Transcripts → 2014


Australian Financial Review TV with Su-Lin Tan

Senator the Hon Mathias Cormann
Minister for Finance


Date: Tuesday, 25 November 2014

Medibank Private Share Offer, ABC

SU-LIN TAN: Minister thank you very much for the interview today. $5.7 billion, a lot of money, what is the first three things that you will be doing with that cash?

MATHIAS CORMANN: As we have said all the way through, we will be reinvesting the proceeds from this sale into job creating, productivity enhancing infrastructure. This is a central part of our plan to build a stronger, more prosperous economy and maximise the opportunity for everyone across Australia to get ahead.

SU-LIN TAN: Anything earmarked specifically?

MATHIAS CORMANN: As we have announced in the Budget the proceeds from the sale of Medibank Private will go into our Asset Recycling Fund and working together with the States, we will identify appropriately high quality economic infrastructure projects and that will all happen in due course. We weren’t going to spend the money before it had actually been realised. These are judgments now for the future.

SU-LIN TAN: There is word on the street that there has been a bit of an artificial hike on the price, it might just all slump over the next 12 months, what are your thoughts on that?

MATHIAS CORMANN: I can’t predict the future performance of the stock market. The future performance of the Medibank Private stock is going to be a function of its performance as a company from here on in and it is going to be a function of the performance of the stock market more generally. I am not going to be a commentator in relation to these things, as I don’t believe anyone will be able to predict that. We have disclosed all of the relevant information in the Medibank Private Share Offer Prospectus, as we must under corporations law. The market has valued Medibank Private as it is valued today and if you look at the early trading you can see that the market has endorsed our judgment on the value of Medibank Private so far.

SU-LIN TAN: I want to take the opportunity to ask you this question, why deny the undeniable when what is happening to the ABC is a cut, why call it an efficiency dividend?

MATHIAS CORMANN: It is an efficiency dividend. Right across Government since the late 1980’s, under Labor and Coalition Governments, efficiency dividends are applied right across the board.  Health, Education, all of these departments are all subject to regular and ongoing efficiency dividends. I have never heard Labor suggest that when they applied the efficiency dividend or increased the efficiency dividend in their period in Government, that they were subjecting Health and Education to cuts. I have never heard them say that. They are being a bit inconsistent. The efficiency dividend on the ABC was first introduced by a Labor Government in 1989, it was abolished by the Howard Government in 1997/8. The ABC is the only taxpayer funded organisation that has been fully exempt from the efficiency dividend that applies to all other organisations since 1997/8. SBS has been fully exempt since 2003/4. The ABC like any other taxpayer funded organisation should operate efficiently, should treat taxpayers money with respect and the efficiency dividend is a well established mechanism to ensure that we deliver services for taxpayers in the most efficient way possible.

SU-LIN TAN: No well that is a cut though in itself.

MATHIAS CORMANN: It is an efficiency dividend as I have just indicated to you. The efficiency dividend has been in place across the whole of Government since the late 1980’s. If you can show me where the Labor Party has said that the efficiency dividend that they applied and increased on an ongoing basis over their successive periods of Government, if you can show me where they indicated that that was a cut to funding for Health, Education and various other departments right across Government, then let’s have another conversation.

SU-LIN TAN: Very well then, thank you.