Should the Australian Government Sell Medibank Private? Essay

Should the Australian Government Sell Medibank Private? Essay

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Whether or not the Australian Government should sell "Medibank Private", and how it will affect Australian consumers and the economy

Table of Contents
Introduction – page 2
Main Body
Pros of Privatisation – page 3
Cons of Privatisation – page 3
Short run and long run implications – page 4
Medibank’s sales and its impact on Governments Savings – page 4
Policy implications – page 5
Case Study
Sweden – page 6
America – page 6
Conclusion – page 7
Glossary - page 8
Price ceiling – page 8
Short Term and Long Run Costs – page 8
Gross Domestic Products – page 8

The Abbott Government has announced that it will progress with the sale of Medibank Private. The sale will be held through the next share market float next financial year (Hurst, 2014). Currently Medibank Private is estimated to be worth 4 billion (Hurst, 2014). These proceeds are expected to be re-distributed back into the economy to stimulate areas such as infrastructure. Privatising Medibank Private will have little effect on the quality of health care and will not cause premiums to rise in price for consumers. The current dividends already received from Medibank will be a loss to the treasury however; the proceeds from the sale with prove to either produce greater revenue in the long term and will lever Australia’s deficit position. This report examines policy implications in respects to privatisation and market controls as well of 3 possible approaches of a sale of Medibank Private in order to achieve the best outcome for Australian taxpayers for a fair value of sale. A short run and long run analysis of the privatisation; the pros and cons in regards of the sale proceeds and case study comparisons on expenditure and health car...

... middle of paper ...

...erprise fluctuate to meet the associated long run average costs for each factor of production. For example in the long run a firm may: Leave an industry responding to an economic loss, enter an industry with the expectation of profits and either increase or decrease their plant size depending on whether they are making a profit or loss.
Gross Domestic Product (GDP)
Gross domestic product measures the total value of all goods and services produced by a country with a financial year, or other specified timeframe. It is an important measure of a countries overall productivity. A Country with a high level of GDP per capita, generally speaking has a high standard of living. GDP is used in the report to compare and analyse the performance of Australia’s economy and health system with regard to Sweden and America’s respective economic systems and market structures.

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