might leave it there. Thank you.