The Minister for Finance, Matthias Corman has announced that Medibank Private is to be privatised.
Mr Corman said an initial public offering provided the best option for the Government to achieve its objectives for a sale, including contributing to an efficient, competitive and viable private health insurance industry; and to maintain service and quality levels for Medibank customers, including in regional and rural Australia.
He said the Government also aimed to ensure the sale process treated Medibank employees in a fair manner, including the preservation of accrued entitlements; to minimise any post-sale residual risk and liabilities to the Government; and to maximise the net sale proceeds from the sale.
Mr Corman said Medibank Private would be sold through an initial public offering in the 2014-15 financial year.
"The independently prepared scoping study reaffirmed our long-held view that there is no compelling reason for the Government to own Medibank Private," he said.
"Medibank Private is a commercial business operating in a well-functioning, well-regulated competitive private health insurance market with 34 competing funds."
Mr Corman said the scoping study found no evidence that premiums would increase as a result of the sale of Medibank Private.
"Medibank Private will need to continue to compete against other funds for policyholders and will need to continue to comply with relevant regulatory requirements around changes in premiums," he said.
Mr Corman said the sale of Medibank Private would remove the inherent conflict currently in place where the Government was both the market regulator and the owner of a large participant in the market.
He said the Government would now proceed to the next stage of preparing for the initial public offering, which included the appointment of joint lead managers and other relevant appointments.
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