Nationals leader Michael McCormack’s post-spill plea for ally

Days after the Nats spill, Michael McCormack lobbied for a $120,000 grant to keep open a regional aged-care home.

DP Jones aged-care home in Murchison, Victoria. Picture: Stuart McEvoy

In the days after the Nationals leadership spill, Michael McCormack lobbied Scott Morrison and Aged Care Minister Richard Colbeck for a $120,000 grant to keep open a 40-bed regional Victoria aged-care home in the electorate of ally Damian Drum.

Mr Drum on Wednesday insisted the timing of the funding had nothing to do with the leadership challenge, where he backed Mr McCormack ahead of Barnaby Joyce, but Nationals sources have questioned the “due process” conducted ahead of the grant being finalised in four days.

Despite an unprecedented $520,000 in commonwealth funding being allocated since November to avoid the sale of the DP Jones Nursing Home in Murchison, Victoria, The Australian understands it may not be enough to avoid its permanent closure. After attempts to find a new aged-care operator failed in late January, Mr Drum blasted senior ministers, including Mr McCormack.

Mr Drum confirmed he wrote to Mr McCormack on January 22 but claimed he did not “criticise the DPM or represent him in any negative connotation”. But The Australian understands the two-page letter was scathing in its ­assessment of Mr McCormack’s handling of the issue, and Mr Drum’s displeasure was ­expressed in strong language.

As residents were moved out of the facility, now under the administration of SV Partners, the Nationals backbencher began lobbying the Prime Minister’s office, Senator Colbeck, Mr McCormack, Health Minister Greg Hunt and Josh Frydenberg, requesting immediate financial support to ensure the aged-care home was not sold.

The DP Jones facility fell into voluntary administration in ­October and liquidation the following month, racking up debts of between $3m and $4m after spending accommodation deposits and not fulfilling obligations to staff.

Mr Drum personally reached out to aged-care operators to come forward with proposals, including Honeysuckle Regional Health, which runs two nearby facilities. From February 6, two days after the leadership spill, Mr McCormack’s office was actively involved in lobbying to extend the life of the DP Jones Nursing Home in support of Mr Drum, whom he later backed in a failed bid to become deputy speaker. Mr Drum said “in no way” did the $120,000 funding impact on his support for Mr McCormack, and his leader had “worked with me on this issue and worked very hard”.

 

Mr McCormack visited Murchison in Mr Drum’s seat of Nicholls in October, pledging his support to keep the facility open and supporting an initial $400,000 in funding last year.

The Aged Care Department recently confirmed it had not “provided funding of this specific nature before”.

Mr Drum said the community nursing home was launched in 1982 by the Murchison community after an eight-year fundraising drive.

“As the local member tasked to represent the constituents of Nicholls, this nursing home represents the very fabric of keeping our regional communities strong and vibrant. I will not shy away from that,” Mr Drum said.

Honeysuckle chief executive Barry Hobbs said Mr Drum approached him about taking over DP Jones, and he agreed over the phone on February 7 before sending a proposal to Mr Drum, who shared it with Mr McCormack’s office and other senior ministers.

“This was an agreement in principle with a number of boxes needing to be ticked before we would proceed,” Mr Hobbs said.

On February 10, Mr Hobbs visit­ed DP Jones and was told by staff the home was closing at 1pm.

“The liquidator rang me and informed (me) of the closure and that I was unable to stop this. A subsequent conversation with Damian Drum indicated we might be able to stop this closure, however this did not happen,” he said.

Mr Hobbs said he met a ­government-appointed consultant last week who was looking at the “best deal to reopen the ­facility”.­

Failing to answer most of The Australian’s detailed questions about his role in lobbying for funding on behalf of Mr Drum, Mr McCormack said he “advocates for enhanced regional services on a daily basis”.

“The Deputy Prime Minister knows aged care has a critical role in local communities and he will not shy away from fighting for the services regional communities expect and deserve,” his spokeswoman said.

Senator Colbeck said the government had recognised the “value of the DP Jones aged-care facility to the community of Murchison” and the impact of its loss as a result of poor financial management. “The federal government acted to give the provider every opportunity to keep its doors open,” he said. “Initial funding was provided to allow the administrator to keep the facility open, enabling it to test the market for another provider to take over the operations of DP Jones.”

Senator Colbeck said the government had agreed to provide for administrators costs, estimated to be about $500,000, while negotiating with potential buyers to reopen the facility.

He said the government recently announced a $50m Business Investment Fund to provide “tailored support to eligible providers grappling with financial ­issues in the future”.

A spokeswoman for the SV Partners insolvency firm, who took control of the property last year, told The Australian they were making “every effort to assist in assessing all potential avenues to maximise the likelihood of DP Jones facility reopening”.