Highly-regarded corporate advisory firm KordaMentha has presented a report to the Government which has confirmed the extent of the former Labor government’s massive health overspending scandal in the Central Adelaide Local Health Network (CALHN).
The recent report is forecasting massive overspending of $303 million in CALHN (including Statewide Clinical Services) for 2018-19 unless urgent corrective action is taken.
KordaMentha’s summary is:
“Absent significant and immediate intervention, we forecast that CALHN’s 2018-19 financial performance will be a circa ($375 million) deficit, equating to a $274 million unfavourable variance to budget. On a consolidated basis (including Statewide Clinical Services) we forecast a deficit (of $421 million) representing a $303 million unfavourable variance.”
KordaMentha also reported that CALHN was operating at a cost significantly higher (29 per cent) than the National Efficient Price in the period July to December 2017.
Treasurer Rob Lucas said KordaMentha also reports that anticipated savings from moving to the nRAH had not been achieved and, in fact, costs had increased as a result of the move to the new hospital.
“The expert report blows out of the water the claims by the former Minister Peter Malinauskas and now Shadow Treasurer Stephen Mullighan that government claims of massive health overspending were untrue,” said Treasurer Lucas.
“The most damning aspect of KordaMentha’s report is their finding that there is a ‘systemic and widespread breakdown and lack of respect for financial control and performance accountability’.”
“It is now time for Mr Malinauskas, in particular, to accept responsibility for the financial mismanagement and incompetence of his period as Minister for Health and that of the former Labor government.”