Brookfield looking to take over Northern Beaches Hospital has links to offshore tax havens
The private company about to take control of the new $600m Northern Beaches Hospital has an offshoot that earned billions of dollars in Australia in the last four years — but official documents reveal the company paid no tax in that time.
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The private company about to take control of 43 hospitals, including Northern Beaches Hospital, has an offshoot that earned billions of dollars in Australia in the last four years — but has paid no tax.
One of Brookfield Asset Management’s many companies, BPIH Pty Ltd made more than $6.8 billion in total income in Australia between 2013 and 2017.
But according to tax office data it paid zero tax in Australia for that period.
Both companies also appear in the Paradise Papers, a leaked set of documents which offers an insight into the complex offshore structures used by multinationals to minimise their tax bills.
Brookfield Asset Management’s $5.7 billion offer has been accepted by Healthscope, the current operator of the private-public partnership Northern Beaches Hospital.
In the Implementation Deeds available on the ASX website one of Brookfield’s parties involved in the bid has an address in the Cayman Islands.
The takeover is currently before the Foreign Investment Review Board, which advises the Treasury on whether it should be approved or not.
Finance expert Michael West said if Brookfield Asset Management takes over Healthscope, he fears profits made from sick patients on the northern beaches could be “ripped out of the country and put into tax havens”.
There are legitimate reasons why a company may not pay tax, including writing off losses from previous tax years. There is no suggestion Brookfield or BPIH have done anything wrong.
A Brookfield spokesman refused to explain why BPIH had not paid tax for four years.
A spokesman for FIRB also refused to comment.
However, Mr West, a Manly resident, who has been investigating Brookfield’s financial background, said if the deal was approved by FIRB it would be a “national disgrace”.
He also added that the complexity of Brookfield’s set up means it is also unclear which of its companies may end up controlling Northern Beaches Hospital.
“There’s a lack of accountability,” Mr West said.
“If we don’t know who controls the company, it means we don’t know where the money is going or who is ultimately responsible for the performance of the hospital.”
Brookfield did not respond to calls or emails asking for a comment on this point.
Health Minister and MP for Wakehurst Brad Hazzard also refused to comment on the tax implications of Brookfield or on whether he knew who he would be dealing with if there was a takeover.
Federal MP for Mackellar Jason Falinski said in his capacity of the chairman of The House of Representatives Standing Committee on Tax and Revenue, Australia had some of the toughest multinational anti tax avoidance laws in the world.
“If anyone has any evidence of Brookfield not paying what it should I’m more than happy to receive it and pass it onto the ATO,” he said.
“These figures are all from data ATO has published. I would be surprised if it has not looked into it.”
He added that there were perfectly legitimate reasons for companies having money in tax havens such as Singapore, the Cayman Islands, and elsewhere, especially for private equity companies which move money around the world and want low transaction fees.
“This transaction is currently under review by FIRB and I do not want to prejudice those proceedings,” he said.
“However, Australia has some of the toughest foreign investment criteria in the world and transactions can be and have been rejected on national interest grounds.
“This has happened several times in the last 12 months, and there is no reason to believe that if this criteria is not met in any transaction in the future that it would not also be rejected on those grounds.”
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NSW Shadow Health Minister Walt Secord said the Government cannot “guarantee patient safety when the strings are being pulled by profits, shareholder dividends and tax minimisation schemes from a tax haven micro-country in the Caribbean”.
“This is downright alarming and deeply disturbing,” he said.
It also gives rise to the need for a thorough investigation by FIRB into the takeover of Healthscope by Brookfield.
“Another day, another drama, another crisis involving the Northern Beaches Hospital. It is not even four months old and it is already being flogged off on the selling block,” Mr Secord said.
He said NSW Labor is worried about an overseas investment firm taking over a NSW private-public partnership hospital and allowing ultimate control to go overseas.
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