Minns Government to amend Wakehurst MP's Northern Beaches Hospital (Voluntary Contract Termination) Bill
Photo: Wakehurst MP Michael Regan, Federal MP for Mackellar Dr. Sophie Scamps and Pittwater MP Jacqui Scruby attended a strike by Nurses and Midwives at Northern Beaches Hospital in NSW on March 24, 2025, as part of a broader series of rolling stoppages at Healthscope hospitals. The strike, led by the NSW Nurses and Midwives' Association (NSWNMA), aimed to pressure Healthscope, the private operator of the hospital, to address issues like staffing ratios, pay, and working conditions. This was the second such action in recent months - another was held on November 5 2024
The Minns Labor Government announced on Friday June 20 it will introduce amendments to the Member for Wakehurst’s Private Member’s Bill this week, which would enable the NSW Government, if required, to terminate the Northern Beaches PPP contract as if a hospital operator default had occurred.
See May 2025 report: Wakehurst MP Michael Regan Tables the Northern Beaches Hospital (Voluntary Contract Termination) Bill
This follows the appointment of receivers to the parent entities of Healthscope, which the NSW Government considers a default under the contract.
'It is the preference of the NSW Government that agreement on the future control and operation of the Northern Beaches Hospital can be reached with Healthscope and its receivers.
However, the Government must be able to act decisively to avoid a prolonged dispute for members of the Northern Beaches community, staff working at the hospital and for NSW taxpayers.
If a mutual agreement is not reached, the proposed amendments would give the Health Minister the power to issue a termination notice to Healthscope. In addition, the Treasurer would have the power to ensure that compensation negotiations occur in a reasonable time frame and to appoint an independent person to determine compensation if agreement cannot be reached.' the Government said in a released statement
'The alternative to this approach is for the NSW Government to exercise its voluntary termination rights. Under the PPP contract signed by the Liberal Party, this would see compensation to Healthscope’s receivers and lenders run into the hundreds of millions of dollars.
The government’s legislative approach will ensure there are no windfall gains to Healthscope or its receivers.
'Discussions between the Northern Beaches Hospital Taskforce, Healthscope and its receivers remain ongoing, and we are hopeful of a productive outcome.'
'NSW Health will continue to work closely with Healthscope to ensure that patient safety and continuity of services at the Northern Beaches Hospital will not be compromised as negotiations continue.'
The Minns Labor Government passed legislation earlier this month banning any repeat of the failed Northern Beaches PPP model in acute care, ensuring that the Liberals’ privatisation of acute public hospitals never happens again. The Private Public Partnership Prohibition Bill made important amendments to the Health Services Act to prohibit governments from entering into a Northern Beaches-style arrangement to build or operate an acute public hospital.
“We’ve made it clear from the very beginning that we don’t support this sort of arrangement.'' he said on Friday June 20
“This is a complex contract but the community deserves certainty.
“The other mob may have created this mess, but we are going to be the ones to clean it up.”
Treasurer Daniel Mookhey said:
“This is not a decision we take lightly.
“But we are now in a position where the Liberal’s privatisation mess means Healthscope’s receivers are negotiating the future of the Northern Beaches Hospital.
“While an agreed exit from this failed PPP contract remains my preference - I must ensure the government has the right to step in and protect the Northern Beaches community from this dragging on.
“I thank the local Independent Members Michael Regan and Jacqui Scruby for their passion and advocacy.”
Independent MP Michael Regan said;
"This is a huge win for our community because it gets us one big step closer to getting the hospital back into public hands, where it belongs!''
When tabling the Bill he stated:
''Healthscope has been very careful to specify that they want to hand back the hospital "under the provisions of the deed". Under the project deed there are two ways to terminate the Northern Beaches Hospital contract: one, operator default termination, or two, voluntary termination. The operator default termination would occur if the conditions of the deed had been breached. There is not clear evidence for that and, in any case, it would be a very lengthy and contested process. Of that I have no doubt. The voluntary termination option says that the State will pay to the operator the voluntary termination payment in respect of the project in accordance with the termination payment schedule. The voluntary termination payment schedule is schedule 12 to the deed and is not publicly available. However, we know that Healthscope is very keen to terminate the agreement on this basis.
Healthscope's chief executive has said the company does not expect to profit by handing over its Northern Beaches Hospital to the Government but is reported as admitting "removing its most troubled asset from its portfolio of 38 facilities helps pave the way for a sale of the debt-laden company".
It is important to keep in mind that Brookfield, the owner of Healthscope and one of the biggest private equity firms in the world, has over $1 trillion of assets under management. It could choose to inject more funds into Healthscope but has not. We know that the New South Wales Government owns the land and contributed $600 million to the build. No other details about ownership of the physical assets are public.
Crucially, we know that the payout to the operator under voluntary termination is a barrier to the New South Wales Government taking the hospital back into public hands. The bill removes this barrier by specifying that no compensation will be payable on the voluntary termination of the contract by the State. In doing so, it moves us a step towards what the people of the northern beaches deserve and what the staff at the Northern Beaches Hospital deserve—a not‑for‑profit local public hospital.''
Pittwater MPJacqui Scruby says the decision to use legislation to speed up Northern Beaches Hospital negotiations proves the power of independents.
The bill gives the NSW Government a legal exit from the controversial public-private partnership (PPP) with Healthscope, so it can bring the troubled hospital into public hands.
In parliament, Mr Regan described the contract as “an unfixable failure” and called for a “transparent, voluntary and fair exit.”
The government’s proposed amendments will allow the Minister for Health to issue a termination notice if negotiations fail, to avoid a drawn-out legal dispute and the public being liable for hundreds of millions of dollars.
Ms Scruby said she strongly supports this move.
“The Member for Wakehurst’s bill puts power back in the hands of the public, where it belongs,” said Ms Scruby.
“Residents deserve better than a hospital in receivership. We can’t sit by and endure prolonged negotiations that risk unfair costs and risk patient safety.
“The hospital has failed us in its operations and is now failing to meet the expectations of the community in facilitating it being taken into public hands. Mr Regan’s legislation and the Government’s amendments clean up failings of the original deed negotiated by the former Liberal government.”
Ms Scruby has called for public accountability throughout the transition.
“This is a step forward for our community. But, we also need the process to be transparent. The public must be told what the hospital is worth, how any compensation is calculated, and when we can expect to see improved governance, staffing and patient care.
“I commend Michael Regan for taking the lead on this, and I welcome the government’s recognition that the prolonged negotiations or excessive costs to the taxpayer are indefensible.
“Independents deliver. Michael Regan has proposed a smart, legislative solution to make sure that our community and the taxpayer aren’t taken for a ride.”