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Labor should back Medibank sale, says union chief

'The reasons for having that as a government-controlled entity other than being as a revenue raiser aren't there': Paul Howes on Medibank.

'The reasons for having that as a government-controlled entity other than being as a revenue raiser aren't there': Paul Howes on Medibank. Photo: Glenn Hunt

The head of the powerful Australian Workers' Union has urged his Labor colleagues to abandon their opposition to the Medibank Private sale.

National secretary Paul Howes argued the ALP's hostility to the Abbott government's planned privatisation of the health insurer defied logic.

His intervention came during a television interview in which he also backed the sale of the privately owned GrainCorp to US giant Archer Daniels Midland and accused Labor of failing to show leadership on the issue of asylum seekers.

The Abbott government last month announced a scoping study for the sale of Medibank Private, with reports suggesting the move could bring in $4 billion.

Labor's health spokeswoman Catherine King said at the time the sale would be a blow to the Australian public and could "increase private health insurance premiums and reduce competition in the sector".

The stance was based on concerns raised by Australian Medical Association president Steve Hambleton.

But Mr Howes said could not see any logical reason why Labor would oppose the privatisation of Medibank Private.

"It is not a price leader in that market, it's more expensive than many of its competitors, it does not have a monopoly on that market, it's doesn't provide any particular social good," he told Sky News.

"The reasons for having that as a government-controlled entity other than being as a revenue raiser aren't there.

"Labor should not simply look at this issue on the basis of whether it's popular or not, should not simply look at this issue on whether it's easier or not to just be kneejerk in our response to the way that we deal with this issue of privatisation."

Mr Howes repeated his past comments that other assets should be sold to free up capital to build new infrastructure projects.

He argued Labor would never regain government unless it opted to dream big and "slay some of these ideological totems" in the modern, open Australia.

In contrast to its stance on Medibank Private, the Labor opposition has expressed cautious support for Archer Daniels Midland's bid to buy GrainCorp, urging Treasurer Joe Hockey to resist pressure from Nationals colleagues to block the foreign takeover proposal.

Mr Howes said he represented GrainCorp workers and personally supported the sale despite concerns of members who would face "short-term pain".

He said if the nation's agribusiness sector did not have foreign investment Australia could never become the food bowl of Asia.

"There is not the capital available here domestically that is needed to reform our agribusiness sector to give us the opportunity to export and to grow the business and to grow the sector, to take advantage of the massive opportunities that lay to our north with the rise of the Asian middle class," he said.

"I know that a large number of my members in GrainCorp are not happy about this and oppose it. And as I've been talking with our members in GrainCorp about this issue I've been talking about the fact that, yes, there could be some short-term pain, but the long-term gains for regional employment, for agribusiness, for the agricultural sector as a whole is worth that short-term pain."

The nation needed to attract foreign investment "and large conglomerates to come in here and reform a lot of our failing companies in this area", he said.

Regarding asylum seekers, Mr Howes said he found the nation's asylum seeker debate "utterly depressing" and Labor was not showing the leadership that was needed.

Mr Howes was instrumental in the removal of Kevin Rudd as prime minister in 2010 and in the wake of this year's election withdrew from contention to replace Bob Carr in the Senate.

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