Central Adelaide Local Health Network will blow budget by $303m: KordaMentha

THE Central Adelaide Health Network is on track to blow its budget by $303 million unless it takes “urgent corrective action”, private advisory firm KordaMentha has found.

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THE Central Adelaide Health Network is on track to blow its budget by $303 million unless it takes “urgent corrective action”, a secret report from private advisory firm KordaMentha has found.

The Advertiser revealed last month that KordaMentha had been summoned to rein in a $250 million deficit, blamed on the new Royal Adelaide Hospital.

Treasurer Rob Lucas revealed the headline figure but refused to release the report publicly, saying the KordaMentha document had been tabled in Cabinet.

Mr Lucas told a Budget Estimates hearing that the move to the new RAH had not saved money as anticipated, but had instead led to costs increasing.

He said the report showed that it cost the health network 29 per cent more than the National Efficient Price to deliver health services between July and December last year.

“The expert report blows out of the water the claims by (Opposition Leader Peter Malinauskas and treasury spokesman Stephen Mullighan) that government claims of massive health overspending were untrue,” he said.

“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 health minister and that of the former Labor Government.”

CAHLN chief executive Jenny Richter told The Advertiser last month that the department had been trying to deal with the deficit.

“We acknowledge that a budget deficit close to $250 million is unacceptable and our network faces a significant challenge to become financially viable,” Ms Richter said.

The Advertiser has requested a copy of the KordaMentha report.

Labor health spokesman Chris Picton said Mr Lucas owed it to the “hard working staff of our hospitals to release the full report and show how many doctors and nurses they want to sack”.

“The Budget already foreshadows 880 health staff to be sacked this year and these secret cuts will only make ramping and waiting times worse.”

He also said Budget papers showed the health network had only overspent its budget by $98 million last financial year, despite the Government spruiking the $250 million blowout.

But Mr Lucas said the cost blowout was only smaller because the Mid-Year Budget Review had pumped extra cash into CAHLN.