A tax windfall of almost half a million dollars will help Oamaru Hospital's owners, Waitaki District Health Services Ltd, pay a GST bill when it writes off a $5 million suspensory loan in December.
When the hospital was built, the Government granted the Waitaki District Council-owned hospital company a five-year, $5 million suspensory loan.
The loan was extended for a further three years to the end of this year, and will be written off by the Government, but Waitaki District Health Services will have to pay 12.5% GST on the loan, adding up to $625,000.
Company chairman George Berry said yesterday that the GST bill would be partially paid by a $458,281 tax refund it would receive this year after an amendment to the Income Tax Act last December made charitable companies managing hospital exempt from tax, backdated to April 1, 2001.
The company had made provision to pay the rest of the GST bill.
The company has reported its half-year result to the end of December, recording a post-tax surplus of $240,613, compared to $236,537 in the same six months to the end of 2006.
That placed the company in a sound position. Income for the half year totalled $5.162 million, including $4.269 million from the Otago District Health Board for health services provided to Waitaki district residents.
The company also has the Waitaki District Health Services Trust, which holds grants and bequests made for health services in the district.
The trust has investments totalling just over $2 million, about $440,000 being added since June last year.
The trust recorded a six month surplus of $369,357. Mr Berry said one of the highlights of the half year was taking over radiology services from the Otago board in December.
‘‘Apart from some initial difficulties in relation to transition of staff, the change over was satisfactorily accomplished,' he said.
New X-ray and ultrasound equipment had been installed and the trust had purchased a CT scanner.
The hospital's maternity unit - the only fully staffed maternity unit continuing to operate in Otago and Southland district hospitals - continued to be well supported.
Staff had been maintained during the six months, although there continued to be recruitment and retention issues in the area of medical officers and physiotherapists.
‘‘This is a national problem for district hospitals,'' Mr Berry said.
