The Abbott government has taken its first serious steps towards the privatisation of $4b-valued Medibank Private. Photo: JOSH ROBENSTONEThe Abbott government is working on the sale of Medibank Private before receiving expert advice on the suitability and timing for the $4 billion privatisation.
In November, Finance Minister Mathias Cormann appointed investment bank Lazard to advise on a sale – the biggest government sell-off since the float of rail company QR National.
Lazard has until the end of the month to deliver a scoping study advising on the readiness of Medibank for privatisation, a method of sale, timing and estimated proceeds.
In announcing the appointment of Lazard, Mr Cormann stressed: “The government has not made any decisions yet regarding the timing and structure of any sale.”
But the appointment of corporate spin doctors to a $2000-a-day, six-month contract is the clearest signal yet that Medibank will be put on the block before Treasurer Joe Hockey’s first Budget in May.
Newgate Communications, whose 10 senior executives include four former Liberal government staffers and former James Hardie and News Ltd spin doctor Greg Baxter, has been handed a $211,000 contract that runs until June 30.
According to the government’s AusTender website, Newgate has been appointed to “assist with the scoping study into the sale of Medibank Private.
Mr Cormann’s office said Newgate would provide communications advice on any announcements flowing from the findings of the scoping study. The contract contained the option of retaining the company for a sale process.
Fairfax Media understands that Newgate has been working for the past fortnight on ways to sell the case for a sale to the public.
Lazard will advise whether a full float on the Australian Stock Exchange, a partial float or a so-called “trade sale” to another health insurance provider will maximise value for the taxpayer. Medibank, which returned a profit to government of $315 million in 2013, is valued at about $4 billion by market analysts.
Labor claimed the government had already decided to sell Medibank without waiting for advice or demonstrating how it would increase competition or put downward pressure on health insurance premiums.
“$2,000 a day to spin to Australians why assets should be privatised is simply the most extraordinary government waste,” said shadow health spokeswoman Catherine King. “[the government] will pay $2000 a day for a spin doctor, but they won’t support Toyota jobs.”
Mr Cormann declined to comment. He has previously said there is “no compelling policy reason” for the government to retain ownership of Medibank, which operates in a competitive market against 34 other health funds.
Given the protracted time frames for government privatisations any full or partial listing may not be completed until 2015, according to reports.
This story Administrator ready to work first appeared on Nanjing Night Net.