Steve Irons (Swan, Liberal Party) Share this | Hansard source

To be. I acknowledge his serious concern for the aged-care industry in his electorate as well as in all of Western Australia and Australia. I rise today to speak on the Aged Care Amendment (2008 Measures No. 2) Bill 2008 and explain how it affects the people of my electorate of Swan, Western Australia. I have spoken to many aged-care organisations in the local community since I was elected last November and hopefully have gained an understanding of the main problems facing the sector at present. In my recent seniors newsletter, I highlighted the components of the aged-care crisis in my electorate. I now want to raise these issues with the House and in particular to see how they fit with the essence of this bill.

I want to make it clear at the outset that I support this bill. It makes several important amendments to the Aged Care Act 1997 that reflect the changing dynamic of the industry. As the shadow minister for ageing announced in her speech, this bill will further protect accommodation bonds, for example, which will guarantee residents’ payments should the provider enter into liquidation. However, I will qualify this support with several concerns I have about the individual elements of this legislation. I will also refer to some more general concerns that show that the government has not properly responded to and does not fully understand the true nature of the threats facing the industry.

Demographic trends indicate that the aged-care industry is becoming increasingly important to Australia, and many members in this House are approaching qualification under this classification. Our country’s population is ageing. According to the ABS, in WA in 2007, people aged 65 years or over made up 12 per cent of Western Australia’s population. In 2056, this proportion is expected to increase to about 22 per cent. The older age bracket of 85 and over made up 1.4 per cent of the population in 2007. This group is expected to grow to 4.6 per cent by 2056. This demographic shift is attributable to a sustained low fertility rate accompanied by an increasing life expectancy rate. Latest ABS statistics suggest that Western Australians have one of the longest life expectancy rates in the world. Life expectancy at birth in WA is 79.1 years for males and 83.8 years for females.

The ageing population has meant over the last few years that there has been an increasing demand placed upon the services that seniors are reliant upon. One of these services is the aged-care industry. It is important to understand the structure of the aged-care industry in Australia. The recently released Grant Thornton aged-care survey divides the aged-care industry into two. Aged-care services provided to consumers in their homes are referred to as community care programs. This is the most common type of aged-care service provided. The Howard government recognised that investing in community aged care was just as important as investing in residential aged care. People in my electorate tell me that they want to stay in their homes for as long as possible. The second aspect of the industry is residential aged care, which is provided to aged people with physical, medical or social care needs which are not met in the community. The Grant Thornton survey describes two types of residential aged care: low care and high care.

The government is involved extensively in the residential aged-care industry. It is involved both in regulating and in subsidising the industry. The industry is regulated through three principal measures. Firstly, aged-care facilities across the country must be registered and approved by the Aged Care Standards and Accreditation Agency. This body, appointed by the Department of Health and Ageing, is also responsible for ongoing supervision of the organisation. Any single accreditation of an aged-care facility can last only three years before having to be renewed. I support the decision by the Minister for Health and Ageing earlier to introduce police checks for aged-care workers and increase the powers of ACSAA, including unannounced site visits.

Secondly, independent from the Aged Care Standards and Accreditation Agency, there is the Aged Care Commissioner. The commissioner is able to review certain decisions made under the Aged Care Complaints Investigation Scheme and to examine complaints about the scheme’s processes for handling matters under the investigation principles. The commissioner also has the power to investigate complaints about the Aged Care Standards and Accreditation Agency and the conduct of persons carrying out audits or making support contacts under the Accreditation Grant Principles 1999. The Aged Care Act 1997 provides for the commissioner examining matters on the commissioner’s own initiative. In this way, the commissioner acts as an important check and balance for the regulatory system.

Thirdly, the National Aged Care Advocacy Program is funded by the government under the Aged Care Act 1997, with the aim of promoting the rights of people receiving Australian government aged-care services. The program funds aged-care advocacy services in each state and territory. These services are community based organisations which are there to give advice to aged-care patrons about their rights and to work directly with the aged-care industry to encourage policies and practices which protect consumers. Therefore, the aged-care industry is heavily regulated. It is important that the aged-care sector is regulated. This is because the people that use the aged-care industry are among the most vulnerable in society. They have, by definition, been placed in this situation because they cannot look after themselves.

It is of course the duty of society and government to ensure that the rights and dignity of these people are adequately upheld. This is also important because the industry is heavily subsidised. According to the Report on government services 2008, federal government expenditure on aged care was $8.4 billion in 2006-07. Sixty-nine per cent of this was spent on community care services, and 31 per cent was spent on residential care services. It is important to guarantee some accountability for the large sums of taxpayers’ money invested in the industry. Regulation is a method by which the government can achieve accountability. However, having said that this is widely accepted, that the aged-care regulatory system is overburdened, the Grant Thornton report of 2008 said:

The regulatory and pricing framework now threatens the viability of the aged care sector by suppressing incentives to invest in modern aged care infrastructure. This decline in investment severely limits choice for consumers of aged care services.

In question time on Wednesday, 12 November, the Minister for Finance and Deregulation accused the coalition of being anti regulation. He said:

There are some people in the community who do not like regulators and who do not like tough rules. The sharks and the shonks and the spivs that inevitably populate the nether regions of the financial world do not like regulators. Unfortunately they have taken over the Liberal Party.

I deny these assertions. We in the Liberal Party are not against regulation per se; we are against bad regulation. My first criticism is therefore that the government needs to think carefully about relieving the regulatory strain on the industry, which this bill does not achieve.

Before making my second point I want to briefly consider the context of the aged-care crisis in Australia. Traditionally the federal government has had responsibility for the funding of aged-care services and the states and territories for service provision. The former Howard government placed significant emphasis on wide-ranging reforms to deliver a high-quality, affordable and accessible aged-care system that meets the needs and preferences of older Australians. The coalition’s reforms began in 1997, when the Aged Care Act 1997 and the Aged Care Principles introduced a unified residential care and payments system and a national quality assurance framework for residential aged care, combining accreditation, certification and the Aged Care Complaints Investigation Scheme. The challenges over the last year continue to become increasingly serious and I am not convinced that the government is properly managing the industry.

I want to demonstrate two parts of this bill which I am concerned about by reference to a community based aged-care organisation and a residential aged-care organisation within my electorate of Swan. An analysis of these organisations also reveals significant problems beyond the immediate scope of this legislation but which the government should seriously consider. First, this legislation does not, as we were led to believe, amend section 22 of the act. The Aged Care Assessment Program determines the eligibility of persons for admission into residential aged care and the level of care required. Once recommended, the person can receive subsidised aged care. Patients needs and status can deteriorate and change from low care to high care. However, under the auspices of section 22 there have been lengthy delays between reassessment of patients by an aged-care assessment team. This means that the patients may be receiving high care by an aged-care organisation yet the organisation will only be compensated for low care. As the payment of the subsidy is not retrospective, the aged-care organisation becomes less financially viable. Secondly, aged-care organisations are likely to experience additional financial burdens as a result of having to comply with this bill.

I would like the House to now consider how these points might affect two aged-care organisations in my electorate. The first is Southcare, which is a non-residential community support agency based in my electorate of Swan. It aims to provide emergency relief and caring services, principally in the City of South Perth, assisting residents to enhance their quality of life. Its constitutional objectives are to assist in the development of a caring community in which fellow members care and assist one another; provide caring services for those who are disadvantaged by age, sickness, disability, unemployment, poverty or family or social stresses; bring together volunteers from within member organisations and elsewhere to participate in the delivery of appropriate services; and to make these services available to all members of the local community.

Southcare’s aged-care program includes community home support and day centres. It provides financial counselling services, operates family support services and provides the local community with these services. In their annual report, Southcare noted an enormous 96 per cent increase in clients presenting with housing issues over the last two years. There is a housing affordability crisis in my electorate that has significantly affected the people of my electorate. Among these are elderly people who require low-care services.

I spoke in this place in August about a distressed lady called Linda who came to my office seeking assistance. Linda had recently been made homeless after being forced to leave her rental property. She also had cancer. With no affordable rental accommodation in the area, Linda approached Homes West for help. However, with the chronic shortage in public housing, Linda was told that she would have to wait indefinitely for somewhere to live. She was one of more than 17,000 people waiting for Homes West housing. This figure has now gone up to 19,000. She had to sleep in her car at night. Tragically, I was contacted by Linda’s carer recently and was told that Linda had passed away, still waiting for a place to live.

The previous Labor government in WA failed to significantly increase housing stocks in WA. All we have had from the Rudd government has been disappointing policies such as the National Rental Affordability Scheme and the housing affordability scheme. Both of these policies should be commended for their ability to grab headlines but equally both should be condemned for the limited concrete action they will undoubtedly achieve. Southcare faced the consequences of Labor’s housing policy on a day-to-day basis. It is in this context that I ask members whether it is fair that the aged-care industry should be experiencing the additional financial burdens expected from the implementation of this new legislation.

The second organisation I will refer to is a residential aged-care provider. SwanCare has been providing services and accommodation to seniors in Western Australia since 1961. During this time, SwanCare has developed a reputation for providing high-quality care, support and services to a community of residents which now number more than 1,000, with approximately 750 of those residents living in 600 independent-living units. The organisation manages the Bentley Park Retirement Village in my electorate of Swan. SwanCare Group is a not-for-profit operator that has a philosophy that supports the provision of affordable accommodation to seniors. Given the housing crisis I have just described, I am sure that honourable members will agree that this has never been more important. However, I was dismayed to hear from the SwanCare CEO recently that the future of the organisation is under threat. There are three specific threats to the aged-care sector in Western Australia. First, the very way federal funding is calculated is putting SwanCare at risk. SwanCare estimates that its costs are increasing at an average real rate of seven per cent per annum. However, because federal funding is tied to a national indexation system, COPO, it has been increasing at only two per cent per annum. In other industries, such as private health insurance, it is government policy to ensure income matches costs. This same rationale should apply to the aged-care sector.

The conditional adjustment payment subsidy was introduced by the former Howard government in response to the report of Professor Warren Hogan’s Review of pricing arrangements in residential aged care and in recognition of the funding constraints that providers were experiencing. However, the Rudd government has failed to properly adjust this mechanism to reflect the spiralling costs of living since it came to power one year ago. The Rudd government must take decisive and immediate action to ensure that the CAP adequately reflects the inflation rate and that industry does not collapse. The CAP is currently at 8.75 per cent. Incredibly, the Rudd government was set to cut funding to aged care in the 2008-09 budget by ceasing indexation of the CAP. Fortunately, Mr Rudd decided against this course of action at the last minute. The Minister for Ageing has commissioned a review into the payment, and we are still waiting for that to be published.

The combination of this problem with the ageing population of Australia has led to a second problem. There is an ever-increasing need for more staff members but an ever-diminishing supply of money to pay them. This exacerbates the much publicised skills shortage for the aged-care industry. I call on the government to assist the aged-care sector’s attraction and retention of staff and to do whatever is necessary to enable the aged-care industry to compete with the broader sector markets.

Finally, there are insufficient high-care beds available. Consequently, we are forced to either transfer these residents to hospital beds, thereby clogging the acute sector, or keep the patients within their low-care facilities at a high cost to the aged-care industry, compromising both the care of the patient and the health of the organisation. WA’s public hospital beds have been used inappropriately by frail aged persons who cannot find a bed in a residential care facility because of the bed shortage. SwanCare estimates that it costs approximately $1,000 a day to care for a hospital patient, whereas an aged-care bed costs just $200 each day. This problem is exacerbated by the delays in reassessment identified previously.

These two examples highlight specific concerns with this bill. They also paint a picture of an aged-care industry under threat—an industry that is no longer financially viable. This is a problem that the legislation does not provide a solution for. These two organisations are invaluable to the community and yet they are threatened. As I recently informed the House, I nominated representatives associated with each of these organisations for the WA Seniors Awards: David Harvey for his work as the chairman of the village advisory council for Bentley Park, and Inge Dahners for her work as aged-program manager for the SouthCare Group. Inge finished runner-up in the business participation category.

In conclusion, I support this legislation because of the important amendments it makes to the Aged Care Act. However, section 22 has not been amended and I am concerned that the implementation of the new provisions will lead to an increased financial burden on providers. Outside the remit of the bill, it fails to address the severe homelessness crisis and the skills shortage.

Finally, I make the general point about the way this government has treated the elderly. Schedule 1 of the Social Security and Other Legislation Amendment (Economic Security Strategy) Bill 2008 will provide for economic security payments to be made to pensioners, seniors, people with disabilities, carers and veterans as an immediate down payment. As I informed my local community in my recent seniors newsletter, a payment of $1,400 will be made to single recipients or holders of the stipulated payment or card, and a combined payment of $2,100 will be made if both members of a couple receive or hold one of the cards. This will require total funding of $4.874 billion.

These groups are among the most vulnerable in society and should be supported in these trying times. However, the government’s attitude towards these groups has been inconsistent since it came to power almost 12 months ago. The rising cost of living over the past 12 months has hit pensioners particularly hard. With no increase in the base rate of the pension forthcoming, the coalition acted. Members will recall that, on 22 September 2008, the coalition introduced into the Senate the Urgent Relief for Single Age Pensioners Bill 2008, providing for an immediate annual payment of $30 per week for recipients of the single age pension, the widow B pension and the single service pension, effective from 20 September 2008.

That legislation would have meant that the single age pension would have increased from $273.40 to $303.30 per week. In fact, if it had included the automatic September indexation, that $30 increase would have brought the new rate of the pension to $311.05 a week. It would also have resulted in the single pension, currently at 59.9 per cent of the couple pension, being 66.4 per cent of the couple pension. Incredibly, the following week, this House witnessed the attempt by the government to block the bill, despite the fact it was agreed to in the other place and despite the fact that the Treasurer, the Deputy Prime Minister and the Prime Minister himself admitted they could not live on the single age pension.

Over 928,000 pensioners, including 857,000 single age pensioners, 700 widow B pensioners and 70,900 single age service pensioners would have stood to gain a financial boost from the coalition’s bill on a weekly basis. The total costs of our proposal stood at $1.45 billion. As the government’s first year has come to an end, I suggest it reflects on its attitude towards the elderly. I will continue to stand up for the best interests of the elderly in my electorate of Swan.

See this speech in context