`act Of Theft' If Medibank Is Sold To Boost Coffers
Sydney Morning Herald
Monday May 13, 2002
Any attempt by the Federal Government to profit from the sale of Medibank Private ``would be an act of theft", says the founding chief executive of the fund, Ray Williams.
His comment follows the disclosure that tomorrow's Budget will contain plans for a ``scoping study" of Medibank, opening the way for the sale of the country's biggest health fund.
Unofficial estimates are that Medibank would sell forbetween $500 million and$1 billion. But Mr Williams said that if the Government believed it could take all of the sale proceeds it should think again.
``Before the debate about privatising Medibank Private gets too far off the rails it needs to be pointed out that government can achieve no financial gain by such a move."
Mr Williams, who managed the controversial transition of Medibank to a private health insurance fund under the government of Malcolm Fraser in 1976, said the fund's assets and reserves ``arise solely from the contributions of members".
When Medibank Private was established it was given a $10 million seeding loan by the government, which was repaid in full in the early 1980s, he said.
``There is not one cent of government money invested in Medibank Private, thus any attempt to make a profit out of the sale/privatisation of Medibank Private would be an act of theft."
His view echoes that of the former Medibank chairman and Liberal heavyweight Fred Millar, who rejected privatisation talk in 1988.
``Medibank Private is a non-profit organisation based solely on its contributors' funds," Mr Millar said then. ``The Government has no financial interest in Medibank Private's assets and reserves. They are the property of its contributors."
Mr Millar could not be contacted last week on whether he still held that view.
The Howard Government has changed the laws covering Medibank, naming the health minister and finance minister as the two shareholders of the fund.
Industry and Government insiders say that even though bureaucratic assessments have raised doubts about the ownership question, the Government has argued that it owns the fund lock, stock and barrel.
Under one view supportive of the Government, because Medibank is not a mutual fund, to argue that its members own it would be like suggesting that people with car insurance had a right to the assets of the insurance company.
The Government would need the support of the Australian Democrats to get any sale past the Senate. The Democrats' health spokeswoman, Meg Lees, said the party would require the Government to undertake a full assessment of the ownership question before considering whether or not to support such a sale.
And even if it was established that the Government had ownership, the Democrats would want to be convinced the sale was in the public interest.
``It would be a great opportunity to get a substantial slab of money into public hospitals," Senator Lees said.
A health specialist with the Australian Consumers' Association, Nicola Ballenden, said that while she did not necessarily oppose Medibank being privatised, its members should be allowed to vote on the issue.
© 2002 Sydney Morning Herald
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