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Question Time - The Northern Beaches Hospital

Mr MICHAEL REGAN (Wakehurst) (11:25): My question is directed to the Chair of the Public Accounts Committee [PAC]. Given the circumstances surrounding the Northern Beaches Hospital and the performance audit recently commenced by the New South Wales Audit Office, will the Chair update the House on the PAC's work on accountability measures for major government projects and the impact of the new follow-the-dollar powers to ensure that communities like mine do not pay the price for poor government decision-making?

The SPEAKER: Order! The Chair of the Public Accounts Committee will be heard in silence.

Mr JASON LI (Strathfield) (11:26): I thank the member for Wakehurst for my very first question. He is a rockstar member of the Public Accounts Committee and a fierce advocate for his local community, and he is gravely concerned about the situation at the Northern Beaches Hospital. That hospital was a private public partnership [PPP] established by the previous Government in an act of touted financial genius—so much so that members opposite planned to privatise a further five regional hospitals using the same model. Launching the Northern Beaches Hospital in 2018, former Premier Gladys Berejiklian said:

Delivering life-changing infrastructure like this is only possible due to the strong economic management of the Liberals and Nationals …

A recent Deloitte audit report found that a material uncertainty exists as to the hospital's ability to continue as a going concern. The operator of the hospital, Healthscope, is also facing financial crisis. An AFR headline in April read, "Healthscope lenders add McGrathNicol to $1.6 billion debt restructuring". When insolvency and restructuring experts McGrathNicol are called in, that is generally not a sign of strong economic management. That latest blow follows a litany of issues at the hospital, including a 2019 Herald report that hospital staff were being incentivised with $500 gift vouchers to convert public patients to private so that the hospital could charge the private health insurers more money.

A 2020 parliamentary committee from the other place recommended that that type of PPP never be used again, finding that public patients were receiving a lower standard of care than private patients in the same hospital. The Audit Office has commenced a performance audit on the hospital using the new "follow the dollar" audit. I acknowledge your role, Mr Speaker, as the former Chair of the PAC, in agitating for those powers. As Chair of the PAC, I want to be non-partisan in this. I am not going to go into the evils of privatisation except to say they are fundamentally opposed by the Minns Government because they create— [Extension of time]

They create a structural conflict between the interests of shareholders and their concern about profit, and the public interest. That conflict is particularly acute in the context of the provision of public health care, where the care and wellbeing of patients has to be paramount. The PAC is also engaged in an inquiry into accountability measures for major government projects, including business case assurance. In other words, we are asking: How is it that so many of our business cases and our project assurances get it so wrong? When we thought about which projects we should look into first, we did not know where to start. Should we start with the Rozelle interchange? Should we start with the intercity train procurement, which is a billion dollars over budget, 35 months delayed and with trains that did not fit through the tunnels?

The SPEAKER: The member for Pittwater will come to order.

Mr JASON LI: We were confronted with a fiasco smorgasbord. We did not know what to choose, and so we started with something bite-sized: the Critical Communications Enhancement Program. That is an important upgrade to the public safety network used by our emergency services organisations. The original business case was $400 million, and it was meant to be delivered in 2020. The latest cost estimate is $2 billion, and it is running seven years late. I look forward to the performance report from the Audit Office on the Northern Beaches Hospital. I look forward to the PAC tabling our report so that taxpayer funds are not wasted, so that critical projects are not delayed by years and so that communities like Wakehurst can get the high-quality services that they deserve.

Read the full question time on the Hansard, Northern Beaches Hospital 05 June 2024

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