Louise Markus (Greenway, Liberal Party, Shadow Minister for Veterans' Affairs) Share this | Hansard source

We live in the most challenging of times. Financial, environmental and social crises dominate the news, and our responses have to be not just swift and decisive but reasoned, informed and in the best interests of this nation. Often as legislators we are faced with complex and competing priorities, but there is one issue that ranks amongst the highest—that is, aged care. If we do not get aged care right, we condemn all Australia’s ageing population to a lower standard of care access and service in the years ahead. We have medical and pharmaceutical innovation right: in some cases Australia leads the world with improved medication and medical technologies. We have the aged-care system right: residential, home and community care provided by both private care services and public government funded services are anecdotally the envy of the world. We do not as yet have the regulatory framework right to ensure that government funded providers of aged care have certainty and that users of aged care have confidence in our system.

The Aged Care Amendment (2008 Measures No. 2) Bill 2008 seeks to amend the Aged Care Act 1997 and the Aged Care (Bond Security) Act 2006 to strengthen the aged-care regulatory framework so that it reflects the current structure and nature of the aged-care industry. But will the bill’s emphasis on compliance manage to achieve that objective? Let’s look at some statistics. There are 2.8 million people aged 65 years plus, which is 13 per cent of the population. There are another two million people aged 70 years plus, which is around 9.3 per cent of the population. That means almost one quarter of the total population is over the age of 65. The average age of people entering residential aged care is 82. Seventy per cent of people entering residential aged care enter high care. A very high proportion, over 50 per cent, of residents in any aged-care facility will have mental health or dementia related problems.

In my own shadow portfolio of veterans affairs, the average age of permanently incapacitated senior veterans is 81.7 years of age. The largest number in that group is made up of those aged between 85 and 89 years, who number 32,019. That means there are 32,019 veterans who need care, treatment and peace of mind. The highest number of veterans on disability allowance is 27,562, and they are aged between 85 and 89 years of age. The second-highest number of veterans on disability allowance is around 24,808, and they are aged between 80 and 84. There are around 22,325 Vietnam veterans on disability allowance aged between 60 and 64. The other very vulnerable group are war widows. There are 108,023 war widows being looked after by the Department of Veterans’ Affairs, and only 2,258 are under the age of 60.

We already have a crisis in aged care. The most critical thing to understand is that over the next four years the number of Australians aged 85 years will increase fourfold. These are statistics that cannot be ignored. Over the past 20 years, there has been a greater emphasis on keeping people in their homes for longer. If you talk to many people who are ageing or who already require care, they agree. Their preference and desire is to stay in the familiar surroundings of their own home for as long as possible. But there will come a time for many when they cannot sustain their day-to-day care as home-care services will not be enough or they decide that they will feel more secure and be able to access better services by moving into a facility, and hospitalisation will be necessary. How will this bill meet that need? The answer is: it won’t.

There are 2,870 accredited aged-care facilities throughout Australia. An independent aged-care survey released recently disclosed that the average return on investment in a single bedroom is only 1.1 per cent a year. Such a low return on investment gives little comfort to an investor looking at the aged-care market and comparing it to other opportunities for a higher return. The immutable law of diminishing returns will see the lack of investment lead to a decline in the building of new facilities to meet growing demand. The bill does nothing to encourage new investors to invest in this sector. In fact, it does the opposite. The Hogan review in 2004 and, most recently, the Productivity Commission’s 2008 report on aged-care services found that the regulatory and pricing framework decreased the viability of the sector. The law of supply and demand will see our most vulnerable Australians—the generations that have gone ahead of us who worked hard; went to war; came home; built prosperity; shaped our values of a fair go, mateship and reward for effort; and delivered a peaceful, stable society—will have nowhere to go.

We often hear people say that they want to leave the world a better place for future generations; we also need to look at the responsibility we have to older generations. The coalition, when in government, introduced reforms that delivered a high-quality, affordable and accessible aged-care system. The national quality assurance framework for residential aged care, which combined accreditation and certification, was a step forward, as was the Aged Care Complaints Investigation Scheme. But more needs to be done to reflect changing times and needs, and this bill falls far short of what is needed. Since winning government, Labor has ignored older Australians. It has no answer to the nursing skills shortage, no answer to the rising demand for high-care services and no answer to the question of how to encourage more investment in this seriously underfunded sector.

The Aged Care Amendment (2008 Measures No. 2) Bill does not address the serious problem of funding for high-care services. Currently, if an aged-care recipient is assessed by an aged-care assessment team as needing low care but, on entering a residential facility, is assessed as requiring high care, the funding that the facility receives is at the low-care rate until a reassessment takes place. That takes time. If the aged-care resident’s reassessment is for high care, funding is not backdated at the higher rate. While waiting for a reassessment, facilities have to wear the difference between the cost of providing high care and the original low-care cost. That can take weeks and, in some instances, months. The government is asking industry to bankroll its aged-care responsibilities. Industry was led to believe that this issue would be addressed in the bill. The situation just adds to the disincentive for investment.

Funding is important but, equally, administrative arrangements can be the difference between what works and what does not. The bill seeks to further protect accommodation bonds. Accommodation bonds were introduced by the Howard government in 2006 and have been successful in guaranteeing the repayment of bonds if a provider, for whatever reason, enters into insolvency or becomes bankrupt. The opposition supports that concept. The measures in this bill will extend the accommodation bond scheme to include lump-sum payments which are paid by residents to enter a facility that, at the time of payment, is not an approved provider but subsequently becomes an approved provider. That is a good measure and provides confidence in the system. On the other hand, there is concern about the bill’s remedies for noncompliance. These include the imposition of sanctions and the revocation of licences. The concern is that the bill widens the power of the secretary of the department to impose sanctions as a deterrent to future noncompliance rather than as a response to breaches. This is the big-stick approach and introduces an element of distrust and complexity into the legislation.

In 2007 there were around 2,872 residential aged care providers in Australia. Approximately 64 per cent are private not-for-profit, 26 per cent are private for-profit and the remaining 11 per cent are government providers. That means that almost 90 per cent of aged-care facilities are provided by private organisations. In the main, these organisations do a great job and they need to be encouraged and given opportunities to develop and expand their services. There is a simple truth that if there are fewer facilities for a rapidly ageing population demand, then many people will miss out. That is not the way to run an aged-care system. This bill will make some positive changes to administrative arrangements but the overarching result will be fewer facilities being built and a bleak future for the frail aged and sick. If governments want the private sector to invest in aged-care facilities and services there needs to be a serious look at the direction in which this bill is taking aged care.

I want to reflect on and reiterate a comment made by the shadow minister for ageing, my colleague Margaret May. She said:

I … urge the parliament to consider the extent to which the additional and amended obligations proposed in the bill will affect the ability of industry to provide the high level of care that older Australians expect.

The opposition do not oppose this bill but we do have concerns. There are a number of matters that need to be addressed. The signs are that the aged-care industry is in crisis and much more work needs to be done before we can be satisfied that the legislation will address the very real needs of the industry and the ageing Australian community.

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