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Legislative Assembly for the ACT: 1996 Week 3 Hansard (28 March) . . Page.. 757 ..

Opposition members interjected.

MRS CARNELL: I think that the Independents and the Greens are actually interested in this report and what the background of it is - or I assume that they are.

Despite more than a year of negotiations, in March 1987 the relationship between the VMOs and the Commonwealth Government broke down, to the point that the VMOs withdrew their services for public patients for eight months. In November 1987, ACT Health - still under the Labor Commonwealth Government - reached an agreement which included the most extraordinary document, a deed of understanding. This deed was alleged to give VMOs rights in perpetuity to choose their own contract arrangements, sessional or fee-for-service; and to have annual indexation, which had a cumulative effect of increasing income well beyond the salary increases of ordinary workers.

The deed was "tested" in 1990 when the contracts were renegotiated, and the only changes made were to the arrangements in the fee schedules. Every VMO working at that stage was able to choose to continue working on the contract of their choice. The managers were finding it very hard to manage under these arrangements, and VMO costs were escalating. This, of course, was under Mr Berry, and under Mr Humphries as well. In 1993, when the three-year contracts once again came up for renewal, the department decided to seek fundamental changes to the contract arrangements to ensure that managers did have the capacity to make decisions about the types and quantity of services required. Obviously, this was a fundamental challenge to doctors who had worked under the other contracts for over 10 years.

Mr Wood: Yes. They overcame it all right, did they not?

MRS CARNELL: When the new contracts were offered by the then Labor Government under Mr Berry's auspices, they were rejected once again, and the ACT was again plunged into dispute.

Mr Wood: It was a challenge. They mastered it. They got on top of it all right.

MRS CARNELL: I thought you were the one who did not do this, Mr Wood. I am sorry; I just must have forgotten.

This resulted in VMOs withdrawing all services for eight weeks. So, under Mr Berry, we had another dispute, and VMOs withdrew all services for eight weeks. The essential problem was the legality of the deed of understanding. The whole Canberra community will remember the absolute trauma for families of patients. They were placed in the position of having to manage emergency evacuations, additional costs and family separation. In November 1993 the department took the matter to the Australian Industrial Relations Commission, but the VMOs did not accept the recommendations of the commission, and the strike continued. In December 1993 the Australian Medical Association took the matter of the deed to the Supreme Court. The court found that the deed did not bind the parties in the way that it had been utilised since 1986, and the

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