Senator the Hon Mathias Cormann

MATT TAYLOR: Welcome back to the show. Well of course we have been covering for you the listing of those Medibank Private shares here in Australia. The Government are raising about $5.7 billion as a result of this Initial Public Offering. The shares hitting the board at $2.22 and the last time I checked, they were sitting right around level. Of course retail investors paying $2.00 for the shares, $2.15 for those institutions. Of course a very popular IPO as well, the Government would have to be happy with how it went off. Let's find out more now. We are joined by the architect of the float, the Finance Minister Mathias Cormann. Thanks very much for chatting to us. You must be happy with how things got away; we saw the bump up of the price range just in the last few weeks before we saw the stock come to market.

MATHIAS CORMANN: We are very happy that the market has supported the judgements that we have made on the value of Medibank Private. Medibank Private is a good business. It looks after the needs of 3.8 million Australians in terms of their health care needs. It is a strong brand and of course we determined the final share price on the weekend and it is great that the market has supported our judgements.

MATT TAYLOR: When you look at the valuation though now, it does look quite costly where at 20 times when you look at the price to earnings ratio. Do you hope that investors hold on to the stock for the longer term considering the valuations and how they sit right now?

MATHIAS CORMANN: The sale price was determined by the market, so the value was as the market determined it to be. Moving forward, these are judgements for individual investors to make. We can't predict the future performance of the share price. It is going to be a function of the performance of the company moving forward and it is going to be a function of the performance of the stock market more broadly moving forward. So individual investors will make their own judgements as to at what price Medibank Private remains a good investment for them.

MATT TAYLOR: What has been your message then to the company throughout this process? And how will you, or won't you, be monitoring the performance of Medibank going forward?

MATHIAS CORMANN: Our message to the Medibank Private Board and the Medibank Private management is that we wish them every success in the future. We believe that Medibank Private in private ownership will be able to perform even better than in Government ownership. We believe they will have more flexibility to pursue growth opportunities and to manage their cost structures. We believe that this is going to be good news for Medibank Private policyholders into the future because Medibank Private will be able to deliver even better services for them. It will be good news for the private health insurance market as a whole, because the Government is no longer conflicted as both the regulator and the largest market participant.

MATT TAYLOR: Let's talk about the demand for I guess State owned assets. Obviously you would be very happy with how this one went and I know that you have flagged some potential at looking in at selling of the mint and Australia Post is something that has been talked about, so what does this experience then mean for further selloffs by the Government?

MATHIAS CORMANN: The Government has not talked about the sale of Australia Post. The Government will continue to make judgements on a case by case basis. Over the past year we have pursued the sale of Medibank Private subject to market conditions and that has been completed today. In the last Budget we identified four other potential opportunities, Defence Housing Australia, the Royal Australian Mint, the ASIC registry services and Hearing Services Australia. Scoping studies into those potential sales are currently underway and as we did with Medibank Private, once those reports have been received, we will consider the merits or otherwise of progressing a sale.

MATT TAYLOR: Just to wrap it up, let's talk about the Budget situation. Of course, selling down some of these assets, for instance $5.7 billion that you got from Medibank Private will help you with your budgetary situation that you are currently trying to get parts of it through the Senate from the Budget in May. What is going to be your message now I guess to those Senators, you have got a newly independent Senator in Jacquie Lambie, will you be having discussions with her about trying to pass some of the budgetary measures to rectify as what you have identified as a Budget emergency?

MATHIAS CORMANN: We need to continue to repair the Budget. We inherited a budget in very bad shape when we came into Government in September last year. It is very important that in Australia we live within our means, that we don't keep living at the expense of our children and grandchildren, borrowing from them to fund a significant part of our recurrent expenditure today. Because we don't want to reduce opportunity for our children and grandchildren. We want to build stronger opportunity for the future and that is why it is very important that we continue to work on repairing the Budget mess that we have inherited.

MATT TAYLOR: We are out of time, we will let you go. Thank you very much for chatting to us and congratulations on how the listing went. That was Mathias Cormann, the Finance Minister.