Dissenting report by Opposition Senators
1.1The Australian Capital Territory Government's compulsory acquisition of the Calvary Public Hospital (comprising land and other assets belonging to Calvary Health Care ACT Limited (“Calvary”)) has unfolded in deeply concerning circumstances. It has been marked by an unfortunate absence of consultation, a contrived sense of urgency, a blatant dismissal of significant health system risks, and a concerning indifference to employee rights.
1.2The Explanatory Memorandum of the Bill provides a succinct outline of the issues:
On 11 May 2023 the Australian Capital Territory (ACT) Government announced it would be acquiring Calvary Public Hospital, its land and its assets, effectively terminating their remaining 76-year contract and forcibly transferring Calvary staff employed at the public hospital to ACT Health.
This decision was made with no consultation, and no inquiry by the Legislative Assembly prior to the announcement.[1]
1.3The evidence provided to this Committee demonstrates the clear need for an inquiry into the ACT Government’s unprecedented use of its compulsory acquisition powers.
1.4The significance of the exercise of the ACT Government’s compulsory acquisition powers in this case cannot be overstated.As stated in the submission of the Australian Catholic Bishops Conference:
Such an acquisition of a Catholic institution is unprecedented in Australia. The forcible acquisition of Calvary Hospital marks the first time in Australian history where a federal, state or territory government has forcibly taken over an institution of the Catholic Church.[2]
1.5It is for these reasons that we recommend that the Senate pass the Australian Capital Territory (Self-Government) Amendment Bill 2023 (the “Bill”) requiring the ACT Government to hold an inquiry into the Health Infrastructure Enabling Act 2023 (ACT) under which the compulsory acquisition occurred.
1.6In our view, the Majority Report has not adequately engaged with, nor responded to, the material concerns raised in the 65 submissions and almost 7000 letters that the Committee received regarding this Bill. Most of these submissions support the Bill.
1.7In our view, it is entirely appropriate for the Commonwealth Government to be concerned with the ACT Government’s decision given that there are now legitimate concerns about the adequate delivery of health services in the ACT and the ACT Government’s unprecedented use of compulsory acquisition powers has undermined trust (especially for faith based institutions) in the exercise of compulsory acquisition powers by government.
1.8The background to the current dispute was outlined most fully in the submission from Calvary. The course of events described below is largely from that submission although it is noted that the ACT Government’s submission did not dispute any of these facts.
1.9The ACT Government wrote to Calvary in April 2022 about its plans to build a new public hospital in north Canberra. The ACT Government was negotiating with Calvary over the acquisition of land from Calvary on which to build the hospital and a new contract with Calvary to provide public hospital services at the new hospital. The ACT Government and Calvary met over 15 times between May 2022 and November 2022 about these matters, but no agreement was reached.
1.10On 14 September 2022, Calvary received a letter from the ACT Government’sMinister for Health, Ms Rachel Stephen-Smith MLA (“the Minister”), proposing to purchase certain lands from Calvary and offering Calvary services agreement to operate the new hospital for 25 years.
1.11On 28 November 2022, Calvary responded to the Minister indicating that Calvary was prepared to work with the Minister on these matters but that it could not accept the reduction in the length of its contract and that the amount of land requested was larger than originally discussed.
1.12On 10 January 2023, the Minister wrote to Calvary acknowledging its letter and indicated that the ACT Government was considering its contents.
1.13Calvary did not hear again from the Minister, or the ACT Government, on these matters until 8 May 2023. On that date, Calvary officials attended a meeting with the Minister at which they were handed a letter from the ACT Government’s Chief Minister, Andrew Barr. This letter advised Calvary that the ACT Government planned to introduce legislation to acquire the Calvary Public Hospital and associated land. This was the first time Calvary was made aware of the ACT Government’s plans to compulsorily acquire property from Calvary.
1.14On 10 May 2023, Calvary received a copy of the Health Infrastructure Enabling Bill 2023 (“the Health Infrastructure Bill”) and associated regulations. On 11 May 2023, the Health Infrastructure Bill was introduced to the ACT Legislative Assembly. Calvary were not given the opportunity to comment on the Health Infrastructure Bill before its introduction.
1.15On 31 May 2023, the Health Infrastructure Bill was passed by the ACT Legislative Assembly. The legislation passed just over one month before the ACT Government compulsorily acquired the Calvary Public Hospital on 3 July 2023.
1.16The ACT Government’s acquisition of Calvary Public Hospital was hasty and there was no public justification provided for the need for such haste. The power to compulsorily acquire private assets is one of the most onerous powers available to a government. In the view of the Opposition Senators, the ACT Government has failed to use these onerous powers in a diligent and responsible way.
1.17The ACT Government provided no opportunity for the ACT people to comment on its plans to compulsorily acquire the Calvary Public Hospital. The ACT Government in its submission claimed that:
The Enabling Act was the result of a lengthy policy process and consideration by the ACT Government. This included a two-stage public consultation regarding the new northside hospital that occurred in 2022, during which a range of feedback was received regarding health services across Canberra, particularly in relation to health services on the northside of Canberra. Information about the consultation (both the processes undertaken and the nature of feedback received) is available on the ACT Government’s ‘Your Say’ website here:
https://yoursayconversations.act.gov.au/accessing-health-care.[3]
1.18However, neither of these stages contemplated the ACT Government compulsorily acquiring the Calvary Public Hospital. Indeed, the Phase 2 report from this consultation was published in April 2023, just weeks before the ACT Government announced its plans to compulsorily acquire assets. That Phase 2 report does not mention any plans to compulsorily acquire assets.[4]
1.19Given that the ACT Government must have been preparing detailed legislation to acquire Calvary’s assets at this time, this evidences that the ACT Government for some time had a predetermined view with respect to the action it was proposing to take; namely the compulsory acquisition of the Calvary Public Hospital.Given the failure of the consultation process to canvass compulsory acquisition and the timing of introduction of the Health Infrastructure Bill, in the view of Opposition Senators, the ACT Government’s claims that it conducted consultation are disingenuous.
1.20The ACT Government also suspended its normal processes for compulsorily acquiring assets and scrutinising legislation. As the Australian Catholic Bishops Conference noted in its submission:
The Health Infrastructure Enabling Bill 2023 bypassed the usual requirements of the Lands Acquisition Act 1994, which is legislation that sets out how the ACT Government can acquire land by compulsory process, and associated laws as set out in the proposed legislation. For example, the Lands Acquisition Act stipulates the need for appropriate compensation before the Government assumes operation, rather than the Government plan to offer compensation afterwards.[5]
1.21The ACT Government has provided no justification for why it could not follow its normal processes under the Lands Acquisition Act.
1.22Moreover, the ACT Government used its numbers in the Legislative Assembly in the ACT to suspend standing orders and to prevent the Public Accounts Committee to hold an inquiry into the Health Infrastructure Bill. As stated by Elizabeth Kikkert MLA in the Legislative Assembly on 31 May 2023:
When the health minister Ms Stephen-Smith presented the bill authorising this government’s forced takeover of Calvary Hospital a mere 20 days ago, every single Labor and Greens member opposite voted along with her to suspend standing orders—the rules of this Assembly—to allow the bill to be debated and voted on today, before the public accounts committee, which I chair, could conduct any kind of inquiry.
I remind those opposite, and those who read or hear my words, of what wise democratic legislative bodies realised a long time ago—that, without this kind of scrutiny, the risk is that a concentration of power in the executive will lead to extreme measures lacking broad community support. Checks designed to hold a government to account and to check or restrain the government’s use of power are not trivial things at all. They are there for a reason.
When members of the parties forming the government decide foolishly to toss aside those checks, just because scrutiny might be in the government’s way, the outcome will never be good. Unchecked, unregulated, uncontrolled government never is; I promise you that. That is precisely what is happening with this government’s forced acquisition of Calvary Hospital.[6]
1.23The ACT Government’s only public rationale for the compulsory acquisition of the Calvary Public Hospital is that it will increase the efficiency of delivering public hospital services in the ACT. As they state in their submission:
While Calvary has played an important role in the delivery of public hospital care for generations of Canberrans over the last 44 years, consolidating our public hospitals to create a single network will allow us to better coordinate our health services, distribute resources effectively, strengthen the capacity of our workforce, plan infrastructure on a Territory-wide basis, and improve health outcomes for all Canberrans.[7]
1.24There are three main issues with the ACT Government’s position.
1.25First, the ACT Government has not provided any quantitative evidence for their claim that compulsorily acquiring the Calvary Public Hospital was necessary to improve health services. Given the size of this change, and the serious use of government powers, it is surprising that the ACT Government has not been able to provide any detailed cost-benefit analysis on the outcome of its actions.
1.26As distinguished, retired senior public servant Mr Andrew Podger AO outlined in his submission to this inquiry:
It may be that amalgamating the two hospitals offers economies of scale, including improved ambulance services and emergency department management. But there is no guarantee, as the takeover will still leave two public hospitals in Canberra whose services will need to be coordinated. There will also remain the challenge of the ACT hospitals’ relationship with NSW hospitals in the areas surrounding the ACT.[8]
1.27Mr Podger’s submission acknowledges that it may well be that a single provider may provide economies of scale, improved ambulance services, and emergency department management, but it’s not guaranteed. The primary focus should be looking at reducing existing excessive hospital demand by increasing primary care options, which had been one of Calvary’s priorities.
1.28Second, even if one accepts the ACT Government’s rationale, it is not clear why it had to act with such haste nor why it needed to resort to compulsory acquisition. As is clear from Calvary’s submission, Calvary was engaging in good faith negotiations with the ACT Government on the purchase of land to build a new hospital. The ACT Government has provided no evidence that these negotiations were so irreconcilable that they had to be cut short using the brutal powers available only to the government side of these negotiations.
1.29Third, many are concerned that the ACT Government’s actions are not in good faith and may be more due to concern about religious differences rather than a genuine concern about the delivery of efficient health services. The Australian Christian Higher Education Alliance noted in their submission that there is now significant anxiety in other faith-based service providers in Canberra arising from the way the Calvary Public Hospital was compulsorily acquired.To quote from the Alliance’s submission:
The acquisition of Calvary Hospital raises serious questions regarding the rights and security of faith-based institutions, in our case higher education institutions, to be assured that similar rapid acquisitions without adequate process and consultation might also take place. Without an accountable and independent inquiry into the Calvary Hospital acquisition, the confidence of FBHEI to invest in the ACT region is significantly undermined.[9]
1.30Many submissions also noted that just one month before the ACT Government decided to compulsorily acquire the Calvary Public Hospital, the ACT’s Legislative Assembly released a report on abortion services. This report singled out the Calvary Public Hospital for criticism and some of its criticisms had to be corrected in a corrigendum to its report. As was noted by the Canberra Declaration in their submission:
Further evidence of bias against Calvary Hospital exists in Recommendation 14, where the inquiry requests “that the ACT Government advocate Calvary Hospital to provide full reproductive health services in accordance with human rights.” It is curious why the report singles out Calvary Hospital as the culprit but makes no such criticism for Canberra Public Hospital, which according to the inquiry’s report likewise restricts its abortion services “to severe foetal abnormality".[10]
1.31The ACT Government has made a decision that has shocked many ACT residents. That shock has been heightened given the lack of reasons provided by the ACT Government for its haste in using onerous compulsory acquisition powers.
1.32One reason why a public inquiry is needed into this decision is to properly examine the genuine concerns of many. If the ACT Government has good reasons for its decisions, it would have nothing to fear from an inquiry.
1.33Calvary Public Hospital had provided health services to the ACT for over 44 years. There has been no evidence that Calvary’s provision of public hospital services was not adequate. Indeed, the ACT Government entered into a new agreement with Calvary just 12 years ago.
1.34Notwithstanding Calvary’s well-regarded delivery of health services, the rush with which the ACT Government has taken over the Calvary Public Hospital has put at risk the delivery of health services in the ACT. For example, Calvary raised concerns with the timeframe of the transition, as they estimated a full handover would take a minimum of 12 months to ensure there was no disruption to the provision of health services, but from the passing of the legislation they only had 33 days before the takeover of the hospital.
1.35There are even greater concerns about how the hasty change has affected staff and their continuity in roles. Calvary’s submission contained quotes from affected staff:
To allow the majority of Calvary’s 1800 staff to find out about this via social media was absolutely disgraceful. Clearly this had been in covert planning for quite some time. The level of complicity in this deception speaks to a some-what disturbing ethical code and leaves us with many questions related to your party’s ideology.[11]
1.36And:
The ACT government really needs to explain why staff haven’t been adequately consulted and informed. It is not in our interests to transition quickly and haphazardly! I do fear that important processes will be missed during the transfer![12]
1.37These concerns make it even more important to have a full inquiry that hears from health staff at the “coalface” about what the issues are in transitioning to government control.
1.38While it is up to the ACT Government to run its health system, the Commonwealth Government has a clear interest in making sure that health services are delivered efficiently given it is a large funder of hospital services. Mr Andrew Podger AO also stated in his submission:
I also consider it entirely appropriate for the Commonwealth, and the Commonwealth Parliament, to consider the ACT Government’s decision and to express views on it if they wish. Health, including hospital services, is a shared responsibility between the Commonwealth and the States and Territories. The Commonwealth provides the majority of government funding for the health system and has overall responsibility for its policy design.[13]
1.39Many submissions including those from the Catholic Archdiocese of Canberra and Goulburn, Calvary, Australian Christian Higher Education Alliance, and Andrew Podger argue that the way in which the acquisition was undertaken raises investment risk for counterparties to government contracts.
1.40A government’s compulsorily acquisition power is one of its most onerous. It should be used carefully, diligently, and only after all other options have been exhausted. The ACT Government’s power to compulsorily acquire assets is devolved to it from the Commonwealth through the Australian Capital Territory (Self-Government) Act. That Act specifies that the ACT Legislative Assembly has no power to acquire property “otherwise than on just terms".[14]The use of the word “just terms” replicates the wording which binds the Commonwealth Government under section 51(xxxi) of the Australian Constitution.
1.41These powers are broad and gives the ACT Government an enormous power to acquire private property providing it is done on just terms. The Australian Government only rarely uses this power and tends to prefer voluntary negotiation over compulsion. For example, the Australian Government’s recent acquisition of property to expand military training facilities near Townsville and Rockhampton was conducted on a voluntary basis even though it could have used compulsion.
1.42There is good reason to keep compulsion as a last resort. The use of such power by governments creates a large imbalance between themselves and private investors in a market economy. If governments repeatedly and wantonly use such power, private businesses will be more wary to invest in the first place lest they be made to sell their assets outside a normal market negotiation. These risks are heightened further with the delivery of health services where there is an ongoing interaction between governments and private providers.
1.43Given the flood of negative comments that have been received by this Committee in relation to the compulsory acquisition, there is no doubt that the ACT Government has harmed its reputation as a good faith partner in the delivery of health services. The broader risk is that all Australian Governments are tarnished by the actions of the ACT Government, including its failure to follow due process.
1.44This is another reason is why a review is required.It would provide an opportunity for all stakeholders to convey their concerns.It will provide an opportunity for all governments to reflect on the extraordinary circumstances relating to the compulsory acquisition of the Calvary Public Hospital. The ongoing delivery of health services will require investment from private and faith-based service providers. It is essential that we restore trust in the government policy framework so that the health sector can continue to attract investment.
1.45As stated in paragraph 1.3 of the Majority Report, a public hearing in relation to the Bill was held on 4 September 2023.The public hearing was well attended by members of the community.
1.46The evidence presented at the public hearing on 4 September 2023 affirmed the basis for the Bill.The effluxion of time has not diminished the concern in the community in relation to the action of the ACT Government.
1.47In its opening statement, the Catholic Archdiocese of Canberra & Goulburn stated:
Given the exceptional nature of this action by the ACT Government and the fact that it may well establish a precedent for future actions by the same or some other government, the Archdiocese believes that more scrutiny is required of the decision, rather than less. For that reason we support this amendment…
In support of the amendment, we note three elements of the controversy over the seizure…as warranting serious consideration of this amendment…
Firstly, the ACT Government determined to waive the accountability measures that it had itself built into its own Standing Orders and Legislation to precisely address the risk of government over-reach and mismanagement…
Secondly, we are concerned as a civic entity, especially one that has multiple contractual and legislated contracts and lease arrangements with the ACT…that those contracts and land leases in the ACT are no longer secure or able to be relied on…
Thirdly, we need to consider the “elephant in the room” – the issue of religion and the presence of faith-based entities and service provision in the ACT.The ACT Government publicly and the ACT Chief Minister and ACT Health Minister privately assured the Archdiocese that religion played no part in this decision.We accepted that assertion at face-value.However, we do need to reflect on the fact that there is an increasing disdain and even antipathy toward people of faith as such in civic operations in Canberra.[15]
1.48In its opening statement, Calvary stated:
Calvary believes the Health Infrastructure Enabling Act 2023 is a piece of bespoke legislation the Australian Capital Territory created in a clandestine manner and then unilaterally enacted to compulsorily acquire the land of the former Calvary Public Hospital Bruce and terminate the associated operating agreement, which had 76 years remaining…
Calvary considers the manner in which the Australian Capital Territory has developed and implemented the Health Infrastructure Enabling Act 2023 and associated Regulation borders on unconscionable conduct.
It has demonstrably taken steps to avoid standard democratic processes to enable appropriate levels of consultation, genuine debate and rigorous scrutiny of its own legislation.
Calvary is supportive of an inquiry into the actions that led to the acquisition and transition of Calvary Public Hospital to the Territory.[16]
The purpose of this Bill is to insert a requirement that the ACT Government conduct an inquiry into the ACT legislation that enables the acquisition. This does not impact on the ACT Government’s rights to make decisions, it is intended to ensure that there is public consultation with the decision that has been made, so that people have the ability to have their voices heard.[17]
1.49To achieve this, the Bill simply inserts one new section into the Australian Capital Territory (Self-Government) Act 1988 requiring the ACT Government to conduct an inquiry into the ACT law enabling the Calvary Public Hospital acquisition (the Health Infrastructure Enabling Act 2023 (ACT)), and to report before 30 June 2024.
1.50The Bill does not direct the ACT Government with respect to how it would respond to the inquiry, the Bill simply requires an inquiry to be conducted to provide relevant stakeholders with an opportunity to provide their views.
1.51As Archbishop Christopher Prowse, Catholic Archbishop of Canberra and Goulburn stated in his submission:
This proposed amendment does not alter the ACT Legislation; it does not invalidate the acquisition; however, it would require that the ACT Government be held to account to some extent and would enable a degree of scrutiny that has, hitherto been denied.[18]
1.52Given the overwhelming and significant public concern about this issue and the submissions of affected stakeholders, it is of paramount importance that the Parliament supports this Bill. It is not an attempt to undermine the ACT Government’s rights to make its own decisions, but rather seeks to ensure that decisions of such profound magnitude and far-reaching implications are made with a deep sense of responsibility, informed by a comprehensive public inquiry and consultative process.
1.53There is very strong support for an inquiry from a range of stakeholders who have made submissions to the inquiry into this Bill:
[The Racial and Religious Discrimination Legal Service] unreservedly supports the Australian Capital Territory (Self-Government) Amendment Bill 2023 (Cth) as, in RRDLS’ view, the Health Infrastructure Enabling Act 2023 (ACT) is incompatible with human rights…It is the submission of RRDLS that the Health Infrastructure Enabling Act 2023 is incompatible with the rights of members of the Catholic religion to maintain a not for profit Catholic hospital.[19] – Racial and Religious Discrimination Legal Service
A thorough investigation into the ACT Government's extraordinary action is warranted to determine why the forced takeover neglected normal processes including community consultation, why so little time was allowed and why Calvary Hospital received such unprecedented and unfavourable treatment.[20] – Australian Catholic Bishops Conference
The Amendment currently being considered by the Senate would be very appropriate in light of the fact that the Territory Government and the Territory Assembly has demonstrated a willingness to avoid scrutiny. This sense is heightened through the extraordinary haste demonstrated in this acquisition by Government.[21] – Archbishop Christopher Prowse, Catholic Archbishop of Canberra and Goulburn
In our view, there is clearly sufficient community concern to justify an inquiry. The ACT Government has clearly proceeded with its proposal despite this unaddressed community opposition. An inquiry would give the public a proper opportunity to express their concerns in a forum in which they will be considered.[22] – Australian Christian Lobby
The rushed passage of the Bill through the Assembly, with the suspension of the usual accountability mechanisms, have aggravated the fears and apprehensions of many people about the lack of respect for religious institutions and their autonomy across the ACT…The best means of addressing these concerns is through a thorough and transparent independent inquiry.[23] – Australian Association of Christian Schools
Calvary is supportive of an inquiry into the [Health Infrastructure Bill] and the Territory’s conduct regarding the acquisition and transition of the Public Hospital to the Territory. Calvary remains deeply concerned by the clandestine manner by which the acquisition and transition were orchestrated.These events create a dangerous precedent for departure from usual parliamentary scrutiny and due process.The marked absence of consultation and the self-inducted urgency gave rise to considerable patient and community risks.[24] – Calvary Health Care ACT Limited
1.54As a result of this decision by the ACT Government, the offices of Senators and MPs around the country were inundated with thousands of emails and phone calls on this issue, legitimately raising questions about the real reason behind such a move and concerns about the precedent this action creates, potentially for other faith-based services including other health facilities and education institutions.
1.55This unprecedented compulsory acquisition action by the ACT Government has not only incited considerable distress among employees but has also threatened the standing of a nationally trusted healthcare provider. Moreover, the Territory’s sidestepping of the standard legislative chamber processes highlights larger issues of sovereign risk that warrant more detailed scrutiny.
1.56Opposition Senators regard a full public inquiry as critical in the process of ensuring transparency, respecting employee rights, preserving the reputation and function of essential healthcare services, and providing a platform for public consultation.
1.57The Australian Capital Territory (Self Government) Amendment Bill 2023 doesn’t impact the decision from the ACT Government to acquire the hospital, but it will provide the oversight and due process that the Commonwealth is entitled to ask of the ACT Government.
Recommendation 1
1.58It is strongly recommended that the Bill be passed.
Senator the Hon Matthew Canavan
Proponent of the Bill and Participating Member
Nationals Senator for Queensland
Senator Paul Scarr
Deputy Chair
Liberal Senator for Queensland
Senator Alex Antic
Committee Member
Liberal Senator for South Australia
Footnotes
[1]Explanatory Memorandum, Australian Capital Territory (Self-Government) Amendment Bill 2023.
[2]Australian Catholic Bishops Conference, Submission 14, p. 5.
[3]ACT Government, Submission 21, p. 2.
[4]Communication Link, Phase 2—northside hospital consultation report: Designing ACT health services for a growing population, April 2023, https://hdp-au-prod-app-act-yoursay-files.s3.ap-southeast-2.amazonaws.com/3416/8327/3797/Phase_2_consultation_report_-_Northside_Hospital_final_formatting.pdf.
[5]Australian Catholic Bishops Conference, Submission 14, p. 3.
[6]Debates of the Legislative Assembly for the Australian Capital Territory Daily Hansard Edited proof transcript, 31 May 2023, p. 1359.
[7]Chief Minister Andrew Barr's coving letter, ACT Government, Submission 21, p. 2.
[8]Mr Andrew Podger AO, Submission 40, p. 2.
[9]Australian Christian Higher Education Alliance, Submission 31, p. 2.
[10]Canberra Declaration, Submission 38, p. 13.
[11]Calvary Health Care ACT Limited, Submission 66, p. 7.
[12]Calvary Health Care ACT Limited, Submission 66, p. 7.
[13]Mr Andrew Podger AO, Submission 40, p. 1.
[14]Australian Capital Territory (Self-Government) Act 1988, para. 23(1)(a).
[15]Opening statement of the Catholic Archdiocese of Canberra and Goulburn tabled at the public hearing held on 4 September 2023.
[16]Opening statement of Calvary Health Care ACT Limited, from a public hearing on 4 September 2023.
[17]Explanatory Memorandum, Australian Capital Territory (Self-Government) Amendment Bill 2023.
[18]Catholic Archdiocese of Canberra and Goulburn, Submission 5, p. 5.
[19]Racial and Religious Discrimination Legal Service, Submission 15, pp. 1–2.
[20]Australian Catholic Bishops Conference, Submission 14, p. 2.
[21]Catholic Archdiocese of Canberra and Goulburn, Submission 5, p. 5.
[22]Australian Christian Lobby, Submission 11, p. 8.
[23]Australian Association of Christian Schools, Submission 13, pp. 1–2.
[24]Calvary Health Care ACT Limited, Submission 66, p. 8.
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