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Legislative Assembly for the ACT: 2003 Week 1 Hansard (19 February) . . Page.. 199 ..

MS DUNDAS: I move:

That this Assembly calls on the ACT Government to table financial information in the Assembly by 1 April 2003 relating to Totalcare identifying:

(a) the total revenue received from ACT Government clients;

(b) the total revenue received from clients other than the ACT Government;

(c) the total cost of providing services to ACT Government clients; and

(d) the cost of providing services to clients other than the ACT Government;

with all figures for each of the three business segments of Totalcare presented separately.

Mr Speaker, Totalcare was established in 1990 by the Follett government, originally providing laundry, safe waste disposal and sterilisation services for the ACT public health sector. Totalcare then branched out into road and infrastructure maintenance, property management, facilities management, and fleet management. As part of its expansion, the corporation moved into private sector work, presumably with the goal of achieving economies of scale.

Since taking office in this Assembly, I have been repeatedly approached by local business people who have competed against Totalcare for contracts with both government and private businesses and have been underbid by Totalcare. If it were clear that Totalcare was observing the principles of competitive neutrality, yet returning a profit to the ACT community, there would be no call for questioning the bidding decisions of Totalcare. However, the fact that Totalcare has been consistently making a loss since it was established means that questions do need to be asked.

Since Totalcare moved into providing linen and other services to the private sector, which includes New South Wales hotels and hospitals, its financial losses have snowballed. Last year, the government injected an extra $5 million into Totalcare in the form of a capital injection and upped ACT government contracts by $10 million. More than 20 per cent of Totalcare's businesses are services to non-ACT government entities, so at least some of this money that has been injected into Totalcare could be attributable to private contracts done at uneconomic rates. Without the full information on Totalcare's accounts, how can we be sure?

Totalcare's losses are of great concern because it does appear probable that the business is bidding at below cost for private contracts. There is also a possibility that ACT government clients are being overcharged to make up part of the shortfall. However, the business is losing money overall, so it is possible that the subsidy for loss-making private companies is coming from direct cash injections from the public purse rather than through excessive charges for government services. But these are all at the moment just possibilities and questions that I pose. The motion that I have moved today seeks to get this information so that we can know for sure how Totalcare is operating and how public money that Totalcare uses is being spent.

I have been pursuing this issue for some time. In the estimates process over July-August 2002 I asked both the Treasurer and the chief executive of Totalcare which parts of the businesses were losing money and whether the private sector contracts were profitable. Unfortunately, as is the process with estimates, the chief executive of Totalcare was evasive and the Treasurer only conceded that the linen business was losing money.

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