Medibank Private Sale Sparks Debate Over Proceeds

Liberal and National MPs are pushing for the sale proceeds of Medibank Private to be used for building roads, while Prime Minister John Howard insists the money will fund medical research. The proposed sale to US private investment firm Kohlberg Kravis Roberts (KKR) has sparked concerns over foreign ownership and potential premium increases.

Key Takeaways:

• Government backbenchers want the sale proceeds of Medibank Private to go towards building roads, but the money has been earmarked for medical research.
• Prime Minister John Howard maintains that the funds will go to medical research, citing a previous announcement and budget allocation.
• A parliamentary library paper raised doubts over ownership of the health fund, but finance minister Nick Minchin provided strong legal advice stating the government owns both the company and the fund.
• MPs requested a cap on foreign ownership and limits on individual shareholder ownership, but their concerns were ignored.
• Opposition Leader Kim Beazley warned that selling Medibank Private would inevitably lead to higher premiums.
• Labor backbencher raised concerns about KKR's interest in the fund, citing the potential for increased Americanisation of the Australian health system.

Statistics:

• $A2 billion: The reported price KKR may pay for Medibank Private.
• $US1.54 billion: The equivalent US dollar value of the reported price.
• 100%: The amount of ownership of the company and the fund claimed to be owned by the government, according to finance minister Nick Minchin.
• 1: The number of Labor backbencher expressing concerns over KKR's interest in the fund.

Sources:

• A parliamentary library paper
• A joint parties spokesman
• The Australian Associated Press (AAP)