Peter Andren (Calare, Independent) Share this | Hansard source

The Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005 will strengthen prudential requirements and further protect the contribution of aged care residents through their accommodation bonds.

The bond security bill sets up a scheme through which the government will be able to repay outstanding accommodation bond balances to an aged care consumer or their estate in situations where an aged care provider defaults on such repayment as is required under the aged care legislation. Such bonds, it will be remembered, are an investment vehicle for aged care providers to enable the building up of sufficient funds to provide the urgently needed capital spending requirements of the sector that were identified more than a decade ago in the Gregory inquiry and were introduced by the government in its aged care reforms of 1997 and later.

Under the provisions of this bill, the Commonwealth carries the risk for attempting to recover the outstanding balance of the bond from the defaulting aged care provider. The bill also contains administrative steps that must be taken so that a levy on all aged care providers can be imposed under the levy bill. The levy bill itself will enable the Commonwealth to impose a levy on aged care providers so as to recover amounts it cannot obtain from those defaulters. The amendment bill strengthens existing prudential requirements related to accommodation bonds, especially in relation to liquidity, record keeping and disclosure.

There is no doubt that the aged care sector is far better resourced than it was in 1996 when I entered this place. Many years of neglect had seen the standard of aged care facilities slip alarmingly, with poor care facilities and many older people located in country hospitals, for example, who by any standard were nursing home patients, not hospital patients. Thankfully, that situation is gradually, though not entirely, being turned around.

Figures from 1995-96 and 2005-06 show that the contribution from the Commonwealth has increased from $3 billion to $7.3 billion. There is no doubt that the reforms and changes to the contribution regime from aged care residents in low-, medium- and high-care facilities has helped enormously to rectify the formerly sad state of aged care accommodation in this country.

However, there is a long way to go. While the current structure and funding model with its mix of public and user-pays has helped lift aged care standards, I fear and know there will be a logjam of demand for high-care places in not too many years. The success of community care packages enabling older people to stay at home longer will create future demand not for hostel or low-care but for medium- and in particular high-care places—and I know the bricks and mortar are just not there. While the increase in the number of community care packages certainly met a need in recent years to accommodate those 90 per cent or thereabouts of older people who want to stay at home, I believe we run a risk of supporting this most economic of aged care options while ignoring the increasing build-up of need for high care, the most expensive option.

Currently the formula for allocation of aged care places is 108 services per 1,000 people over the age of 70. There are many arguments about how fair this formula is and how applicable it is across the board—compare a high retirement area with a high mortgage belt area and a younger demographic outer metropolitan area, for example. However, that is the formula that we have to deal with, with just 40 of those places available for high-care residents. I am told that figure has not changed since 1984. I ask the minister whether the demand for high-care places vis-a-vis low-care and community packages has not changed, or why it has not changed, over that time. Indeed, is that ratio still the same? I doubt it very much. Forty-eight of those 108 places are available for low-care and hostel places, while 20 places are allocated to community care packages.

My point is that we need to urgently review that figure of 40-odd high-care places, with many people cared for by community packages reaching a point where they really need high care. They are in their place with Meals on Wheels, a visit from a nurse or a volunteer carer, perhaps, or a weekly home and community care package visit. I believe—and I have thought this for a long time—that these packages, while providing the quantity of services, really lack the increasing level of quality required. I would like to see those community care packages in the short term be at least a ‘bed and breakfast’ option where a community care nurse gets the person mobile or comfortable in the morning and ensures that they are looked after as they go to bed at night. That is not an ideal circumstance, as we all know of people in their own homes who are alone for those long hours of a night. In many and an increasing number of places and cases, I think that they are fast reaching the age where they will need not low-care but high-care nursing home accommodation.

Where will those high-care places be if we keep the formula carve-up as it has been for the past 22 years? Surely we know there has been an increase in the proportion of aged in our population, and it is going to reach significant proportions—I cannot quite remember the figure, but in the order of 25 per cent of people over the age of 65—by the year 2025.

Despite the fact that we are going to have a shortage of the resources to build these places, we do not require an accommodation bond for high-care places. That accommodation question has been a political rather than a rational policy issue, in my book. That political decision—and I see Deputy Speaker Barresi nodding his head—will lead us to a funding crisis. We do not have the resources to build the high-care places unless we look at the bond option. No-one, I would suggest, is looking at taxpayers providing all this capital in the years ahead, given the looming figures for the ageing proportion of our population. We cannot expect the young income earners of the next 20 or 25 years to provide all of the care for the aged by way of an extension of the aged care sector as part of our hospital process, given the enormity of the problem we are facing in upgrading our hospital care and, as I will mention in a moment, our need to care better for our disabled.

So let us not go down the emotive road we travelled in 1997 when the family home was said to be threatened. The family home perhaps should be the equity against which a bond is raised in many situations—except the most obvious hardship circumstances—with draw down limits on bonds and the interest receipts used to build new care places. I cannot see any other funding option, given the call on our tax resources in the years ahead and notwithstanding the fact that at the moment we happen to have a pretty attractive sort of a surplus. Let us look at our hospital and education options as well. If we do not go there in providing high-care aged places, we will be in real strife.

There are other aged care issues in my electorate that are pertinent to this debate. Indeed, in Oberon, another aged care model—the multipurpose service model—is largely funded by the state health department, but the aged care component is the responsibility of the Commonwealth health department. I hope the health minister, who has received a letter on the Oberon situation from me on two occasions, is able to find a staff member to return the calls in the next day or two so I can report back to that Oberon community about their statistics, which show that the population projections for that area have rapidly overtaken the projections from the official figures.

Although a new deal has been signed up to on this MPS for the next three years, these new figures show that those provisions will be far short of the requirement for an area that, like many around Australia, is enjoying in many economic respects the benefit of the tree change phenomenon, with many people retiring to just west of the mountains as a lifestyle choice. But I think we are going to find that the realities are overtaking the official census figures. It will be interesting to see how this year’s census figures stack up in many parts of this state, particularly in my electorate, compared with the last one. I suspect there is a big sea change under way in areas that were regarded as sleepy rural communities in years past.

I think we have to revisit the issue of accommodation bonds for high-care nursing homes if we are to provide the capital required to meet the surge in bricks and mortar infrastructure that we are going to need over the next two decades. I think the superannuation industry could not find a more secure guaranteed investment than aged care, and surely the super funds of today providing the wherewithal for the funding of aged care tomorrow is a more than satisfying scenario.

Getting back to these bills, the Hogan report in 2004 noted the large amounts of money being held in accommodation bonds and pointed out that there was little protection available. Rather than establishing a guaranteed fund via a levy on industry, the Commonwealth will act as guarantor for the bond balances. However, it will then levy the industry on a needs basis. The industry supports this ‘good guys’ arrangement whereby good providers bail out the defaulters. The industry’s argument is that such a system does not lock up potentially large amounts of bond money that could otherwise be used by the providers for capital expenditure. I must say that I was staggered to note from the Bills Digest that the average accommodation bond being levied on new residents in 2004-05 was $127,618. I had not familiarised myself with these bond figures for the last year or so, and on checking that figure with the library I was told that there has been a quantum leap almost from $90,000 or thereabouts to $120,000 in the space of a couple of years.

While market forces can dictate what bonds are charged in many areas, while people are happy to pay for five-star accommodation and the extra provision of services and so on and while bonds can only be levied on residents who have assets in excess of $30,500, it seems to me that the enormity of the cost of aged care infrastructure is dramatically illustrated by this average bond figure. Perhaps it is the lack of a cap. It shows the funding challenge we face in providing aged care accommodation into the future.

It is not as if all this money is available to the aged care sector. They can only draw down a legislated amount. They can derive the benefits of the interest at the bond rate of about eight per cent, but if the fund of bond money increases then obviously the interest returned increases, and I wonder whether we are creating a huge bowl of public assets in these bonds which is serving no greater purpose than delivering an interest component and tying up an enormous amount of money. Given that the cost of a high-care bed must be heading towards $100,000 per annum now—it was about $60,000 10 years ago—it suggests to me that it is an enormous cost that we are looking at here, and we are not going to be able to solve this unless we get very creative and non-political about the way that we access the resources needed.

Catholic Health Australia and the industry have supported this process and I do commend the government for this bill and for its contribution to aged care over the past 10 years. There is no doubt we faced a crisis by the middle of the 1990s, and successive coalition aged care ministers have each made a strong contribution to the sector, but I suggest we will face another crisis in the near future unless some tough economic and political decisions are made. Dementia care is one issue in particular that needs addressing, as is the viability of low- and intermediate-care accommodation providers in smaller rural communities and those multipurpose services who are catering for the aged care as well as the health needs of more and more smaller communities. I do not know that we have quite got the funding figure right there yet.

Another area that is tacked on to this whole issue is that of the severely disabled younger and middle-aged members of our community. Even in the rare circumstance of nursing home care being available, an aged care facility is not suitable for the young or the middle-aged disabled. This, along with mental health care, is also an area of almost hidden care, particularly in country areas. We need far more care places, and respite care in particular, for those many thousands of carers who devote their lives and their own health in saving this country many billions by caring for disabled people in their own homes. We owe these people the very best of care facilities for the disabled, particularly for those who are getting 24/7 care from their loved ones, much to cost of the health of many of those carers. We owe these people as much attention as we have given aged care in the last decade and we owe much more attention to that build-up of high-care aged in our community whose families are going to be knocking on the door for places that just will not be there if the current funding formula continues to apply.

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