Medibank is Australia’s largest private healthcare insurer and one of the leading service providers created by the Australian Government in 1976. It has been operating as a government, business since then, though 30% of it was sold to the private sector. The complete sale of Medibank will promote more competition within the healthcare sector and drive better outcomes for all Australians. The government’s role in relation to private ownership is to regulate the businesses and allow them to operate according to the legislation put in place. The capitalism system requires private businesses to do what best suits market value and choose people who can operate the business effectively. However, unlike Sweden and Germany, Australian government does not own resources in order to deliver the services to the people but practices the free market model. The public doubt whether medibank privatisation will have a positive impact on low income earners. This essay will discuss several reasons why the privatisation of Medibank, should be implemented.
Privatisation is a way in which the government transfers public properties to private sectors ( ). It was adapted by the Australian Government as an essential way of generating revenues ( ). This policy was started by a Labor government and later adopted by Liberal as a simple way of making business industries competitive and to avoid the economic burden on the government ( ). Despite been highly criticised by economists as unfruitful, the liberal government is considering selling Medibank and other public properties to private institutions in order to address economic emergency and clear the debt left behind by the Labor government ( ).
However, privatisation has developed across the world as a means of shaking up and reforming the public sectors (Pollitt and Bouckaert, 2004). Its adoption in most cases has strengthened a fundamental and necessary restructuring of states through the use of agreements, competition and market systems of governance (Walsh, 1993). Privatisation is about designing a better mixture of ownership and regulating industry laws to achieve the best outcomes for society ( ). The sale of Medibank to private ownership would be a good option in order to boost the economy and allow invisible hands to control the market ( ). In some cases, government ownership may better achieve society’s objectives, through cheaper cost to low income patients and people with chronic diseases that need government support in order to seek better treatment ( ). The government’s ownership does not promote business industry competition as required by the capitalism principle, and that is why the government chooses privatisation to solve its problem ( ).
The rise of new public management provided an outline in which privatisation has developed as a genuine and potentially profitable means of increasing the efficiency and effectiveness of the state and the business sectors ( ). This principle produced, in part, the...