Finance Minister Mathias Cormann insists it is unsustainable to continually draw large dividends from Medibank Private, as he defends a government decision to sell off the health insurer.
Labor has warned the privatisation of Australia’s biggest health fund will push up premiums, and hit taxpayers by adding to the budget deficit.
It claims the government will be eschewing annual dividends of up to $500 million by privatising Medibank.
Senator Cormann says the claims showed why Labor made “such a mess” of the budget.
“(Labor) raided Medibank’s capital reserves – that is not sustainable over time,” he said on Thursday
The proposition that the commonwealth would be able to draw half a billion dollars in dividends on a yearly basis was “ridiculous”.
Opposition health spokeswoman Catherine King admitted there was little the opposition could do to block the sale, with laws passed in 2006 allowing the government to sell the insurer without parliamentary approval.
“What they need to do is guarantee that premiums will not rise as a result of this decision,” she said.
As the major parties fought over the proposed sale of Medibank Private, Greens health spokesman Richard Di Natale introduced a private member’s bill to parliament that aims to prevent private insurers from providing GP cover.
Along with other insurers, Medibank Private wants to offer coverage for GP services – a proposal the senator says would see health insurance premiums “skyrocket”.
Private insurance of GP visits would “mark the end of Medicare as we know it”.
“This might be a good tactic for increasing market share and driving up the Medibank sale price but it will leave ordinary people worse off.”