A committee inquiry found the two-staged process to announce the total costs associated with the Calvary Hospital acquisition contributed to “public confusion” about the compensation process. Photo: Ian Bushnell.
The ACT Government’s desire to change the budget bill to reflect Calvary Health Care’s compensation provides “greater transparency” than other options, but communication could have been clearer, an inquiry has found.
A special inquiry was needed when Health Minister Rachel Stephen-Smith presented proposed amendments to the Appropriation Bill 2025-2026 so that the government could pay for its acquisition of the now-North Canberra Hospital.
It was originally announced that the government would pay $65 million, in addition to the $23.2 million it had already spent in 2023, as part of the deal.
But Ms Stephen-Smith then clarified a day after the announcement that the true cost was $150.6 million due to waived debts, liabilities and other financial offsets.
The government hadn’t expected negotiations would be “finalised as quickly as they were” and so the settlement had been provisioned in the 2026-27 financial year.
A provision of $89.565 million was established in the 2023-24 financial year and had been carried forward as negotiations took place.
Despite the $65 million payment being moved from 2026-27 to the 2025-26 appropriation, it’s being recognised in the 2024-25 papers due to the rules of accrual accounting.
“As the final settlement was announced after the 30 June 2025 reporting period, accounting treatment and disclosures in the financial statements must comply with the requirements of Australian Accounting Standard AASB 110: ‘Events after the Reporting Period’,” a letter from the Auditor-General submitted to the inquiry noted.
“The draft financial statements of ACT Health Directorate and Canberra Health Services will now be revised to reflect the final settlement arrangements to correctly recognise the liability and related disclosures.”
Ms Stephen-Smith told the inquiry that, had the Appropriation Bill 2025-26 passed the Assembly before negotiations had been finalised, consideration had been given to introduce a second appropriation bill to cover the compensation rather than access other options, such as the Treasurer’s advance.
The committee found amending the bill provided “greater transparency than other options”.
Despite this finding, concerns were highlighted about potential “lack of transparency” from the government in other respects.
Treasurer Chris Steel provided an addendum to the 2025-26 budget to reflect the changes proposed in the amendment after hearings had concluded and draft reporting had begun.
The committee noted this meant there was “no opportunity to adequately scrutinise this information and incorporate it” into the final report.
Independent Murrumbidgee MLA Fiona Carrick stated the lateness of this material had “removed” the committee’s ability to “ask questions about the transaction and the Budget Addendum”.
“During the hearing, we were told that the $65 million required for settlement of the Calvary Hospital purchase would come from borrowings and attract interest payments,” she said
“When we received the Budget Addendum, we found that the $65 million payment would come from deposits and reduce interest receipts.
“The committee did not have the appropriate documents at the hearings, so it was unable to scrutinise the transactions thoroughly and ask questions about them. This is a concerning lack of transparency.”
As for how the acquisition’s cost had been communicated, Acting Under Treasurer Scott Austin told the inquiry that Calvary Health Care had requested the media release avoid the “grossed up” number.
“The committee considers this process contributed to public confusion about the exact costs of the Calvary Public Hospital acquisition, and contributed to the impression that the minister was not being fully transparent,” the inquiry report noted.
“The committee finds that the two-stage approach to public communication regarding the costs of the acquisition … could have been undertaken with greater clarity to provide a full picture of the cost of the settlement at the outset.”
