NSW announces legislative approach to Northern Beaches Hospital

The NSW Government has announced that it will introduce amendments to the Member for Wakehurst’s Private Member’s Bill to enable it to, if required, terminate the Northern Beaches public–private partnership (PPP) contract as if a hospital operator default had occurred — following the appointment of receivers to the parent entities of Healthscope which, the government said, it “considers a default under the contract”.

In a Treasurer–Minister for Health joint statement, the NSW Government said that while it is its preference that agreement on the future control and operation of the Northern Beaches Hospital can be reached with Healthscope and its receivers, “the Government must be able to act decisively to avoid a prolonged dispute for members of the Northern Beaches community, staff working at the hospital and for NSW taxpayers”.

The statement continued: “If a mutual agreement is not reached, the proposed amendments would give the Health Minister the power to issue a termination notice to Healthscope. In addition, the Treasurer would have the power to ensure that compensation negotiations occur in a reasonable time frame and to appoint an independent person to determine compensation if agreement cannot be reached.

“The alternative to this approach is for the NSW Government to exercise its voluntary termination rights. Under the PPP contract signed by the Liberal Party, this would see compensation to Healthscope’s receivers and lenders run into the hundreds of millions of dollars.” This legislative approach, the government said, “will ensure there are no windfall gains to Healthscope or its receivers”.

“This is not a decision we take lightly,” NSW Treasurer Daniel Mookhey said. “But we are now in a position where the Liberals’ privatisation mess means Healthscope’s receivers are negotiating the future of the Northern Beaches Hospital.

“While an agreed exit from this failed PPP contract remains my preference, I must ensure the government has the right to step in and protect the Northern Beaches community from this dragging on.”

The Treasurer and Health Minister said they are hopeful of a productive outcome, with discussions between the Northern Beaches Hospital Taskforce, Healthscope and its receivers ongoing. The statement also said, to ensure that patient safety and continuity of services at the Northern Beaches Hospital will not be compromised as negotiations continue, NSW Health will continue to work closely with Healthscope.

“We’ve made it clear from the very beginning that we don’t support this sort of arrangement,” Health Minister Ryan Park said. “This is a complex contract but the community deserves certainty.”

The announcement of this latest legislative approach follows the passing earlier this month of legislation banning PPPs, something the government said will prevent any repeat of the Northern Beaches PPP model in acute care.

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