Home - Claire Moore - Labor Senator for Queensland

Medibank Private Sale

I take up part of the challenge posed by Senator Nettle and indicate that the obvious response is that the Australian Labor Party are opposed to the Medibank Private Sale Bill 2006. We have been opposed to the privatisation of Medibank Private in the past, we are opposed now and we will continue to be opposed to the sale of Medibank Private . That contrasts greatly with the government's position. We all know the government has always wanted to sell Medibank Private. It is no surprise that this legislation is before us. The government made its public announcement that it wanted to sell, it was going to sell-and it has made that announcement a few times-and its most recent announcement was in April this year. Of course, it had to then bring in legislation to make that statement real.

Again, in this place I am going to put on the record my complaint about the role played by the Senate committee process in the ongoing determination of legislation.

When the government made its decision that it was going to sell MPL and made that decision public, there was surprise from people who are members of Medibank Private-of which I am one and I think many people in this place are also members of Medibank Private-and there was surprise in the community about this. From the Labor Party's point of view, it is clear that the government always wanted to sell Medibank Private, along with the long list of other public entities which have been sold and which the government promised it would sell-sometimes it changes its mind-and it is clear that the government has a privatisation agenda. Somehow during the election process, and most particularly during the last election process, the sale of Medibank Private was not high on the agenda. In terms of the public pronouncements during the election processes, it was not a killer argument with the community. So when we actually had the election results and the change in the numbers in this place-which I think is a stimulus to the ability to move forward with this type of legislation-whilst we expected the legislation to come forward there was still a sense of surprise in the community and amongst the people who have private health cover. However, once the announcement was made publicly, it was important that the legislation was brought in to make it a reality so that we could go through the farce of the debate here-so that we could have the rubber stamp of the decision.

Following normal practice, the legislation was put before the Senate Standing Committee on Community Affairs for review. The legislation was brought in in late October and was referred to the Scrutiny of Bills Committee-and a number of people here have already spoken as members of the Scrutiny of Bills Committee-and the Senate Standing Committee on Community Affairs, of which I am a member. I see that the chair, Senator Fifield, is in the chamber at the moment. The committee advertised the inquiry on 25 October 2006 and went through the normal processes of contacting people who have shown interest. In terms of health insurance, the Ombudsman and a number of different associations and organisations were personally approached to see whether they cared to make a contribution to the committee. Then there was one hearing, on 3 November.
The inquiry was advertised on 25 October, there was one hearing on 3 November and the date to report back to this place was 27 November. So for this particularly significant piece of legislation that is going to change the status of one of the largest-if not the largest, depending on whose figures you are actually looking at-private health funds in the country, the decision by the major owner, the government, was to sell it off despite conflicting legal advice, which we saw as members of that committee. Considering the range of issues, the amount of time dedicated to the effective scrutiny of that legislation was one hearing day. That is extraordinary pressure.

I have actually got the name of the committee incorrect and I apologise for that. I have been referring to the Senate Standing Committee on Community Affairs, which is the other committee I am on. I apologise to the extremely effective secretariat of the Senate Standing Committee on Finance and Public Administration. Of course, that is the appropriate committee. It is just that community affairs has a crossover with health. There was extraordinary pressure on that secretariat to work with the chair and the other members of the committee to have their report ready in a very quick fashion in order to bring the legislation to this place for consideration.

As with the vagaries of the way the schedule operates, this legislation was not actually debated last week, which I think was the intent of the government. It had to be rushed forward and tabled on 27 November so we could go to the debate, but it is actually being debated this week, as we can see. Again, the effective time for scrutiny, consideration and exchange of knowledge and opinions has been truncated, which it is of deep concern to me and, I am sure, to other members in this place and to people who watch the processes of government. We should not be rushing through such significant issues. We should be considering more clearly, with greater concept of detail, and allowing more debate around how we can best move forward. Given that, at least the people who did have the opportunity to make a contribution-and I think most of them are on record, as we can see through the Hansard-noted their concerns about the limited time they had to put forward their concerns and be involved in an effective debate, because this issue demands debate.

Whilst we know the government is determined to push forward, I think that it is worthy of debate to see whether the sale of Medibank Private should be concluded and, more particularly, how it should be done. We note that we now have a decision to sell-there is no real clarity about how-in the future. Once again we have a greyness of process. All the decisions will be made, it will be set up and we will do it in the future. So we move forward and have the opportunity to at least put our concerns on record. There are a number of concerns. Of course there is the basic concern about the privatisation of something that was introduced with great fanfare. There has been a long history with Medibank Private. I am one of those people who can remember, vaguely, when the idea was actually introduced in 1976 to have that process. Certainly, from the time that I was able to be employed, and I was an employee of the public sector, there was an acknowledgement that Medibank Private had a linkage with the government. For some people, this is seen as a very positive aspect. I asked the representatives of Medibank Private directly when they came before our committee and at previous times when we had them at Senate estimates whether they actually understood the rationale of people when they chose to take up private health insurance and which private health insurance they chose. Anecdotally, there is a view that for some people there is a particular attraction in going to the organisation that has some sense of a link to the government, and Medibank Private has had that.

I refer to a letter that the previous Prime Minister, Malcolm Fraser, sent to the Save Medicare Alliance. He said in that letter that he felt that when Medibank Private was introduced there was a feeling that you could keep an eye on what was going on by having some sense of government ownership. I state that not in outright support of Mr Fraser but just to illustrate how things change. We had a Liberal Prime Minister who was involved in setting up this process and, years later, he is asked his opinion on another Liberal government's decision to sell it. There is such a contrasting view. The fact that a previous Prime Minister was prepared to put on record some concerns that he had about the sale of Medibank Private indicates that there is some community interest in the sale. The Save Medicare Alliance, which is a community focused alliance made up of trade unionists-certainly my own union, of which I am a proud member, the CPSU-a number of other community organisations and health focused people, is looking at the sale of the Medibank Private. In particular, there was a concern that not enough people in the community were engaged in the debate; that many people who perhaps had coverage with Medibank Private or were genuinely interested in the Australian health system were not sure about what was going on. We felt, and they felt as an alliance, that an opportunity should be presented for people to have their say. One group of people that are rarely asked their view about whether or not something should happen are those that are involved directly in the process. I have asked at different times of Medibank Private whether they have done any internal surveying of the people who have Medibank Private coverage about how they feel about the privatisation. I have to admit that, in terms of the correspondence I have had with the organisation-it is often just coloured brochures telling me that the premiums have gone up-sometimes I do not read with the kind of attention to detail that I should. It was stated that there had not been an open survey process. Certainly there have been attempts since we had the discussion at Senate estimates and when we had the people from Medibank Private before us during the finance and public admin inquiry, and a website has been set up. There has been a process to try and ensure that people who have coverage with Medibank Private and, most particularly, the people who are working for the organisation have the opportunity to find out what is going on rather than finding out what is happening to their workplace and their future careers by reading media releases from the government and from their employers in the papers.

Those people had the opportunity, hopefully with confidence, to ask questions and look at the incredibly important aspects of any privatisation or change of business arrangements and how that is going to be handled for employees. They were particular questions that we asked the people from Medibank Private at the finance and public administration inquiry. They assured us that that they were taking a deep interest in those issues and there was absolute confidence-that was the statement made by the representative at the inquiry-amongst all staff members that their interests were being looked after and protected. I think that that is an issue that we as a parliament should also be considering. The transfer of business arrangements needs to be clearly codified so that people know about their conditions of service, their future activities and about the locations of their businesses.

One of the key aspects of Medibank Private is that in the last 20 or so years there has been a distinct program within that agency to have regional offices. I know many parliamentarians in this place have been lobbied both on behalf of Medicare officers and Medibank Private officers to ensure that there is that local arrangement-and there are some very small regional offices across the country. We have the only major public document available to all people in the community, if they choose to look at it, about the possible impact of this sale and at the possible efficiencies that could be acquired by the sale. One of the key areas was that they felt they could find some efficiencies in administration, despite the fact that when you look at the cost balances within Medibank Private over the last years and their linkages to their income, outgoings and their administrative costs, they are right in the middle of that important list that they have-talking about administrative costings. One of the justifications for the sale, and to make it more attractive, is that there could be advantages in efficiencies by a sale and privatisation. It would be only natural for the staff members of the organisation to wonder whether those efficiencies meant them. That is the kind of ongoing discussion we should have. Once the decision to sell has been made public, which it has, and once we get through this unfortunate necessity of going through the parliament to rubber-stamp the legislation to allow the sale to go through, we, the parliament-and at the moment the minister for finance is the major shareholder for this particular process-should have concerns about the people who work in the agency. These staff have been celebrated numerous times through annual reports and public pronouncements by the government and by the structures of Medibank Private for their efficiency, their courteousness and the way that they operate. Given that that has been the history, it is very important for us as a parliament to ensure that those workers are protected, that their concerns are noted and that all those things are put in place before the finalisation of whatever process is to be put in place for the sale.

For me, one of the saddest things about the justification of the government has been this aura around the decision that somehow the sale of Medibank Private is going to have some impact on keeping health premiums down. There is no absolute evidence to that effect. There is no guarantee, and we all know that the costs of health care are determined by a wide range of factors. Senator Nettle used her contribution to talk about general issues of healthcare costs. But if the sale of one agency was going to have such a phenomenal impact on the healthcare premiums, perhaps we would have heard that argument before, and we have not. It has only been in the process of justifying the decision the government has already made to sell this agency that there has been any attempt to produce data to say that the sale of Medibank Private will have a downward effect on healthcare premiums. That is a particularly unfortunate argument because it gives hope to people that somehow there is a linkage and that they will have lower healthcare premiums. We heard-and I will not go through the figures again because I think Senator Nettle went through them in great detail-the recent history of healthcare premium increases, and they have always gone up. In fact, I would like to have some information about the last time healthcare premiums went down. I do not know whether we would link that directly with the sale of any organisation, but perhaps that could be the kind of economic information that we could have shared with us as a parliament. Consistently, when we asked for documentation from the various people that came before us in our inquiry, the key documents that we sought were always unable to be provided because of confidentiality in the business world. That becomes increasingly frustrating. If you are actually trying to justify a decision to sell, it is not good enough, I believe, to say that we cannot get the scoping studies or the extensive information that has been gone through by the department because it is confidential and business-in-confidence. That seems to happen in most areas. Mr Acting Deputy President Murray, we have been together on a number of committees where that has been the response when we have asked for information. The government says that we will be able to keep those healthcare premiums down by selling off Medibank Private. The linkage is not clear. It is actually mischievous to put that out to the community and say that that is a justification for this sale.

In the small time I have left, I really want to get one quote from our committee report on record. It is from Dr Deeble. He talked about the CRA methodology-that is information that we were able to share-into the kinds of efficiencies that could be gained. I felt that it was not in-depth. I felt that it was quite a simplistic assessment of efficiencies that could be gained by the sale. But, nonetheless, it was able to be read and I applaud that. But I really want to get the quote that we used in the committee report on record here. In our committee report we talked about the fact that the AMA had raised concerns about the CRA report. As Senator McEwen said, the AMA often does not agree with many things we put forward about health issues, but in this case it came forward because it was quite concerned about the simplistic expectation that this sale of Medibank Private was going to have such a wonderful impact on the whole healthcare system. Our report quotes Dr Deeble as saying-and we actually described it as 'bluntly' in our report:

My criticism of the CRA report is the method that they have used, which is dressed up in all sorts of academic gobbledygook which I know-or should know, anyway. The methodology they have used there has been misapplied.

In terms of the way that we have actually been sold the issues about the benefits of the sale of Medibank Private, I think in many ways that sums it up for me. I think there is a degree of desperation in the attempts to ensure that people think there is a science in this sale; that there is a rational reason for having this sale. In fact, there is quite a simple reason for the sale from the government's perspective. They believe it is the best thing to do. They believe in privatisation. They want to divest themselves of this organisation. They will dress up any kind of rationale they can find-that it is going to be more efficient, it will help to keep premiums down, and somehow it will be an advantage-to make it palatable to the people involved. How can we have an advantage in selling an Australian company? One thing we can say about a government owned company is that it is Australian owned. How we can have an advantage in a proposition that gives us a five-year window in which there will not be overseas ownership? How that can be guaranteed, I am not sure. We are opposed to this legislation-we always will be. There is no surprise in that. We know how it is going to occur. We just have to make sure that every effort is made to protect those who have coverage with Medibank Private, to protect those who work in Medibank Private and to ensure that we make the best of what is going to happen.

04 December, 2006