Medibank sell-off 'wouldn't impact budget'

A proposed sell-off of Medibank Private by the federal opposition would remove downward pressure on health premiums and would do nothing for the budget bottomline, Finance Minister Lindsay Tanner says.

In an address to the National Press Club on Tuesday, opposition treasury spokesman Joe Hockey said a coalition government would sell off the health insurer to pay off the government's debt.

"Reducing the level of government debt is essential for the prosperity of all Australians," Mr Hockey said, estimating the privatisation of Medibank would rake in $3.5 billion to $4.5 billion.

But Mr Tanner said the coalition's plan would have no impact on the net financial worth of the commonwealth or the budget's underlying cash balance.

"Privatising Medibank Private would cost the budget millions of dollars in forgone dividends, offsetting any public debt interest effect from proceeds of the sale," he said in a statement.

"The government remains committed to returning the budget to surplus and repaying the debt which has been incurred during the global financial crisis through sound fiscal policy, not the fire sale of publicly owned assets."