Tony Abbott Is Under Scrutiny for Selling Hospitals to a Cayman Islands Company

Recently, Tony Abbott is facing a great deal of scrutiny due to his decision to sell hospitals to a company based in the Cayman Islands. The biggest source of the pressure came from Zali Steggall, a Warringah independent candidate.

The Concern

Steggall’s concern is that Tony Abbott approved selling 43 different Australian hospitals, including the Northern Beaches Hospital which is new, to a company from the Cayman Islands that is very obscure. The company, Brookfield was approved to take over Healthscope for $5 billion.

Within the financing arrangements, Healthscope will get divided. The $2 billion of hospital property that it currently owns would be sold to two separate foreign property groups and the operators would then lease it back. The documents for the takeover show a complicated bidding structure involving three entities that a Cayman Islands entity owns.

Taking Action

Steggall became a barrister after a career as an Olympic skier. She and Alice Thompson, the Mackeller independent candidate, wrote a letter detailing their concerns. Specifically, the letter was addressed to Josh Frydenberg, the Treasurer, and Chris Bowen, the Shadow Treasurer, and asked them to stop this takeover. Julian Burnside, the Greens Candidate who is running against Frydenberg for Melbourne’s Kooyong seat, also opposes the deal.

Brookfield Has a Tax Avoidance History

Brookfield is actually an asset management group from Canada, but Steggall, Thompson, and others have expressed concern over the company’s history of tax avoidance. This company is known for utilizing tax havens to its full advantage. Brookfield and its entities were also in both the Paradise Papers and the Panama Papers.

Within Australia, the company pays minimal corporate tax. The company gets away with this low tax via structuring of assets in trusts with profits being sent to offshore tax havens. These hopeful Australian representatives do not want a company that does not pay its fair share of taxes in Australia to benefit from the hospitals in the area.

Opponents See It as Wasted Taxpayer Money

The opposition to a company benefiting from Australian citizens via ownership of hospitals without paying its fair share of taxes is not the only concern expressed by opponents. The letter written by Steggall and Thompson also points out that selling the Northern Beaches public hospital services to any foreign company is not in the interest of the public or the country.

They emphasized their point by mentioning that it operates from a tax haven and is run for profit. The two further point out that more than $2 billion of money from taxpayers was invested in the new hospital. By selling the hospital to a company operating in a tax haven, the taxpayers do not get to see the benefits of that massive investment. Steggall and Thompson also disparaged the lack of consultation with the community before taking action with the deal. As it serves an area with 256,000 residents, community input is key.

Even More Concerns

The list of concerns related to Abbott’s decision to sell the hospital to a company operating in a tax haven continues. The contractual details for Healthscope and the government of NSW are not known, meaning that there is no way to know if or what provisions were given related to essential health services.

There are also concerns about the status of the Cayman Islands as a secrecy jurisdiction. Because of this, there would be no method of determining who controls the Australian hospitals or even who is a director of the entity. This does not just apply to the new hospital in NSW either as there are Healthscope hospitals in each territory and state of Australia.

Sources:

https://thenewdaily.com.au/money/finance-news/2019/05/01/hospitals-sale-healthscope-cayman-islands/