Monday, September 29, 2014

Ideology before reason

"There is absolutely no good reason for the Federal Government to own a private health insurance business today."

Mathias Cormann,

I can tell the Minister for Finance two overriding reasons why Medibank should continue to be publicly owned. In fact I said it back in a March post.

One, it gives a large measure of control over the premiums charged by the private health insurers, using market forces. Instead of laws and regulations - surely an aim of the 'small government' Coalition? - Medibank can exert a strong influence by keeping its premiums under control. Competition - a catch-cry of the Coalition - means the others would need to follow suit.

Two, the hundreds of millions contributed to the federal budget by Medibank would continue year after year. Sell it and you get a very short-term windfall but bugger all in future years.

But no, ideology wins out yet again.

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