WEBVTT - Inside the ‘hostile takeover’ of Meals on Wheels

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<v Speaker 1>So, Rick, you have been reading people's emails and letters lately,

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<v Speaker 1>specifically an apology letter that was sent by a senior

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<v Speaker 1>government bureau crap. So can you read it to me?

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<v Speaker 2>I can, because I have a copy of it, and

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<v Speaker 2>it's quite extraordinary. It was written by the former Assistant

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<v Speaker 2>Secretary in the Department of Health and H. K. Russell Herald.

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<v Speaker 2>Everyone calls him Rusty, and he was apologizing for his

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<v Speaker 2>role in this enormous and strange saga, which involved a

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<v Speaker 2>failed plot to take over Meals on Wheels by a

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<v Speaker 2>private company, a consulting firm that was receiving millions of

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<v Speaker 2>dollars in government funding.

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<v Speaker 1>Rick Morton is a senior reporter at the Saturday Paper.

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<v Speaker 1>The letter in front of him from Rusty is to

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<v Speaker 1>the chair of Meals on Wheels. In it, Rusty apologizes

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<v Speaker 1>for his behavior towards Meals on Wheels staffers, saying it

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<v Speaker 1>fell well short of the standards expected of someone like him.

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<v Speaker 2>He goes on to say, I also noted my emotional

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<v Speaker 2>state as it was at the time in relation to

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<v Speaker 2>this project meant I was in effect not fit for duty.

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<v Speaker 2>This is something I have since reflected on and something

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<v Speaker 2>for which I must and will be held accountable for

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<v Speaker 2>as a senior public servant. My regret is not identifying

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<v Speaker 2>this at an earlier point in time.

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<v Speaker 1>From Schwartz Media, I'm Ruby Jones. This is seven am today,

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<v Speaker 1>Rick Morton on the failed plot to take over Meals

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<v Speaker 1>on Wheels, the private company and the millions in government money.

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<v Speaker 1>It's Tuesday, February eighteen. Take me back to the start

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<v Speaker 1>of this story wreck, before Rusty got involved, before he

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<v Speaker 1>had to make this apology for his emotional state. Where

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<v Speaker 1>does this begin?

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<v Speaker 2>I mean, things always seemed better at the beginning, don't they,

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<v Speaker 2>Because Rusty was one of the kind of cohort of

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<v Speaker 2>senior public servants who were charged with you know, home service,

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<v Speaker 2>age care reform, meal delivery reform, and way back when

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<v Speaker 2>in twenty nineteen twenty, when the Royal Commission into Age

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<v Speaker 2>Care reports back, the Department decides that Meals on Wheels

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<v Speaker 2>is not going to be able to compete well in

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<v Speaker 2>this new future because lower behold. You won't be surprised

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<v Speaker 2>to learn that there's a lot of marketization happening and

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<v Speaker 2>a lot of competition in age care because we privatized everything.

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<v Speaker 2>So the solution they thought was to get meals on

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<v Speaker 2>wheels into a competitive position. The problem was that the

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<v Speaker 2>department and some people within the department really didn't like

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<v Speaker 2>meals on wheels. They hated dealing with them, they hated

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<v Speaker 2>giving money to them because they were so disparate. There

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<v Speaker 2>were different peak organizations in the different states. Some of

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<v Speaker 2>them did frontline service deliveries, some of them did not.

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<v Speaker 2>And then, of course you've got each individual service which

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<v Speaker 2>is run by community grassroots organizations, but are often hosted

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<v Speaker 2>and subsidized by local councils who don't want to do

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<v Speaker 2>it anymore. And so the government decided to give a

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<v Speaker 2>whole bunch of money directly to a private consulting firm

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<v Speaker 2>that had even less experience in meals delivery, Miles Morgan Australia.

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<v Speaker 1>Okay, so tell me a bit about this company, Miles Morgan, Australia.

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<v Speaker 2>The director of Miles Morgan Australia for the entirety of

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<v Speaker 2>this project is Luxman Gonnaratnam. He actually bought the company

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<v Speaker 2>in twenty twenty two after serving as its chief executive

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<v Speaker 2>since twenty nineteen. And they were given their first contract

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<v Speaker 2>to kind of look at a feasibility study, and you know,

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<v Speaker 2>come up with a bottle for how meals on wheels

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<v Speaker 2>could deliver meals at an efficient price. But I think

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<v Speaker 2>one thing that's important to know here for context is

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<v Speaker 2>that we now know that Miles morg in Australia had

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<v Speaker 2>likely had bigger designs than just this immediate project. They

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<v Speaker 2>had an eye to, you know, a much longer horizon

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<v Speaker 2>about what they can do in a meals on wheel space,

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<v Speaker 2>and they needed strategic relationships to do this right. And

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<v Speaker 2>what are the strategic alliances that Luxban Gunnaratnam form in

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<v Speaker 2>this sense was the then CEO sometimes general manager of

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<v Speaker 2>Newcastle Meals on Wheels, a man called Damien Isaacs. Mylesborg

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<v Speaker 2>in Australia essentially cements their strategic alliance with Damien Isaacs

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<v Speaker 2>by appointing him as a future Fit brand ambassador from

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<v Speaker 2>July twenty twenty three. The position came with this bonus

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<v Speaker 2>salary for him and apparently his wife of about one

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<v Speaker 2>hundred and seventy thousand dollars and they were both red hot,

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<v Speaker 2>red hot for this, you know the scope of what

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<v Speaker 2>they were able to do with government backing to completely

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<v Speaker 2>transform meals on wheels. And when they get this contract

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<v Speaker 2>extension both Gunneratum and Isaacs, you know, they're jumping for

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<v Speaker 2>joy basically, and there's emails between the two of them

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<v Speaker 2>where they're actually planning to fly to Brisbane where there's

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<v Speaker 2>a conference where a bunch of meals on wheels people

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<v Speaker 2>are attending. And it also happens to be Rusty the

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<v Speaker 2>Health bureaucrat Rusty Herald's birthday. And so Isaacs writes this

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<v Speaker 2>email to Gunneratanum on July seventeen, twenty twenty three, and

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<v Speaker 2>he says, we'd as brother, we are getting Rusty smashed.

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<v Speaker 2>And then Gunna Ratnam, who is a man at least

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<v Speaker 2>in his forties, if not older, he responds to that

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<v Speaker 2>email going, yes, I told him to brace himself as

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<v Speaker 2>the Brown Brothers were in town and brackets much like

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<v Speaker 2>the Blues Brothers, but far better.

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<v Speaker 1>Right, Yeah, I suppose The next question is, I mean,

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<v Speaker 1>what do they do next? Do they get Rusty smashed?

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<v Speaker 2>Well, I mean, and I need to be fair to

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<v Speaker 2>Rusty here because Rusty, you know, we have no evidence

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<v Speaker 2>that Rusty knew about this plan. And at the same

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<v Speaker 2>time they're doing all of this. Miles Morgan, Australia have

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<v Speaker 2>spent about one hundred thousand dollars on legal advice through

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<v Speaker 2>a law firm to help ISAACS with what Newcastle Meals

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<v Speaker 2>and Wheels subsequently said under new management was a hostile

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<v Speaker 2>takeover attempt of the New South Wales peak body Meals

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<v Speaker 2>and Wheels New South Wales of the board because Newcastle

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<v Speaker 2>Mills and Wheels CEO ISAACS was a member of the

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<v Speaker 2>board and according to this timeline of events, you know,

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<v Speaker 2>there was influence being brought to bear on the board

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<v Speaker 2>to try and shape it to their vision.

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<v Speaker 1>Right. Okay, So you have this company, Miles Morgan, which

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<v Speaker 1>has won a government contract to transform Meals on Wheels,

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<v Speaker 1>but at the same time they're also getting legal advice

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<v Speaker 1>on how to take over Meals on Wheels what's been

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<v Speaker 1>described as a hostile takeover. So how do they go

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<v Speaker 1>on that?

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<v Speaker 2>Well, there was yeah, not well, but they tried. They tried.

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<v Speaker 2>It was kind of like a Game of Thrones thing

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<v Speaker 2>was happening for a control of the future of Meals

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<v Speaker 2>on Wheels, including the control of the brand and the logo.

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<v Speaker 2>So Gunnar Ratnam, you know, he's possibly we don't know,

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<v Speaker 2>but possibly using taxpayer funds from the contract to pay

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<v Speaker 2>a law firm to get legal advice about how to

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<v Speaker 2>take over Meals on Wheel State Peak Body and then

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<v Speaker 2>gets that same law firm to get advice about collapsing

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<v Speaker 2>or winding up Meals on Wheels Australia, transferring it to

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<v Speaker 2>a company limited by guarantee, and then saying, hey, do

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<v Speaker 2>we get to keep the state trademarks?

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<v Speaker 1>I mean, Rick, what's being attempted here is audacious.

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<v Speaker 2>At the very least, it is audacious, and as my

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<v Speaker 2>editor said, it is a finely threaded needle. And there's

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<v Speaker 2>no better example of that than what happened at the

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<v Speaker 2>Whitehase City Council. So there is a service in Victoria

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<v Speaker 2>which is threatening to be shut down because the local

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<v Speaker 2>council and Whitehorse City Council doesn't want to run it anymore.

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<v Speaker 2>You know, the Department realized they needed someone to come

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<v Speaker 2>in and save Whitehorse because I'd have some vulnerable Australians

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<v Speaker 2>without meal delivery services, which is part of the age

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<v Speaker 2>care safety in it right, Miles Morgan Australia are the

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<v Speaker 2>preferred people to go in and save that service. The

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<v Speaker 2>government just wants to give them money to go and

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<v Speaker 2>take over it, but they can't because they're not Amalth

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<v Speaker 2>Home Support Package contract holder. So what they do is

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<v Speaker 2>they say, hey, Newcastle Meals and Wheels, can you be

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<v Speaker 2>the host of this service? And so Newcastle Mills and Wheels,

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<v Speaker 2>when Damian Isaac was still the CEO, said sure, let's

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<v Speaker 2>do it. And that's what happened for a short while.

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<v Speaker 1>Okay, So in reality though, it was Miles Morgan Australia

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<v Speaker 1>who was running the whole operation at white Horse.

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<v Speaker 2>That's exactly right. They had control of the systems, control

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<v Speaker 2>of the buildings, they were planning the runs, the meal

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<v Speaker 2>delivery of everything, but they couldn't do it officially because

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<v Speaker 2>they weren't a holder of a Commonwealth Home Support Package

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<v Speaker 2>and a proved provider of one of those contracts, and

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<v Speaker 2>so they had to, you know, essentially trick everyone into

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<v Speaker 2>thinking that Newcastle Meals on Wheels was the service provider

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<v Speaker 2>when they had almost nothing to do with it. And

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<v Speaker 2>of course then that became a difficult deceit to uphold.

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<v Speaker 2>When a pesky senator by the name of Jenet Rice,

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<v Speaker 2>a Green senator at the time, starts asking questions and

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<v Speaker 2>demanding to come and have a look.

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<v Speaker 1>And so what happens when she gets there, I love

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<v Speaker 1>this part of it. That's after the break. So Rick

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<v Speaker 1>Miles Morgan is secretly running meals on Wheels in white

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<v Speaker 1>Horse and Senator Janet Rice has just started asking questions

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<v Speaker 1>about this and has decided to visit the site. So

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<v Speaker 1>tell me about her trip there.

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<v Speaker 2>So the Department knows at this point that the white

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<v Speaker 2>Horse Mills on Wheels site is being run by Miles

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<v Speaker 2>mog and Australia. They claim that they didn't know they

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<v Speaker 2>were as heavily involved as they were, which then necessitates

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<v Speaker 2>this Rube Goldberg machine cover up between Miles Borg and

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<v Speaker 2>Australia and the Department with the reluctant acquiescence of Newcastle

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<v Speaker 2>Meals on Wheels, where they say, all right, Jenet Rice

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<v Speaker 2>is coming, milesin bog in Australia, will send home all

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<v Speaker 2>of the staff who have been propping up this service

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<v Speaker 2>and will just send the Newcastle Meals on Wheels. CEO

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<v Speaker 2>Damien Issax, he's still coo at this point to take

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<v Speaker 2>Senator Rice around, do a tour of the site, and

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<v Speaker 2>you know, we'll give him a script to tell him

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<v Speaker 2>what he can and can't say, so we don't tip

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<v Speaker 2>it anyone off. And a Newcastle Meals and Wheels are like,

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<v Speaker 2>what Hang on a second, this isn't right, And they

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<v Speaker 2>actually asked during a board meeting there was a phone

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<v Speaker 2>call with Rusty Herald who was dialed in and they said,

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<v Speaker 2>why do we have to lie to Senator Rice on

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<v Speaker 2>the thirtieth January this is twenty twenty four that you

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<v Speaker 2>know we've been out there running the White House service

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<v Speaker 2>when we haven't. It's been Milesbaugh in Australia. And the

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<v Speaker 2>file note that they made says Russell said the department

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<v Speaker 2>were not aware that MMA were in the White Horse

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<v Speaker 2>as much as they were, and they don't want that,

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<v Speaker 2>and so they MMA are now being managed and will

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<v Speaker 2>not be used after the eighth of March twenty twenty four.

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<v Speaker 2>So essentially they agree that they'll send Damien Isaacs with

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<v Speaker 2>a script that was written by Luxhman Gunner Atnam and

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<v Speaker 2>the script literally says to any Meals on Wheels person

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<v Speaker 2>there that day that if you're asked who you work

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<v Speaker 2>for in the first instance, you say Damien Isaacs or

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<v Speaker 2>Newcastle Meals on Wheels, and only if you're pushed do

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<v Speaker 2>you say Miles Morgan Australia.

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<v Speaker 1>I mean this is outrageous. Rick, you got to help

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<v Speaker 1>people to lie to a senator like this.

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<v Speaker 2>Well apparently you can. And they essentially got away with

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<v Speaker 2>it because they split it up like they You sent

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<v Speaker 2>Damien with Senator Rice, and they sent her adviser off

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<v Speaker 2>with another Meals and Wheels member, And of course Newcastle

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<v Speaker 2>Mills and Wheels, who tried to warn about this visit

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<v Speaker 2>being faked anyway, were so concerned by what they saw

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<v Speaker 2>and what actually happened on the ground that they actually

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<v Speaker 2>they rang Senator Rice afterwards to say, heng On, what

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<v Speaker 2>you thought you saw was a complete fabrication. None of

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<v Speaker 2>what you saw today was real. It was a facade

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<v Speaker 2>to try and trick you into thinking that this was

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<v Speaker 2>being managed by us, and it's not. It's a private consultant.

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<v Speaker 2>And then at Senator estimates on February fifteenth, so only

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<v Speaker 2>you know. Less than a month later, Briany Mitchell, who's

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<v Speaker 2>the new chair of Newcastle Meals and Wheels in her team,

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<v Speaker 2>wrote to First Assistance Sectary THEA Connolly in the Department

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<v Speaker 2>of Health and said we were gobsmacked to hear that

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<v Speaker 2>Miles Morgan Australia have been provided a new contract, a

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<v Speaker 2>new contract for one point six million dollars to quote

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<v Speaker 2>unquote close out the transition of white Horse meals on

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<v Speaker 2>wheels to Newcastle. And they had sunk at the department

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<v Speaker 2>that's had sunk many millions of dollars into this project

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<v Speaker 2>already and they had almost nothing to show for it.

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<v Speaker 2>And so suddenly miles Borg in Australia gets one point

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<v Speaker 2>six million dollars to do a document handover and a

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<v Speaker 2>transferred to business as usual, which is yeah, it's unfathomable.

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<v Speaker 2>So the Australian National Order Office is investigating all of

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<v Speaker 2>this and they're actually due not too far away from

0:12:30.400 --> 0:12:32.280
<v Speaker 2>now actually to hand down their report.

0:12:33.160 --> 0:12:35.680
<v Speaker 1>So rick at the end of all of this, where

0:12:36.200 --> 0:12:39.360
<v Speaker 1>does it leave meals on wheels? Because despite whatever the

0:12:39.400 --> 0:12:42.840
<v Speaker 1>department might have thought of the service, it is essential

0:12:42.920 --> 0:12:45.600
<v Speaker 1>for so many people. I actually used to go out

0:12:45.640 --> 0:12:48.120
<v Speaker 1>with my Umar and my upah when I was young

0:12:48.160 --> 0:12:50.599
<v Speaker 1>and we would do meals on wheels together, and I

0:12:50.679 --> 0:12:53.240
<v Speaker 1>did and I remember the people who we gave the

0:12:53.240 --> 0:12:57.439
<v Speaker 1>meals to and they're often lonely, elderly people who really

0:12:57.480 --> 0:13:00.440
<v Speaker 1>rely on the service. So I mean, we'll meals and

0:13:00.440 --> 0:13:02.320
<v Speaker 1>wheels continue.

0:13:02.400 --> 0:13:04.839
<v Speaker 2>That is a thank you for making that observation because

0:13:05.080 --> 0:13:07.120
<v Speaker 2>really the biggest value in meals and Wheels is the

0:13:07.160 --> 0:13:09.520
<v Speaker 2>time they spend with the elderly. It's incidental time, but

0:13:09.559 --> 0:13:12.040
<v Speaker 2>it's still time. It's not like they just fling the

0:13:12.640 --> 0:13:16.240
<v Speaker 2>frozen meal through the kitchen window. They might do a

0:13:16.280 --> 0:13:18.000
<v Speaker 2>little bit dusting whether they're there, or sit down and

0:13:18.040 --> 0:13:20.920
<v Speaker 2>have a cup of tea. It's part of the service, right,

0:13:21.559 --> 0:13:23.800
<v Speaker 2>and you can't replace that with a full blown market

0:13:23.920 --> 0:13:26.559
<v Speaker 2>and I think that apartment did recognize that, and I

0:13:26.600 --> 0:13:29.440
<v Speaker 2>think perhaps that's why they got so overly invested in

0:13:29.480 --> 0:13:33.040
<v Speaker 2>this thing to the detriment of meals and Wheels. Funnily enough,

0:13:35.360 --> 0:13:37.480
<v Speaker 2>you know, people want that kind of level of service.

0:13:37.480 --> 0:13:40.320
<v Speaker 2>They don't want another. You know, NDOS comes along and

0:13:40.360 --> 0:13:43.679
<v Speaker 2>then everything gets marketized and then suddenly you know, no

0:13:43.679 --> 0:13:47.120
<v Speaker 2>one's doing anything that they're not getting paid for, whereas

0:13:47.160 --> 0:13:51.400
<v Speaker 2>meals and Wheels was fundamentally different to that. And you know,

0:13:51.440 --> 0:13:54.280
<v Speaker 2>there's a difference between supporting someone to adapt to a

0:13:54.360 --> 0:14:00.680
<v Speaker 2>new world and forcing them out of operation because you

0:14:00.720 --> 0:14:01.680
<v Speaker 2>don't like the model.

0:14:04.160 --> 0:14:06.720
<v Speaker 1>Quick thank you for your time, Thank.

0:14:06.559 --> 0:14:11.040
<v Speaker 2>You Ruby for your volunteer service as a youth. I

0:14:11.160 --> 0:14:11.600
<v Speaker 2>loved it.

0:14:21.040 --> 0:14:23.960
<v Speaker 1>Also in the news today, the Reserve Bank of Australia

0:14:24.080 --> 0:14:26.960
<v Speaker 1>is widely expected to cut interest rates today as the

0:14:26.960 --> 0:14:30.000
<v Speaker 1>bank holds its first meeting of the year. The official

0:14:30.040 --> 0:14:32.240
<v Speaker 1>cash rate has been at a thirteen year high of

0:14:32.320 --> 0:14:35.400
<v Speaker 1>four point three five percent since November twenty twenty three,

0:14:35.760 --> 0:14:38.360
<v Speaker 1>and most economists are predicting a cut of point twenty

0:14:38.400 --> 0:14:43.920
<v Speaker 1>five percentage points to four point one percent. And the

0:14:44.000 --> 0:14:46.640
<v Speaker 1>US Secretary of State says Ukraine and Europe will be

0:14:46.680 --> 0:14:50.200
<v Speaker 1>part of any quote real negotiations to end Russia's war

0:14:50.240 --> 0:14:54.280
<v Speaker 1>in Ukraine, attempting to downplay Europe's concerns of being cut

0:14:54.360 --> 0:14:57.120
<v Speaker 1>out of initial talks between Russia and the United States

0:14:57.160 --> 0:15:00.240
<v Speaker 1>set to take place in Saudi Arabia this week. Maco

0:15:00.320 --> 0:15:03.520
<v Speaker 1>Rubio said a negotiation process has not yet begun in

0:15:03.560 --> 0:15:07.240
<v Speaker 1>earnest and Ukraine and other European countries will be brought

0:15:07.240 --> 0:15:10.960
<v Speaker 1>into the fold as talks advance. I'm Ruby Jones. This

0:15:11.040 --> 0:15:12.760
<v Speaker 1>is seven am. Thanks for listening.