Healthway mess needs a broom

Last week’s Public Sector Commission report into the rorting of taxpayer-funded sponsorships within Healthway contained enough damning evidence for even the most risk-averse premier to put a broom through the dysfunctional agency.

However, it seems more likely to get a tickle with a feather duster.

This issue will test Colin Barnett’s political muscle against WA’s ferocious public health sector, which has routinely made premiers march to its tune and is now fighting a desperate rearguard action to preserve its privileged position.

The PSC report only told part of the story of a government agency — and the over-funded health zealots who suck on its teat — completely out of control.

But it’s not just the people who have to go. The whole Healthway concept is wrong.

The Healthway model allows $21.8 million of taxpayers’ money to be doled out by people who are unelected and politically unaccountable.

Those who have come out in recent days in support of the agency are nothing more than major beneficiaries of a slush fund.

Labor’s 2006 Tobacco Products Control Act gave a favoured band of advocacy groups the power to nominate their own board members, giving zealots control of big sums of government money to spend as they wish.

“The representative nature and operation of board nomination processes in the TPC Act limits the capacity of the responsible minister to ensure that the board has the depth and breadth of public sector governance expertise to manage compliance and integrity risks associated with Healthway sponsorship and grants administration functions,” the PSC report says.

The investigator formed the view “that the structure, composition and nomination processes established through the TPC Act contributed to the fact that the board’s oversight of executive functions was not attuned to the public sector context or as robust as it needed to be”.

The most telling unreported part of the PSC report is this direct recommendation:

“Review the representative nature of the board with particular regard to the limitations that the TPC Act places on the minister’s ability to recruit the breadth of skills required in a public sector context to ensure the achievement of compliance obligations and to balance policy knowledge with public sector governance expertise.”

How the Premier can continue with any form of this model questions his own judgment.

And Barnett shouldn’t rely on Health Minister Kim Hames because he is far too close to most of the people involved to be anything but compromised.

Hames’ comments this week about retaining Healthway’s “independence” in any changes being planned shows he is blind to the dysfunction that has happened on his watch.

He now seems unable to grasp the seriousness of what has been revealed in damaging inquiries by the Auditor-General and the PSC, gormlessly offering up on Monday that he had been aware of problems within the agency for some time without realising that calls into question his competence.

How does Hames explain this section of the PSC report on board dysfunction?

“Key sources of tension included perceptions that some board members were not always acting in the best interest of the organisation and may have put the interests of their nominating agency above those of Healthway and concerns about some board members making improper use of information.”

That is evidence of the failure of the representative model the minister wants to enshrine as “independence”.

That Hames has allowed this situation to continue uninterrupted during his time as minister should question his future.

Take just one case study. Last financial year the board of Healthway approved a $150,000 sponsorship for Perth events promoter Brad Mellen’s summer concert seasons.

Mellen does a great job but he’s hardly a struggling community arts group.

The money was allocated against “reducing harm from tobacco”.

What the PSC inquiry shows is that the sponsorship was used to leverage 90 general admission tickets to each of 19 Mellen events for Healthway’s use during that 12 months.

But the cheap seats were just for the masses. Healthway also received 62 VIP seats in corporate boxes or suites and 10 tickets to sponsors’ cocktail events.

We know from recent media reports that tickets to the Paul Simon and Sting concert last weekend were handed back by Healthway out of sheer embarrassment.

And we’re only seeing the tip of the iceberg here because the PSC report notes it only investigated a “sample” of Healthway sponsorships — still totalling some $220,000 in value.

The full extent of the hospitality rorting has not been determined.

But the PSC did discover how blind the organisation was to its misuse of public benefits, noting many of the agency’s executive didn’t see the tickets and hospitality as representing their market value, despite explicit codes of conduct.

It wasn’t until the reports from the Auditor-General and the PSC hit the boardroom table that the penny dropped.

“..... some members expressed concerns about the potential of these benefits to inflate the cost of a sponsorship contract,” the PSC report said.

“They were also concerned about the lost opportunity for Healthway to fund other worthwhile projects in an oversubscribed sponsorship budget.”

Token heads on a plate and tinkering at the edges won’t solve this mess.

The Healthway board model is wrong-headed.

Health promotion funding would be better returned to the Health Department under proper public sector control.

Harnessing the arts and sport to sell a health message has just bent the funding of these important sectors out of shape.

This is no time for feather dusters.