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Legislative Council - Fifty-Fourth Parliament, First Session (54-1)
2018-11-07 Daily Xml
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KordaMentha

The Hon. I. PNEVMATIKOS (15:14): My question is to the Minister for Health and Wellbeing. What experience do liquidators and administrators KordaMentha have in managing emergency departments and ambulance ramping?

The Hon. S.G. WADE (Minister for Health and Wellbeing) (15:14): The honourable member's question repeats a refrain of a member in another place, which questions the relevant skills of KordaMentha in relation to the task that the government has engaged KordaMentha for in terms of financial recovery. The fact of the matter is that KordaMentha, like a whole range of consultancy firms, engages in a whole range of industries. KordaMentha has extensive experience in forensic investigation services and extensive experience in turning around businesses in financial difficulty. KordaMentha's engagement provides a much-needed business focus perspective not achieved in other previous health consultancies.

What do I mean by that? The former Labor government was more than willing to engage consultancies. I would remind the honourable member that the former Labor government spent almost $80 million on consultancies contracted to the big four accountancy firms—

The Hon. R.I. Lucas: Eighty million?

The Hon. S.G. WADE: Eighty million—and the McKinsey group in the five years to the end of 2016-17. What did Labor achieve with those consultancies? The Auditor-General reported that between 2015 and 2017 alone, the actual net savings from Labor's Transforming Health were a cost of $47 million. Labor spent tens of millions of dollars on consultancies on Transforming Health as part of a savings strategy and yet we actually went in the wrong direction. We lost money; we lost $47 million in two years.

The government has the task of fixing Labor's mess. We not only have to make savings to eliminate the underlying budget overspend, we have to make up the ground that Labor lost in their term of government. In that regard, given that the budget overspend for the Central Adelaide Local Health Network is around $300 million, the government is very serious about both an organisational recovery for the CALHN network and also a financial recovery. We have engaged KordaMentha for stages 1 and 2 of that process and we appreciated the fact that the CALHN health network needed financial expertise as part of its financial recovery.

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