Tony Abbott has come under pressure from Warringah independent, Zali Steggall, over the Government’s decision to approve the sale of the new Northern Beaches Hospital, and 42 other Australian hospitals, to an obscure company in the Cayman Islands.
Steggall, an Olympic skier turned barrister, and Alice Thompson, the independent candidate for Mackellar on the Northern Beaches of Sydney, have written to Treasurer Josh Frydenberg and Shadow Treasurer Chris Bowen to ask them to intervene in the $5 billion takeover of Healthscope by Brookfield. Tony Abbott has not responded to concerns over the sale of the hospital or responded to requests to comment.
Brookfield, a Canadian asset management group, has track record of tax avoidance. Its entities have been identified in the Panama and Paradise papers data leaks and, in Australia, it pays little corporate income tax as its assets are structured through trusts and profits are siphoned offshore to tax havens.
Steggall and Thompson join Greens candidate Julian Burnside – who is running against Treasurer Josh Frydenberg in the Melbourne seat of Kooyong – in opposing the deal.
“It is not in the national or public interest for Northern Beaches public hospital services to be onsold to a foreign company, run-for-profit, and operated out of a tax haven,” says the letter from Steggall and Thompson. “Over $2 billion of taxpayers’ money has been invested in the new hospital.”
The new hospital services a population of 256,000, write the two independents, noting there was a complete lack of community consultation over the deal. Indeed, as the contractual documents between the NSW state government and Healthscope remain a secret it is impossible to know what assurances have been given regarding the provision of essential health services.
Moreover, as Cayman Islands is a secrecy jurisdiction, the identity of the directors of the entity which controls the hospitals in Australia remains a secret. Every state and territory has a Healthscope hospital.
According to takeover documents filed with the Australian Securities Exchange (ASX) by Healthscope, there is a complex structure of companies controlling the hospitals which involves four Australian companies owned 99 per cent by a company incorporated in the Cayman Islands, Brookfield LP (BCP VIG Holdings LP).
The directors of at least two of the Australian companies controlled by the Caymans entity are financial services people without hospital experience. The boards are the same.
As part of the financing arrangements for the transaction, Healthscope will be busted up, its $2 billion worth of hospital property sold to two foreign property groups and leased back by the operators.
What the takeover documents, filed recently with the ASX show, is a tricky bidding structure with three Australian entities owned by a Caymans entity. The Australian companies have identical directors: three from the Eastern Subs of Sydney, one from New Jersey and another from Toronto.
The maze of companies is typical of Brookfield financial engineering. The accounts for another Brookfield entity in Australia analysed earlier this year, BIPH, show $920 million was sent to the Bermuda parent company over two years while no income tax was paid.
If the deal proceeds, 43 Australian hospitals will be transferred from a visible, ASX-listed company whose directors are publicly accountable to a tax haven controlled obscure structure operated by financial engineers rather than hospital people. $2b spend of taxpayers money for one hospital alone (NBH) – a monopoly asset in a critical sector – ploughed in … only for it to end up controlled by an entity whose directors we don’t even know in the Caribbean.
This article was published by Michael West on the 1st of May 2019.