The Nationals leader, Michael McCormack, promised to keep an aged care centre open in the seat of his ally Damian Drum before an “unprecedented” $400,000 government grant was paid to the nursing home’s administrators.
Guardian Australia can reveal that in October the deputy prime minister joined Drum to meet the Murchison Community Action Group, in Drum’s Victorian seat of Nicholls, and promised community members the DP Jones centre would be kept open with federal government assistance.
While a spokesman for the deputy prime minister said “no commitments were made” by the deputy prime minister during the 31 October meeting, this was disputed by multiple sources present at the meeting.
A month after the meeting, the government paid administrators of the home a $400,000 grant over a three-month period.
Following the undertaking, Drum also told the community the centre was “staying open, end of story”, but last week it closed after the administrators were unable to secure a takeover.
Warwick Gregory, the chair of the Murchison Community Action Group who was in the meeting with McCormack, said the community had been “devastated” that the commitment had not been fulfilled.
“You take a man for his word, that’s the old country saying, isn’t it? It might be different in the city, but if you say you are going to do something in the country, you do it,” Gregory told Guardian Australia.
“We are devastated – it rips the guts out of the town.”
The involvement of McCormack in the centre’s fate comes as the Nationals leader fends off internal criticism about his leadership style following a spill against him earlier this month aimed at restoring Barnaby Joyce to the role.
Drum is seen as a key ally of McCormack and was offered the position of deputy speaker following a reshuffle of Nationals’ positions in the aftermath. However, he missed out after Labor successfully nominated renegade MP Llew O’Brien – one of McCormack’s chief critics – for the role.
In a further sign of the political sensitivity surrounding the centre’s closure, Drum has conducted negotiations with another operator, Honeysuckle Regional Health, to try to keep the centre open.
Honeysuckle had submitted a formal expression of interest to the administrator about taking over the centre but was knocked back because it was dependent on government funding and not seen as financially viable.
Despite this, following discussions and an in-principle agreement between the Honeysuckle chief executive, Barry Hobbs, and Drum, Hobbs attended the centre last week to try to keep it open.
This led to the court-appointed administrators refusing him access to the site given the centre is now being liquidated according to the requirements of the Corporations Act.
Hobbs said he had been hopeful that “when the paperwork was completed” with the federal government for further funding, the centre could remain open under his company’s operation.
“I turned up on the Monday when the facility was closing to see if we could keep it open, but the liquidator took control and said no,” Hobbs told Guardian Australia.
“It was my understanding that the federal government would be able to stop [the closure] through my conversations with the federal government before I went down there.”
Asked who he had been negotiating with, Hobbs said: “I was going through Drum, but he was going to the department.”
Minister for aged care Richard Colbeck has said discussions with “potential future operators” for the centre were continuing, while Drum has said he is still working on trying to save the centre.
Gregory said the decision was now in the hands of the department, describing the situation as a “terrible mess”.
“It is now up to the department; the politicians can only do a certain amount.”
A spokesperson for McCormack confirmed that McCormack had attended the meeting, but denied he had made a commitment to keep the centre open.
“While no commitments were made by the deputy prime minister, the federal government is working with the administrator to find an alternative provider for the facility.”
As reported by Guardian Australia, the Department of Health has told the Senate the decision to provide financial assistance to the Murchison centre was made by the government, not the department.
“This was a decision of government. The department has not provided funding of this specific nature before,” the department said in response to a question on notice.
Labor has criticised the process that led to the grant, saying the government “must come clean” on why this centre received “unprecedented funding” while other nursing homes across the country at risk of closure have not.
