On 31 July 2007 I announced the Commonwealth's decision to re-establish the Mersey Hospital as a community-controlled and Commonwealth-funded public hospital.
Subsequently the Premier of Tasmania, Mr Lennon, offered to sell the hospital to the Commonwealth, including land, buildings, equipment and liability for staff salaries and entitlements, for a consideration of $1, subject to certain conditions.
After positive discussions between the Minister for Health and Ageing, Mr Abbott, and his Tasmanian counterpart, Ms Giddings, I am pleased to announce that the Commonwealth will proceed with the proposed purchase.
I have written to Mr Lennon confirming this, and advised that the Commonwealth wishes to proceed with the transfer of ownership as soon as possible, and no later than 1 November 2007. I have provided to the Premier a draft Heads of Agreement document which would set out the terms and conditions for the transfer and subsequent operation of the hospital. I envisage that the Tasmanian Government will continue to operate the hospital on the Commonwealth's behalf, on a full reimbursement basis, until the proposed Community Trust takes over.
I have also confirmed that the purchase and Commonwealth direct funding for the Mersey Hospital will not affect Tasmania's entitlements under current and future Australian Health Care Agreements, and that Mersey-related funding will be quarantined from Commonwealth Grants Commission processes. This is conditional on the funding windfall to Tasmania being spent on health services for Tasmanians, especially but not exclusively in the north and north-west of the State where needs are very acute.
I welcome the willingness of the Tasmanian Government to accept the Commonwealth's determination to proceed with its Mersey Hospital plan, and I look forward to Mr Lennon's response in the very near future.