Senator the Hon Mathias Cormann
Minister for Finance
Date: Monday, 29 September 2014
DAVID KOCH: Australia's largest health insurer Medibank Private is now up for sale and will go public. And the Government has announced the public float in the biggest sell off of a Government asset since Telstra was offloaded. The sale is expected to attract so called retail investors, mum and dad investors. Finance Minister Mathias Cormann joins me from Canberra. Minister thanks for joining us.
MATHIAS CORMANN: Good morning.
DAVID KOCH: Now how much are you hoping to raise from the sale of Medibank?
MATHIAS CORMANN: The value of Medibank Private will be set by the market. You wouldn't expect the Government to speculate on that. Obviously on behalf of tax payers we are working to achieve the best possible net return.
DAVID KOCH: Yeah. You're not just going to flog it for any price though. You must have a minimum to make it worthwhile for you.
MATHIAS CORMANN: Like any seller of an asset, we have got some private views. But a part of conducting this sort of process professionally is to let the market determine the value and in the meantime we are doing everything we can to give ourselves the best possible opportunity to achieve the best possible net return for taxpayers from the sale of Medibank.
DAVID KOCH: So where will the money go?
MATHIAS CORMANN: What we have said for some time is that we would recycle the capital released through the sale of Medibank by reinvesting it into productivity enhancing infrastructure. In 2014 there is no reason for the Federal Government to still be involved in running a private health insurance business. So the opportunities here are that one, Medibank Private policy holders will be able to benefit from an even better performing Medibank Private in private ownership and we will be able to release the capital that is currently tied up in Medibank Private and use it for better purposes.
DAVID KOCH: Okay so it will go to roads, rail, ports, that sort of thing?
MATHIAS CORMANN: Genuinely economic infrastructure, which will help us build a stronger, more prosperous economy.
DAVID KOCH: Yeah, alright that's political speak though isn't it? Sounds like it is going to general revenue?
MATHIAS CORMANN: No, it won't go into general revenue, that is the whole point. We are releasing capital and we are reinvesting the proceeds from that sale back into capital infrastructure, with a very focused and disciplined commitment to ensure that it is genuine, economic infrastructure, which will help us build a stronger, more prosperous economy.
DAVID KOCH: Okay, alright, good luck with it. We will keep following it. Thank you for joining us and for more details on how you can register for the Medibank Private Share Offer head to our website.