Senator the Hon Mathias Cormann
Minister for Finance
ROSS GREENWOOD: Mathias you have got 750,000 Australians who have pre-registered to receive this private share offer. Are you confident that you can maximise the value for those shareholders but also for the Australian taxpayer?
MATHIAS CORMANN: We were very pleased with the level of interest from people right across Australia in the course of the pre-registration process. Obviously one of our key objectives is to maximise net proceeds from the sale of Medibank Private. So we are now in the sale process proper and we believe we have given ourselves the best possible opportunity to maximise net proceeds for taxpayers.
ROSS GREENWOOD: And why is it right that the Federal Government should sell Medibank Private now?
MATHIAS CORMANN: Well Medibank Private is a commercial business which is operating in a well functioning, well regulated, competitive private health insurance market with 33 other private health funds. There is no market failure here. There is no good public policy reason for the Commonwealth to continue to own a private health insurance business in 2014. Of course by selling the Medibank Private business, not only will we be able to release the capital so we can reinvest it in job creating productivity enhancing infrastructure for future growth, but we also will be able to see Medibank Private perform even better given that they will have more freedom to access capital markets as a truly independent commercial business. And of course the current conflict that we have as a Government being both the largest market participant through Medibank Private in the private health insurance market as well as the industry's regulator will be removed by us selling Medibank Private. So these are some of the key reasons why the Coalition for a very long time has been committed to the sale of Medibank Private.
ROSS GREENWOOD: So the money will go into infrastructure projects to create jobs in the future. It doesn't necessarily go into paying down the national debt?
MATHIAS CORMANN: As we have said for some time now, our commitment is to use the proceed from the sale of Medibank Private to reinvest them in job creating productivity enhancing infrastructure to help build a stronger, more prosperous economy into the future. That is right. And of course a stronger, more prosperous economy among other things over time will help generate more revenue for Government.
ROSS GREENWOOD: And for a person who is trying to make the assessment as to whether they should take up these Medibank Private shares, there is a range of price $1.55 to $2 a share that you have said today. What sort of indicators should they look for that they should buy those shares?
MATHIAS CORMANN: Well there is a lot of information obviously in the prospectus and anyone who is considering participating in the future of Medibank Private by purchasing shares obviously should read the prospectus that we have released today very carefully, taking advice as appropriate. Obviously from our point of view we have put all of the information out there. People across Australia considering whether to invest obviously have to make their own decisions having considered all of the relevant information that is now in the public domain.
ROSS GREENWOOD: You said earlier that you believe that there is scope for Medibank Private to do even better in fully private hands. What sort of areas would you imagine it could do better in? Is it in cost production? Is it in the general use of health funds into the future? Where does it lie?
MATHIAS CORMANN: This is a general point essentially. Governments are not as good as private operators at running businesses. Obviously a Government running a business comes with certain dynamics that hold those businesses back. By being able to operate as a truly independent commercial business, by being able to access capital markets more freely for example, obviously Medibank Private will be in a position to pursue future growth opportunities more flexibly than they could have if they had remained or if they were remaining in public ownership.
ROSS GREENWOOD: And just a final, is the ageing of the population one of the things we should watch and recognise because clearly that would see a greater demand for health service into the future.
MATHIAS CORMANN: Well it is certainly true that there will be in the context of an ageing population a growing demand for access to health care services into the future. From that point of view health care as a whole has been in the past and is likely to be in the future a growth sector for sure.
ROSS GREENWOOD: Mathias Cormann, thank you very much.