Page 3330 - Week 08 - Tuesday, 17 August 2010
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discussions that we had with LCM. That proposal did not get the support of the Catholic Church and we started negotiating around the next best way through.
The opposition say that we were going to fritter away money on the pretence that we could not invest in that building and that we had neglected Calvary for two years while we worked through those issues. That is absolutely incorrect. Calvary Public Hospital has the best intensive care unit in this city because of the investments we made. They have a better intensive care unit in terms of facilities than Canberra Hospital does. That $10 million hit our bottom line in accordance with the accounting standards—
Mr Smyth: So it was all about accounting.
MS GALLAGHER: Just like, Mr Smyth, every investment you ever made in Calvary hit your budget’s bottom line. That is the way the accounting standards operated and, indeed, still operate. To sit here and say that this was not an issue and that all of you already knew and could see into the future around the potential changes to accounting standards—
Mr Smyth: This issue is that you said there was no other way.
MS GALLAGHER: I do not think that Sinclair Davidson even mentioned accounting standards. Andrew Podger’s essential argument was that if this is an accounting issue, let the accountants fix it. Under the standard that was released on 21 April, it appears that the accountants have sought to fix these situations. But that was not an option open to the government when we commenced those discussions back in February with the archbishop.
As much as it will hurt the opposition to hear this, during those discussions with LCM I sought independent expert advice on the accounting standards to ensure that if we did purchase the hospital, we were able to capitalise the investment in it. It was my decision, because what I did not want to happen—
Mr Seselja: Yes, but you did not seek advice as to whether there was another way.
MS GALLAGHER: Mr Seselja, you have raised a whole range of questions and I am seeking to answer them for you. I know your concentration span after your winter hibernation makes it a little hard to get back into work but if I could just explain it, I sought advice to make sure that if we did purchase the asset we would be able to capitalise the investment, because there is an argument around economic control.
Who has economic control? You can own the building but if you do not control what goes on in the building does that mean you can invest that capital in the building? I know this is complicated for the opposition to understand but this is the real story. That advice was being commissioned. That overlapped the period of this exposure draft 194 being released on 21 April. Our accountants came back to us and said, “If you sign the new agreement”—the networking agreement, which is the new contract that we have negotiated with Little Company of Mary Health Care—“a service concession arrangement will apply and you can capitalise the asset”. The response from Little Company of Mary was—
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