CBC Chairman Archie Tsirimokos said early termination of legally binding contracts “damages investor confidence and stifles economic growth”. Photo: Region.
The ACT Government’s takeover of Calvary Hospital could erode business confidence and impact future Crown lease opportunities, according to the Canberra private sector’s peak body.
The passing of the Health and Infrastructure Enabling Bill in the ACT Legislative Assembly enables the government to compulsorily acquire the hospital in Bruce and merge it with Canberra Health Services.
Chief Minister Andrew Barr said the move was to secure a more integrated and efficient hospital and community health care system, but the Canberra Business Chamber (CBC) is concerned by the unintended consequences in the business community.
CBC chairman Archie Tsirimokos said while the chamber supported all efforts to improve the Territory’s health facilities, it was a bad look for Crown lease agreements.
“Early termination of legally binding contracts exposes the ACT to sovereign risk, which damages investor confidence and stifles economic growth,” he said.
“A stable and predictable business environment is crucial for attracting investment. By disregarding any established agreement, the government risks undermining this environment and potentially discouraging future private sector involvement in contracts for infrastructure or other services which may be performed by the private sector.
“This stability provides the basis for businesses of all sizes to work with government without the fear of seeing arrangements change or contracts cancelled.”
Calvary Public Hospital Bruce has been compulsorily acquired by the ACT Government to be merged with Canberra Health Services. Photo: Claire Fenwicke.
With the Calvary Network Agreement and Crown lease not due to expire until 2098, the takeover announcement came as a shock to many.
Calvary has sought an injunction to stop the acquisition in the ACT Supreme Court.
Mr Tsirimokos said the impact on the business community would be amplified in the context of economic uncertainty, fuelled by inflation, rising rates, twitchy markets and whispers of recession.
“Confidence is down at the moment, in the economy, in the city. And when the chips are down, something like can have everyone looking over their shoulder,” he said.
“It stands to reason that other businesses that have arrangements with the government would be nervous.”
Mr Tsirimokos said that the chamber respected the ongoing discussions and was monitoring the progress closely regarding potential precedents or risks it may have on other government commercial arrangements and Crown leases.
“From a business point of view, this is about confidence and perception. This compulsory takeover of an ongoing arrangement does not inspire confidence for doing business in the ACT and Australia more broadly,” he said.
“The chamber would welcome engagement to further understand the rationale and reasoning for the decision to take over the running of Calvary, along with the process behind the decision and the potential impacts on healthcare, and other government agreements, including on infrastructure and business activity generally.”
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