Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Hansard source

I rise to speak on the Aged Care Amendment (2008 Measures No. 2) Bill 2008. This bill amends the Aged Care Act 1997 and the Aged Care (Bond Security) Act 2006. The Rudd government would have us believe that the purpose of this amendment bill is to address the current legislative inequities and maintain effective regulatory safeguards for ensuring high-quality care for older Australians. The coalition left a world-class aged-care system to the Rudd government. We delivered wide-ranging reforms and record funding for high-quality, accessible and affordable aged care.

We all know that Australia has an ageing population. People aged 65 or over currently make up 13 per cent of the population. But in the next 40 years this figure is expected to rise to seven million people, or 25 per cent of the population. There is also expected to be a significant increase in the number of people aged 85 and over, from 1.7 to 5.6 per cent of the total population. For this reason, the aged-care system does need to adjust and grow with our ageing population to reflect trends in the aged-care sector and meet future challenges.

A Productivity Commission report on aged-care trends released in September highlighted a number of issues in projecting that future demand for aged care will become markedly more heterogeneous. This is due to increasing diversity among older Australians in terms of their care needs, cultural and linguistic backgrounds, preferences, expectations, personal income and wealth. The coalition introduced a number of measures to address aged-care trends and projected future industry deficits. Labor’s amendments to the aged-care system do not properly acknowledge either the current state of the industry or future directions addressing a more diverse aged-care demographic. This bill does not, as claimed, ensure high-quality care for older Australians—certainly not for all older Australians, especially those in our rural and remote regions.

Aged care is an issue in my electorate of Kalgoorlie as it is for the rest of Australia; in some ways, however, it is more so. The Australian government system of assessing suitability for its funded aged-care places recognises that conditions associated with ageing generally affect Indigenous people substantially earlier than other Australians. Therefore, the target demographic for Australian government funded aged care is frail older persons aged 70 years and over or 50 years and over for Aboriginal and Torres Strait Islander people. My electorate is nearly one-fifth Indigenous—18.3 per cent. In fact, I represent 5.7 per cent of the total Indigenous population of Australia, or about 26,000 Aboriginal people. Based on these criteria, at the last census there were at least 10,459 people in my electorate who fell into the target group for government aged-care planning. Provision of aged care in my electorate faces other challenges, as I will explain.

Anyone who heard me speaking about the failure of the government’s National Rental Affordability Scheme to meet the needs of regional Australia would now be aware that the housing crisis in parts of regional Western Australia has had a severe impact on service industries. Unfortunately, aged care is one of the service industries that has fallen victim to this predicament. My fellow members have heard me refer many times to a housing crisis on the north-west coast of my electorate. Land costs are higher, construction costs are higher, rental and of course capital purchase costs are higher, accommodation costs for staff are higher and readily available accommodation is practically nonexistent.

Service industries like aged care struggle to compete against mining industries. For example, a multiskilled support worker in residential care gets less than $20 an hour and less than $40,000 a year before tax, but in mining towns of the north-west an average rental house is worth double that, if you can get one. One aged-care service provider in Broome says that housing is the main limiting factor for staffing. They are able to locate staff but staff cannot afford the very high rents. This provider has therefore developed its own staff accommodation, which it could fill two or three times over. Fortunately, this situation is not widespread, but these communities still need aged care. Our older Australians have every right to spend their twilight years with dignity in their home towns or at least near their home country.

The Productivity Commission report on aged care which I referred to previously says that metropolitan areas have just over half of all staff in the aged-care sector but two-thirds of the clients. In regional areas, the ratio of staff to clients is about even. In rural and remote locations, 25 per cent of Australia’s residential aged-care staff look after only 11 per cent of the clients. There are various reasons for this—for example, smaller facilities and fewer or no outsourcing opportunities. The upshot is that staffing costs are much higher in rural and remote areas. Quite often aged-care providers can only get inexperienced workers, with a rapid turnover as untrained or unprepared staff struggle to cope with the heavy workload. Staffing shortages put pressure on new staff as well as existing staff. In cities, aged-care providers can rely on staffing agencies, even though this means that staff are inexperienced and unfamiliar with the clients. In rural and remote regions, aged-care providers usually do not have that option.

The Productivity Commission also said that there may also be a requirement for culturally appropriate aged-care services in rural and remote regions, which can significantly increase costs. As things now stand, aged-care facilities in rural and remote areas are a very bad business proposition. Perhaps this is why about 45 per cent of Australia’s aged-care residential places are offered by religious or charitable providers. But they cannot afford to run at a loss any more than a provider who is in it for the profit motive can.

A pressing and common problem for smaller rural and remote towns is that they may not have enough residents to work profitably under current funding models—that is, they cannot achieve an economy of scale to stay in business. The residents of these small towns are equally entitled to receive aged-care services without being uprooted from the familiar surroundings they have spent their lives in, raised children in, helped to build and chosen to live in. Aged-care providers suggest that, under current funding models, any rural or remote aged-care facility with fewer than 50 or 60 residents will find it hard to remain viable.

Kalgoorlie-Boulder is a regional city, but providers tell me that the provision of aged care there costs a lot more than the same service would in Perth. In fact, I am told that regional aged care can cost up to 40 per cent more than in Perth. Everything is more expensive, from staff training, to transport, to food, to care products. This is partly due to freight cost loadings and partly because in regional areas services are limited. Aged-care providers have to take what they can get and do not have the option to shop around and save money. This all means that the funding is quite simply inadequate in regional areas. As I mentioned, there is also a flow-on effect from the housing crisis, which, for regional facilities, means they are unable to attract staff, since staff cannot afford or cannot obtain housing. Because these regional facilities typically run on a very, very tight budget, they are unable to offer pay incentives to subsidise staff housing.

As several other speakers have noted, aged care is at a crisis point. ‘Crisis, emergency, catastrophe, disaster’—I believe that describes how residents of the Olive Laird Hostel at Carnarvon on the west coast of my electorate felt a year ago, when they were told that their home, the aged-care facility where they thought they were spending the rest of their lives, had no choice but to relocate them and close down. Not only was this very bad news for the elderly who lived there at the time that the hostel was forced to close; it effectively left the residents of some 1,300 kilometres of Western Australian coastline without an aged-care facility. The Olive Laird Hostel was a casualty of the lack of economy of scale that I have been talking about. The hostel had only 10 residents, plus a number of community clients, when it was forced to close its doors, but it was effectively the only residential aged-care facility between the towns of Geraldton and Port Hedland—some 1,300 kilometres. That left the residents of some 1,300 kilometres with no aged care. When the Olive Laird Hostel closed, its residents were located as far away as Perth, 900 kilometres or a full day’s drive to the south.

One of my constituents who had spent her life in Carnarvon, whose husband is buried there and whose family still lives there was one of those who were relocated to Perth after 70 years in her home community. How do you explain to someone who has lived in one community all her life and has never called anywhere else home that she will be moved, not just a short distance away but a great distance away, to a different facility, a different set of doctors, health staff and carers, a different town or city and a different climate and environment far away from family and friends? That is not how anyone should have to spend the latter years of their life, but that is what has happened to the residents of the Olive Laird Hostel in my electorate. You can understand why the senior citizens of Carnarvon and the surrounding region are now very distressed at the prospect of having to leave their home and move a world away to access residential aged care.

A better and more flexible funding model is needed. Some aged-care facilities have to rely on charitable funding, often from religious institutions, to survive. They should not have to, but sometimes they do. The Olive Laird Hostel in Carnarvon was operated by the Churches of Christ Homes organisation, which found itself having to subsidise the operation quite extensively before having to close it down. In my home city of Kalgoorlie-Boulder we have, among others, two excellent aged-care facilities run by Little Sisters of the Poor. Little Sisters of the Poor has grown from one woman helping the elderly in France in the 1800s to a mission which runs homes for 14,000 residents in 31 countries on five continents. The Little Sisters have been in Kalgoorlie for more than 30 years. They cater to different levels of aged care with a 29-place hostel and a 20-place nursing home, with a full capacity of 49 places.

Little Sisters of the Poor is right on the borderline of financial viability; in fact, they run at a loss all the time and are subsidised by the national Little Sisters of the Poor organisation. I happen to know that the sisters working in the Kalgoorlie facility take part of their monthly stipend to feed the aged-care residents. In 2007, both of the Kalgoorlie facilities failed to meet the 44 audited standards. This came as a great surprise to the local community because no-one has had a bad thing to say about the Little Sisters of the Poor in Kalgoorlie. It was widely acknowledged that their standard of care was exceptional. When the Little Sisters failed to meet their audited standards last year, the mother superior said the standard of care had never been compromised, which no-one in Kalgoorlie doubted, but the paperwork and the records were not up to accreditation standard. After doing some catch-up with recordkeeping, the Little Sisters met accreditation standard and passed their subsequent audit on every count.

No-one, least of all the residents, questioned the aged care provided by the Little Sisters of the Poor. The residents themselves are as devoted to the Little Sisters as the Little Sisters are to them and were horrified to think that anyone would question the standard of care. This is a classic example of how organisations like this, devoted wholly and solely to looking after their residents and struggling to meet staff requirements on the ground, can also struggle to deal with the accompanying paperwork. Those in the industry acknowledge that residential care can suffer because of the ridiculous amount of time paperwork takes away from the residents. It was even suggested to me that an aged-care facility which focused on meeting its bureaucratic requirements before the needs of its clients could have the best paperwork and the worst care. The legislation I am talking about tonight only increases the bureaucracy and the paperwork required of these dedicated organisations and their staff. Centres with a small population have no chance of sustainability under current funding models. It appears that the Rudd government writes its policies for the city and metropolitan population. Regional citizens do not count.

I have been talking about the aged-care crisis in my electorate, but it is not just my third of Australia; it is national. Ever since this legislation was first read, we have seen more and more evidence of critical inadequacies in the aged-care sector. We hear that, far from the former strong competition for bed licences, providers are now handing them back at a time when we need more and more bed licences to be taken up to cater for current and future demand. We are seeing stories in the media about residents who have suffered from malnutrition or dehydration. For example, one Western Australian provider was placed under sanction by the Department of Health and Ageing, but both the provider and the industry’s peak body, Aged and Community Services, agreed that staffing issues were a big contributor to the problems experienced at that facility.

For the aged-care sector to grow to meet the needs of the next generation, let alone the current generation, it has to be an attractive proposition for providers—and for both employers and employees alike. We have to be able to attract more interest from the private sector. We also have to stop organisations like the Churches of Christ Homes closing down facilities because they cannot afford to run them. We have to stop organisations like the Little Sisters of the Poor failing audits because they are so overworked that they do not get the paperwork done.

In my home state of Western Australia, operators rejected 360 of the 1,000 bed licences in the 2007-08 funding round because they could not afford to build or staff facilities. That paragraph alone says a great deal about the inadequacy of this legislation. It purports to be the be-all and end-all and the most current, up-to-date process of addressing all of our needs in aged care, and it fails miserably. I repeat: operators rejected about a third of the 1,000 bed licences available in the 2007-08 round because they could not afford to build or staff the facilities under the payments that are currently afforded by this government. The Bethanie Group, one of WA’s biggest aged-care providers, has handed 100 bed licences back. Another provider acknowledged their declining levels of service and dealt with it by closing beds rather than trying to fill staffing shortfalls with temporary staff and having to deal with the associated problems.

I repeat that the industry is in crisis. We are talking about people’s lives and their right to spend their twilight years in comfort and dignity—in the city, in their home towns or near their traditional country. The government must take this seriously and come up with better and more appropriate funding models and a more appropriate way to address these extremely vital issues. This relatively toothless and ineffectual piece of legislation will only make life harder for our struggling aged-care providers. It is long on spin and short on substance—as, unfortunately, we have come to expect from this Rudd government. The government owes it to all Australians, particularly those in rural and regional areas, to do better.

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