Legal move over Medibank sale
Members of Medibank Private are seeking legal advice on a potential court challenge to the federal government’s planned $4 billion sale of the health insurance fund.
The organisers of a petition that calls on the federal government to recognise the ownership claims of Medibank Private policyholders have signalled they may be forced to take the government to the High Court to defend their rights.
In a statement emailed to thousands of Medibank policyholders on 28 September, petition organisers have called on members to support a constitutional challenge to the government’s claim to full ownership of the health fund.
• Revealed: Medibank sale doubts
• EXCLUSIVE Will Tony Abbott have to pay Medibank policyholders?
Medibank salesman and Finance Minister, Mathias Cormann. Photo: AAP
As reported previously in The New Daily, the Commonwealth’s claim to ownership of the health fund relies on controversial legislation passed by the Howard Government in 1997. Thousands of members maintain that they were cheated on $632 million of assets that were “transferred” to the government after the special legislation took effect.
The government paid $100 to become sole shareholder of the business as a result of this legislation. However, the email sent to signatories of the petition on 28 September indicates that a class action may be in the offing.
Letter from Medibank members seeking legal advice on sale of health insurer. Source: Change.org
It shows that petitioners are seeking advice on whether they may be able to sue the government under section 51 of the Australian Constitution:
“The government is continuing with its sale of Medibank Private having not considered if the actions of the Howard government and Health Commission were indeed illegal and unconstitutional given the the government transferred ownership of Medibank Private to the government for $100.00 without reference to members ( the rightful owners ),” the petitioners said in the email.
“Do any of our signatories on this petition have knowledge or expertise that can help in a legal challenge to the government on behalf of Medibank members per, dare I say it, section 51 of the constitution?”
Under section 51 the Commonwealth is required to pay compensation on “just terms” when it compulsorily acquires property from private citizens.
The move from disgruntled Medibank members came on the same day that the government began taking pre-registrations from retail investors for the planned float.
While the government has indicated it is willing to offer preferential share allocations to Medibank Private “customers”, it has refused to recognise the potential ownership rights of the fund’s members.
The prospectus, which will indicate the price per share, will be available in the second half of October with the enterprise due to list on the domestic stock exchange by December.
The offer will preference registered policyholders, who will be able to get a greater share allocation than non-policy holders.
Finance Minister Mathias Cormann said the government anticipated a “large amount of interest” in the sale, which could raise about $4 billion for the federal coffers.
The proceeds would be invested in productivity boosting measures, he said.
The New Daily would like to hear from Medibank Private members on what they think about the government’s decision not to issue free shares to policyholders. Please email your comments to [email protected]
