RAH consultants KordaMentha get $57,000 in reimbursements amid calls for SA firms to get lockdown compensation
SA businesses have been knocked back when asking for lockdown compo from the State Government, but it’s just “reimbursed” KordaMentha $57,000.
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Consultants KordaMentha will be paid almost $60,000 in reimbursements for the “pause” in their SA Health contract caused by the pandemic – as businesses hit by the latest lockdown are refused compensation.
The state government will pay the Sydney-based company $57,737 for costs relating to the cancellation of flights and rental accommodation after its contract was cancelled in April due to the pandemic.
The payment has outraged the Opposition and industry leaders including Australian Hotels Association SA chief executive Ian Horne who said the lightning lockdown cost hotels alone around $50m.
“It is not just functions from Christmas parties to weddings which were cancelled but also accommodation,” he said.
“We asked for compensation and the Premier pretty quickly said no, so to learn an interstate company is getting reimbursement for a past situation is hard to take.
“The hotel industry alone employs 23,000 South Australians and under the current severe conditions of 25 per cent capacity, venues are just not viable. If anyone has a case for compensation it is hospitality.”
KordaMentha had been appointed administrators of the Central Adelaide Local Health Network (CALHN), which includes the Royal Adelaide Hospital, in November 2018 after compiling a devastating report about the agency’s annual budget blowout spiralling towards $300m a year.
Their initial $18m, one-year contract was extended in January, and that $20.8m contract was supposed to run until February 9, 2021, with a six-month extension option, increasing the total to $45.78m.
The company had been paid $32.1m from the beginning of its first contract until June 30, and the cancelled contract was reactivated last month. It will now will see the company paid $4.4m for four months’ work, to February 2021.
Health and Wellbeing Minister Stephen Wade said KordaMentha’s work will deliver better patient outcomes while saving taxpayer money.
“It is appropriate that we reimburse out-of-pocket expenses incurred by KordaMentha as a result of their contract being unexpectedly suspended due to COVID-19,” he said.
“No other costs were incurred as a result of the contract pause – in fact, taxpayers saved $10m by reducing the scope of KordaMentha’s original contract.
“The new board and new CEO of the Central Adelaide Local Health Network, in partnership with KordaMentha, are making good progress in turning around the financial and organisational mess that the former Labor government left at CALHN.”
KordaMentha aimed to save $276m over three years by methods including cutting the length of patient stays, slashing agency nurse numbers and stricter purchasing controls. Mark Mentha told a parliamentary inquiry last year CALHN was “the most broken organisation I have ever witnessed, both financially and culturally.”
CALHN chief executive Lesley Dwyer said the company helped the organisation save $57m in its first year of the recovery program.
Opposition health spokesman Chris Picton blasted the KordaMentha reimbursement.
“It’s shocking the lengths the Marshall Government have gone to in compensating interstate corporate liquidators, ahead of South Australian pandemic impacted businesses,” he said.
“KordaMentha were flying in and flying out their consultants from Melbourne and Sydney and there are serious questions why they should have to be compensated when this was put on hold.
“Why is a FIFO interstate consultancy more important than South Australian businesses that have been impacted? Why should taxpayers be paying for aborted flights and accommodation for FIFO consultants for a contract put on hold?
“KordaMentha have received over $30 million from the Marshall Liberal Government over the past two years.”
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