Labor’s $1.37bn hidden health project blowouts
The LNP government has revealed taxpayers will bear the brunt of a $1.37bn increase on six major health projects – now Labor has bitten back.
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Deputy Opposition Leader Cameron Dick says the new LNP government is priming Queenslanders for project cuts after it was revealed Labor tried to disguise a $1.3bn health cost blowout.
Mr Dick said his colleagues had been “open and transparent” with Queenslanders in September when announcing the additional $1.3bn would be spent on increased scope of works across six hospital expansion projects, despite there being no explanation of what those scope of works were and how they differed from the original plans.
“It was very clear that we had made an investment in relation to cost escalation and also to increase the scope of work, and we were very upfront with Queenslanders about it,” he said.
“We were very plain and direct with Queenslanders about it.”
Mr Dick said it was now Premier David Crisafulli’s turn to explain how his government would deliver all projects within the current budget.
“Which he said he would deliver in full on time, without cuts,” he said.
“I think Queenslanders are waking up to the fact that David Crisafulli is now trying to soften them up to cut projects to deliver his uncosted election commitments.”
It was earlier claimed by the LNP government that Labor stealthily disguised staggering cost blowouts on major hospital projects as revised works.
Taxpayers will bear the brunt of a $1.37bn increase on six major health projects originally priced at $2.34bn – a near 50 per cent cost jump.
The new government has blamed Labor’s poor planning and budget management, with Health Minister Tim Nicholls’ candidly revealing sorting out the infrastructure program would be a “nightmare”.
Then-Premier Steven Miles and Health Minister Shannon Fentiman in the dying days of the Labor government, announced “expanding planned expansions” at six hospitals would cost $1.3bn.
The increase would be covered by a “funding boost” in the state budget “allowing for increased scope” to optimise patient flow and indicated the increase would be covered from within the “allocated budget”.
An Opposition spokesman has since said Labor approved extra funds across six projects based on advice from Queensland Health.
Labor at the time had mentioned cost escalation were factored into the $1.3bn, but never outlined what portion of the funds were for blowouts nor precisely what extra services were added.
The six projects impacted were stage 2 of the Ipswich Hospital and Logan Hospital expansions, the expansions of Princess Alexandra Hospital, QEII Hospital, Hervey Bay Hospital and the Cairns Hospital upgrade which was split into two tranches.
The “expanded expansions” involved no new beds but did include an extra pharmacy, mortuary and kitchen in Ipswich and a pharmacy, three catheterisation labs and administration space in Logan. The combined price tags of the projects rose by $700m.
At the Princess Alexandra, where the cost jumped nearly $400m, a pharmacy, kitchen and administration area was added according to Queensland Health.
At QEII medical imaging, space for medical records and maintenance areas were added. The price jumped $115m.
The Hervey Bay Hospital project doubled in cost from $40m to $94m but there were no add ons.
The Cairns Hospital Expansion set to cost $250m originally were split into two “tranches”. Queensland Health confirmed the second tranche, cost and timeline unknown, now includes a kitchen expansion. Stage one will be $171m.
A Queensland Health spokesman said the department was “working as hard we can to mitigate price increases and ensure Queenslanders receive value for money”.
It’s understood a bulk of the $1.3bn increase was due to cost blowouts, with the restrictions on subcontractors caused by Best Practice Industry Principles partly to blame alongside ongoing labour shortages and growing material costs.
State Development Minister Jarrod Bleijie said Queenslanders had been “denied the truth from a Labor government obsessed with secrecy”.
“These major cost blowouts on our hospitals are a result of Labor’s poor planning, failure to manage budgets and BPIC,” he said.
Health Minister Tim Nicholls said there were projects which were improperly scoped to begin with.
“It’s just going to be a nightmare,” he said.
Infrastructure Partnerships Australia chief executive Adrian Dwyer said the former government had announced the health infrastructure pipeline with scopes, cost and timing estimates “clearly removed from today’s reality”.
“A year ago, we forecasted that the tight sequencing of the hospital pipeline would be near impossible to deliver within the then Queensland Government’s committed budgets and time frames. This has proven more than a prediction; it was a spoiler,” he said.
“Hope has proven not to be a good strategy, and the new Government will need to do a proper review and come up with a proper strategy.”
An Opposition spokesman said the scope and cost increase had been revealed publicly on September 26 — four days before the election proper.
“The scope of projects can change between when contracts are awarded and when the contractors finalise consultation with clinicians during detailed design,” he said.
“Queensland Health advised the scope changes of these projects were necessary and any questions about those changes should be directed to Queensland Health and the new Health Minister.”
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