General News
6 September, 2024
Hospitals including MDHS needed “urgent” help to avert potential payroll crisis
The Maryborough District Health Service (MDHS) was just days away from being unable to pay its staff and creditors in June last year, documents have revealed.
MDHS, and 21 other hospitals across the state were forecasted to end the 2022-23 financial year in the red — needing “urgent payments” from the Victorian Government, according to correspondence and reports recently released to the state’s opposition under a Freedom of Information (FOI) request.
In a letter, written on June 9, 2023, and addressed to Treasurer Tim Pallas, the state’s Health Minister Mary-Anne Thomas sought support “to make urgent cash payments” of $422 million to bailout health services, including MDHS.
The Maryborough Hospital was projected to post a deficit of $3.7 million, a departmental brief also released under the FOI has shown.
“Without additional funding in June Health Services will be unable to make payroll payments to employees and will have insufficient operating cash to pay creditors. This may have reputational risks for individual Health Services, the public health system and Government,” the brief warned Ms Thomas.
“The Department [of Health] is reviewing its own budget to identify any existing funds that may be reprioritised to support health services financial sustainability. At this stage of the review, advice from the corporate finance area is that there are insufficient funds to meet health service needs.”
Operating on a tight deadline, the brief, also dated June 9, said funds needed to be made to the relevant health services in the next four days — “payment is required on 13 June 2023 to ensure they can meet their payment and payroll obligations”.
While these revelations indicate MDHS was in a dire monetary situation at the time, its financial statement from the same period say otherwise.
It achieved a surplus net result of $8.68 million in 2022-23, which also accounts for a “non-cash contribution” from the Department of Health.
Responding to The Advertiser’s request for clarification, a spokesperson from MDHS said the service’s forecasts vary through the year — with the final position published in the annual report.
“We welcomed additional funding from the Victorian Government to support health services across the state to cover rising operational costs and extraordinary demand for frontline healthcare services during the COVID-19 pandemic,” the spokesperson added.
Broadly, Shadow Minister for Health Georgie Crozier said, information around the bailout has come to light in the midst of ongoing uncertainty around hospital budgets for the current financial year.
“Is it any wonder why our health system remains in crisis under Labor when hospitals are running out of money and cannot afford to pay nurses, doctors and staff on time,” she said.
“A year on from this bailout and the situation has only worsened.
“The Allan Labor Government must urgently provide funding certainty for Victoria’s health services so they can continue to focus on delivering better patient outcomes.”
According to the Federal Member for Mallee Anne Webster, the documents demonstrate the State Government’s “horrendous economic management”.
“Labor continues to hoodwink the community, claiming the bailout was a ‘funding injection’ but the Allan Government continues to accrue massive debt which is hurting Victorian families,” Ms Webster said.
“Federal and State Labor love to spin stories about what they are doing with taxpayer money, but the black-and-white figures do not lie — Labor cannot manage money and Maryborough families are paying for it.”
However, Member for Ripon, Martha Haylett defended her colleague’s decision, saying the government would not hold back from supporting the state’s health services.
“I am proud to be a part of a government that funds public hospitals and we will continue to provide the funding they need, when they need it, so they can continue delivering world-class healthcare to our communities,” she said.