Page 3667 - Week 08 - Thursday, 19 August 2010
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palliative care service. This proposal was subject to extensive public consultation as well as opposition from stakeholders within the Catholic Church.
Following the public consultation, the Little Company of Mary Health Care announced in February this year that it would not be able to proceed with the original proposal. Following this announcement, the ACT government held extensive discussions with Little Company of Mary Health Care to explore alternative options.
I personally met with the Little Company of Mary Health Care on a number of occasions to discuss possible options to enable a proposal to be developed and carried out. I outlined to the Little Company of Mary Health Care that the preferred way forward for the government, under the circumstances, would be for the territory to purchase Calvary Public Hospital and for Calvary Health Care ACT to continue to operate the hospital under a renegotiated operating agreement, which became known as the network agreement.
I also outlined that the government would introduce legislation to the Assembly to entrench the role of Calvary Health Care ACT under that operating agreement, with annual funding and performance agreements. Extensive negotiations on this proposal occurred and the Chief Minister and I also met with the archbishop, Sister Jennifer Barrow, Mr Brennan, Martin Laverty, Francis Sullivan and Father Brian Lucas around this time to further discuss an appropriate way forward that would be suitable to both parties.
Before proceeding to the formal signature stage, the territory sought advice, through Treasury, from PricewaterhouseCoopers on the accounting treatment of the draft network agreement that had been developed through negotiations. In April 2010, the Australian Accounting Standards Board released an exposure draft, ED194, of a proposed international public sector interpretation which proposed that the government apply the same principles as private operators when accounting for service concession arrangements.
In May 2010, PricewaterhouseCoopers provided accounting advice to the territory on the proposed arrangements. PricewaterhouseCoopers advised that the proposed Calvary network agreement, if signed, would result in a service concession arrangement which means that the territory would be able to register the hospital on our accounting books as our asset and would not need to buy the asset in order to achieve this. This advice was significant and obviously changed the course of action for both the government and Little Company of Mary.
ACT Treasury then provided a briefing to me as the Treasurer, advising of the PricewaterhouseCoopers advice that the proposed network agreement represented a service concession arrangement and that the territory would be able to capitalise Calvary hospital assets without proceeding to legal ownership. Given this advice and the changes it posed, Treasury then engaged PricewaterhouseCoopers to provide accounting advice on the existing Calvary Public Hospital arrangement.
PricewaterhouseCoopers advised that within the existing arrangements there is currently a service concession arrangement and informed Treasury that the territory
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