Senator the Hon Mathias Cormann
Minister for Finance
Date: Tuesday, 25 November 2014
JOURNALIST: Mathias, with the price that you have seen out on the board today are you broadly pleased with that?
MATHIAS CORMANN: Yes I am. Over the last year, we have worked very carefully and methodically to ensure we achieve the right value from the sale of Medibank Private for taxpayers, but obviously we are now looking forward to shareholders across Australia and the market embracing the future of Medibank Private and its future potential. So it is good to see that the market has supported our judgments in relation to the appropriate pricing for Medibank Private. I wish Medibank Private every success as a business moving forward.
JOURNALIST: How important is the success of this sale to the future sale of other public assets?
MATHIAS CORMANN: We will make a judgment on a case by case basis. The sale of Medibank Private has long been Coalition policy. There was no longer a policy case in favour of Government ownership of Medibank Private. Medibank Private is a commercial business operating in a competitive, well functioning market. Arguably the Government had an inherent conflict as both the regulator of that market and its largest market participant. Today we have been able to formally release the capital that the Commonwealth had tied up in Medibank Private and we will be able to reinvest that capital in job creating, productivity enhancing infrastructure to build a stronger Australia for the future.
JOURNALIST: But you want to sell other assets; you needed Medibank to go well don't you?
MATHIAS CORMANN: We want every sale that we may consider to go well, of course. Anything that we do in Government, we want it to go well. Everything we do in Government we approach it in an orderly and methodical fashion so that we maximise the outcomes for taxpayers. That is what we are always setting out to do. Our commitment over the past year was to execute the sale of Medibank Private in a professional way, to maximise the return for taxpayers subject to a series of other considerations. We have been able to achieve that. In terms of any potential future sales, that will be a matter for future consideration. If we were to go down that path, we will go through an equally careful, orderly and methodical process.
JOURNALIST: You've got a very good price for Medibank Private, have you considered what the outcome might be for the Government if management are unable to meet their expectations?
MATHIAS CORMANN: We got the right price that the market valued Medibank Private at. $2.15 was the price that at the end of the book build process we judged was the appropriate price and it reflected the valuation of Medibank Private by the market.
JOURNALIST: Truth is it's hard for Government these days to come up with an easy $5.7 billion for anything, isn't it?
MATHIAS CORMANN: This was unfinished business from back in 2006. This sale today was conducted under the auspices of the Medibank Private Sale Act 2006. To the previous Government's credit, they never repealed the Medibank Private Sale Act in their period in Government, so we've been able to essentially manage this sale in a very efficient way, deploying all of the skills available from the team that we have been able to assemble. I wouldn't say that it has necessarily been easy, but we are very satisfied with the outcome after the process that has gone for just over a year.
JOURNALIST: Who wins out the most?
MATHIAS CORMANN: This is a win-win. It's a win for Medibank Private policyholders because we believe that Medibank Private in private hands will perform even better than in Government ownership, because they will have more flexibility to pursue growth opportunities into the future. They will have better access to capital markets. It is a win for all Australians with private health insurance and indeed it is a win for all Australians seeking affordable access to high quality healthcare, because this sale will contribute to the expansion of a viable, competitive, efficient private health insurance market in Australia. And of course it is a win for taxpayers because we have been able to release the capital that, until today was tied up in Medibank Private and we will be able to reinvest that in job creating productivity enhancing infrastructure to build a stronger, more prosperous economy.