The cost of the takeover of Calvary Public Hospital was worth it, the Health Minister says. Photo: Thomas Lucraft.
The total cost so far to the ACT of the takeover of Calvary Public Hospital is $150.6 million, Health Minister Rachel Stephen-Smith has revealed to the Legislative Assembly.
But she also later told the Assembly, after a question from Opposition Leader Leanne Castley, that there were administrative and legal costs still to be calculated, as well as the possibility of a compensation claim not covered by the Deed of Release.
Ms Castley expressed her shock at the total cost, saying it was a WTF moment.
“Living in the ACT with this health minister is like living in The Twilight Zone,” she said.
“I’m never quite sure what reality I’m living in.”
Ms Stephen-Smith announced on Tuesday that the negotiated compensation settlement with Calvary amounted to $65 million, to be paid by 15 October.
She also said at the time that the Territory had waived some debts, liabilities and other financial offsets to the value of $62.4 million, revealed in her Ministerial Statement to the Assembly on Wednesday (3 September).
The ACT already paid $23.3 million to Calvary in 2023, bringing the total to $150.6 million.
Employee entitlements that transferred to the Territory on 3 July 2023, along with the 2000 staff, amount to $48 million, while there are $14.4 million of waived debts.
The latter figure comprises debts of $13.46 million for services provided by ACT Government entities to Calvary before the acquisition, Supreme Court Costs of $220,000, and Utility Costs of approximately $750,000 for gas and water across the hospital precinct since the acquisition.
Asked by Region why these extra amounts were not detailed on Tuesday, Ms Stephen-Smith said she had been clear that she would do so in her Ministerial Statement.
Ms Stephen-Smith said accrued leave would not count as a liability in accounting standards, but the government had decided to identify it as part of a commitment to transparency.
She said the waived debts would not be recouped, “but it’s not an additional cash payment to be paid”.
The Minister told the Assembly that there were some internal costs related to the transition listed in the budget papers.
“I have asked the directorate, now that the process is almost finalised, to go through and work out exactly what was spent of those budget allocations because some were rolled over from one year to the next. Some allocated for this year will probably remain unspent,” she said.
“That is going to take a little bit of time to work out exactly what the ACT Government’s legal and administrative costs were.”
Ms Stephen-Smith said that the final settlement with Calvary released the Territory from all claims that ought to have been reasonably known at the time of settlement, but it was possible that there may be a further claim that could not have been known then.
She said the Auditor-General would be invited to examine the acquisition and settlement process.
The $65 million payment to Calvary will require amending the Appropriation Bill, to which Ms Castley quipped: “This year’s health budget isn’t even legislated yet, and the minister is coming back to ask for even more money to repay Calvary Healthcare for the hospital that Labor stole from them in 2023.”
The Assembly established a Select Committee to inquire into the proposed amendment, and will hold public hearings on 8 September and present a report by 15 September.
In her ministerial statement, Ms Stephen-Smith said she recognised that the focus this week might be on what the cost of this transaction had been to the Territory, “but I want to reiterate the significant benefits for the people of Canberra and the surrounding region”.
“A single operator means better coordination, smarter resource use, stronger workforce planning, and improved health outcomes for Canberrans.”
