A tax bill put the owner and operator of the Oamaru Hospital and Waitaki health services into debit in the last financial year.
Waitaki District Health Services Ltd, wholly owned by the Waitaki District Council on behalf of the community, had to pay $555,555 GST on a $5 million suspensory loan originally provided by the Government to set up the hospital and which has now been written off.
That tax bill resulted in the company recording a $417,383 deficit in the 2008-09 financial year.
If it had not had to pay the GST on the loan, the company would have had a 2008-09 surplus of $138,173, compared with a surplus of $89,258 the previous financial year.
Yesterday, the company's chairman, George Berry, delivered the annual report to the council's meeting.
The $5 million loan was made by the Government when the hospital was built 10 years ago.
It was originally for a five-year term, but was extended for three years before being written off.
Outside the council meeting, Mr Berry said the company had obtained several legal opinions to determine whether it had to pay the GST on the $5 million loan.
They indicated it had to.
However, the company over recent years had started to make provision for the GST bill and was able to pay it out of cash reserves without affecting its health services, he said.
The hospital now had land and buildings worth $8.7 million, which were debt-free.
It had retained earnings of $6.6 million and total equity of almost $10.5 million.
In addition, the company had the Waitaki District Health Services Charitable Trust which had assets of $3.336 million.
The trust last financial year had received "a substantial boost" with an anonymous donation of $1 million, the donor asking it be used for research and development of rural health initiatives.
