Senator the Hon Mathias Cormann

MATHIAS CORMANN: Good morning everyone. Today marks the culmination of more than a year of careful and methodical preparation of the sale of Medibank Private through an initial public offering. The process started with the announcement of a scoping study in October last year and it ends today with the listing of Medibank Private on the ASX. It has long been the Government’s policy to sell Medibank Private because in our judgement, Medibank Private in private ownership will perform even better as a business and also in particular and importantly for its policyholders. Better than it has been able to do in Government ownership. We also take the view that in 2014 there no longer is a public policy case for Government ownership of a private health insurance business. Medibank Private is a strong commercial business, operating in a well functioning, competitive, well regulated market with 34 health funds and as of today, Medibank Private will truly become private.

At the outset, we made clear our objectives for this sale. We set out to contribute through this sale to a vibrant, efficient, competitive and viable private health insurance market. We set out to ensure that quality and service levels for Medibank Private customers, in particular in rural and regional Australia would be maintained. We set out to ensure that Medibank Private employees were treated fairly through the sales process and we also set out to ensure that any post sale risk and liabilities for the Commonwealth were minimised and subject to all of those considerations, to maximise net proceeds from the sale. As you know, we have been able to achieve proceeds of about $5.679 billion, which exceeded our expectations. That capital which has been released from Medibank Private will now be reinvested in job creating, productivity enhancing infrastructure as part of our plan to build a stronger, more prosperous economy where everyone can get ahead.

This process has been so successful because of the outstanding professionalism of everyone that was associated with this sale. Right from the word go, we have had very strong public interest. More than 750,000 Australians pre-registered their interest in a Medibank Private Share Offer Prospectus. We had nearly $12 billion worth of binding bids from broker firms in Australia and New Zealand, we had more than $5 billion in applications from other retail applicants. We had very strong overseas and domestic institutional interest and the results are all here for you to see today.

We are about to transfer ownership of Medibank Private to about 400,000 individual shareholders. That is a great achievement for us and I know that is something that Medibank Private is very, very happy about. From our point of view, I would like to very much thank the Board of Medibank Private, led by the Chair Elizabeth Alexander, I would like to thank the management team at Medibank Private led by George Savvides for their outstanding work, working with the Government as the seller of the asset. It has been a very professionally run process all the way through. Thank you so much and best wishes for a successful future for Medibank Private and for your policyholders. I would also like to thank our business advisers Lazard, our Joint Lead Managers, Deutsche Bank, Goldman Sachs and Macquarie Bank, our legal advisers Herbert Smith Freehills, our accounting advisers Ernst and Young and our communications advisers Newgate.

This has been a great process all the way through. I am looking forward to the judgement of the market on the work we have done and I commend Medibank Private to the market.