Australia’s peak doctors’ group says the government should recover taxpayer funds from PPE suppliers who provided defective equipment at the height of the pandemic.
Guardian Australia revealed last month that the former government handed a PPE contract worth more than $100m to a small, relatively unknown online retailer, whose previous experience involved selling robot vacuum cleaners, massage guns, bedding and air fryers.
The company, Australian Business Mobiles (ABM), sourced 50m masks and 7m gowns via intermediaries based in the low-tax jurisdiction of Cyprus, which sourced most of the PPE from Chinese manufacturers.
The Cyprus intermediaries recorded about $40m in profit and the Australian government was left with 46m unusable masks, because masks from five of the seven manufacturers were deemed to be defective and deliveries were made on mixed pallets, making it difficult to separate compliant and noncompliant products.
The health department is yet to initiate any process to recover the money paid to ABM. A spokesperson said the government is still exploring avenues for cost-recovery.
“The Department has and is exploring options for viable cost recovery or replacement of non-compliant products from ABM,” a spokesperson said. “There are challenges with undertaking this as the Department holds the contractual relationship with the supplier and not manufacturers where the refund or replacement products would need to be sourced.”
Speaking generally, the AMA president professor, Steve Robson, said the government should seek to recover costs from PPE suppliers who provided defective products during the height of the pandemic.
The issue of PPE procurement is being explored during the current Covid inquiry. Robson said there was a need to be better prepared for future pandemics, but said it was important to acknowledge the pressure governments were under to secure supplies during the crisis.
“While the distribution of PPE should have been better, we need to acknowledge that Australia was competing with other nations for PPE during global shortages and supply chain issues as a result of the pandemic,” he said.
The AMA Queensland president, Dr Maria Boulton, said general practitioners in particular had struggled to get appropriate PPE – including N95 masks – during the pandemic.
“We were getting these [masks] that we couldn’t use, because they weren’t proper N95,” she said. “I’m not sure who they bought them from or how they placed the order.”
Asked whether the federal government should pursue costs from PPE suppliers who provided unusable equipment, Boulton said: “As any consumer, if you receive goods that weren’t what was promised, any consumer would do something about it, right?
“I do know at the time it was really difficult to order anything, but I think it all would have been different if we were able to produce them in Australia and secure those lines.”
Boulton was speaking generally, not referring specifically to the ABM deal.
Both the health minister, Mark Butler, and the Covid inquiry panel’s chair, experienced public servant Robyn Kruk, have confirmed the current probe will examine PPE procurement.
The government suspended normal procurement rules to source PPE generally during the height of the pandemic, instead conducting its due diligence on suppliers using taskforces set up within the health and industry departments.
The arrangements were designed to speed up procurement during the intense global competition for PPE supplies.
The Guardian is not suggesting any of the parties involved in the $100m ABM deals engaged in wrongdoing. The gowns sourced by ABM had no issues and were compliant.
ABM has not responded to questions about the contract.
