Health giant under microscope for charity tax status

The charity status of a private hospital operator has drawn scrutiny from the Health Services Union. (Dan Himbrechts/AAP PHOTOS)

A union boasting some 110,000 members urges the government to scrutinise possible exploitation of tax loopholes by a troubled private healthcare giant.

The Health Services Union has written to Treasurer Jim Chalmers and Health Minister Mark Butler arguing Healthscope is misusing salary packaging arrangements designed for not-for-profits.

The scandal-plagued, second biggest Australian private hospital operator, formerly backed by private equity behemoth Brookfield, went into receivership in May for its financial debts totalling about $1.6 billion.

But the organisation is under fire for restructuring into a charity to stay afloat, allowing it to access tax exemptions for fringe benefits provided to employees.

The Health Services Union says staff would have to hand back most of their salary packaging benefit. (Mick Tsikas/AAP PHOTOS)

"Healthscope wants workers to hand over 90 per cent of their salary packaging benefit so the company can pay down corporate debt," the union's senior official Kate Marshall said.

Under the proposed scheme, some 20,000 workers entitled to salary packaging worth up to $11,660 a year would be forced to return 90 per cent of the amount to the firm in-receivership.

The arrangement could cost Australian taxpayers up to $200 million annually in lost revenue, the union claimed, describing the financial plan as a "corporate cash grab".

"Taking money directly from workers' pockets to rort the tax system is an appalling and unacceptable plan," Ms Marshall said.

"This is an unprecedented grab for millions of dollars taxpayers' money - allowing this to go ahead would set a shocking precedent for workers and the federal budget."

Government has struck a deal to buy the Northern Beaches Hospital, putting it back in public hands. (Dan Himbrechts/AAP PHOTOS)

The federal government has previously ruled out a bailout for the beleaguered provider, which operates 37 hospitals across Australia.

But Commonwealth Bank stepped in to provide a $100 million lifeline to receivers attempting to sell the business.

On Tuesday the NSW government reached an initial agreement to buy back the Northern Beaches Hospital in Sydney for $190 million, restoring it to public ownership.

The transition is expected to occur in mid-2026 and comes after the death of toddler Joe Massa, who died in 2024 after spending three hours in the emergency department waiting for care.

A sustained campaign led by his parents Elouise and Danny Massa prompted the NSW government to pass "Joe's Law", banning future private-public hospital partnerships.