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Transcript of doorstop interview: Canberra: 4 September 2006: sale of Medibank Private; stem cells.

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Shadow Minister for Health Manager of Opposition Business


ISSUES: Sale of Medibank Private, stem cells

JULIA GILLARD: The Howard Government is dithering and divided about Medibank Private and its sale. What has been forgotten here are the concerns and interests of the 3 million Medibank Private policy holders around this country.

Nick Minchin says he has got legal advice that says they have got no rights when Medibank Private is sold. Labor on Friday released a paper by experts in the Parliamentary Library that said that they did have rights. The only response that Nick Minchin has made to that Parliamentary Library paper is to slag off at the people who wrote it. Well, I think Australians are smart enough to know, if you are choosing between the honesty and expertise of a Howard Government Minister or independent experts, you should go with the independent experts every time.

Nick Minchin today should do what he refused to do on the weekend and release the legal advice he says proves Medibank Private members have no rights.

Secondly, they should be guaranteeing Medibank Private members that their policies will be honoured in full, that they won’t lose any benefits or pay increased premiums because of the sale of Medibank Private.

Today’s newspapers report that American corporate raiders KKR are interested in buying Medibank Private. These are the original barbarians at the gate, the people interested in buying Coles Myer, the people who buy and slash and burn and then re-sell. In the face of this news, the Government has to guarantee what will happen with Medibank Private policy holders, their benefits and their premiums after the sale.

JOURNALIST: But hasn’t both Peter Costello and Nick Minchin suggested that policy holders will be given sweeteners in terms of when they buy in?

JULIA GILLARD: Treasurer Costello yesterday mused on giving policy holders sweeteners if Medibank Private is floated. But the Government hasn’t even

committed yet to floating Medibank Private. It wants this Parliament to put through legislation which would allow it to sell Medibank Private in any way it choses. So if, in a couple of months time they decided to just do a dirty trade sale or to sell to KKR, there would be absolutely nothing to stop them.

JOURNALIST: If it goes to a share market float, would you be in favour of policy holders being giving either first buy in or a discount on shares?

JULIA GILLARD: We obviously want policy holders to get the best possible advantages but we think the best way of guaranteeing that is for Medibank Private to stay in public ownership. What Medibank Private does now is its sole mission is to focus on the benefits for members. When management gets up every morning, its sole mission is to work out how to run that company in the interests of members. There is no way once it is sold, that will be the mission of management. The mission of management will be to maximise profit and that will be at the expense of members.

JOURNALIST: Will a Labor in Government in 12 months time buy it back?

JULIA GILLARD: Once these things are sold, they are sold. That is the problem with the Howard Government, once you have got a Government that is prepared to sell out Government assets, then they are gone. What Medibank Private members and indeed Australians who are concerned about this should be doing is making their views absolutely clear to Howard Government members. We have seen them backflip before when it came to the Snowy Mountain Scheme, they did backflip, comparable pressure has got to be brought to bear.

JOURNALIST: You have said premiums will rise if it is sold, how can you prove that, how do you know?

JULIA GILLARD: Well, it just stands to reason. If you have a company that is being run for profit, that will mean that premiums will need to be higher than they are now. The mission of Medibank Private now isn’t to return a healthy profit it is to run the business in the interests of members. Once the mission changes that is going to put pressure on premiums.

The Government is wandering around claiming premiums are going to go down, I would like to see them prove that.

JOURNALIST: You have pointed out that premiums have risen unacceptably quickly in recent years anyway so Medibank hasn’t been a success in suppressing those premiums?

JULIA GILLARD: Health insurance premiums have gone up a staggering 40 per cent on average since 2001. We think that is because the Howard Government doesn’t put sufficient pressure on the private health insurance industry to develop and market value-for-money products. That is a failure of the Howard Government and its

regulatory structure and its inability to put sufficient pressure on its private health insurance mates.

JOURNALIST: But if the sale doesn’t occur until after next years premium rise, isn’t that going to make it very difficult for Labor to prove its point…

JULIA GILLARD: I anticipate that private health insurance premiums will go up again next year. Every time Tony Abbott has been asked by private health insurers can we put our premiums up he has always rushed to say yes, and he will again.

But the issue here is, over the long term, will premiums be lower with a company running Medibank Private which is focused on profit or will they be lower in a government owned company that is focused on running the business for the benefits of the members.

JOURNALIST: You described it as a dirty trade sale, does that mean that it’s a worse option than floating Medibank Private?

JULIA GILLARD: Certainly there are huge competition concerns about a trade sale. If one of the current big private health insurers in this country bought Medibank Private that would lead to a huge consolidation in the market, there would be far less competition and far less downwards pressure on premiums. Once you have got less competition you would expect premiums increase even more quickly.

JOURNALIST: So given it will be sold you would prefer a float than a trade sale?

JULIA GILLARD: Our position is clear. We don’t think Medibank Private should be sold. However you sell it, we think in the long term that will be worse for members. What we are asking the Howard Government to do though, is to come clean on the legal advice it has and to guarantee Medibank Private members that they won’t suffer because of the sale and that is particularly important when we have got corporate raiders like the Americans KKR now on the scene.

JOURNALIST: Julia, John Anderson has raised concerns about eggs, women being paid for their eggs in the stem cell debate. Have you heard those comments and what do you make of them?

JULIA GILLARD: I haven’t heard those comments but Mr Anderson would probably be aware that there is not one person in this country who has suggested that anybody be paid for anything that relates to stem cell research. We don’t, in this country have any history of money changing hands in our health sector. We don’t, for example pay for blood donation, which other countries do. I would be absolutely be opposed to any introduction of payments into our health sector but I really think Mr Anderson is probably scaremongering a bit because I have never seen anybody suggest that that should be done and that is certainly not suggested in the Lockhart Review.

JOURNALIST: Like a human hybrid type argument, do you think?

JULIA GILLARD: It is less inflammatory language than Tony Abbott is using but you would expect that. John Anderson is a less inflammatory character but I still think that it is probably a furphy for him to be raising paying for things associated with stem cell research. I haven’t heard anyone in this country advocate that.

JOURNALIST: Have you made up your mind on how you are voting on…

JULIA GILLARD: I have consistently said I am predisposed to support efforts that will help medical research but I will make my final position clear when I see the Bill or Bills that come before the Federal Parliament.