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E&OE TRANSCRIPT PRESS CONFERNCE CANBERRA PARLIAMENT HOUSE WEDNESDAY, 26 MARCH 2014 SUBJECT/S: Sale of MediBank Private, Private Health Insurance Pre iu s TONY BURKE, SHADOW MINISTER FOR FINANCE: Thanks very much. As you would be aware the government has made announcements with respect to the sale of Medibank Private. I want to make a few comments before handing over to Catherine King who will deal with it in a fair bit more detail from the health perspective. abor has for a very long time as you would be aware! opposed the sale of Medibank Private. The enabling legislation to do this went through under the "oward #overnment so we had no reason to believe that there would be fresh legislation to come before the Parliament. $ven after that legislation went through the "oward #overnment ended up not selling Medibank Private! for a number of reasons but one of which was they couldn%t guarantee that there would be decent return to the ta&payer through going through the sale. It needs to be understood what%s happened today in terms of the budget issue itself.

Medibank Private delivers a dividend to the government that ranges in the order of between about '() million dollars to half a billion dollars per*year. The way the budget rules work is the sale of an asset does not hit the deficit figures. Therefore the impact on deficit from today%s decision is +uite straight forward. The #overnment in one move adds in the order of about half a billion dollars to Australia%s deficit each year. In only few months in office in the lead up to M,$-. /oe "ockey added 01 billion dollars to our deficit. In the decision today depending on the dividend each year it is in the order of half a billion dollars that gets added to that as well. As I say there are significant health issues! significant issues on premiums! on the workforce. Issues that relate to the '.1 million policy holders as well! to make sure that they get a good deal. 2ut it has been our position for a long time that we don%t support the sale. As I say the "oward #overnment got the enabling legislation through! looked at the market and didn%t go ahead with the sale either. I%ll hand over to Catherine King. CATHERINE KING, SHADOW MINISTER FOR HEALTH 3 Thanks very much for that Tony. And I too would 4ust like to reiterate it has been abor%s longstanding position that we do not support the sale of Medibank Private and that we believe that it should be kept in government hands. There%s a couple of issues in the private health insurance market at the moment that I want to talk about particularly from a health perspective. The first is that obviously 4ust before 5ecember we saw the largest increase in private health insurance premiums in almost a decade. It is very clear that consumers are not at the heart of decision making of this government when it comes to private health insurance. That decision was done very! very rapidly. 6omething when abor was in government often took three to four months! a substantial amount of work to*ing and fro*ing between different insurers to see where we would land on that. 7e are concerned as is the Australian Medical Association about what this will mean for premiums. There is no guarantee! I note that the -inance Minister today gave no guarantee that this would not put upward pressure on premiums! nor did he make any guarantee as you would e&pect with the sale of such a large private health insurer that it would put downward pressure on private health insurance premiums. I think we8re also! we are concerned about what it means for competition in the private health insurance market. It is our view strongly that having a #overnment insurer actually makes sure you have a moderating influence across the entire sector. I also have some concerns! there are some 9))) staff employed by Medibank Private in this country. There are no guarantees about what would happen to them in this process. There are no guarantees about what would happen to the some '.1 million policy holders in the sale of Medibank Private.

6o certainly again I reiterate that abor has long held the view that Medibank Private should remain in government hands. 7e will certainly look with interest if the scoping study is ever made public about some of these issues that we%ve raised and the concerns we%ve raised today. JOURNALIST: "ow does it actually act as a moderating influence: Is it not at the moment operating effectively as a private insurer: KING: It%s actually got! of all of the private health insurers it%s actually got some of the best fees! particularly! so that actually adds to keeping the prices down as well. JOURNALIST: Is high premiums do you think they are a certainty: KING: ook again it is really up to the #overnment. The #overnment is pursuing this sale. It is really up to the #overnment to guarantee that this won%t lead to an increase in private health insurance premiums! and counter to that I would actually say it is up to them to show people that it would in fact lead to downward pressure to private health insurance premiums. JOURNALIST: Is abor kicking itself that it didn%t repeal the Medibank Private 6ales Act of ;))0 when it had the chance: BURKE: The issue here was that the "oward #overnment even with that act in front of them saw that there was no reason that you could mount the case to go ahead with the sale. And from what we%ve heard from the Abbott #overnment today they still haven%t mounted the case. JOURNALIST: Are you concerned given Medibank has I think ') per cent of the market share at the moment that you will effectively be dumping a massive 1)) pound gorilla: KING: 7hat a good +uestion. And I think that is a very good +uestion to put to the #overnment and it goes to the heart of this issue. 7hat is the impact that this will have on the private health insurance market and on the '.1 million people who have Medibank private insurance and what will it do on the overall market. <ow the #overnment%s saying it will have no impact what soever well then why is it going ahead with the sale: E!"S