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From the Archives, 1971: Victoria’s hospitals in ‘grim’ debt crisis

Last night Mr. L. Swinden, manager of the Royal Melbourne Hospital – Victoria’s largest public hospital – sad the RMH’s debt alone would exceed $2 million.

Figures from the Metropolitan Public Hospitals’ Association show that a further 27 out of 35 member hospitals would have a combined overdraft of $10.4 million and a combined deficit of $5.25 million.

The manager of the Preston and Northcote Community Hospital (Dr. I. A. G. Brand) said that the Commonwealth Trading Bank had told him yesterday that it would not increase the hospital’s overdraft.

Dr. Brand said the hospital had an overdraft of $40,000. It sought, three weeks ago, an overdraft of $650.000.

“The increase was necessary to sustain hospital services until December,” he said.

Dr. Brand said the Commonwealth Bank had told him it would only lend an amount equal to one month’s subsidy from the Government.

He said the situation could become general in Victoria.

The $25 million represents a spectacular leap from the total debt for Victorian hospitals of $10.56 million at the end of last financial year.

The Hospitals and Charities Commission, revealing the debt in its annual report last December, called for urgent Federal Government action to prevent the burden from becoming insupportable.

The 116-strong Country Hospitals’ Association puts its overall debt at $3.3 million, while figures released for a proportion of hospitals for the aged show a current debt in excess of $1.5 million.


The secretary (Mr. B. Cahill) said last night: “It is obvious from our survey that some hospitals will not be able to continue.”

The secretary of the Association of Victorian Homes and Hospitals for the Aged (Mr. A. De Forest) said institutes were starting to turn patients away through lack of funds.

The surveys do not include debts for hospitals caring for the mentally ill.

Nor do they take into account the extra burden of the six per cent national wage rise, the variation in the State incremental payment scheme, new penalty rates for nurses nor expected variation to nurses’ wages.

Some country hospitals have already indicated that without urgent Government help they will be unable to meet wages and salaries.

In Melbourne tomorrow delegates for the aged and country hospitals will hold two separate conferences to force their claims on the Government.

Mr. Cahill said country hospitals would ask the Government to increase grants immediately to cover known deficits.

Mr. Cahill said his association did not see the answer in increased hospital lees.

“The Government is expected to make a statement on increases in fees by April 1 but even an increase will not help in the coming financial year.”



Mr. Cahill said he was speaking for 102 rural general hospitals, 10 base hospitals and four aged homes.

Mr. De Forest said he could not predict the outcome of his association’s meeting.

“But the situation is grim,” he said.

Mr. De Forest, who is also the manager of the Grace McKellar Hospital for the Aged, in Geelong, said the hospital had 234 beds.

“We also have a waiting list of 800 – 250 of them urgent cases.

“We have been told by the Hospitals and Charities’ Commission that we cannot open a wing with 50 additional beds because of a lack of staff.

“And we cannot afford additional staff at present.”

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