Hague Kevin: Questions for Oral Answer — Questions to MinistersText is incorporated into the Bound VolumeHague Kevin: Questions for Oral Answer — Questions to Ministers[Sitting date: 19 February 2014. Volume:696;Page:16057. Text is incorporated into the Bound Volume.]1.KEVIN HAGUE (Green) to theMinister of Health: Does he think fraud in the publicly funded health sector is serious and if so would he investigate any allegations of fraud if they were raised with him?Hon TONY RYALL (Minister of Health): Yes and yes. In relation to the dispute between the Southern District Health Board and the Dunedin general practitioner organisation South Link Health this matter has been under dispute for over a decade. It involves an argument over $5 million or $6 million of savings generated through laboratory and pharmaceutical contracts during the 1990s and whether there was an agreement on how those services would be reinvested back into health services. This has remained a complex dispute. The district health board has advised me that it has received advice that it is best to pursue this as a commercial matter but it has also referred the issue to specialist forensic accountants to see whether any illegality was involved.Kevin Hague: When did the Minister first become aware of concerns that South Link Health may have misused public funds in excess of $5 million that were intended for patient services but were instead spent on other things without authorisation?Hon TONY RYALL: To the best of my recollection and the advice that I have received I became aware of that issue in November 2013 as a result of a management letter from the Auditor-General. On the wider issue of the dispute I have been aware of that for quite some time.Kevin Hague: Is the Minister quite sure that he was not made aware of it in 2010 and briefed on the legal advice that had been received by the Southern District Health Board that suggested there was the possibility of fraud?Hon TONY RYALL: I have no recollection of that and we have got no record in our office of such a briefing.Kevin Hague: Is it not true that even though he knew that the Southern District Health Board had legal advice that fraud may have occurred he as Minister personally discouraged the district health board from taking this allegation to police in 2010?Hon TONY RYALL: I do not have any recollection of being aware of it so I cannot have actively discouraged the district health board. What I would have required of course would have been for the district health board to act on whatever advice it had. I am advised that that letter of November 2010 was not clear-cut. It actually says there could be elements of fraud or there could be elements of commercial dispute.Kevin Hague: Is it not true that even though the district health board had repeatedly asked for assistance from the Ministry of Health on this matter beginning in December 2010 no ministry action was taken at all until it became clear that the Office of the Auditor-General was going to refer to potential fraud in its report on the Southern District Health Board in 2013?Hon TONY RYALL: That is not the information I have received. My understanding was that the matter was considered by the audit and compliance people at the Ministry of Health and that there were negotiations that I think the ministry was involved in trying to facilitate in 2011 but that did not go anywhere.Kevin Hague: What interactions did the Minister have with the Office of the Auditor-General over its management letter to the district health board in 2013 and what was he seeking?Hon TONY RYALL: When I received that management letter I then asked for a meeting with the Office of the Auditor-General to discuss its concerns further and to get a better understanding of the information and concerns that it had. I was able to discuss those with the chair of the district health board and as he advised the Health Committee today my strongest advice to him was that if it believed there was sufficient evidence of fraud then it should refer that to the Serious Fraud Office.Kevin Hague: What dealings has he had with South Link Health since he was made aware of these allegations of potential fraud in 2010?Hon TONY RYALL: I have no recollection of being made aware of those and there is no record of that. What I can say to the member is I have met South Link Health on a number of occasions since it is a leading general practitioner organisation.Kevin Hague: Why given that a massive question mark ought to have remained in his mind about a potential fraud did he in June 2012 describe the executive director of South Link Health Professor MurrayTilyard as having “great entrepreneurialism and innovation” and being a “prophet in his own land”?Hon TONY RYALL: The member can sort of cast as many aspersions as he likes and make allegations. When I became aware of the management letter on the issue of fraud I met as soon as I could with the Auditor-General and I have made it very clear to the chairman of the Southern District Health Board that if he believes there is sufficient evidence of fraud then that must be referred quickly to the Serious Fraud Office. And as the member will know from my earlier answer it has been referred to forensic auditors for that very purpose.Kevin Hague: I seek leave to table a page from the New Zealand Doctor website. It is protected behind apaywall so most members will not have access to it. It is entitled “South Link groups in growth phase” and it refers to the Minister’s interaction as in those quotes.Mr SPEAKER: Leave is sought to table that particular document that is not easily available to members. Is there any objection to that being tabled? There is none. It can be tabled.Document by leave laid on the Table of the House.Hon Annette King: In this meeting with the Auditor-General did he seek at any time to have any mention of the word “fraud” removed from the Audit Office report to the select committee?Hon TONY RYALL: It is not the responsibility of the Minister of Health to direct the Auditor-General in what they do. [Interruption] No no I have no recollection of asking them to remove the word “fraud”. The member can cast as many stones as she likes but actually she was the Minister at the time that most of this contract stuff was happening.Hon Annette King: Point of order Mr Speaker—Mr SPEAKER: Order! I have a point of order which I want to hear in silence.Hon Annette King: I seek leave to show that in fact this problem started in 1995-96—Mr SPEAKER: Order! [Interruption] Order! That is using the point of order system simply to continue a political debate. The member has got a question coming up shortly. She should use that opportunity with supplementary questions to continue the debate.