A private psychiatric hospital in Toowong is closing after nearly five decades of operation, with administrators confirming the facility owed millions, including a significant debt to the Australian Taxation Office (ATO).
Closure Confirmed Following Mounting Debt
Toowong Private Hospital, a 58-bed psychiatric facility in Brisbane’s inner west, is ceasing operations after administrators determined the hospital could not continue due to severe financial pressure. The hospital, which had provided mental health services since 1976, has failed to find a buyer following its voluntary administration in May.
Longstanding Mental Health Provider
Established in the 1970s, the facility served over 3,000 patients annually and supported 154 specialist staff. It was founded by NA Kratzmann & Sons, a construction group led by builder Noel Austin Kratzmann. Mr Kratzmann chaired the hospital board until his death in 1989. The family also contributed to the University of Queensland’s psychiatric and cultural programs.
Creditors and Debt Details
Administrators from EY reported that the Australian Taxation Office was the hospital’s largest creditor, with an outstanding debt nearing $3.4 million. Total liabilities reached approximately $3.75 million, including amounts owed to suppliers such as Gateway Providores and The Wholesale Fruit Co. Additionally, about 60 staff are owed more than $1.2 million in wages and entitlements.
Administrators Cite Trading Challenges
According to administrators, the hospital faced challenges in the trading environment following the COVID-19 pandemic. The Australian Private Hospitals Association separately pointed to broader structural issues in the sector, including underpayment for insured patient care, ongoing delays in contract negotiations with insurers, and limited access to international psychiatric specialists.
Attempts to Sell Unsuccessful
Despite efforts to secure a buyer following the appointment of administrators on 14 May, no acquisition offers materialised. Administrators have since moved to implement a wind-down plan. Services will formally cease from 11 June, with patients and psychiatrists being notified and transition arrangements underway.
Community Reaction and Petition
The closure has prompted community concern, particularly from former patients and local representatives. An online petition launched by a previous patient has received over 1,700 verified signatures. The petition calls for Queensland Health to intervene and maintain the facility’s operations, citing its unique outreach programs and veteran-specific mental health services.
The petition also claimed that Toowong Private Hospital delivered integrated care involving psychology, occupational therapy, creative therapy, and other allied health support. It warned that the hospital’s closure would affect patients across Queensland who travel long distances for access to specialist mental health treatment.
Ongoing Care Coordination
EY has stated that continuity of care remains a priority, with psychiatrists coordinating directly with patients to manage transfers. Queensland Health is currently reviewing the potential impact on public mental health services, while the Department of Veterans’ Affairs is working to support affected service personnel and emergency workers.
Published 10-June-2025
