Rowan Ramsey (Grey, Liberal Party) Share this | Hansard source

I rise to address the Aged Care Amendment (2008 Measures No. 2) Bill 2008. Investment in the aged-care industry is becoming more tenuous by the day, particularly in a vast regional and rural electorate such as my seat of Grey. I have at least 50 registered aged-care facilities in my electorate. It is the nature of the seat; many of the communities are small and spread out. Many of these facilities are run by state authorities, but there are more than 50. At least six registered aged-care facilities have expressed to me a need to expand. I know there will be more, because I have not yet had an opportunity to speak to them all. They need upgrading and expanding. Many of the facilities in these rural towns were actually designed some years ago. Many of them are almost 30 years old and, in many ways, are probably reaching their use-by date. I suspect people of my generation have much higher expectations of what aged-care accommodation should be and will shy away from many of the facilities currently there. Major investment is needed to upgrade these facilities.

There has been a big push for home care and for keeping people in their homes for as long as possible, and I applaud that. But it will still not meet the huge demand that is on the way—the bulge of the baby boomers. Peter Costello’s Intergenerational report identifies that the percentage of the population over 65 is expected to more than double over the next 40 years, from 2.8 million to 7.2 million. Even more disturbing is that, in that time, the proportion of people over the age of 85 is set to increase by 200 per cent, to five per cent of the Australian population. This will create an unprecedented demand for aged accommodation. Demand will soar and so will hospital and medical costs. It is a fact of life: if we live longer, we will cost more to keep alive and we will cost more to house. Taxes will fall and outputs will increase in the aged-care industry.

I turn to the meat of this bill and that is regulation.  I fear perhaps increased regulation, even though I note the member for Oxley’s closing remarks about the rationalisation of regulation. It seems to me that there is more compliance in what is being proposed. One of the great frustrations of the industry is in fact over-regulation—three levels of government all piling on the red tape. All residents deserve to be protected, all residents deserve to have the highest quality of care, but we need to take a common-sense approach. I think more time is sometimes spent in ensuring that every worker has signed off on every line of every document to ensure that they can always prove in a court of law that, whatever went wrong, it was not their fault.

Recently, a major provider in my electorate contacted me—because I have been talking to a number of aged-care providers—and provided me with a small list detailing the operations of the aged-care facility over a couple of months. I would like to read it:

October: unannounced visit. Aged care accreditation agency. Outcomes audited were continuous improvement, pain management and infection control. No action required by the nursing home to meet standards. Our full three-year audit is less than eight weeks away.

October: triennial fire inspection. Four outcomes that require attention. All completed.

November 20: state government auditing of catering and infection control. Already audited by local council in October. Were passed on all expected outcomes in infection control by aged care accreditation agency just one month ago.

December 15: three-year accreditation audit. Aged care accreditation agency. Timetable received includes all 44 outcomes, including those audited in October this year (see above)—pain management, infection control and continuous improvement. Also includes audits covered by triennial fire inspection and state government catering service. All to be re-audited again.

December 16: HACC, Home and Community Care, South Australian government audit of day centre. Also includes audit covered by triennial fire inspection and catering service. Outcomes to be audited again.

December: date to be notified. Fire re-audit by the local brigade to ensure a triennial fire inspection, as noted above. Outcomes have been completed. This will be our fourth fire audit in three months.

December: date to be notified. WorkSafe SA, covering all aspects of OHS and WorkCover also audited by a number of the above audits.

They go on to say:

I realise that our residents and clients deserve the best possible services that we can provide. I realise that governments at all levels provide large amounts of money that need to be accounted for. However, surely we can have some coordination between all levels of government to least acknowledge that the outcomes of audits should be recognised in all audits, regardless of local, state or federal interests (e.g. fire safety, catering, cleaning et cetera) so that our staff and residents and clients do not get bombarded with a program as outlined above on a regular basis. This level of auditing is overwhelming.

We can all see just how difficult it becomes to run that type of institution. It says it all: ‘Don’t strangle us. Don’t drive good people away from our workforce.’

My electorate is dotted with small to medium-sized aged-care facilities. I spend time travelling and talking to most of them. We are, as I said before, facing an ageing infrastructure but we have a bottleneck on supply and we need to ramp up that supply. In fact, we seem to have reached some kind of plateau at the moment. Almost all of the aged-care facilities in my electorate are not for profit. If the not-for-profits stop investing, we are in deep trouble. If we cannot make a business case for a not-for-profit organisation, then who on earth can? One of the majors in South Australia, Elder Care, have publicly announced that they are building no new beds, are doing no renovations and cannot continue under the current arrangements. This is a major concern. They list a series of problems with the new aged-care funding instrument, with very few pay points for low care and rafts of new levels of compliance, with new costs and no means of recovering these costs. The day-to-day operating costs have reached the point where, as I said before, the system has plateaued.

There was investment going on up until as recently as 12 months ago, but it seems that, with the extra compliance requirements, the change in investment and the credit squeeze, things are getting tougher, not easier. As I said, when a major institution like Elder Care pulls out, it leaves a great hole in the market, as I am sure you would be aware. Capital investment, as pointed out in the Intergenerational report, will come because of the pressure of the over-85s. Over-85s mean high-care aged care. We need the next wave of investment. We need some new impetus, because pressure is building up. I believe the government will have to consider some form of base capital funding to achieve these ends. One of the major suppliers of aged care in my electorate, in a large regional centre, pointed out to me that they consider the costs of construction of new facilities in the country to be 40 per cent higher than in the city. There is no way of recouping this cost from the target group.

It is time—and I know this has been raised by a number of speakers in this debate before—that parliament considered the possibility of bonds for high care. It has a certain symmetry about it. I think we all know it makes sense that, if people are compelled to pay bonds to go into low care, when they move out of low care and into high care or if they come in at a high-care rate they should also be required to pay a bond. We have shied away from this, and different governments and oppositions at different times may have raised concerns about this, but it is something we are going to have to address because of the great bottleneck facing us.

I was speaking to a nursing home in Whyalla—and I will name this particular one: Whyalla Aged Care—which was granted an operating licence for 20 new beds. They have recently handed back their licence; the two years had expired and, because they could not raise the capital, they had to surrender their licence. That is symptomatic of what is going on out there. We may have the operating subsidies but we just cannot raise the capital to build these facilities—which comes back, as I said, to the issue of bonds.

The government’s move with the pension bonus in the $10.4 billion stimulation package is welcomed. But it does actually lead to what I am sure is an unintended consequence in the aged-care industry, in that it sidesteps accommodation costs. If the government had elected to give an increase in the pension, then the accommodation fees would rise as a percentage of the pension. This is a one-off bonus, and a substantial bonus. Most pensioners are facing rising costs of living—except those who live in aged-care facilities. If you assume that 10 per cent of their pension income is disposable to them and the other 90 per cent is going into their accommodation, then they get the bonus but the accommodation facilities do not. I realise that the previous government had also used a number of bonuses to pensioners. But such a bonus will not flow through into the aged-care industry, as one would think it should. So the facilities cannot pass on their rising costs until pensions rise.

In closing, I would just like to say that I believe that an across-the-board pension increase will help address some of these issues in the aged-care industry, but we do need investment in capital infrastructure and I think we have to address the day-to-day running costs of these aged-care facilities. I hope that this regulation will not add more costs to these facilities because, as I pointed out, they are already struggling under this great burden. I hope that it will help. I am fearful that it will not and that we will have to go back and really bash some heads together in those three levels of government to make sure we get some common sense operating in this field.

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