Monday, 4 September 2006

selling the farm

Mr Costello's recent foray to soften the electorate for the sale of Medibank Private will no doubt cause the Opposition to froth and foam, and indeed it may be doctrinaire and ideologically based but it is quite different from the sale of key infrastructure like Telstra.
The private health insurance market is essentially that, a private market, it is not as if the Government's ownership of such an asset actually benefits those who otherwise would not be able to afford private insurance. In some cases, certain Medibank products are actually more expensive than their private counterparts.
The question is whether the members would benefit by such a sale., This, it seems to me, is a little more complex. It may depend on how it might be sold. It could for example be just sold to another fund which is what Herr Senator Minchin seems to suggest in his infallible way (is he yesterday's man?), or Costello suggests it could be floated like Telstra on the stock exchange.
Such a public float may indeed bring more rigour to the industry as a whole if they then have to perform for shareholders and not just Boards.
So it could be a good thing, n'est-ce pas?

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