Wednesday, October 18, 2006

Sell MediBank?

A bill to sell the Government-ownde Medibank Private health insuarnce company has bee introduced into the Federal Parliament of Australia.

Should it be sold?? The government claims selling it will "increase competition".

Voters need to remember a the outcomes of some previous sales of government businesses.
  • Commonwealth Bank: well bank CEOs are paid ever-more handsomely these days. Bank fees have been introduced and risen inexorably. The interest rate paid on bak accounts was a minimum of 3.25% ...once upon a time. Now it's 0.1%, and the fees are usually greater than the interest received.
  • Telstra: enough said? Certainly line rentals have increased markedly. Its INternet plans are expensive; it is currently wrestling with the ACCC to increase its wholesale prices (so competitors' plans must rise & be less competitive)
  • Privatisation of the Wheat Board to create AWB: certainly there were/are some well-paid executives, but what of AWB ethics and the anti-competitive stance of farmers; farmers' organisations; the National Party and the Federal Government. It surely can't argue that "increased competitiveness" is a reason for selling, when it maintains that it is acceptable fro AWB to operate as a monopoly!

I believe that a well-run government organisation can help competitiveness within the industry, because it is less likely to be as "indulgent" as some of its privately-owned competitors.

Medibank Private should not be sold.

The Analyst