Dr Kerryn Phelps, AMA President, with Fran Kelly, ABC TV '7.30 Report'

Dr Wooldridge is now a paid consultant of the college.

Another doctors' representative group, the Doctors Medical Association, and the Opposition are asking the auditor-general to investigate.

Michael Wooldridge stands by the decision on policy grounds and has this afternoon instructed his legal council to begin defamation proceedings over the issue.

Political correspondent Fran Kelly reports from Canberra.

FRAN KELLY: Two weeks ago it was former defence minister Peter Reith in the spotlight over the children overboard incident.

Today it was another former cabinet minister causing the government grief - former health minister, Michael Wooldridge.

STEPHEN SMITH, SHADOW HEALTH MINISTER: Is it not the case that the former health minister, only one week before the last election was called agreed to give the Royal Australian College of General Practitioners $5 million for a new Canberra building?

Is it also the case that the $5 million is money originally allocated for asthma management and rural and regional health?

PM, if your government believed that a building in Canberra represented a correct priority for health expenditure, why did your government keep this whole deal secret and make no public announcement before or during the election campaign?

FRAN KELLY: Those facts were revealed in Senate Estimates three weeks ago when Health Department officials outlined a plan for collocation of key doctors groups within one building in the prestigious Parliamentary Triangle.

ANDREW STUART, DEPARTMENT OF HEALTH: I'm informed that the former minister gave a speech on 6 December 2000, as early as 6 December 2000, where he floated the potential benefits of establishing a GP precinct in which GP organisations would be gathered together to promote greater cohesion in the industry.

FRAN KELLY: But he didn't sign off on it until one week before the election.

And we now know details of the deal weren't widely known even within the government.

STEPHEN SMITH: PM, when were you or your office first told either orally or in writing about Dr Wooldridge's GP house funding proposal?

JOHN HOWARD, PM: Mr Speaker, I have no recollection of having been informed of this at the time the original decision was taken and a quick check done this morning, and I say it's a quick check in the time available, would suggest that that recollection is correct.

But part of getting a full report from departments is to establish who knew what and when, and when I have the result of that I will be very happy to take further questions, Mr Speaker.

FRAN KELLY: The government's own Budget papers show that the $5 million for the college of GPs building came from money earmarked for asthma research and a rural health outreach program in this financial year.

The Minister for Health, Kay Patterson, says the programs were under spent and rather than lose the money to consolidated revenue it was decided to reallocate it, though today the government was at pains to guarantee that the money for asthma and rural health was still there.

SENATOR KAY PATTERSON, HEALTH MINISTER: The government intends to support the asthma management platform and the medical specialist outreach program in full.

JOHN HOWARD: I want to give an assurance, Mr Speaker, that no less money, not a dollar or a cent less, will be allocated to the relevant asthma and medical specialist programs as a result of the contract offered to the Royal Australian College of General Practice.

STEPHEN SMITH: It's only when the heat of question time goes on the PM, that he hides behind the skirt of a report, says he knows nothing about something which occurred five months and one election ago, and which was considered by Senate Estimates two weeks ago and then seeks to solve the problem by saying: 'Don't worry about the money for asthma or for the regions. We'll spend the money twice', in direct contradiction of his own Budget papers.

FRAN KELLY: Though today, John Howard was sounding decidedly like he might not spend this money at all.

JOHN HOWARD: I do not rule out withdrawing the Commonwealth's offer to the Royal Australian College of General Practice, Mr Speaker.

FRAN KELLY: In fact, it's hard to find many fans of the idea of a government-funded building for doctors.

DR KERRYN PHELPS, AUSTRALIAN MEDICAL ASSOCIATION (AMA) PRESIDENT: If there was $4 million earmarked for the specialist outreach program that's exactly where it should go.

I have spoken to doctors involved in that program and they are suffering because of lack of security in their funding.

$4 million would go a long way to providing more security for that important work.

FRAN KELLY: Mind you, the AMA hasn't been a big fan of Michael Wooldridge all around.

Neither was it part to the GP precinct discussions.

It already has its own building just a block or two away from the proposed site.

But the contract between the government and the Royal College of GPs says the government funds are dependent on at least two other national doctors organisations renting the space, including the Australian Divisions of General Practice.

Today, it looks like the deal may have fallen at the first hurdle, that group issuing this statement rejecting the invitation to rent a room.

DR JULIE THOMPSON, AUSTRALIAN DIVISIONS OF GENERAL PRACTICE: No, we're not at this point in time.

It meant increased resourcing for us, increased rental for us and we really don't think, at this point in time, the benefits of that are guaranteed enough for us to take that risk.

FRAN KELLY: The Rural Doctors Association is the other major GPs group.

It hasn't received a formal request to join the Royal College of GPs in the new building but it's let it be known it's very happy where it is as a tenant of the AMA's.

The building would be a commercial venture for the college of GPs and privately other doctors groups question the idea of the scarce health dollar subsidising what is essentially a property venture.

And there's other questions being asked too.

SENATOR CHRIS EVANS, SHADOW DEFENCE MINISTER: Does the Minister support Dr Wooldridge making this decision immediately before the election where he retired from politics and does she support Dr Wooldridge then getting a lucrative consultancy from the same lobby group immediately after the election?

What action will you as Minister take to reverse this outrageous rort?

FRAN KELLY: Michael Wooldridge and the Royal Australian College of GPs deny the implications of that question.

In fact Dr Wooldridge says he's been scrupulous about not misusing his former position for paid employment and says the recommendation for the grant came from the Department of Health and was given the OK by the Minister for Finance.

Today the former health minister has instructed his legal council to investigate defamation proceedings.

And he's not the only one issuing instructions.

The Opposition has written to the auditor-general asking him to investigate the terms of the deal and the AMA wants the auditor-general to look at all of Dr Wooldridge's decisions for the six months prior to the election.

DR KERRYN PHELPS: We don't know what we'll find but I think it's important the auditor-general asks the questions.

FRAN KELLY: During his ministerial years Dr Wooldridge was plagued by controversy, most notably over his handling of the MRI Medicare funding and his intervention in the make-up of the Pharmaceutical Benefits Advisory Committee.

Even in retirement, the former health minister's decision making remains under close scrutiny with some of the old foes still close at hand.

KERRY O'BRIEN: And Dr Wooldridge wasn't available for interview today.

Ends