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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2022-09-07 Daily Xml
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KordaMentha Report

Ms CLANCY (Elder) (15:10): My question is to the Minister for Health and Wellbeing. Can the minister update the house regarding any engagement with interstate corporate liquidators over the past five years?

Members interjecting:

The SPEAKER: Order!

The Hon. C.J. PICTON (Kaurna—Minister for Health and Wellbeing) (15:11): Another excellent question of importance to the people of South Australia from the member for Elder. While I can confirm that there haven't been corporate liquidators appointed certainly since March this year, unfortunately that was not true for the four years prior to that, because the former government did appoint KordaMentha, who are an interstate firm noted for their work in terms of liquidations and corporate administrations of companies—

Mrs Hurn: Why aren't you talking about ramping?

The SPEAKER: Order!

The Hon. C.J. PICTON: —not just to come in and consult in terms of the running of the Central Adelaide Local Health Network but to actually put them in charge of running it.

People might recall that two partners from KordaMentha were appointed as executives in the health service. It's completely unheard of before, I think, probably anywhere else in Australia—particularly not in South Australia—that that would happen. This was, of course, at great expense to the taxpayer. Now that we're in government, I have been provided with the details in terms of what this cost over that period of time.

Mrs Hurn: Where are the ramping stats?

The SPEAKER: The member for Schubert is warned for a final time.

The Hon. C.J. PICTON: There were certainly a number of contracts, I think 10 separate contracts, that were between 2018 and 2021—10 separate contracts between the government and KordaMentha—and that totalled $33.3 million of taxpayers' funds.

The Hon. A. Koutsantonis interjecting:

The Hon. C.J. PICTON: That's right: $33.3 million of taxpayers' money went to KordaMentha. We found out during the procurement process for KordaMentha that their economic contribution to the state was measured and recorded as part of that procurement process and was recorded as nil—a nil economic contribution because their entire staff, none of whom were based here in South Australia, flew in at the start of the week and flew out at the end of the week. Some of those staff, the contracts reveal, were paid up to $6,492 per day, which is nice work if you can get it.

Of course, this has been noted by many people, and it was noted in a report which has been released recently and which has come to my attention. This is a leaked report, of course, from the Liberal Party's internal review. It noted—and I'm not referring to the bit that speaks generously about myself, because I'm too modest to refer to that, but I'm referring to the section that says:

The appointment of KordaMentha at a cost of many millions of dollars was never explained satisfactorily to the public. The perception was, why did the state need a duplication of bureaucracy to run the health sector?

That's a very good question: why did we? The existing bureaucracy was still there, but we brought in, at a cost of $33 million, an entire other bureaucracy to put in place over the top of it. In fact, if it hadn't been for COVID, it would have been much more that was spent on the contract as well because a suspension in one of the contracts stopped the total number of contracts going out to $48.6 million that would have been spent on KordaMentha during that process.

In addition, there were also private lawyers who were engaged as part of the process, at an additional $1.8 million, which would have tipped it over $50 million cost to the state that was contracted. Of course, the issues in terms of the finances are still there but of course some consultants from interstate have made a significant amount of money in the process.

Members interjecting:

The SPEAKER: Order! Before I take us to grievances, I observe that standing order 127 concerns digression and personal reflection on members. I draw the house's particular attention to:

2. [Members are not to] impute improper motives to any other Member,

3. or make personal reflections on any other Member.

These are matters I will keep closely in mind for future question times.

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