Tasmania will receive $730.4 million following the successful conclusion of negotiations with the Federal Government for a new, fully funded, 10-year deal for the Mersey Community Hospital.

The new deal will also see ownership of the Mersey return to the Tasmanian Government, giving long-term security for the hospital’s future and removing the uncertainty which surrounds it every federal election cycle.

“The $730 million payment, which will be fully exempt from GST calculations, is the biggest single cash transfer from the Federal Government to the Tasmanian Government ever, and is more than twice the amount provided for the Royal Hobart Hospital Redevelopment,” Premier Will Hodgman said.

“The Mersey is a crucial part of our health system and it is critical North West health infrastructure. It is important that we have been able to deliver the long-term certainty for the hospital the North West community deserves. This is what we promised to fight for and that is what we have delivered.

“This agreement demonstrates the ability of my Government to get the best possible deal by working with the Federal Government while always fighting hard for Tasmania’s interests.”

Health Minister Michael Ferguson said that the funds will be quarantined for use at the Mersey, with no ability for them to be siphoned off to other uses, or other parts of the state.

“These funds will be quarantined by the Government for use at the Mersey hospital, and invested through the Tasmanian Public Finance Corporation (Tascorp), with annual draw-downs by way of a special dividend to fund the operation of the Mersey hospital.

“Based on the calculations of the Treasury Department, the funds will provide for 10-years of operating costs of the Mersey on a low-return scenario (around 4 per cent per annum), and 12-years of operating costs under a high-return scenario (6.6 per cent).

“Once the funds are exhausted, the Mersey will be funded from a combination of Tasmania’s annual health budget, and the national arrangements which provide activity based funding.

“I would like to thank all those who played a part in getting this successful outcome, including Latrobe Mayor Peter Freshney and the North West mayors, Senator Jonathan Duniam and the Tasmanian Liberal Senate team, and Federal Health Minister Greg Hunt. Many said this was an impossible task but we have delivered,” Minister Ferguson concluded.

It is expected that arrangements to formalise the new agreement will be finalised over coming weeks, with the $730.4 million to be paid to Tasmania prior to June 30 this year.

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