It should have been obvious to us
all. When Tony Abbott approved that 8% increase for health insurance
premiums on the same day as interest rates went up and disappointing
growth figures were released, few people considered one potential
motivation for the government – fattening up Medibank Private for sale.
Finance Minister Nick Minchin gave the strongest hint yet yesterday,
pointing out the government’s conflict in being both regulator and
shareholder. Indeed. So what does the regulator do? It allows consumers
to be gouged to benefit the conflicted shareholder?

government hasn’t exactly been honest with the Australian people about
health insurance premiums. Who can forget this laughable claim by then
Health Minister Michael Wooldridge back in July 2000: “We have got so
many extra people in that’ll keep real downward pressure on premiums.
They won’t go up 5 to 8% a year as they did under Labor.” The 7.30 Report spotted that quote in this interesting Emma Alberici story
on 3 March. Since Wooldridge made that comment, premiums have risen by
30% and when combined with booming investments markets, Medibank
Private is a nicely fatted cow that might just bring in another $500
million for the government based on last year’s $45 million profit.

seems to get forgotten by the Howard government. Who can forget the
pricing free-for-all that allowed Sydney Airport to abuse its power and
jack up prices such that the $5.6 billion paid by the Macquarie
Bank-led consortium now looks cheap.

If both Telstra and
Medibank Private do get privatised, that will leave just Australia Post
in government hands. And who knows how long it will remain bolted down?
A government that can sell its Defence Headquarters can sell anything.
Even the Americans wouldn’t sell the Pentagon.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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