Andrew Hastie (Canning, Liberal Party) Share this | Hansard source

I agree with the member who just spoke that the role of government is to care for the elderly and for those who are vulnerable, so I speak today to support the Aged Care Legislation Amendment (Increasing Consumer Choice) Bill 2016. I commend it because I believe it does just that.

According to the 2015 intergenerational report, Australia's older generation is on track for unprecedented growth, with the number of people aged 65 and over predicted to reach 8.9 million, more than double the current population, by 2025. This is particularly pertinent in my electorate of Canning. To give you a sense of some of the demographics: as of September last year, 16.6 per cent of Canning residents were aged between 60 and 69, 15.2 per cent of Canning residents were aged 70 or above and 49.1 per cent of the Canning population was aged 50 or above. As you can see, the question of aged care into the future is a big one, and Canning will get a lot of benefit from this bill.

Understandably, this increase will put pressure on our aged-care system, so, in order to meet the demands of such significant growth, we need to start the reform process now. That is exactly what this bill seeks to do. These reforms will be delivered in two stages that will see the focus of home care shift from the provider to the consumer in order to create a more competitive, affordable and user-friendly aged-care system.

Australians place great value on their independence, so it is no surprise that many of us wish to maintain this as we grow older. While in some instances it is not always possible for older Australians to live fully independently, the government believes that individual freedoms should not be forfeited when you reach a certain age. I know a lot of elderly Australians have spent a lot of time throughout their lives making shrewd investments, saving money and preparing for their retirement. I think the family home represents this, so I understand that a lot of elderly Australians want to remain in their family home. I speak from personal experience; both grandparents on both sides of my family remained in their family homes almost to their final years, before they moved into aged care. They enjoyed the benefits of home care. I think they would have benefited from a more flexible approach to home care. If they were alive today, this bill would certainly resonate with them.

We also recognise that conversations about aged care can be difficult to have with loved ones, which is why we are taking the initiative to simplify the process for consumers, their families and providers. Stage 1 of the reforms contained in this bill is set to commence in February 2017 and will allow funding for a home-care package to follow the consumer rather than be allocated to the provider. This builds upon the change introduced in July last year that saw all home-care packages delivered on a consumer directed care basis, allowing consumers and providers to work together to determine the most appropriate type and level of home care.

Consumer directed care also ensures greater transparency of the aged-care process by introducing individualised budgets and regular income and expenditure statements so that consumers are kept aware of how resources are being used. But, while consumer directed care is a progressive step in the right direction, further reform is necessary to bolster the aged-care system. By allocating the funding to the consumer rather than the provider, consumers will have the ability to choose the provider best suited to their needs. A central tenet of coalition philosophy is the choice of the individual to make their own decisions, whether it be through freedom of association or how they spend their money, which is what we are talking about here with particular reference to aged care.

Importantly, a redirection of funding in this manner will also enable consumers to change their provider if they are reallocating or if they feel their needs would be best met elsewhere. In the past, anyone wishing to change their home-care provider might have experienced disruption in their care either through a lengthy transition process or through lower level interim services. They also might have been discouraged from moving to another provider by the fact that unspent funds allocated to the approved provider for a particular consumer's care can be retained by that provider when the consumer no longer receives home care from them. This is not good enough. We understand that circumstances change and care should not be compromised because of this. People, particularly at a fragile time in their lives, should still be afforded choice without punitive financial consequences.

It is important to note that the changes proposed in this legislation are not driven by a government agenda. I note that the opposition broadly supports the passage of this bill. In fact, in its 2011 report the Productivity Commission found that government involvement in aged care is justifiable because of the inequitable access to services for vulnerable consumers and the provision of information.

The coalition government is committed to reforming the aged-care sector in so much as facilitating its transition to consumer driven, market based care models that are vital to the industry's sustainability. In facilitating this transition, the government is employing a bottom-up approach by consulting key industry stakeholders such as providers, consumers and department officials. The key belief underpinning this reform—that competition is essential to consumer driven care—is a sentiment thus echoed by key industry bodies:

The National Aged Care Alliance lamented the lack of consumer choice in both its 2012 and 2015 blueprints for aged care reform; and the Aged Care Sector Committee, established to guide the government with ongoing reform, notes choice, support, innovation, affordability and sustainability as its guiding principles.

While the government is focused on streamlining the aged-care process for consumers, we are also focusing on reducing the regulatory burden on providers already operating within the industry as well as those looking to enter. The first step in this direction is to abolish the aged care approvals round or ACAR. ACAR is a competitive process through which prospective and current providers are required to submit detailed proposals of their care models and capabilities in order to be allocated federally funded home-care places or capital grants. This process places an extremely high and unnecessary administrative burden on providers, who are required to submit applications focused in part on key personnel and individual performance indicators rather than the organisation's overall capacity to deliver quality consumer outcomes in aged care in line with the legislation.

If I may digress, I know that the ACAR has proved to be a significant hurdle for Canning residential aged-care providers in the past due to the regional nature by which places are allocated. For example, residential care providers in Pinjarra, located approximately an hour and 10 minutes south of the Perth CBD, have been grouped together with larger metropolitan providers to compete for places under the ACAR process. When we consider the fact that last year only 6,045 home care places were available for allocation in the 2015 ACAR, despite the 126,826 applications received by the department, it is little wonder that providers who find themselves at a disadvantage by distance are struggling to compete.

As such, I am glad to see that the government is moving on from this antiquated system. We are the government that removes red tape, not enhances it. That is not to say that providers, particularly smaller providers in rural and remote areas, have not expressed concern about the challenges associated with transitioning to market driven care—such as comparatively less marketing capability and increased costs of service provision.

There are providers within my electorate that would likely fall within this category, and so I am pleased that the government engaged stakeholders on this very issue, some of whom have noted that smaller providers should be able to better position themselves as providers of choice in their local communities by drawing upon existing local knowledge and relationships. It is perhaps also worth noting here that not-for-profits currently control much of the home-care market, overseeing 82 per cent of allocated places.

The second stage of the reforms contained in this bill is the integration of the home care packages program and the Commonwealth home support program into a single, streamlined home-care program as of July 2018. These two initiatives are already simplified versions of a range of home-care options, and thus this phase is a continuation of broader industry reform.

The government understands that these changes may overwhelm consumers who are not entirely confident in their own ability and knowledge to access the best information on aged or home care. The My Aged Care portal, a one-stop-shop that facilitates access to the most up-to-date information and services, will thus create this opportunity for consumers to better understand the process.

We also recognise that providers, such as those who have provided their feedback on these changes through Aged Care Services Australia, will also have some reservations about transitioning to a market driven aged-care sector. That is why the government has established a new Home Care Reforms Advisory Group, which will continue to provide advice to the Minister for Aged Care and the department about implementation, communication and monitoring issues for stage 1 as well as areas of stage 2.

I note the department has also been engaging with stakeholders since these changes were announced in the 2015 budget, and I am pleased hear that this active engagement will continue in 2016 and beyond. This legislation is good coalition government policy: it is consumer focused, market driven and represents innovative reform with a look to sustainability and affordability. At the height of it is the recognition of the dignity of the individual, particularly for those in their elderly years. It respects freedom of choice. It respects the fact that people have invested in their retirement, particularly in the family home, and would thus like to age accordingly in their home without disruption to their daily patterns of life.

Backed by a range of stakeholders, the legislative changes included in this bill lay down a clear path of reform that will provide far-reaching benefits for consumers and providers across Australia, including those in Canning. With this in mind, I commend this bill to the House.

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