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The Guardian
22 minutes ago
- The Guardian
Public-private pain: buying back Sydney's embattled Northern Beaches hospital faces uncertain prognosis
Just before the New South Wales parliament rose for the winter break, an unusual piece of legislation passed through both chambers late in the evening. It aimed to strengthen the arm of the Minns government in its negotiations to return the Northern Beaches hospital (NBH) to public ownership by threatening changes to the terms of the contract with its private partner, Healthscope. NBH is the only public-private partnership (PPP) in NSW where public hospital services, including emergency care, are delivered by the private sector. The Labor government, a staunch critic of PPPs, has vowed it would not enter any such deals in the future. To underscore its stance, it has now passed legislation banning PPPs to deliver acute care. After years of mounting debt and a string of complaints about care standards – including a toddler dying in a chair while waiting hours for care and a woman whose baby died in childbirth because an emergency caesarean was offered too late – the hospital went into receivership in May. Untangling its private components from its public ones and settling the terms of the government's buyback are proving painful. The PPP was put in place by the previous Coalition government in 2013, despite a similar failed experiment by the Greiner government at Port Macquarie hospital almost two decades before. The Minns government had resisted earlier calls to buy back NBH, but it has now been forced into action after Healthscope's collapse, with debt of $1.6bn. Local MPs and staff at the hospital had long been sounding the alarm about the impact of the financial incentive for profit on patient care. The independent Wakehurst MP, Michael Regan, has campaigned for a government buyback, proposing legislation that would return the hospital to public hands with no compensation at all. With the financial future of a hospital serving more than 370,000 residents on Sydney's northern beaches uncertain, the government has concluded a buyback is its only option. It is adamant, however, that it does not want to pay a 'windfall gain' and so supported the amended legislation. The Northern Beaches hospital continues to operate normally with a financial lifeline from the Commonwealth Bank, while a government-appointed taskforce negotiates with Healthscope's receivers, McGrathNicol. Progress, however, has been slow. The parties have not reached agreement over the price or exactly what it is that the government is going to buy. One of the problems is that the private and public components at NBH are closely integrated, unlike some other hospitals, where the private facilities are often housed in a separate building with its own services. NBH has separate wards, but many services – such as theatres, nursing staff, cleaning, , X-ray, pharmacy and pathology – are shared, with several operated by third-party private companies. The building itself had also been sold to a property trust, which leases it back to Healthscope, adding further layers of complexity. Sign up for Guardian Australia's breaking news email The cost of building the hospital was well north of $1bn, with the government contributing $600m at the time. A report in 2015 said the total cost to taxpayers – for the building and for Healthscope providing the public hospital beds over the life of the contract to 2038 – was $2.14bn. Healthscope also has rights to operate the private component until 2046. But is it a lucrative deal or not? It was revealed in a scathing independent report by the NSW auditor general, Bola Oyetunji, released in April that Healthscope was anxious to exit from running the public hospital part of NBH and had made two offers to the government to sell in 2023. The special legislation passed in late June arguably tips the scales in the government's favour by making it clear that receivership is a breach and starts the clock ticking on a resolution. 'If a mutual agreement is not reached, the amendments would give the health minister the power to issue a termination notice to Healthscope,' the treasurer, Daniel Mookhey, said in a statement. 'In addition, the treasurer would have the power to ensure that compensation negotiations occur in a reasonable time frame and to appoint an independent person to determine compensation if agreement cannot be reached.' Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion But the approach by the government has drawn criticism from business and the opposition (which ultimately supported the bill) on the grounds that it amounts to retrospective alteration of a contract and raises the question of sovereign risk for future investors in NSW. For the time being, the receivers and the taskforce appointed by the government are back at the table. A spokesperson for Mookhey said they are looking for a quick resolution. The government has a pot of money available for the buyback of the hospital. The 2025-26 budget revealed unallocated funds of $860m. It could all go smoothly or it could end in the courts. 'We are continuing to engage in constructive discussions with the NSW government on the future ownership of Northern Beaches hospital,' Healthscope said in a statement. 'Given the government's policy position against further public-private partnerships in the health sector, we believe this is in the best interest of the Northern Beaches hospital staff, patients and wider community.' There have been serious questions about NBH's ability to provide reliable healthcare since it opened in 2018. Staff reported shortages of basic supplies and an inefficient IT system where records were divided over several databases. Some teething problems were resolved early on, but staff continued to be concerned about the tensions between profit and patient care. The auditor general's April report confirmed critics' concerns, finding the PPP 'creates tension between commercial imperatives and clinical outcomes'. It found the hospital had failed to act on warnings about risks to patient safety and outcomes, and its electronic medical record systems 'present quality and safety risks', which Healthscope and the government's Northern Sydney Local Health District had known about since the hospital opened in 2018. In 2019, Healthscope was bought by a Canadian private equity firm Brookfield. High levels of debt intensified Healthscope's financial pressures and resulted in more concerns about how the PPP was operating. At the same time, the private hospital sector was at war with private insurers over a reduction in payout amounts for in-hospital care, which added to financial pressures. NBH – or at least its public hospital operations – will be returned to public ownership. The more likely outcome is that the government will buy the whole hospital, though this is not certain. It hopes the sale can be resolved quickly – and without blowing the budget. That will be welcomed by nurses who want to be employed on the same terms as their colleagues working in government-owned hospitals, including better patient ratios. For patients on the northern beaches, there will hopefully be an improvement in services, though Healthscope insists it already performs well compared with other similar hospitals. One of the big changes is likely to be the types of operations offered at NBH. At the moment, more complex cases are channelled to the Royal North Shore hospital under opaque policies put in place by the Northern Sydney Local Health District. With the same ownership, there will be less incentive for this practice to continue.
The Guardian
22 minutes ago
- The Guardian
What happened to the Liberal party of Menzies? They became obsessed with virtue-signalling
The image of Robert Menzies is brandished like a scimitar in and around the modern – and ailing – Liberal party. When Liberal leaders, activists or factions jostle, one or another can be relied on to appeal to Menzies' authority. Strangely for a man who, in life, seemed not to change much while the world changed around him, Menzies has now become a screen on which any number of beliefs and aspirations might be projected. Indeed, the Liberal party's external critics can also join in the fun, berating Menzies' heirs and successors for their betrayal of his legacy: home ownership and support for universities have figured prominently. What happened to the Liberal party of Menzies, they ask. I've done it occasionally myself. Is it fair? Well, yes and no. The Liberal party today is a very different beast to the one Menzies left behind on his retirement in January 1966. In government, he pursued a cautious and conservative pragmatism that did not turn every policy issue or administrative decision into another opportunity for a performance piece displaying one's ideological virtue. In the process, he gained the support of many working-class voters; yet, unlike the apparent inclination of too many Liberal politicians today, he did not need to imagine them as a collection of appetites and prejudices in order to do so. To be fair to today's Liberals, Menzies ruled in vastly different times – and, put bluntly, they were easier times. His postwar prime ministership of 16 years coincided with, and was nourished by, an extended period of economic growth and personal affluence. Leaders of that time knew that fortune had smiled on them. And they enjoyed their luck, assuring themselves that even if they had not themselves made the good times, they would sure as hell have been blamed in bad times. It is instructive to read the letters Menzies received from ordinary folk on his retirement, as I did recently, because they tell us much about what people valued in the man and his party. A Sydney woman, writing on behalf of her family, said: 'All my voting life, you have been Prime Minister, and I have never known any real hardship. Our children are growing up in a secure feeling of a well-respected country in the world where so many countries are in turmoil. For this I thank your wise management over the years.' 'Security' was the word to which the letter-writers kept returning: 'the security we have enjoyed as a family and members of community & nation', as another woman put it. And when they were not talking about 'security', they turned to what they saw as its close sibling, prosperity: 'the sane and sensible government which has been so greatly needed for the growth and prosperity of this country': Menzies' years of service had 'lifted the Australian image to a remarkably high position in the outside world'. People who could never have imagined that they would ever own a home or a car now found themselves with one of each. There might even be a second car in the driveway for mum to drive to the new shopping centre at Roselands or Chadstone. It all seemed rather miraculous, and it made them happy and proud. Menzies embodied their patriotism, which was often still British as well as Australian, with 'dignity' – another term that kept appearing in their letters. The new Liberal leader, Sussan Ley, has said a Liberal party is needed that 'respects modern Australia, that reflects modern Australia, and that represents modern Australia. And we have to meet the people where they are.' She might have added (and the Liberals are in the habit of doing so): 'just as Menzies did'. Menzies understood only too well that people craved security and prosperity, alongside liberty and individuality. He was never so foolish as to imagine that people wanted from their prime minister and government repeated virtue signalling about 'free enterprise' more than they wanted a home in the suburbs, a nice, shiny car, and a better chance for their children than they had enjoyed. Some who voted for Menzies would have supported Labor governments at the state level that gave them benefits such as annual leave – reaching three weeks per year in New South Wales by 1958. Some Liberals are frank in expressing their dislike of much they find in modern Australia. Its branches and organisation are less representative of middle Australia than they were in Menzies' time. Some who claim to speak for the party seem like the weird neighbour most of us do our best to avoid at the end-of-year street party. The one who last year was button-holing anyone he could find about the 'globalist conspiracy'. This year, he was recently heard mumbling something about 'trans' in an alarming way while watering his dahlias. 'Although I have, because of my upbringing, never voted for the party you have controlled for so long, I want you to know that I am one of your greatest admirers', a Melbourne man wrote in 1966. Menzies understood that he and his party needed to connect with such people. As a mature politician, he had learned not to sneer at or insult them. If Liberals, in their own interests, were to ban the use of the word 'woke' from all party gatherings, they would be on the way to absorbing the wisdom their leading founder has still to offer them. Frank Bongiorno is a professor of history at the Australian National University
The Guardian
27 minutes ago
- The Guardian
Abundance: the US book is a sensation among our progressive MPs. But can it spur action in Canberra?
'We should be able to argue that the clean energy future should be fucking awesome.' It's days away from the start of the 48th parliament, and if in Canberra there's one book that you must at least pretend to have read by then, it's Abundance by Ezra Klein and Derek Thompson. Klein, a New York Times journalist and host of a popular podcast, produced the above quote during an interview in March, a couple of weeks after the book's release. Sign up for Guardian Australia's breaking news email With that kind of enthusiasm, it's no wonder that the book – subtitled How We Build a Better Future – is a sensation among progressives in America and around the world. Klein and Thompson helpfully distil the book into a simple idea: 'To have the future we want, we need to build and invent more of what we need.' Need more? At its heart, the authors are trying to create a more effective progressive movement focused on providing for people in ways that matter for them – from affordable housing and childcare, to key infrastructure, to cheap and clean energy. In Australia, Productivity Commission research has found that the construction sector is building fewer homes per hour worked than in the 1990s, despite adding more than 700,000 home building jobs. The PC places the blame squarely on a proliferation of rules and compliance that has slowed the pace of innovation and wrapped up builders and developers in red tape. Meanwhile, Deborah Cobb-Clark, an economics professor at the University of Sydney, at a conference last week highlighted survey data which showed 40% of young Australians think they might not have a comfortable place to live in the next 12 months. The pessimism runs deeper than housing. In 2022, 72% of all Aussies did not believe a child born then would do better than their parents – a 14 percentage point increase from the year before, and the biggest rise in the world. 'There's a lot of pessimism, and a lot of angst, and a lot of concern among young Australians about their place in Australian society,' Cobb-Clark said. 'For many outcomes it's perceptions of inequality that are more important than real inequality.' The answer, say Klein and Thompson, is a 'liberalism that builds' – a can-do government that is focused on outcomes. Klein elaborated on the Pod Save America podcast: 'The future is going to be defined on affordability'. 'We are in a period where the big economic problem for a long time is going to be: the things people need the most of, we just don't have enough of them.' The treasurer, Jim Chalmers, is trying to sell us his own vision of a cleaner, greener and more dynamic Australian economy built on industries of the future. He sees a major role for the government in driving this transformation. So it's no wonder he has called the book a 'ripper' and said it is doing the rounds through 'a whole bunch' of Labor colleagues. Andrew Leigh, an assistant minister in the treasury portfolio, is a convert who has been – to use the term doing the rounds online 'abundance pilled'. Leigh, the author of a number of economics books and who has a PhD in the subject, even titled a speech in June 'The Abundance Agenda'. The chair of the Productivity Commission, Danielle Wood, has read it and found much to agree with; after all, finding ways to unleash the productive potential of the economy is her job. A little over a month out from Chalmers' economic reform roundtable, Wood has talked about how Australia must regain a 'growth mindset'. In the US, where Trump is reversing major spending bills for clean energy, the authors are arguing for no less than the dawn of a new political order to replace the tired neoliberalism that began its decline in the 2010s. Faith in government and its legitimacy rests with producing results for citizens, the authors argue. The collapse in Americans' trust in government to do the right thing, from 77% in 1964, to just 22% in 2024, is in part down to the incapability of politicians, to paraphrase, to get shit done. It's not a great leap to see this as a cautionary tale for Labor: reach the policy goals that matter for people, or risk a Clive Palmer running the joint. Australia is not America by any means, so the blockages identified in Abundance are not as daunting. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion Our politics and people are not as polarised, our system not as litigious, our parliament not as sclerotic. Still, the challenge to pursue an abundance agenda is far from easy. It demands some uncomfortable debates within the left – between environmental groups, unions, and politicians. And when it comes to the clean energy transition, the bipartisan divide on green energy here is wider than in almost every other country. Edelman's global trust barometer report for 2024 found that 28% of Australians classified as on the 'right' reject green energy technology, compared with 7% on the left. Klein and Thompson say that in the US 'the government has taken on the task of decarbonisation and the responsibility of coordinating a once-in-a-century transformation of America's built landscape'. 'But it is doing so with laws and agencies and habits that are better designed to block green construction than to allow it.'There are obvious parallels with Australia, where opposition to huge green power generation and infrastructure projects is growing among local communities and environmental groups. Bob Brown caused a stir in 2019 when he opposed a major windfarm project on Tasmania's Robbins Island and criticised plans to lay transmission cable through the Tarkine forest. He likened the Robbins Island proposal to the thwarted plan to dam the Franklin River in the 1980s – a landmark victory for the nascent green movement. Nearly six years later and the renewable energy project remains in limbo. The then environment minister Tanya Plibersek delayed the decision until after the May election. Klein and Thompson accuse the environmental movement of 'trade-off denial', saying 'society has run out of time to save everything we want to save, and to mull things over for years'. 'Nothing about this is easy, and it is not always clear how to strike the right balance. But a balance that does not allow us to meet our climate goals has to be the wrong one.' There are plenty of other curly questions for politicians, even those fully on board with the so-called abundance agenda. As an example of the type of overregulation that slows down projects, the authors point to Biden's worthy $US39bn program to subsidise semiconductor manufacturers to set up factories in the US. Rather than a laser focus on how to get this done, applicants needed to answer questions about 'specific efforts to attract economically disadvantaged individuals and promote diversity, equity, inclusion and accessibility'. Now consider Treasury's National Interest Framework to assess proposals under Labor's Future Made in Australia program: 'The government will also apply community benefit principles in relation to investments in priority industries. These principles will have a focus on investment in local communities, supply chains and skills, and the promotion of diverse workforces and secure jobs.' Klein and Thompson's comments could just as easily apply in the Australian context: 'Many of these are good goals. But are they good goals to include in this project? There is no discussion … of trade-offs.' There's no doubt that Klein and Thompson's book offers a manifesto that American democrats could take to the next election. It offers a lens for a new type of more effective progressive government. Leigh has called it 'progressive productivity'. So will the future be 'fucking awesome'? Let's hope so. The stories we tell ourselves are important, and a shift in mindset where the future is there to be won could help. One thing's for certain: it will take more than an abundance of rhetoric to get there. Patrick Commins is Guardian Australia's economics editor
