The Australian newspaper has revealed days after the Nationals leadership spill, Michael McCormack (pictured below inset) personally asked Scott Morrison and Senator Richard Colbeck for a $120,000 grant to try to find a buyer for the 40-bed DP Jones aged care home in Murchison, Victoria, which is in the electorate of his ally Damian Drum.
The $120,000 grant followed an earlier Government grant of $400,000 to the facility’s administrators SV Partners after DP fell into voluntary administration in October 2019 and liquidation in November – with debts of $3 to $4 million after spending its RADs and not fulfilling obligations to staff, according to the paper.
But two expressions of interest campaigns failed to find a buyer and the home closed its doors on 10 February.
But The Australian says Mr Drum wrote to Mr McCormack in late January to criticise the failed expressions of interest campaigns and began lobbying the Prime Minister’s office, Senator Colbeck, Mr McCormack, Health Minister Greg Hunt and Treasurer Josh Frydenberg, requesting immediate financial support to ensure the home was not closed – even as SV Partners moved residents out.
Ministers deny grants process was different – despite quick approval
This week, Mr Drum denied the timing of the funding was related to the leadership challenge – where he supported Mr McCormack over former leader Barnaby Joyce, but Nationals “sources” have questioned the approval process for the second grant – which was finalised in just four days.
Both Mr McCormack and Senator Colbeck say there was nothing unusual about DP’s case.
“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,” Mr McCormack’s spokesperson said.
Minister Colbeck also maintained the Government acted to give the provider every opportunity to keep its doors open.
But the Department of Health has confirmed this kind of specific funding has never been provided before – and the administrators told us directly the home is financially unviable.
Administrator labels aged care home financially unsustainable
As covered in our 5 February 2020, 234th edition, SV Partners director Richard Cauchi was firm that while there had been some interest from other providers, none of their offers delivered the cash needed to upgrade the ageing facility – which was built in 1982.
“It requires either a substantial input of money from an operator or from a third party,” he said.
Richard also stressed that the home has never been able to meet its 40-bed capacity due to competition from facilities in neighbouring towns, with residents’ RADs being diverted towards operating costs, rather than upgrades – an unsustainable situation.
Mr Drum argues that the home – which was the largest employer in the town of 1,000 people and supported the medical centre, pharmacy and community centre – represents the “very fabric” of regional communities – and he won’t back down.
More closures could spell ‘Groundhog Day’ for PM
But how many other aged care homes in country towns are like DP Jones – the lifeblood of a small community?
The Murchison case provides an interesting insight into the pressure that can be brought to bear on the Prime Minister and his Ministers.
Is this setting a dangerous precedent for the Government, however?
As discussed, StewartBrown’s Grant Corderoy estimates 57% of providers will be running at a loss by the end of FY20.
In the last month, there have been reports of one aged care facility closing every week.
Could this become ‘Groundhog Day’ for the Government? Will the PM come to the rescue of all providers with a local member willing to fight for them?
That could be an expensive exercise – if we have 52 closures this year at $520,000 to hunt for a buyer like Murchison, that is $27 million.
Would these taxpayer dollars be better spent supporting the reforms being proposed by the Royal Commission and other funding measures?
Government willing to spend $200-plus billion for 1,700 submarine jobs
Consider this too. Earlier this month, the Government ran into trouble over its decision to award an $80 billion contract to French company DCNS to build 12 submarines for the Australian navy back in 2016 under previous PM Malcolm Turnbull.
Turnbull had committed to the Australian build – the most expensive military spend in Australia’s history – on the guarantee it would deliver 1,100 direct Australian jobs plus another 1,700 Australian jobs through the supply chain.
But last November, it was revealed the total cost of the project will be closer to $225 billion – including $145 billion in support and maintenance costs for the subs until 2080.
The first lot of submarines to be built in Adelaide is also not due until 2032 – 12 years away.
DCNS has also back-pedalled on its promise to base 90% of its workforce in Australia, now committing only to at least 60% local contractors.
So, the Government is willing to spend over $200 billion – all to keep 1,700 jobs in Adelaide.
Imagine if they scrapped that project and delivered the funding to aged care and its growing 366,000-strong workforce?
