[1][2][3] Under the Tasmanian Government's 2007 plan to reform its health system, the Mersey campus was to be downgraded with certain care services transferred to Burnie.

[1] On 1 August 2007, the Australian prime minister announced Australian Government would guarantee the continued funding of a wide range of in-patient and out-patient services at the Mersey campus, and support its re-establishment as a Mersey Community Hospital, managed by a community-controlled and federally funded trust.

The Australian Government's announced intention is that the hospital continue to provide a full range of services.

Political commentators were generally cynical, noting that the 'takeover' was to occur in the Division of Braddon, the most marginal government-held federal electorate in Tasmania.

[2] On 20 August 2007, the Tasmanian Government agreed to sell the hospital for a nominal $1.00, subject to a number of conditions.