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Legislative Assembly for the ACT: 2003 Week 3 Hansard (12 March) . . Page.. 930..


MRS BURKE: Thank you for your answer, Minister. Of course, I understand all of the above. However, have you worked out a new deadline to implement the changes, and will you give a commitment to this Assembly to meet that?

MR WOOD: We are aiming to do it by the end of June.

Totalcare

MR CORNWELL: My question is to the Treasurer. Mr Quinlan, the Canberra Times of 12 March reports you as saying that all divisions of Totalcare were "up for grabs"but that the linen and sterilising service must continue "no matter what". In last year's estimates committee hearings, on 17 July 2002, you advised that the linen service was "chewing"money.

I will quote the full sentence, from page 128, just in case I am not allowed to table it, Mr Speaker: "The big business, and a business which is chewing money actually, is the linen service."Given that the linen service is "chewing money", will you abandon promises to workers in the linen and sterilising service, as you have reneged on your promises to other divisions of Totalcare?

MR QUINLAN: I am informed that the linen service is running at a loss-that is, "chewing money". But management is confident that, if it was benchmarked and received in the transfer payments, it might not be.

A lot of what Totalcare does is about transfer payments within the system. If it was underpricing its services, it would show a loss and we would have to effectively make up that money in Totalcare. But if it then charged what turned out to be a higher, benchmarked price, it might no longer be turning a loss. In fact, the government is going to end up paying around the same amount of money for clean linen.

We are concerned, particularly in the linen service, that there is not a lot of competition in the market. There is at least anecdotal evidence that other states have closed their own capacity to their long-term regret. They got a short-term predatory price from a private supplier but then found themselves with nowhere else to go and paying a premium price at a later stage. We want to make sure that we do not do that.

Obviously, the linen service is an essential service within the city. Part of the reason it chewed money last year was that it had some very unfortunate contracts in Western Sydney-which it no longer has. But it still has a turnover of about 60 per cent public work and about 40 per cent private work, for hotels and external institutions.

It is something we want to keep, and we want to make sure we do not leave ourselves open to premium costs. As you know, quite a number of people are employed in it. Provided it can operate at reasonably effective rates, it will stay in the long term. But in the medium term it is an essential service in the territory.

The sterilisation is a slightly different matter, in as much as the pool of equipment and appliances that are used and sterilised on a regular basis is exactly that: a pool. It does


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