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Hockey announces Medibank privatisation plans -

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Hockey announces Medibank privatisation plans

Broadcast: 16/02/2010

Reporter: Emma Griffiths

Joe Hockey has announced plans to sell Medibank Private to the private sector if the Coalition wins
the Federal election.


LEIGH SALES, PRESENTER: The Opposition has made a big ticket election promise, reviving plans to
sell the private health insurer Medibank Private if it wins.

The Shadow Treasurer Joe Hockey says the sale could raise as much as $4.5 billion and he's pledged
to use the money to pay down debt. The Government says selling Medibank is a prescription for
higher premiums.

But today, Labor's main line of attack harked back to previous Coalition policy, claiming that Tony
Abbott is poised to bring back WorkChoices.

Political reporter Emma Griffiths has more.

EMMA GRIFFITHS, REPORTER: Remember the last election? If today's political debate was anything to
go by, this year's campaign could be a re-run - of the rhetoric at least.

KEVIN RUDD, PRIME MINISTER: If two or three Australians in 100 change their vote, then Mr Abbott
will be Prime Minister and WorkChoices will be back.

EMMA GRIFFITHS: The Government's warned that recent statements from senior Opposition figures spell
a return of the policy. Tony Abbott says it's nothing but a Labor scare campaign.

TONY ABBOTT, OPPOSITION LEADER: Look, of course, of course WorkChoices is dead. Of course workers
who are working anti-social hours deserve to be appropriately recognised and rewarded.

EMMA GRIFFITHS: But the Opposition still wants more flexibility.

TONY ABBOTT: We can't have one-size-fits-all rules, and that's what Labor is imposing upon people
and that is gonna cost jobs, it's gonna reduce wages and it's gonna depress Australia's prosperity.

EMMA GRIFFITHS: Something the Opposition is promising to do if it wins is sell off the nation's
largest private health insurer Medibank.

JOE HOCKEY, SHADOW TREASURER: I don't think the Government should be in the business of pet
insurance, which is something that is offered by Medibank Private. I don't think the Government
should be in a whole range of activities that Medibank Private is in.

EMMA GRIFFITHS: Joe Hockey says the sale could reap as much as $4.5 billion, but the Government's
already panned the idea saying it'll lead to premium hikes and cause problems for the budget.

WAYNE SWAN, TREASURER: He's not been able to answer the critical question: where is the funding
coming from for the $10.7 billion of unfunded commitments that he's made.

EMMA GRIFFITHS: The Shadow Treasurer argues that selling the asset and paying off debt will lift
some of the upward pressure off interest rates, and if the Opposition has its way, government debt
and any bearing that has on rates will feature heavily in this year's election campaign.

The Reserve Bank has given some insight into its decision earlier this month to leave rates be. It
cited concern about global growth and the impact of bad loans in Europe and the United States, an
area where it still sees significant risks.

GUY DEBELLE, RESERVE BANK ASST GOVERNOR: Given the size of the upward contraction that we've seen,
one would expect that we are not all that far advanced in the adverse credit cycle that normally
accompanies recessions, and this has not been a normal recession in the North Atlantic.

EMMA GRIFFITHS: Domestically, the board decided conditions were mixed, but the minutes show it's
again left the way open for future rate hikes, stating, "If economic conditions evolve broadly as
expected, further adjustment to policy [will] probably be needed ...".

Interest rate speculation will flare again this Friday when the Reserve Bank appears before a
Parliamentary Committee in Canberra.

Emma Griffiths, Lateline.