In February FIRB released a letter from Alpha
which indicated their intention to enter the aged care marketplace
and capitalise on Sun's experience in this area. I also learned that
Alpha owned and operated pathology laboratories which were included
in Sun's purchase. Both nursing homes and pathology laboratories are
licensed from within Dr Wooldridge's departments jurisdiction. Dr
Wooldridge had been challenged on this issue at least twice and had
declined to comment in the basis that hospitals were state matters
and he had no jurisdiction. Following Sun's entry Wooldridge had
announced his plans to revolutionise our health system using step
down facilities, a Sun speciality. I wrote to point this out to FIRB
a criticism I had written of the FIRB
process, its consequences and the way in which loopholes had been
2 March 1998
Mr A Hinton
Foreign Investment and Review Board (FIRB)
The Treasury Building
Parkes Place Your fax 06 263 2940
Dear Mr Hinton,
I am writing to express my thanks to you, Margaret Kyburz and your staff for the courteous manner in which you have dealt with my submissions and with my FOI application. Thank you too for not charging for this.
I sincerely trust that you will not take my criticisms of the FIRB process and what happened as criticisms of you or your staff.
I would like to point out to you that Pathology laboratories which Sun was purchasing de facto control of are licensed by the Health Insurance Commission. I have been unable to determine whether any of the facilities purchased were nursing homes but the correspondence from Sun indicates quite clearly its intention to run aged care nursing homes in Australia. From the content of the letter it seems that the subacute step down facilities which our minister plans to use to "revolutionise" health care in Australia will be run in nursing homes. Nursing homes are licensed by the federal department of health and family services. Both fall within the portfolio of the minister for health. It surprises me therefore that you did not advise the Health and Family Services of the intention to operate nursing homes, and the Health Insurance Commission of these purchases and ask their comment -- unless of course it was known that all parties were already informed. Was Sun's entry part of the governments plan for health care. In a letter to me in 1994 the Director of Accountability from what was then called the Commonwealth Department of Human Services and Health indicated that a nursing home operator must be approved. "This approval involves checks of propriety, honesty, financial capacity and previous experience in the industry." and "The checks we undertake extend to responsible officers of the applicant company, such as Directors, who are involved in the decision taking relating to the business." I would have expected him to have a very decided opinion.
As indicated in the attached overview your decision places Australian health regulatory authorities in an impossible position. It is almost impossible for them to withhold licences once you have allowed them in. This loophole in our regulations allows potential criminals into our health system. It is a matter which I have pressed with politicians since 1993. In this instance it is as if the government have themselves used the loophole to bring Sun into Australia in spite of its track record disregarding issues of probity because of its own political priorities
Thank you again for your kind consideration and for dealing with the correspondence yourself.