THE head of Australia Post claims he is unaware of any plans to privatise Medicare and other health payment services, but would be keen to play a role.

Ahmed Fahour told a parliamentary committee today that it was on the public record that Australia Post was interested in delivering payment services.

Mr Fahour said the agency has formally expressed interest in delivering payment services more than a year ago, pushing its expansion agenda “very hard” as a matter of survival.

But he said there has been no recent discussions with government, despite a media report that the Federal Government was secretly considering privatising Medicare, pharmaceutical and aged-care benefits.

It was reported today that Treasurer Scott Morrison would make privatisation of some payment services a key feature of May’s Federal Budget.

The report by The West Australian said the contract, which would be put to market shortly after the budget was handed down, was worth more than $50 billion.

Mr Fahour said the agency was working on a plan to ensure the survival of local post offices beyond 2020 when the letter business was “gone”.

He said convincing the government to let post offices deliver more government services was a key component of this plan, just as they already provide passport and drivers licence services.

Diversifying the income stream of post offices and pushing major metropolitan post offices into e-commerce were the other focuses of the plan.

Mr Fahour said once complete, the plan would be submitted to government.

Under questioning from Greens Senator Scott Ludlam, Mr Fahour said it has been about nine months since Australia Post had spoken to the government about their interest in providing additional payment services.

Mr Fahour said he thought the plan had “gone away”, but the report today Australia Post was being considered to provide such services was “wonderful news”.

Senator Ludlam said it appeared the plan has been plucked from the “bottom draw”.

Health Minister Sussan Ley released a statement confirming the government was “investigating ways to digitise its transaction technology for payments to a more consumer-friendly and faster format”.

“This is part of our commitment to ensuring the Government embraces innovation and is agile and responsive to changes in the digital economy,” she said.

“This work will be undertaken with the assistance of business innovation and technology experts, to determine the best and most-up-to-date payment technologies available on the market for consumers and health and aged care service providers.

“At this stage no decisions have been made, and the work continues.”

Ms Ley said the Medicare, Aged Care and the Pharmaceutical Benefits Scheme processed transactions worth more than $42 billion each year.

Shadow Health Minister Catherine King said health payment data was highly sensitive and the government must immediately rule out privatisation.

Ms King said she also feared the government would send responsibility for payment processing offshore.

But Prime Minister Malcolm Turnbull told Parliament the change would ensure payment services kept up with technological changes.

“Every day, all Australians, or most Australians — I am sure all honourable members here — are using their smartphones to transact business online and yet Medicare has still not kept pace with that,” he said.

“That is a vital part of the progress and that is what the minister has been examining.

“That is why the Department of Health is investigating ways, as the (Health) Minister said today, to digitise its transaction technology for payments to what it describes as a more

consumer-friendly format, a modern contemporary format.”