ACT government signed off on work to draft Calvary takeover law a year before it was announced

Cabinet gave permission to start drafting legislation two months into negotiations with Calvary over the hospital's future, with no intention to introduce the bill while the government was trying to strike a deal with the Catholic hospital operator, documents show.

The ACT's cabinet gave permission for legislation to start being developed to compulsorily acquire the Calvary Public Hospital Bruce almost a year before the government made the announcement.

This happened just months into the negotiations with Calvary about the hospital's future but it was not intended to be introduced while the government was trying to reach an agreement, documents have revealed.

ACT Health Minister Rachel Stephen-Smith this week told a federal Senate hearing the government started drafting legislation in March 2023.

But documents, released under freedom of information, show the government had actually started to plan to draft legislation in May 2022.

The government had considered introducing legislation in late 2022 and this was included in the government's program, but this was later removed.

Documents reveal the government wanted to ensure the legislation was drafted in case negotiations with Calvary over the future of the hospital site had failed.

Ms Stephen-Smith publicly announced the government would be taking over the hospital on May 10. This was only two days after Calvary had been informed.

The government made an "in-principle decision" that Canberra Health Services would take over the hospital in March 2023 and this was signed off by the territory's ministers in early May.

Calvary expressed shock at the ACT government's decision and described it as an "unexpected and unilateral decision" by the government.

But the government has always maintained it told Calvary compulsory acquisition was an option if negotiations failed.

The government had a contract with Calvary, which had 76 years remaining, for the organisation to run the Bruce public hospital. The government is building a new hospital in Canberra's north and had to negotiate with Calvary about its role in the future hospital.

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A ministerial briefing for the Health Minister from June 16, 2022 sought agreement for legislation to be developed as early as October 2022, "depending on the outcomes of the negotiations with Calvary".

"This timeline will ensure legislation can be drafted in a timely manner following negotiations, if required," the briefing said.

Ms Stephen-Smith provided feedback, saying: "The point of getting policy approval for legislative drafting was to commence drafting now, not wait and see. I'm keen to get an early look at what a bill might look like."

The briefing said it was just one option being considered.

The territory wanted to own the land on which the new hospital was built.

"Acquisition of the crown lease by special legislation is only one option being pursued by the territory relation to a new northside hospital," the briefing said.

"Early negotiations with Calvary have indicated that special legislation would not be Calvary's preferred approach and would not circumvent the requirement for them to seek approval from their relevant church governance (including the Vatican)."

Calvary eventually agreed to allow the ACT government to retain ownership over the land but did not agree with a new, shorter contract with the government.

The Catholic organisation would also need to seek permission from the Vatican in any case and this approval scuppered an earlier deal between the government and Calvary in 2010.

The ACT government took control of the hospital on July 3. It is now called North Canberra Hospital.

An ACT government spokesman confirmed the government had initially intended to introduce legislation in late 2022, depending on the outcome of the negotiations.

"The ACT government initially proposed drafting special legislation for the Spring Program 2022, but this was later removed from the program through written agreement between the Chief Minister and the Minister for Health because negotiations with Calvary were ongoing," the spokesman said.

A letter from Chief Minister Andrew Barr to Ms Stephen-Smith showing the bill had been removed from the 2022 legislative program was included in the freedom of information documents.

The spokesman said the government had written to Calvary national chief executive Martin Bowles in April 2022 to say the government would consider legislation to acquire the hospital.

The drafting of the actual legislation did not begin until 2023, the spokesman said.

"Following cabinet approval for CHS to be the operator of the northside hospital in March 2023, the government began drafting legislation," he said.

"In March 2023 ACT Health, with assistance from the ACT government solicitor, provided instructions to the Parliamentary Counsel's Office on the structure, content and intent of the bill.

"In early May 2023, the ACT government made the final decision to build the new northside hospital on the Bruce site and to introduce special legislation."

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