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There’s always enough money

By housebound - 1 October 2009 11

Despite the news that the ACT could lose $50 or $60 million (depending on whose version you believe), a view amongst the ACTPS that there won’t be any money around next year for things they don’t want, and strong opposition from the local AMA to the waste of money (buying something back that was never actually sold), the ACT government has announced that it will buy back Calvary Hospital for the grand sum of $77 million.

Katy Gallagher says you gotta spend to save.

Perhaps one driver of the sale was the little-known fact that The Little Company of Mary has only 12 nuns left (reported in the Canberra Times today).

The lesson of this: get a grant then sell it at enormous profit. It’s a bit like the Koomari selling of the long-stay Caravan Park, which was a $1 grant (by Carnell) that got sold on for about $1million. Could the NSW Government even be this silly?

What’s Your opinion?


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11 Responses to
There’s always enough money
bd84 9:29 pm 03 Oct 09

they certainly will need to borrow some money to fund the purchase of the hospital.

I would also point out that the ACT Government will be (proposing to) buy the whole Calvary Hospital which is currently two hospitals – Calvary Private (run and funded by the LCOM) and Calvary Public (run by LCOM, funded by the ACT Government), however the line between each is a bit hazy given that neither party really knows where the line between each lies.

pelican 8:50 am 03 Oct 09

I guess taxpayers are stuck with the system – the plot is worthy of an episode of Yes Minister – taxpayers built the hospital, then have to pay to buy it back? Why don’t we just get rid of the patients, it would be much cheaper to run.

Surely it is just the contractual service agreement with the LCOMHC that needs to be bought out not the actual buildings? The government works in mysterious ways in relation to tax concessions for religious groups – not only do they get government tax relief but funding to amass property and then wish to reap the benefits of the sale.

The comparison above with the Koomari fiasco is apt.

Trunking symbols 4:16 pm 02 Oct 09

I have a theory about this. When the Catholics bought John James they banned abortions, contraception and IVF. Is the government buying Calvary in order to provide these services after they were banned at John James?

shauno 3:12 pm 02 Oct 09

So being a church of the mystic phantom beliefs I take it its tax free?

amarooresident2 2:57 pm 02 Oct 09

Well I didn’t write it but that’s the explanation in the FAQ.

You can question the terms of the original contract I suppose but it was entered into well before self government and if it says the LCMHC own the land and buildings then there is probably not much you can do about it.

Either way, I think $77m for an existing working hospital structure with potential to expand is a bit of a bargain really.

Buzz2600 2:14 pm 02 Oct 09

Ammarooresident2 said:

“Calvary Hospital was built by the Commonwealth Government before ACT self?government. The historical contractual arrangements established originally by the Commonwealth Government mean that LCMHC owns the land and the buildings at Bruce and currently holds a 99 year Crown lease over the land. The ACT Government, via a service agreement, purchases the services of Calvary Health Care (CHC) to provide the public hospital services and has provided capital grants to develop the facilities at Calvary Hospital, which may have created a perception that this is publically owned”.

Hang on …. we paid for it to be built on commonwealth land and then paid for any upgrades and now we have to buy it back? It more than a “perception” amarooresident2, it’s clearly public property that was handed over to LCMHC under ethically questionable contractual arrangements. Who said god botherers were silly? They’re making millions on property speculation and here’s a good example. We’re the silly ones…..

Maze 1:35 pm 02 Oct 09

“It is unsustainable to continue to invest public funds into a facility that is not owned by the Government, with the benefits accruing to a third party’s balance sheet,” she said.

Does this mean that outsourcing is now ‘bad’ and we should look to a single service provider approach and throw out this ‘core services’ guff.

excuse me – I have to go and re-write some business cards and a web page.

S4anta 11:15 am 02 Oct 09

@buzz2600,

It is more cost effective to refurb old hospitals than build new ones. The only problem with this is a healthcare facility being rebuilt (noise = not a great place to heal and convelece(sp?) ). But when you think about it Ccalvary is quite nicely located in regards to access by patients etc when you consider that a bunch of major arterials tip out near its location/. In the years to come, assuming canberra grows, that will be quite handy.

Not to mention ensuring that the government, once it learns hows to administer a health system properly has control of the two of largest more established health facilities in the territory.

amarooresident2 11:12 am 02 Oct 09

The perception that the ACT government already owns Calvary is not quite correct. From the consultation FAQ sheet.

Q: Doesn’t the ACT Government already own the hospital?
A: Calvary Hospital was built by the Commonwealth Government before ACT self?government. The historical contractual arrangements established originally by the Commonwealth Government mean that LCMHC owns the land and the buildings at Bruce and currently holds a 99 year Crown lease over the land. The ACT Government, via a service agreement, purchases the services of Calvary Health Care (CHC) to provide the public hospital services and has provided capital grants to develop the facilities at Calvary Hospital, which may have created a perception that this is publically owned.

The consultation web page is here

http://www.health.act.gov.au/c/health?a=sp&pid=1253835915

Buzz2600 9:32 am 02 Oct 09

Agreed! The church might have run the place, but they don’t own it! Why is the ACT govt is willing to pay a small fortune for an old facility, which will probably have to go the way of Old Canberra Hospital (without the drama hopefully) in a few years? Why not put the 77 million into a new facility with state of art design and technology rather than a run down building probably with major refurishment requirements. Isn’t there something in the 10 commandments about stealing?!

Gungahlin Al 8:59 am 02 Oct 09

Well at least someone in the ACT Gov’t understands accrual accounting…
There was a v good letter in CT yesterday pointing out that governments shouldn’t try to pay for assets in single budgets, but should borrow to buy/build them, then they are paid off progressively by those who end up using the assets over their servicable life.

If Hargreaves had understood this principle, the GDE would have been built as 4 lanes up front, with the $20+ million saved more than covering the borrowing costs, and with the community cost/benefit piled on top of that.

TAMS is holding a workshop today to try get community groups to support slashing services across TAMS portfolio in order to make their budget stack up. I say borrow money to build better assets that are thereby cheaper to maintain. Spend a bit up front to save a lot for a long time. But you have to understand accrual accounting principles first…

On the hospital purchase, and with some 30% (and growing) of the ACT budget going to health, I have to wonder whether we shouldn’t just say to the Feds: “OK – have the health portfolio – all yours – show us how you’d do it better”? Interested in others’ thoughts.

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