Laurie Ferguson (Reid, Australian Labor Party, Shadow Minister for Consumer Affairs) Share this | Link to this | Hansard source

The essential purpose of the Aged Care (Bond Security) Bill 2005 and cognate bills is to strengthen the prudential requirements and enhance the protections available to residents in aged care facilities who have paid accommodation bonds. These bonds are paid upon entry by non-concessional residents of low-care facilities, previously called hostels, and also by residents in high-care facilities, formerly called nursing homes, which have ‘extra service’ status, as well as by some residents in multipurpose service facilities. When residents exit an aged care facility, they or their family may be eligible for a refund of part of the accommodation bond paid previously. Under current arrangements, if a residential care facility provider becomes bankrupt or insolvent, residents are not guaranteed that they will get their relevant accommodation bond amount refunded. These bills are designed to ensure that residents will, in all cases, be refunded the amount of accommodation bond that they are owed.

This was recommended by Professor Warren Hogan in his 2004 Review of pricing arrangements in residential aged care. In making the recommendation that prudential arrangements be established to ensure the protection of residents’ bonds, Professor Hogan noted that bonds do not qualify as preferential debts under the Corporations Act 2001. Currently, approximately $4.3 billion is held by residential aged care providers as bonds, with an average bond of $127,600. Sadly, this has been the only response the government has made to the Hogan report. We are still waiting for the government’s response to the long-term proposals that Hogan recommended. It has taken the government longer to respond to that report than it allowed Hogan himself to undertake the entire inquiry.

The Aged Care (Bond Security) Bill 2005 establishes a scheme to guarantee the repayment of aged care residents’ bond balances if the approved provider of a residential aged care service or a flexible care service becomes insolvent—a default event—and is unable to meet their financial obligation to repay residents’ bond balances. The Aged Care (Bond Security) Levy Bill 2005 will enable the Commonwealth to impose a levy on approved providers of aged care if it needs to recover its costs, including administrative costs, after repaying accommodation bonds to aged care residents whose approved providers become insolvent and default. A levy can be imposed on approved providers of aged care once a cost recoupment determination is made by the minister. Such a determination is made when the Commonwealth has not recouped money it has paid out in compensation to aged care residents entitled to bond refunds from a defaulting approved provider or when the Commonwealth wants to recover associated administrative costs. The bill does not actually impose a levy. Instead, the rate of any levy will be determined by regulation. The rate cannot exceed the cost recoupment determination amount in any particular case. While any levy imposed may apply different rates to different classes of approved provider, it cannot discriminate between providers on the basis of their location in a particular state or part of a state.

The Aged Care Amendment (2005 Measures No. 1) Bill 2005 contains a number of measures and includes the aims of ensuring that residents of flexible care services are afforded the same protections as residents in residential aged care services, putting in place a set of prudential standards, ensuring that interest is repaid to the estate of a resident for the period between the death of the resident and the repayment of the bond, changing the time frame for repayment of a bond to the estate of a deceased resident and, finally, reducing the time frame in which a bond must be refunded in the event of a resident leaving a facility or if the resident dies. This bill will enable the strengthening of existing prudential requirements related to accommodation bonds, especially in relation to liquidity, record keeping and disclosure. These new prudential requirements will be developed over time and will be subject to review.

While Labor will support these bills, we are concerned at the way in which the Howard government has chosen to manage—or mismanage—aged care. This is evidenced in the comments made by Professor Hogan that Australia’s aged care system is stuck in a Stalinist time warp. I can say from my own experience that Professor Hogan is not one for extreme language, yet he has publicly stated that the government’s system for administering nursing homes has its basis in Moscow’s planning offices of the 1920s. Professor Hogan has called for ‘a comprehensive revision of aged care legislation’. The Minister for Ageing must acknowledge Professor Hogan’s and the sector’s concerns and get on with the job of ensuring the sector’s future. The aged care industry and the community have been saying for years that the government’s quick fix policies are putting enormous financial pressure on the aged care system, yet the former minister has refused time and time again to acknowledge the problems in administration and accommodation.

The Howard government is failing to deliver the aged care services needed for our ageing population, with a shortage of over 9,000 aged care beds across the country. There are thousands of frail elderly who cannot find a nursing home bed because of the Howard government’s failure to ensure promised aged care beds are actually built. After 10 long years, the Howard government has not faced up to the aged care bed crisis in Australia. Every week we hear from families desperate to access an aged care bed for their loved one and the waiting lists, especially for high care, are getting longer and longer. When the Howard government came into office there was a target of 90 residential aged care beds for every 1,000 people aged 70 years and over. As at June 2005, there was a shortage of 9,275 aged care beds against this target—a target the government set. Instead of fixing the problem and meeting this target last year, the Howard government quietly lowered the target to 88 residential aged care beds for every 1,000 people. It lowered the target—I do not think that is a new solution to the problem. Even against its own reduced target, there is still a shortage of 5,500 aged care beds across the nation.

The Productivity Commission reported that, in 2005, 30 per cent of people requiring nursing home care had to wait more than three months to get a bed, which was up from 15 per cent in 2000—in other words, the problem had doubled. The national shortage of 9,275 aged care beds understates the severe shortages in some regions. The Productivity Commission’s recently released report Australia’s health workforce highlights the significant shortage of nurses and care workers in aged care. The report noted:

There have been longstanding concerns about the size, skill mix and availability of aged care workers—particularly in regard to nursing staff. A number of recent reports have reinforced these concerns. For example, the Senate Community Affairs Committee Inquiry into Nursing identified aged care as the area of nursing in greatest crisis, with the acute shortage of nurses having led to increased use of unregulated workers, to the detriment of quality of care.

The recently released unanimous report of the Senate Community Affairs References Committee Quality and equity in aged care also noted that delivery of quality care was under threat from the retreat of both registered nurses and enrolled nurses from the aged care sector. The Productivity Commission report comes on top of myriad other reports that highlight the workforce crisis in aged care, and the Minister for Ageing has yet to engage with the sector to come up with serious solutions.

The government must provide the community with confidence that their loved ones are being cared for by sufficient and appropriately qualified care staff who are happy to work in the aged care sector. In the 2002-03 budget, the Howard government increased residential aged care subsidies by $211 million over four years to assist employers of aged care workers to provide for increases in wages and improved workplace conditions. In 2002 the wages gap between nurses working in residential aged care and those working in the public sector was $84.48 per week nationally—a significant difference. In the 2004-05 budget, the Minister for Ageing announced an extra $877.8 million over four years through a conditional adjustment payment to improve the financial position of aged care providers and allow them to pay more competitive wages to staff. The wages gap in 2005 was $191.83 a week. The problem is that there was no mechanism to ensure that this funding of nearly $900 million was actually passed on in wages so that we can recruit and retain nurses and care workers in an area that is struggling to keep them. Most of this money has gone not to nursing staff but to the providers themselves.

If this government were really serious about the provision of quality care for older Australians, it would make a commitment to increase the number of undergraduate nursing places. There are plenty of people wanting to undertake nursing but patently insufficient places for them. Figures from the Australian Vice-Chancellors Committee showed that 2,716 eligible nursing applicants missed out on an undergraduate nursing place last year. That represents 20 per cent of those interested in getting into the sector.

With the release of yet another workforce report highlighting the significant shortages in aged care, it is now time for this government to take immediate action so that older people in Australia receive the care they deserve. And when we speak of immediate action we are not saying that the government’s current method of importing skilled staff and undermining the nursing education systems and the availability of nurses in Third World countries is a solution—that is precisely not the solution.

In 10 years the Howard government has failed the grade in aged care. There is a major lack of infrastructure and long-term workforce planning, and the government’s lack of investment in future needs and, most critically, its inability to collaborate with state and territory governments have led to this crisis. Every day sees thousands of frail elderly in acute hospital beds because there are no places for them in residential care. The states and territories bear the cost, people who need hospital treatments must wait and the elderly themselves do not get the type of care and environment they need and deserve. This is an issue Labor has consistently raised. It was one of the key drivers of Medicare Gold, which offered a real solution to the problem.

This issue of what is called ‘bed block’ is so central to the problems confronting our hospital system that it was addressed head-on in the Podger review. We understand that Andrew Podger’s solution was very similar to Medicare Gold, which presumably explains why his report has been condemned to the backblocks. However, as a consequence, the issue of bed block and the need for the Howard government to meet its responsibilities and provide more aged care beds to get the frail elderly out of hospital can no longer be ignored by the Prime Minister, the Minister for Health and Ageing and the Minister for Ageing—or even the Treasurer and the Minister for Finance and Administration. So it will be on the table to be addressed at the COAG meeting next week. We await the outcome of COAG’s deliberations, as do anxious families of those elderly patients around the country who have been unable to find suitable accommodation.

Labor will support sensible proposals which are fair and which seek to relieve the pressure on the aged care system through access, quality, affordability and sustainability. As such we will support this legislation. However, we believe that legislation of this impact should be properly examined and scrutinised, and so we will move in the Senate to have these bills referred to committee for consideration.

Craig Emerson (Rankin, Australian Labor Party) Share this | Link to this | Hansard source

The Aged Care (Bond Security) Bill 2005 and cognate bills aim to secure accommodation deposits by surrounding them with some accountability and prudential requirements. The way it works is that, in the unfortunate event that a nursing home was to become insolvent, the Commonwealth would step in and ensure that the accommodation deposits were refunded to the families of the residents. That is a welcome move because it does provide greater security for those deposits, and it is a reflection of the report prepared by Professor Warren Hogan, Review of pricing arrangements in aged care.

Professor Hogan dealt with the issue in a broader context, however. That context is his support for accommodation deposits for high-care residential accommodation. I, too, support accommodation deposits for high-care residential care, subject to a number of qualifications that I will spell out. There have been very long and acrimonious debates about this matter in the past. I think we need to move on and look again at the question of accommodation deposits for high-care residential care because, as is so often the case, under the current arrangements it is the poor who are disadvantaged by the absence of such arrangements.

However, to put the entire debate into context it is worth looking at the Intergenerational report prepared by Treasury in 2002 and also the Productivity Commission’s major report on the economic implications of the ageing of the population. Both of those reports show that we have a very substantial problem on our hands in terms of the economic impact of the ageing of the population of this country. It is projected that by the mid-2040s Australia will have an extra four million people over the age of 65, yet just a few hundred thousand extra young people. So the profile of our population will definitely be greying. That presents major challenges for Australia, which need to be addressed now, before we get to an absolute crisis. I assert that we are already in crisis on aged care accommodation.

To give perspective to the dimension of the problem in aged care, in these reports it is projected that government spending on aged care as a share of gross domestic product will more than double in the coming 40 years. Furthermore, it is projected that the number of older Australians in high-care residential aged care alone will increase from fewer than 100,000 in 2003 to 337,000 in 40 years time. That gives us an idea of the size of the challenge. But the government is not preparing us for the challenge. It is finding the whole area of aged care too hard—almost too hot to handle. As a consequence, we are confronted with the reality, as laid out by the shadow minister, Julia Gillard, of cost-shifting from the Commonwealth to the states. Instead of taking its responsibilities for aged care seriously and accommodating older people who need high-care accommodation in such facilities, the Commonwealth is leaving people who should be in aged care facilities in hospitals, which takes up very scarce acute-care beds in our hospitals. That might be all right for the Commonwealth, because it shifts much of the cost onto the states. But it is not any good at all for older Australians themselves, it is not good for the system and it reflects the fact that we do not have in place in this country a comprehensive and fair aged care system which anticipates the very real problem of the ageing of the population.

What is happening is that queues are forming. Again, the shadow minister pointed to the size of the queues. This problem has doubled in just the last few years. Whenever we have a situation of queues, whether in aged care, health care or just about any other walk of life, if you examine who is in the queues you find that, most often, it is not the wealthy. Poor people occupy queues, because wealthy people have the capacity to buy their way out of a queue or jump to the front of the queue. Labor in particular should be very concerned about queueing. Of course, the coalition should be concerned too, but, because it is often the poor who are in queues, we find that the coalition is less concerned about that. We should be concerned about the formation of ever-lengthening queues and take remedial measures.

I would like to provide a bit of background about the current arrangements. My professor of old—I will not call him an old professor—Warren Hogan at the University of Sydney alludes to a heavily centrally-planned aged care system. It is ironic that another eminent economist, Professor Max Corden of the ANU, described our university regulatory system as ‘Moscow on the Molonglo’. So we have two eminent professors describing government systems for aged care and education as ‘central planning at its worst’. And I have to agree. That might seem a little odd coming from a Labor member of parliament, but it is true. This government feels that it has to centrally control the provision of aged care and our university system. The government does not let the market play a role in creating the fairer and more affordable system that could prevail if it were to let go of the controls at least a little.

Under the current very complex system, there are two types of charges in residential aged care facilities: accommodation payments and daily care fees. Accommodation payments are designed to help provide a stream of capital for operators to build and maintain aged care facilities, while the daily care fees are a contribution to the running costs of these facilities. Accommodation payments can take the form of deposits—formerly known as bonds—for low-care places but, as a result of government legislation, they are banned for high-care places. In high-care facilities, where accommodation payments are banned, accommodation charges can apply, but they are limited to a maximum charge of just $16.25 a day. So it does not take too much thinking to work out that there is a shortage of funding for the accommodation part of high-care residential aged care. The running costs are covered by daily care fees. Whilst there are limits on those fees, the limits are higher, and therefore there is less of a problem with the running of the facilities but a big problem with the construction and maintenance of high-care residential aged care facilities. There are exceptions to these rules in two circumstances: firstly, up to 15 per cent of high-care residential places can be what are called ‘extra service places’, for which accommodation payments are allowed; and, secondly, when someone enters a low-care facility and pays an accommodation deposit—where they are allowed by law to do so—and then moves to high-care residential aged care, they can carry the accommodation deposit with them.

I think people who are listening to this contribution will begin to understand the absurdity of the situation. There cannot be any philosophical basis for banning accommodation deposits in high-care facilities when they are allowed in low-care residential aged care and in extra service places. I would be interested in hearing the government explain what the philosophical basis for this prohibition is, because there cannot be such a philosophical basis.

The accommodation deposits being provided for low-care residential facilities are being used to cross-subsidise the construction and maintenance of high-care facilities. People who enter low-care residential aged care are effectively subsidising those in high-care accommodation, including people on low incomes in low-care residential facilities cross-subsidising people on high incomes in high-care facilities. So we have the ludicrous situation where, under the current arrangements for residential aged care, the poor are subsidising the wealthy.

Around 65 per cent of residents in residential aged care have high-care needs, yet the Commonwealth has been approving almost twice as many low-care beds as high-care places. So it is beginning to become clear that there is something stuck, and that is a result of this central-planning approach of the Commonwealth. The needs are in high-care residential care, yet the government has been approving twice as many low-care places. The reason for that is the prohibition on accommodation deposits in high-care residential aged care.

There was a big debate about this between 1996 and 1998. The argument used in that debate against accommodation deposits for high-care places was that moving into a high-care residential facility from a low-care facility is traumatic enough without being required to sell your home. That was in the days when low-care facilities were really hostels, and they did not have much of an aged care component to them. They were really like secured premises with not a lot of aged care services provided. Now, several years later, much more commonplace is the situation where low-care and high-care services and facilities are provided on the same site. That is why it is permissible for people who enter a low-care facility to be able to carry their accommodation deposit into a high-care facility. So it is not as if there is this huge traumatic disruption as they move from one facility to another, because commonly now the facilities are on the same site. They may move from one building to another, or they may move even move from one room to another. So the arguments that were carried back in that period have been overtaken by a change in the way that aged care accommodation is provided in this country.

There are already protections in place in relation to the argument about the added trauma of selling the family home in moving from low-care to high-care accommodation. For example, accommodation deposits cannot be levied where the resident has a spouse, relative or other carer living in the resident’s former home. Also, there is an asset limit such that people who are very poor cannot be forced to pay accommodation deposits. These restrictions are designed to ensure that a prospective resident in an aged care facility is not forced to sell a home where it is occupied by a spouse, relative or friend who has been providing care in recent years.

So we have this situation where the Commonwealth of Australia is saying, ‘We are applying by law a limit to the quality of aged care that high-income earners can buy.’ Imagine the furore if the Commonwealth government passed legislation banning the provision of five-star hotel accommodation in Australia on the basis that it is unfair to allow people who have the income, who have the wealth, to buy five-star hotel accommodation in Australia. People would regard that as absolutely absurd. Yet that is exactly the situation that applies in residential aged care, where the Commonwealth bans the use of accommodation deposits.

Baby boomers are beginning to retire. Many of those baby boomers are very wealthy and many of those baby boomers are willing and able to pay for high-quality aged care accommodation but are prohibited by law from doing so. Is this truly 21st century Australia?

As I pointed out, the people who really lose from this limitation on the quality of aged care accommodation that can be purchased by high-income earners are not the high-income earners but the low-income earners: either they are in low-care accommodation and are cross-subsidising high-income earners in high-care accommodation or there are not enough high-care accommodation places because this limitation means that the industry is unable to build sufficient capacity to accommodate residents in high-care accommodation. The ones who miss out are not the wealthy. The ones who miss out are the poor. So we need to look afresh at accommodation deposits.

I do not assert that allowing accommodation deposits in high-care residential aged care will fix all the problems in the aged care sector. I do not assert that, but it is absurd that those restrictions are in place. They should be eased, but subject to a number of caveats. One of those caveats is of course that people should not be forced to sell their homes where they have a relative or someone who has been caring for them for some time living in that home.

A very important caveat is that the proceeds of this extra funding coming from wealthy people going into high-care residential aged care should be used to cross-subsidise the poor, to help those poor people who are sitting in the queues trying to get decent quality aged care to get off the queues and into high-care residential aged care. That seems to me to be a fairly obvious reform that should be contemplated. The reason we are debating this legislation is that Professor Hogan effectively recommended those changes in his report and, as an interim step or as one step along the way, he wanted to provide greater security around accommodation deposits in the event of the collapse of a residential aged care facility. As I understand it, there has not been any great prevalence of such collapses, but it is a prudent measure to provide that protection. But we should then be taking the next big step and look afresh at aged care accommodation deposits for high-care residential aged care places.

When the Minister for Education, Science and Training, who is at the table, was the aged care minister, she floated some other related proposals which are worth debating. They included allocating dollars to the person rather than to the facility. I have one qualification about that: I would prefer to see that occur such that people who are in high need or on low incomes have more dollars attached to them than very wealthy people, so I think consideration could be given to that. The minister further suggested that, in doing this, people who could be in receipt of that funding could include those associated with personal care by a spouse, relative or friend. That does raise some questions about the quality of care, but that does not mean that the issue could not be debated and considered. But there is, in my view, a flaw in the argument. That is that, as a result of the proposals that the minister put up, it is likely that people will stay in their homes longer—that is fine; that is one of the objectives—but then they would move into high-care accommodation. Unless we solve the problem of the costs of high-care accommodation, ultimately that will exacerbate the situation, not improve it—and I see the minister is, in her own inimitable way, acknowledging this point. The minister’s solution is worth debating. It is worth considering but it must be considered within the broader context of the adequacy of funding of high-care residential aged care. If people are willing and able to pay more, why would a government that purports to be in support of self-reliance prevent them from doing so? The Labor Party should consider these proposals because, as I said, it is the poor who lose out, we have a responsibility to the poor and we have a responsibility to all Australians. This debate should continue in earnest.

Luke Hartsuyker (Cowper, National Party) Share this | Link to this | Hansard source

I welcome the Aged Care (Bond Security) Bill 2005 and cognate bills for providing a commonsense and effective solution to the issue of accommodation bond security that will bring increased peace of mind to many residents of aged care facilities and their families. It is important to note that there have been no reported cases of a bond balance not being refunded as a result of an insolvency or a bankruptcy. However, it is right that we should not rely on this state of affairs to continue and should instead provide further safeguards. In such an event, one can imagine the anxiety of those residents and their relatives faced with the prospect of finding a new home. One would not want it to be compounded by doubts about the safety of the accommodation bond, which might be crucial to their financial arrangements. Indeed, it would be a grave injustice if such bonds were to be subsumed in the assets of an insolvent company. This potential injustice would be compounded by the growth in the value of bonds, the average value having increased from some $26,000 in 1996-97 to $127,000 in 2004-05. The total value of bonds held in 2004-05 was some $4.3 billion.

Electorates like my electorate of Cowper are becoming increasingly the destination of retirees, many of whom will eventually need the benefit of some form of aged care. I shall come shortly to the very welcome measures that have been taken to help many of these retirees to live in a secure and caring environment or to stay in their homes with appropriate help. However, the fact remains that demand is growing and the government needs to do what it can to encourage providers to invest to meet the needs of that demand. The measures in these bills go some way towards achieving that end.

It is entirely right, as the Hogan review pointed out, that the government has an obligation to ensure that the funds invested in accommodation bonds are not exposed to risk. Hogan went on to recommend that a levy be raised from care providers to establish a guarantee fund held by the government. While this approach clearly provides the security required, it has the disadvantage of tying up funds that could be used to help meet that growing demand. That is why I welcome the commonsense approach proposed in these bills. The fact that the government will act as a guarantor of the bond balances in the first instance and will reimburse residents affected by a bankruptcy should provide residents with much-needed peace of mind. They need not fear that payments will be delayed while negotiations take place in connection with the bankruptcy. The fact that a levy will only be imposed when required will avoid the necessity of tying up providers’ capital, capital which could be put to better use in providing more facilities.

When money is held on behalf of others, particularly those members of our community who may be frail, it is essential that those holding the bonds should manage the funds safely, effectively and openly. I therefore welcome the strengthening of existing prudential measures which set standards with regard to liquidity, record keeping and disclosure. The Aged Care Amendment (2005 Measures No. 1) Bill 2005 will require more information about the way that these funds are being managed—hence more security—and lessen the risk of a provider becoming insolvent or bankrupt.

These measures affect a sizeable proportion of my constituents. In Cowper the percentage of people aged over 65 is double the New South Wales average. Such a statistic reflects the increasing number of people who are relocating from major metropolitan cities and from other regional areas, seeking a coastal lifestyle and retirement—a lifestyle in the most beautiful area of Australia. Of course, the sea change phenomenon is not something that has just happened over night. For years Australians have been migrating to coastal areas to enjoy their retirement. However, in regions such as my own electorate on the New South Wales North Coast the real difference over the past 10 to 15 years has been the volume of people who have been moving to the coast from the cities and western country areas.

This demographic migration has naturally lead to an increase in the demand for aged care services, as I noted earlier. This is where the coalition government sets itself apart from the members on the other side of the chamber. In 1996, when the coalition was elected to government, the recurrent aged care spending in my electorate was just $13.5 million per annum. When this government came to office, local aged care facilities were struggling to find beds to meet the demand for their services. There were no community aged care packages which provided elderly people with the choice of remaining in their own homes rather than going into a formal aged care facility. Similarly, there were no extended aged care at home places. Under 13 years of Labor, aged care was put on the backburner and many Australians struggled to access appropriate care in their retirement years.

This is an important point because the legislation which is before the House today is an extension of the coalition government’s commitment to providing peace of mind for older Australians. If you ask most older Australians what makes them comfortable, they will tell you that access to health care and their personal security are of paramount importance. These two factors are vital to retirees enjoying their senior years.

I will now turn to some of the achievements in aged care in my electorate as a result of the coalition government working closely together with the aged care sector. Since I was elected as local member in 2001, the Cowper electorate has enjoyed a very close association with two excellent aged care ministers: Minister Andrews and Minister Julie Bishop, who is at the table today. My constituents welcomed both ministers to the electorate during their tenure. The aged care providers appreciated the time made available by those ministers to meet with them and discuss their concerns.

The additional investment which the coalition has made in aged care is evident right across the region. For example, in Yamba we have seen the Caroona Hostel aged care facility expanded to cope with the increase in allocation of beds. A $1 million extension is currently under construction and plans are already under way for a further $5 million expansion after a further allocation of beds this year. In Maclean, the Mareeba Nursing Home is also planning extensions and the Clarence Valley Council is providing an unprecedented number of aged care services in the homes of local residents, funded by the federal government.

This expansion has been mirrored along the Coffs Coast where extensions have been completed at the Woolgoolga and District Retirement Village, at Bellingen’s Bellorana and at the Coffs Harbour Nursing Centre. We have also seen new facilities opened by the Churches of Christ at Coffs Haven, by the masons at the Coffs Harbour Masonic Village, plus the expansion of aged care services in the home, where Mid North Coast Community Care Options are doing a fine job.

In the Nambucca area the good news continues. On 22 December I was able to announce that, as a result of the allocation of 60 low-care places, the Uniting Church would construct a $6.5 million aged care facility in Nambucca Heads. This facility will provide some 70 new jobs in the Nambucca shire. Just under a month later the finishing touches were put on the Riverside Gardens Aged Care Centre, also in Nambucca Heads. This $5 million facility, which was the vision of Nambucca Valley Care, is in addition to the existing Riverside Gardens Retirement Village and hostel, which is one of the biggest employers in the town. I would like to recognise the commitment of Jan Foster, her staff and volunteers at Nambucca Valley Care who are very focused on providing the very best possible aged care services in the Nambucca shire.

A quick snapshot of the Cowper electorate highlights what aged care achievements are being delivered in areas of need in my electorate. However, I would like to note that the coalition recognises that there is a need for work to continue. As we know from the Intergenerational report, it is estimated that by 2042 the number of Australians aged over 65 will double. Many of these people aged over 65 are moving to coastal areas. I therefore welcome the coalition government’s commitment to continue the roll out of aged care beds. We have increased the target number of aged care places per thousand over the age of 70 from 100 to 108 by the end of 2008, and we are on track to meet that target. Since 1996 more than 68,600 new places have been allocated. Over the next three years the coalition has committed to allocate a further 26,600 new aged care places. This is in addition to the measures announced in the last budget providing some $321 million for sufferers of dementia and their carers and the tax-free payments of $1,000 and $600 for those receiving the carer payment and the carer allowance respectively.

There remain some areas in my own electorate where I believe more beds should be targeted. Without doubt the most important and most urgent area of need is in South West Rocks. South West Rocks has experienced huge growth over the last five to 10 years and many of the new residents moving to South West Rocks are retirees. Although the town’s aged care needs are accessed through neighbouring towns such as Kempsey, the demand for aged care services, both in the home and in aged care facilities, is obvious for the people of South West Rocks.

There is a new multimillion dollar facility planned for nearby Frederickton which borders my electorate and is in the electorate of the Deputy Prime Minister and member for Lyne, Mark Vaile. Whilst the Frederickton facility will service residents in both electorates, I believe it should not be used as a justification for withholding an allocation of aged care beds for a stand-alone facility at South West Rocks. South West Rocks is at least 30 minutes drive from the nearest existing aged care facility and approximately 20 minutes drive from Frederickton, which places a great strain on spouses when they wish to visit their partners who are residents in formal care. With little public transport available, many elderly residents are finding it difficult to visit their partners each day. With many of the partners having restricted drivers licences, it makes it a very difficult family situation when being unable to regularly visit your partner of many years in care some 20 or 30 minutes away. The latest round of aged care places increased the number of beds available in the Kempsey shire, but I believe within the shire it is essential that there is a greater focus on South West Rocks. I have welcomed the cooperation and support of the South West Rocks community, and I will continue to work with them to address the aged care needs within the town.

The coalition government is absolutely committed to providing quality aged care for senior Australians. It has been working very hard to address the 13 years of neglect which occurred under Labor. The Commonwealth is currently investing more than $50 million in aged care places in my electorate every year in recurrent funding. That is $50 million these days as opposed to $13.5 million just 10 years ago. The sector is now not only a deliverer of services but also a major driver of the economies in many smaller towns, further highlighting why this legislation is so important to the residents who live in rural and regional Australia and particularly along the North Coast of New South Wales. I commend the bills to the House.

Daryl Melham (Banks, Australian Labor Party) Share this | Link to this | Hansard source

The Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and theAged Care Amendment (2005 Measures No. 1) Bill are designed to protect accommodation bonds held by residential aged care providers in the case of a provider becoming insolvent. The bonds are paid on entry to low-care facilities by non-concessional residents and by some ‘extra service’ residents in high-care facilities. When residents exit an aged care facility they, or their families, may be eligible for a refund of part of the accommodation bond paid. Currently, this refund cannot be guaranteed should a residential care facility provider become bankrupt or insolvent. These bills will ensure that residents will be refunded any of the accommodation bond they are owed.

The bills provide that the government will repay any outstanding accommodation bond balances in the case of an aged care provider defaulting. The levy bill will then allow the Commonwealth to impose a levy on aged care providers to the extent that it is necessary for the Commonwealth to recoup the amounts it has not been able to obtain from defaulting providers. Labor will support this legislation, as far as it goes.

However, these bills go only a small way towards addressing the critical issues confronting Australia’s ageing population. The government is only now coming to the table in dealing with these matters. The Hogan Review of Pricing Arrangements in Residential Aged Care was concluded in 2004. The Senate Community Affairs References Committee tabled their report Quality and equity in aged care on 23 June 2005. I note that that report was unanimous. Both these documents contained numerous recommendations for action this government could take in reforming the aged care system in this country. Yet all we see is this paltry attempt to deal with what is rapidly becoming a national crisis. The government cannot claim to be underinformed of the issues facing this sector, yet has chosen to do little about it.

The Hogan review identified a series of demand drivers. Perhaps the most critical were the demographic changes due to the increased health expectancy of older people and changes in older people’s living arrangements, along with their access to informal care. The review states on page 22:

Over the next four decades the number of older people will almost triple. Moreover, the older population will grow twice as fast as the total population during that period.

There can be no doubt that there will be an increasing demand for aged care services. That demand will have to be met. Given the Hogan review’s projections in table 3.1 on page 24, which state that over the next 40 years the total cost of supplying aged care services will more than double in real terms, it will grow by 113.1 per cent. The Hogan review provides 20 key recommendations. The Senate committee report outlines 51 recommendations. This legislation before the House today deals with only one aspect of the matters in those reports.

Consider for a moment the number of aged care beds. When this government came to office there was a target of 90 residential beds for every 1,000 people over 70 years of age. As at June 2005, there was a shortfall of 9,275 aged care beds against this target. This target has since been lowered to 88 residential aged care beds for every 1,000 people aged 70 and over. Even against this target, there is still a shortage of 5,500 aged care beds. Recommendation No.1 of the Hogan review stated that the government should commit to sustaining a rate of 108 places for every 1,000 people over 70. My colleague Senator McLucas noted in her media statement of 21 November 2005 that it was interesting to consider exactly wherethe shortfall occurred. For example, there was a shortfall in south-eastern Sydney of 1,496 beds yet there was an oversupply in northern Sydney—and there are no surprises for guessing which electorates are in northern Sydney.

I would like to outline briefly some of the areas Warren Hogan noted in his review as requiring immediate change. I do this to provide a clear statement of what the government could and should be doing in relation to aged care. I have already dealt with planning arrangements. Further recommendations were made in relation to greater flexibility in allocations; increased support for aged care assessment; aged care assessment teams’ role in reassessment of existing residents; the resident classification scale; funding supplements; the Aged Care Standards and Accreditation Agency; the aged care workforce; financial assessment on entry; the guarantee fund; viability supplement; targeted capital assistance; conditional incentive supplement; comprehensive data repository; and corporate information. There are an additional five recommendations focused on medium-term reform. Only one of those recommendations—the guarantee fund—is currently being dealt with by this House in the form of the bills today. This is an appalling state of affairs.

I would now like to turn to the key recommendations proposed by the Senate Community Affairs References Committee. This report, by the way, was tabled after the Hogan review and was unanimously supported by committee members. This is a continuing saga of so much to do, and so little done, so many opportunities lost. For example, in recommendation No. 1, the committee welcomed the allocation by the government of an extra 400 nursing places at universities in the 2004-05 budget. Unhappily, this is short of the 1,000 places recommended by the Hogan review. One of the key issues raised by both the review and the committee was the need for increased numbers of trained aged care workers.

The committee made seven recommendations to deal with the issue of lack of appropriately trained staff for the aged care sector. There are 11 recommendations dealing with the accreditation agency, accreditation standards and complaints resolution. There are nine recommendations to improve documentation and technology in the aged care sector. In terms of funding for aged care residents with special needs, the committee detailed nine recommendations. One of these was recommendation 32, which read:

That the Commonwealth establish a funding supplement for residents in residential aged care who have additional needs arising from mental illness.

What I find so inexcusable is the fact that there is no such supplement now. Surely, it is evident that people with special needs require additional funding. There are another 11 recommendations dealing with community care programs. The committee acknowledged the recent funding increases in the Home and Community Care program. It further noted, however, the need for more comprehensive levels of care and the need to ensure sufficient funding growth to meet new demand.

The committee directed several recommendations to the particular needs of some specific groups. Recommendation 39, for example, focused on people from culturally and linguistically diverse backgrounds, Aboriginal and Torres Strait Islanders, people with dementia, financially disadvantaged people and people living in remote or isolated areas. Recommendation 40 recognised the special needs of homeless people or people at risk of becoming homeless as they age. Recommendation 41 dealt with the costs of providing community care services in regional, rural and remote areas. Finally, recommendations 48 to 51 dealt with matters of transitional care.

So there we have it, a total of 20 recommendations from the Hogan review and 51 recommendations from the Senate Community Affairs References Committee inquiry; yet this government appears to take only one of those matters so seriously that it has introduced legislation to address a matter of national significance. I can speak of this subject with some personal knowledge—my own constituents raise these matters with my office on a regular basis. One recent example is an elderly man with emphysema who is unable to find a place locally for his wife. He is forced to travel to Croydon, some kilometres away, to visit her. Pensioner couples are very concerned over the low threshold of the assets test. One woman is very concerned that her savings will not last. She is required to pay an extra $16.63 per day for her husband, who has dementia. With the daily care fee of $28.62, this is a total of $316.75 per week in addition to the extra costs of pharmaceuticals, ancillary health and personal items. For a pensioner couple, the assets test is $61,000. This obviously does not last long at almost $320 per week in extras.

I doubt that I am the only member of parliament who, in the normal course of a day, has concerns raised with him or her on the matter of aged care. Yet we are dealing with three pieces of legislation which deal only with the matter of prudential requirements. I acknowledge that this is a necessary part of the reform process. The Labor Party will of course support these bills. But, to coin a phrase, this is very much the tip of the iceberg. There is so much more to be done in this area and this government has had more than enough time and input to take action to ensure that our ageing population will be cared for in the manner most appropriate to their needs. I commend the government on the start it has made in introducing this legislation. I can only continue to urge that now is the time for the transformation of aged care.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

It is with great pleasure that I rise today to support the Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005 in the House. I am very pleased to see that the former Minister for Ageing is sitting in the chamber. It is very fitting; these were her pieces of legislation—and what a fantastic Minister for Ageing she was. We think that she has done more for the benefit of our residents in aged care facilities and their families than any other minister has done in a long time. I congratulate her for all that she has done, and these are true and genuine congratulations to the former minister for having undertaken her role as a minister for aged care in such a professional and profoundly competent way.

These bills aim to continue the government’s goals to ensure that the protection of aged care residents is paramount when it comes to accommodation bonds. Already this government has made provision for people with dementia and improved training for aged care workers, and the number of aged care places continues to increase throughout my electorate of Riverina and across the nation as a whole. We have put in place a whole host of measures and accreditation to ensure that, when our loved ones have to enter into an aged care facility, the treatment and the service they get is of a high standard. Aged care workers are a dedicated group of people who are entirely committed to the residents of aged care homes. This government has sought to put them in a position whereby their quality assurance and protection along with the protection of the residents is highly valued. I congratulate all of those workers in the industry who are absolutely committed and dedicated to the care of our ageing and elderly Australians who have given much to this nation over their lives.

The Aged Care (Bond Security) Bill 2005 will guarantee the repayment of aged care residents’ bond balances in the event an approved provider is unable to repay residents’ bonds. Under the Aged Care Act 1997, an accommodation bond is an initial payment that an approved provider may charge a resident of aged care services for entry to low-level residential aged care or to high-level residential aged care in an extra service facility. Some aged care residents in multipurpose services may also be charged accommodation bonds. The balance of a bond that is paid to a provider when a resident enters a facility, minus certain deductions and any investment returns retained by the provider, is refunded to the resident on their exit from the facility. They may decide to exit for many different reasons.

With about 74 per cent of aged care services requiring a levy bond to be paid, the effect of the security that comes with the introduction of this bill will assist many older people and in particular their families. Often it is difficult enough for an aged person to adapt to the prospect of having to live in a residence and to be cared for, often far away from family members and friends. Then, perhaps, they may also face losing a huge proportion of their life savings, which they have used for accommodation bonds, by not being repaid when they need the money to move into other levels of care. It certainly will be hugely reassuring to have a guarantee of this kind that their bonds will be repaid due to this legislation currently before the House.

If an aged care facility in a small community closes, it is very difficult not only for family members, who face the task of finding new accommodation for their aged parent, relative or loved one, but also for aged residents, particularly when they are quite ill or frail, who are sometimes sent elsewhere. Not being able to immediately obtain much needed finances to secure other accommodation is a problem that has a great impact on aged people and their families. The majority of aged care providers are absolutely committed to their residents—so much so that they may keep their doors open long after they perhaps should have taken a decision to close in the interests of financial viability. They may continually use up all of their assets and risk their financial viability trying to come up with a way in which to continue to provide their residents with services and a facility. This is why aged care bonds become a casualty and it is how they sometimes get caught up in these issues. Of course there are some unscrupulous operators, but in the main providers of aged care services are absolutely committed, along with their staff. Many aged people require care because they have fallen ill or have had an accident or because their families have had to move away for job reasons and they are not able to be relocated. But to then be told that money that is rightfully theirs has gone because a provider has become insolvent would be absolutely devastating news. That certainly will not occur once this bill becomes law.

Many families find it difficult enough coping with their own daily pressures, let alone trying to recoup lost accommodation bonds and finding more money for a bond at another aged care facility. With an increasing average value of bonds of $127,600 in 2004-05, up from an average value of $26,000 in 1996-97, this bill is welcomed as a valuable protection when bonds need to be recovered after a resident, for any reason, leaves an aged care facility. Currently, if a provider becomes bankrupt or insolvent, the resident is not guaranteed the return of the balance, because they are considered an unsecured creditor under the corporations and bankruptcy law.

If an aged care facility in the Riverina were to become insolvent, a resident would find it very difficult to find alternative accommodation within the region. I think this measure is long overdue. We have a long waiting list for hostel places in my region and it is a difficulty that we have been overcoming. With the help of the former minister and the government, we have been able to overcome many of those issues. I might add that when I first became the member for Riverina the major issue confronting me at almost every constituent interview was the lack of places in hostel care and aged care. Thankfully, due to the efforts of the government in overcoming the bed shortage that was inherited from the previous government, I now find that this is no longer one of the most pressing issues in my region. I certainly thank the minister and the government for the number of beds that have been allocated to our region to assist with our ageing population.

The distance between aged care facilities is greater in rural areas and this places added stress on families already struggling to deal with the daily running of their households and then perhaps also being forced to find alternative accommodation for family members. The introduction of this bill by the government is welcomed because, with 100 per cent of bond moneys owing having to be repaid in full, the loss of a bond is a potential burden that families and residents no longer have to face. There is a feeling of security. People will take the risk of perhaps going into smaller facilities and they will not be concerned that if something happens they might lose their bond. They do not have that risk. They have the security of knowing that they will have their bond refunded in full, aside from some agreed administrative costs, and that is part of all aged care provision.

The aged population of Australia is increasing. It is anticipated that by 2040 those aged over 65 will represent 25 per cent of the total population and there will be one million people over the age of 85. These bills will ensure security on accommodation bonds not only today but in future years, as the need is only going to become greater.

The Aged Care (Bond Security) Levy Bill is part of the government’s guarantee scheme in which the Australian government will pay 100 per cent of the bond balance to residents with interest in the event of a provider becoming insolvent or bankrupt and being unable to meet its financial obligations. This bill will mean the government is able to recover the total amount to be repaid to residents plus the administrative costs associated with the refund and the attempt to recover from the insolvent provider.

In 2004 there were 2,493 services and 1,309 providers in Australia, which included private incorporated bodies, community based organisations, religious organisations, state and territory government organisations, charitable organisations and local government bodies. About 57 per cent of the more than 1,300 providers received bond money, indicating the wide use of accommodation bonds.

The Aged Care Amendment (2005 Measures No. 1) Bill is designed to ensure greater responsibility is taken by individual providers to appropriately manage and secure residents’ accommodation bonds, provide certain information to residents and prospective residents about the financial viability of the provider and better inform residents, prospective residents and their representatives. So we will give effect to the establishment of new prudential regulatory arrangements to improve the management of residents’ accommodation bonds and entry contributions. These new regulations will apply to all services holding bonds, whether they are residential care services or flexible care services.

A significant change included in this bill will be to the arrangements following the death of a resident. The current 60-day provision is problematic for providers if the legal beneficiary has not been firmly established. Under the new provisions, a provider must refund the accommodation bond balance within 14 days of being shown probate or letters of administration. This will be widely welcomed by families who have the unpleasant and unenviable task of trying to settle and determine estates as trustees and executors.

In early 2005, the government announced that lump sum accommodation bonds paid by residents in aged care facilities would be exempt from the social security and veterans’ affairs assets test. From 1 July last year, an aged care resident who pays an accommodation bond wholly or partly by periodic payment is able to rent out their former home without the value of the home or the rental income affecting their pension. These exemptions apply to bonds paid by existing and new residents in aged care, regardless of when the bond was paid. For some existing residents in aged care, these changes may result in an increase in their rate of pension or their becoming eligible to receive a pension.

This legislation aims to continue this government’s goals and commitments to ensure the protection of aged care residents when it comes to accommodation bonds. It is a welcome change to the current regulations. I commend the legislation to the House. It will provide a very fine form of security for aged care residents, those who are considering entering into a facility, and their families when they are asked to pay a bond. The legislation provides greater security and greater peace of mind for all the people in that position.

Julia Irwin (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

The Aged Care (Bond Security) Bill 2005 and related bills comes as a welcome assurance to many older Australians. You could say that we have been fortunate not to have seen any reported cases where bonds held on behalf of aged care residents have been lost due to an aged care facility going broke. But there has always been a risk that it could happen, with dire consequences for residents who have paid a bond. With most low-care residents being required to pay a bond, the failure of a provider could leave those residents without the means to seek alternative accommodation.

As we have seen with the collapse of firms such as HIH Insurance, it is left to the government of the day to compensate those who have lost out as a result of the commercial failure of a firm. I would think that, had a low-care provider become insolvent before this time, the government would have come to the aid of residents who had lost their bond—but not before those residents had suffered considerable anguish at the prospect of having lost the greater part of their life savings

This legislation must come as a welcome relief to all aged care residents who have paid a bond. I think most members would be well aware of the anxiety of older people when it comes to money. When their hard-earned life savings are seen to be at risk, it can be a very worrying experience. For many residents, meeting the bond payment has meant the sale of the family home or, in other cases, other family members have made sacrifices to meet the bond payment. So it is not surprising that the security of the bond is one of the major concerns of low-care residents.

Can I say from the start that I support the concept of bonds for people in need of a low level of care. I know that some would expect that care should be provided without the payment of a bond. But, as we are all aware, with an ageing population and an increasing demand for all levels of care, the contribution to the capital cost of providing care by way of a bond is not unreasonable in cases where the resident has assets over a set amount. In many cases, the former family home is no longer occupied and, depending on the circumstances of a person and their need to enter a low-care facility, it is unlikely that the resident will be returning to the family home. So it is fair that a resident contribute part of the capital cost of a low-care facility by way of a bond.

What also concerns me is that some low-care facilities provide less than the required number of beds for people below the asset threshold at which they would be required to pay a bond. I know that for some new low-care facilities in my electorate of Fowler, bonds provide a significant amount of the capital cost. For not-for-profit community based organisations, access to bond money enables the completion of facilities earlier than would otherwise be the case. There is a temptation to maximise bond funds at the expense of residents not required to pay a bond.

For many families of European and Asian origin, caring for elderly relatives is a serious obligation. In some cases, families have insisted on caring for their relatives in the home rather than placing them in a care facility. Increasingly, these families see their obligation as securing a place for their relative and supporting the facility that provides their care. These arrangements represent an important cultural change, but one that is seen as being in the best interests of an ageing relative.

In and around my electorate of Fowler are a number of low- to high-care facilities sponsored by ethnic communities. Most notable are the Italian, Chinese, Russian and Croatian communities. The facilities they have built are among the best examples of low-care residences for frail, aged people in our area. In every case, the community contributed generously to buy the land and construct the facility. With bonds, government subsidies and residents’ contributions, these communities have developed high-standard facilities, catering to the special needs of people of their own origin, as well as a number of people from other communities.

Within the Fowler electorate we have the Cardinal Stepinac Village, a Croatian low-care facility. The manager, Matt Smolcic, and his fantastic staff have built more than an aged care home. They have built a community and should be congratulated. The residents celebrate events in a distinctly Croatian way and for some it is like being back in their childhood home. But the residents are also very much part of the Australian community. Each year the village raises funds for charity. In past years, the village has given tens of thousands of dollars to causes such as the Canberra bushfires and the South Asian tsunami.

Facilities run by the Australian Chinese and Descendants Mutual Association and the Australian Chinese Buddhist Society provide similar links so important for older people. Just outside the Fowler electorate, we have the new Sydney West Italian Associations Hostel. We also have the longstanding Scalabrini Village facilities at Austral and Moorebank. All of these facilities provide high standards of care and all have been sponsored by community groups. They have relied heavily on the generous support of those communities. But I would not want to give the impression that these facilities are highly profitable. It is quite the opposite. Rising costs such as workers compensation premiums have led to thin margins. The facilities need the capital funding provided through bonds to expand and offer places to others in the community.

There are also privately funded facilities, such as the Blue Hills Village in the neighbouring electorate of Werriwa. In every case, as we look to expand the number of aged care places, we can expect community based facilities, as well as private facilities, to depend on bonds to fund this expansion. As bonds are turned over, their value has increased from an average of $26,000 in 1996-97 to $127,000 in 2004-05. We now have in excess of $4.3 billion held across the industry. As I said earlier, we can think ourselves lucky that so far we have not had an insolvency which has led to residents losing their bond. The consequences of such an event, when today residents are paying as much as $250,000 or more, would be disastrous. The Commonwealth, as the authority responsible for regulating aged care bonds, would have no alternative but to make good those losses. As we have heard, the Hogan review concluded:

There is an obligation on the government to ensure these funds are not exposed to any risk of loss.

Essentially, this legislation reduces—if not totally removes—the risk of loss in the event of an insolvency. The method chosen in this legislation is a post-payment model where the Commonwealth guarantees the bond balances and has the option to levy the sector to recoup any default payments paid. The government will also meet the cost of the first three years of operation of the new framework. This arrangement offers the greatest security to residents paying a bond and, at the same time, is the most economical scheme for providers holding resident accommodation bonds. It remains to be seen if any part of the sector represents a greater risk.

For prudent providers, some parts of the aged care sector may appear to be a greater risk. However, the history of the industry so far suggests that any defaults would be rare and that the amount of levy imposed on the whole sector would reduce the amount of the levy to a point which would be manageable by all providers. But it must be said that the risk and the amount of any potential levy has not been spelt out and this uncertainty is a cause of concern to all involved in the industry. At any rate, the government would still provide a fallback to guarantee the funds of those people paying bonds.

Of course, even an ironclad guarantee is worthless without strict rules applying to the repayment of bonds in all circumstances. This legislation clearly spells out the obligations of providers to repay bonds within certain time limits. I would expect this aspect of the legislation to be strictly enforced. People in aged care are one of the most vulnerable groups in our community. They deserve the full protection of the law when it comes to what for many is their most precious asset: their aged care bond. Aged care bonds are an important consideration in the capital planning for low-level aged care ventures. What presents the greatest risk, as we have seen, is that the value of bonds rises dramatically, and they have risen dramatically in recent years. The increase from $26,000 in 1996 to $127,600 last year represents a 500 per cent increase. Clearly, the sector is becoming more reliant on bonds for capital funding. That in itself definitely represents a risk. Strong prudential standards will also be a necessary part of the administration of the sector.

My concern also is that the industry will become dependent on bonds and, as we have seen with a 500 per cent increase over the past 10 years, further increases can be expected. With increased demand for aged care, for those fortunate enough to own their own home in one of the major cities, we might expect the value of bonds to continue to rise. This can only exclude more and more people from much needed care. It will definitely exclude people within my electorate.

While I agree that low-care bonds are essential, we should be looking at the upper limits of what is demanded by the sector. Where the family home cannot be sold to meet the cost of the bond, many families will need to share the high cost of meeting any debt incurred to pay a bond. In one case I came across recently, the bond asked for in a new facility just outside my electorate in the seat of Prospect was $240,000. That is a lot of money for a family to find and often they have no choice but to pay.

The situation in the aged care sector is changing rapidly, and we will continue to face pressures in the years ahead. This legislation sets a firm foundation for the security of aged care bonds. We now face getting the right balance between the bond, the government subsidy and the resident’s contribution. As the sector grows, these pressures will definitely need to be monitored, and we will need to constantly review the funding for all parts of the aged care sector.

Stuart Henry (Hasluck, Liberal Party) Share this | Link to this | Hansard source

I am very pleased to take this opportunity today to speak in support of the Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005excellent measures to address the ageing of the population; a constructive, well set out policy direction for the government under the previous Minister for Ageing. Before I turn to the substance of these bills, I would like to congratulate the former Minister for Ageing, the Hon. Julie Bishop MP—a fellow West Australian—for her hard work and foresight in bringing these bills to parliament and to congratulate her upon her promotion to cabinet.

These bills will form the legislative framework of a comprehensive new system to safeguard the accommodation bonds of residents of aged care facilities. This new system will provide peace of mind for residents and their families. This peace of mind will be appreciated by many residents and families in the electorate of Hasluck. These bills are a striking example of the Howard government’s commitment to the welfare and dignity of senior Australians—a growing group, of which we will all eventually be members.

The bond security bill will allow the Commonwealth government to compensate residents when their bond cannot be repaid due to the bankruptcy or insolvency of their approved aged care service provider. The levy bill allows for the subsequent recovery of those moneys, either from the defaulting provider or by way of a levy on all bond-holding providers. Perhaps most importantly, the measures bill sets out new prudential regulatory arrangements to minimise the risk of approved aged care providers becoming bankrupt or insolvent in the first place.

The decision to strengthen the protection of accommodation bonds has not come about as a result of a breakdown of the existing system. In fact, to date there has not been a single instance of a bond not being repaid due to bankruptcy or insolvency of an aged care service provider. However, as the value of accommodation bonds has increased, the Howard government, residents and aged care service providers have identified the need to strengthen these bond safeguards. The average new bond paid has increased from $26,000 in 1996-97 to $127,600 in 2004-05. This is a substantial increase, and current figures represent a significant proportion of the life savings of residents.

In light of this, the Howard government has taken the very prudent action of strengthening the safeguards provided under the Aged Care Act 1997. While these existing safeguards have proved adequate thus far, the changes we are debating today recognise that residents and their families should be confident that their bond balances will be paid, even if a provider becomes bankrupt or insolvent and the provider is, therefore, unable to pay in full bond balances owed to residents. Currently residents are classified as unsecured creditors and would have little expectation of recovering their accommodation bond should their aged care service provider become bankrupt or insolvent.

The Aged Care (Bond Security) Bill will offer far greater protection to residents in the future. In the unlikely event of an approved aged care service provider becoming bankrupt or insolvent and, therefore, unable to repay residents’ accommodation bonds, the Commonwealth government will pay these amounts. This will ensure that residents are paid in a timely fashion and are not caught up in protracted battles for the return of their money. The resident will then assign their right to recovery to the Commonwealth, allowing the government to act directly against the defaulting provider to recover the money.

The levy bill allows the Commonwealth government, in circumstances where the amount of the accommodation bond is not able to be recovered from the defaulting service provider, to levy other bond-holding aged care service providers in order to recover the funds required. The new prudential regulatory arrangements introduced by the measures bill provide for improved management of bond holdings by approved providers and an increase in the level of information available to residents about the security of their bonds. Providers will initially be required to comply with three prudential standards relating to liquidity, record keeping and disclosure. Compliance with these prudential standards will be monitored by the Department of Health and Ageing.

While protection of the individual resident is the overriding aim of this package of bills, the new prudential regulatory arrangements also recognise the growing impact of aged care services on our economy. An estimated 74 per cent of aged care services, including multipurpose services, held accommodation bonds at some time during 2003-04. The total value of bonds held in 2004-05 is estimated to be around $4.3 billion. This already significant sum of money will only increase, as the baby boomer generation begins to demand aged care services. Improved financial management and performance of this enormous resource is vital to the viability of our aged care industry into the future and, over time, may allow government and industry to explore alternatives to the guarantee scheme offered in the package of the bills we are debating here today.

Indeed, investment in the sector will also be encouraged as a result of the new prudential regulatory arrangements. On 13 December last year, Ms Robyn Baker, a partner in the Melbourne office of Clayton Utz and a former adviser to the government in the area of health, said:

The Federal Government’s new three-pronged legislative approach would not only strengthen the prudential regime under which aged care providers operated but would also give greater certainty to aged care residents as well as investors in the sector.

Ms Baker went on to say:

The proposals are to be welcomed as improving the regulatory environment in a sector that will be increasingly critical to Australia’s economic and social wellbeing.

The sector is really coming of age. However to encourage ongoing investment, prudential reform as the Government has proposed is drastically needed.

The Howard government has allocated $8.5 million over three years to introduce the new prudential regulatory arrangements in the industry. After this time it is expected that the cost of administration will be met by industry.

I was pleased to hear these measures have been developed with extensive input from the residential aged care sector over the past year. Once again, the Howard government has demonstrated that, by working with industry and consulting with residents and other stakeholders, standards can be improved without prohibitive costs or inconvenience. Indeed, I have spoken to aged care providers in my electorate of Hasluck and they are happy with this legislation. They are keen to see this program of reform continue to ensure the sustainability of their industry and allow them to maintain the very high standards that the government holds them to.

This new legislation demonstrates the Howard government’s commitment to provide Australians with a world-class aged care system. By 2040 one-quarter of the population will be over the age of 65, with over one million people over the age of 85. Constant reform and improvement of our aged care system is vital if we are to meet the challenges posed by our ageing population. The Aged Care (Bond Security) Bill 2005 is just one plank of a comprehensive approach by the Howard government to review and reform the aged care sector to ensure that the industry is viable, self-reliant and responsive to consumer needs well into the future. Providing high quality, affordable and accessible services which meet the individual needs and choices of older Australians is a priority for the Howard government. I am pleased to say that the Aged Care (Bond Security) Bill 2005 and associated bills do just that. I commend these bills to the House.

Ms Anna Burke (Chisholm, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to speak on the Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005. These bills are welcome and long overdue. The industry has been asking for some action in regard to prudential security for quite some time now. Sadly, having had some residents in my area affected by the loss of their bond when a nursing home changed location, I know that certain residents and their families in my neck of the woods will be very happy to see this bill introduced. The Aged Care (Bond Security) Bill 2005 and the Aged Care (Bond Security) Levy Bill 2005 aim to protect accommodation bonds held by residential aged care providers in the case of a provider becoming insolvent.

The Aged Care Amendment (2005 Measures No. 1) Bill 2005 is designed to give residents of flexible care services the same protections as residents in residential aged care services; establish a set of prudential standards; ensure that interest is repaid to the estate of a resident for the period between the death of the resident and the repayment of the bond; change the timeframe for repayment of a bond to the estate of a deceased resident; and reduce the timeframe in which a bond must be refunded in the event of a resident leaving a facility or if the resident dies.

Labor supports these bills, subject to legislative committee inquiry, because it is vital to protect aged care residents who have paid accommodation bonds. Accommodation bonds have become increasingly necessary within the low-care sector to ensure that there is capital to build necessary accommodation. We do not, however, see that there is a need to increase bonds beyond the low-care area. Unfortunately, whilst these bills are welcome and do good things in the prudential area, they do not do anything to reverse 10 years of Howard government incompetence in the area of aged care.

Whilst over that time certain things have been achieved, especially when Madam Deputy Speaker Bishop was in that role, I will look with interest at the new Minister for Ageing, Senator Santo Santoro, who has been appointed to this area. Let us hope that when he is not crusading against Australia’s beloved ABC, getting involved in factional brawls and verbally abusing the whip’s clerk in the Senate, he can find the time to do something in respect of aged care. But sadly, judging from Senator Santoro’s previous political achievements—namely, losing the once-safe seat of Clayfield and making preference deals with One Nation—my expectations are not very high. However, having said that, I am waiting with bated breath to hear back from the senator. I did write to him in his very first week as I have a pressing problem in the aged care area.

One of my respectable providers is having his licences taken over by his leaseholder because in his lease there was a statement that said that, if he did not sign a new lease, then the leaseholder could acquire his licences. The poor owner of the licences is a bit befuddled by this, thinking that it was the Commonwealth department’s decision as to who gets the licences. But now that the department has licensed his landlord and made him an aged care provider, it has all become quite murky. The nursing home that is home to 30 people and the oldest resident in Australia has become quite concerned about the future of the institution and the licences. So I do hope that Senator Santoro can look into this issue. I know the member for Deakin, in whose electorate the facility is located, has also approached Senator Santoro. I hope that we can have this matter resolved, as I am sure we do not want the oldest resident in Australia, the oldest living person in Australia, to suddenly find herself evicted and on the street with no place to live.

It is a shame that my expectations of Senator Santoro are not high, because the Howard government’s neglect of aged care has led to a crisis which is causing unimaginable grief and frustration for families across Australia. There is a shortage of 9,275 aged care beds across the country. Thousands of Australia’s most frail and elderly citizens cannot find a nursing home bed. Certain regions are being particularly hard hit. In southern Melbourne there are 730 bed shortages; in south-east Sydney there are 1,496 bed shortages; on the Sunshine Coast there are 585 bed shortages; in southern Adelaide there are 275 bed shortages; in south-west Perth there are 640 bed shortages and in Canberra there are 386 bed shortages. In contrast, there is a huge oversupply of over 1,000 beds in two aged care planning regions: northern Sydney and metropolitan east in Adelaide. Interestingly, they cover the coalition held seats of Bennelong, Berowra, Bradfield, Mackellar, North Sydney and Warringah. Again, the issue of politics seems to get involved in where aged care facilities go.

The Productivity Commission’s Report on Government Services 2006 reveals the extent of the Howard government’s incompetence and negligence in aged care. According to the report, there are now 85.2 operational residential aged care beds per 1,000 people aged over 70 years. In 1995, when Labor was in power, the ratio was 92 residential aged care beds per 1,000 people aged over 70 years. This is a massive decrease and as a result some of Australia’s most frail and elderly men and women have nowhere to go. They cannot get the care they need. After 10 long years, the Howard government cannot even meet its own benchmark of 88 residential aged care beds per 1,000 people aged over 70 years—which it lowered, in a typically sneaky fashion, from 90 in 2004. That is right—instead of fixing the problem, the Howard government simply lowered its target. What a disgrace!

To make matters worse, waiting times to get into residential aged care have increased significantly. Over 28 per cent of people wait three months or more to get into a place, compared with 15 per cent in 2002. It is not uncommon for my electorate office to get at least one or two, perhaps more, phone calls per week from individuals who have been told by the hospital that mum, nanna or their great aunt can no longer stay: ‘We think she needs to be assessed. Here’s a list of nursing homes; off you go.’ It is a very daunting task for individuals to undertake; they are at the mercy of a system which they do not understand and which is very hard to negotiate around.

In my area of metropolitan Melbourne, where we are fairly landlocked, it is virtually impossible to build new facilities. So, unless you are in a facility, you will not get one that is close to home; you will have to go off quite a distance, so relatives cannot meet—people whom you have been friendly with for years cannot come and visit. So it is a screaming issue within my electorate. That has been compounded, obviously, with the sale of Inala Village by the Salvation Army, which is across the road from my electorate in Deakin but which is home to over 600 residents. Whilst the building has been sold to TriCare, who I believe will be undertaking to do the best they can, there is still a great deal of concern amongst the residents and their families about whether they will have a facility into the future. Because of the Salvation Army’s philosophy, the fees and the bonds were very reasonable, so a lot of families are very concerned about the future of all those families and what will happen. The Salvation Army’s moving out of aged care within Victoria has left a gaping hole, especially for low-income earners.

For current operators within my area who operate small family-run facilities, having to be compliant by 2008 is giving them a great deal of concern, and a lot of families are very concerned about what will happen into the future. You are not about to build an aged care facility within the boundaries of Chisholm; you just could not afford the land costs. So it does mean hiking a fairly large distance.

I want to put on record my congratulations to the Chinese social services within my area, who are in the process of building and almost completing the first ethno-specific Chinese nursing home. Again, that will not be in my electorate; it will be in Donvale, but it will certainly service a high proportion of my Chinese community. It has been a phenomenal effort on their behalf. I thank the government for its support—but, again, there is never enough money and the Chinese community are on the fundraising trail. I went to a fantastic concert on Saturday and enjoyed a lot of Chinese opera to ensure that they will raise the money to get beds to facilitate the opening of this nursing home. So there are a lot of good things happening, but a lot more needs to be done. A lot of this is going back onto the communities to fundraise. I find it slightly disturbing that I am having to go to fundraisers to support aged care facilities.

Community care is worse, with over 36 per cent of assessed people waiting more than three months to receive a community aged care package during 2004-05. Again, this is a really disturbing area. It is still only about seven per cent of people who go into residential aged care. Most of them would like to stay in their own home but, if they cannot get the support and facilities to stay there, their families are under increasing pressure to find aged care facilities for them. Respite care is almost non-existent.

Senior citizens who can find an aged care place cannot feel entirely at ease. Disturbingly, more than 41,000 residents of aged care facilities are at risk of fire. Why? Because the Howard government refused to enforce its own nursing home fire safety standards. According to recently released figures on the government’s own website, over one-quarter of homes have failed to comply—791, or 27 per cent, of aged care facilities across Australia do not meet the home fire safety standard. Once again, the government’s financial mismanagement is to blame.

In June last year, the coalition gave more than $500 million to providers to spend on necessary capital improvements to meet the new fire safety standard, but it has done nothing to ensure that these providers are complying with the safety standards. It is doing nothing to enforce its requirements for nursing home providers to install sprinklers, fire doors and other necessary fire safety equipment. There is also a severe shortage of nurses and care workers. According to the Productivity Commission’s report, Australia’s Health Workforce, released this year:

There have been longstanding concerns about the size, skill mix and availability of aged care workers—particularly in regard to nursing staff. A number of recent reports have reinforced these concerns. For example, the Senate Community Affairs Committee Inquiry into Nursing identified aged care as the area of nursing in greatest crisis, with the acute shortage of nurses having led to increased use of unregulated workers, to the detriment of quality of care.

Unfortunately, the fact that there is a wage gap of $191.83 per week between nurses working in residential aged care and those working in the public sector does not help this problem.

Apart from addressing the wage gap, the government must also invest more in education to increase the number of undergraduate nurse places. Last year 2,716 eligible nurse applicants were turned away—that is around 20 per cent of applicants. Labor believes in investing in aged care because Labor believes that Australia’s senior citizens deserve to be treated with respect. It is often said amongst my Chinese community that a society is judged by how it treats its senior citizens. On this score the Liberal government does not have a great account. Whilst we welcome the bills and the increase to prudential regulation, there is a lot more that can be done within the aged care sector to ensure that we protect those people who have gone to wars and fought off depressions to ensure that they are cared for when they most need it.

Annette Ellis (Canberra, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005. In doing so I will begin by concurring with the remarks made by the member for Chisholm, the speaker immediately before me, particularly when she made the point about the need for some balanced appropriations towards aged care generally. These bills do what should have been done years ago. The Howard government has had nine years to get aged care right. It has taken nine years for this government to protect the hard-earned money—sometimes hundreds of thousands of dollars—that some elderly Australians pay when they go to live in an aged care facility.

The legislation being debated here today is, in my opinion, good legislation. It does three important things. Firstly, it provides a scheme whereby the Commonwealth government will repay an outstanding accommodation bond balance in cases of aged care provider default—for example, if an aged care provider becomes insolvent and cannot repay the accommodation bond it owes to an aged care recipient. I am aware of cases where, for a short time, there was uncertainty about the ability of an aged care provider to repay an outstanding accommodation bond balance. This caused great stress to the residents of those facilities.

The example of a family who had a relative in Villa Lombardia in Victoria demonstrates how dangerous the current legislation is. After Villa Lombardia went into receivership in 2003, the relative in this facility of whom I am speaking passed away. The receivers told the family that moneys could not be found and that the family was considered an unsecured creditor. Thankfully, this turned out to be incorrect; nevertheless, the family had to wait until the facility was sold to be able to receive the remainder of the bond. I am sure we would all agree that this situation is far from acceptable. As shadow minister for ageing at the time, I said at an aged care industry conference, the ANHECA conference of 28 October 2003:

I’m aware that the aged care industry is working closely with the minister to resolve this issue, and I look forward to an outcome in the near future so that other families won’t have to go through the stress of the families with residents in Villa Lombardia.

It took another three years for this government to fix the problem. I do not find that acceptable—far from it. Labor has been calling on the government for years to address this problem and, thankfully, the government has finally responded.

The second major change in this legislation is that the Commonwealth government will be able to impose a levy on all aged care providers to recover the funds it has spent and has not been able to obtain from defaulting aged care providers. I am very pleased that the aged care industry has found it possible to support this measure. The third element of this legislation is to strengthen existing prudential requirements related to accommodation bonds, especially in relation to liquidity, record-keeping and disclosure. It is about time. It took the Howard government nine years to protect the hard-earned money of elderly aged care residents. I find that to be a disgrace.

One of the important changes is in schedule 4 of the Aged Care Act 1997, ‘Refunding of accommodation bond balances’. The legislation before us now forces aged care providers to refund accommodation bond balances with interest. Currently, if there are legal complications—or simply any undue delay—and an aged care provider retains the accommodation bond after a resident leaves or dies, they only have to repay the bond balance without interest.

I know of a case where a family estate had not received the bond balance after several years, and were not entitled to receive any interest when they eventually received the balance. This we would all agree is extremely unfair, when you consider that residents can be charged interest on the bond they owe to the facility from the day the resident enters a service until the day they pay that bond. That is the current provision in the act. I am pleased that, where people are leaving or passing away and no longer need accommodation at the facility, we can now have this particular issue addressed at the end of the process. It is a pity that it took so long, but I am pleased to see that it has finally been addressed.

I do not truly believe that this government fully understands how difficult it is for people to save to buy their own homes and then have this uncertainty that many of them feel, if they are in the position of having to pay a bond when they enter into an aged care facility. There are still many areas in aged care that need fixing but, after nine years, I do not think I will be holding my breath waiting to see them fixed.

One major problem is aged care shortages. I particularly want to refer to my electorate of Canberra. A Productivity Commission report into government services released last week found that, compared to the rest of Australia, the ACT has the lowest number of residential aged care places, the longest waiting list for aged care places, and the highest level of complaints for aged care services. The current aged care planning ratio is 88 residential aged care places for every 1,000 people aged 70 years and over. That is the government’s own target. The Productivity Commission report showed that in the ACT there are 72 beds per thousand people, rather than 88. I think that is a bit of a disgrace, particularly when we know the demographics in Canberra; they are pretty undeniable. We do have an increasing ageing population in this town.

The Productivity Commission report also showed that it took up to one month for 24 per cent of Canberrans seeking an aged care place to enter into an aged care facility, compared with 49 per cent of people in New South Wales. Furthermore, it took three months for 51 per cent of such Canberrans to enter a facility, compared with 75 per cent of people in New South Wales. Canberrans have to wait longer to get into an aged care facility, and that is not good enough. Elderly and frail people who need to go into an aged care facility should have access when they need it. The government has failed Canberrans, I believe, on this issue.

Even if the government was meeting its own target, I am not sure that all of the people who need an aged care bed would have access. Labor has been arguing for years that the ratio should have been subject to regular review over the past seven years. The Howard government did change the ratio, by increasing the number of community care places—and I am very pleased about that. But what the government does not tell people, and does not make very clear in its publications, is that it actually reduced the ratio of aged care beds. The Howard government has made it harder for people to get into an aged care facility.

I want to make a couple of comments about an aged care facility versus community care at home. At-home care is a very good thing and something I am very supportive of. However, families and individuals must be able to make that choice—between at-home care and facility care—confidently and considering all of their circumstances. I am concerned to see that the ratio for aged care beds has come down, even though—granted—we are seeing an increase in community care places. I want to know why that is the case.

There will be some people out there, I am sure, who will make the right decision for all the right reasons, but there will be circumstances—and we all know them—where community at-home care may not work for that particular family or individual. And we need to make sure, in any of the changes that occur in relation to the allocation of these places, that we really think very carefully about the impact those numbers and those changes might have on people’s ability to make those choices.

I know that there are many families out there who are really struggling, even though they are doing what they believe is the right thing in their hearts in caring for and assisting in the care of a relative at home. But I want to make sure that the decision that they are making is being made on the basis of that confidence I spoke of and on the basis that they do know that they have choices.

The Howard government has not reviewed the ratio adequately since it came into power. I do not understand how the government can continue to allocate beds on an old ratio, considering the changing demographics in our society. Our population is ageing and people are living longer and are healthier until much later on in life. The ratio for the target population—that is, people aged 70 years and over—should be reviewed, as should the balance between high- and low-care places and Community Aged Care Packages—that is, at-home care. That ratio should also take into consideration the growing need for dementia-specific and ethnic-specific care services. People in the community are crying out about the shortage of both community and residential places. Labor figures show that, based on the government’s ratio, there is a shortage of 386 beds in Canberra and 9,275 residential places in Australia. We can safely assume that is an underestimate of the shortage in terms of real needs.

Let us not forget the impact of the increasing prevalence of dementia in our society, sadly, which will have a major impact on aged care services in the future. It will also, as I have just said, have a major impact on the ability of people to care for their loved ones at home. It is not an easy thing to do. In many cases I do not know how people manage to do it, but they do. With the increasing prevalence of dementia come all of the stresses and the pressures we are talking about when we talk about choice, confidence in choice and access.

Another important issue I want to talk about today is the shortage of aged care nurses. Unfortunately, since coming into power, I do not believe this government has done anything significant except increase the burden for nurses in the aged care sector. Nearly $900 million of taxpayers’ money, which was given to aged care providers to pay nurses and care workers decent wages, is being spent, but we do not know exactly how, because the government refuses to mandate that that money is actually passed on to the nurses. In the 2002-03 budget, according to the budget statement, the Howard government increased residential aged care subsidies:

... by $211 million over four years to assist employers of aged care workers provide for increases in wages and improved workforce conditions.

In 2002 the wages gap between nurses working in residential aged care and those working in the public sector was $84.48 per week nationally. In the 2004-05 budget, Minister Julie Bishop announced through the budget statement:

An extra $877.8 million over four years through a Conditional Adjustment Payment to improve the financial position of aged care providers and allow them to pay more competitive wages to staff.

The wages gap in 2005 is now $191.83 per week across Australia. It has gone from $84.48 in 2002 to $191.83 in 2005. Minister Bishop is no longer the minister—she has now moved on to another area. It is time for the new minister to develop a mechanism so that this funding is actually passed on in wages so we can recruit and retain nurses in an area that is struggling to keep them. This is in the interest of not only nurses and care workers but also providers, so that they can attract and retain quality staff.

The recently released unanimous Senate Community Affairs References Committee report Quality and equity in aged care noted that delivery of quality care was under threat from the retreat of qualified nurses, both registered and enrolled nurses, from the aged care sector. The report also noted that there had been 34 reviews of nursing in seven years. You wonder who reads these reviews in government. If this government were really serious about the provision of quality care for older Australians they would have made a commitment to seriously increasing the number of undergraduate nursing places and closing that wages gap between nurses working in aged care and those working in the public sector. We have a serious aged care nursing shortage now and the Howard government needs to take immediate action to prevent this crisis getting even worse.

I would like to refer to a young constituent of mine who came into my office just eight or nine days ago. She is a mother of five who is taking herself off to full-time university to study nursing—something I was particularly pleased to hear. She told me that she decided she would get some extra work over the Christmas holiday break to help the family budget—her husband is sick at the moment and she has five children. She got a job as a personal carer in an aged care facility here in Canberra—something that we would all applaud. It is interesting: she is training to be a nurse, and we need those desperately; she tried to do work as a personal carer in an aged care facility over the holiday period, something we need desperately, but she had to stop after two or three weeks because it was financially so much to her detriment to undertake that work. The wage was so low and the impact on the family finances so great, thanks to the way the government has created these structures, that it was actually costing her money to go out and do that work. The whole thing is just a puzzle to me, and it is something that needs some serious attention.

On a more positive note, there are some really good things happening in aged care in the ACT. I want to mention one of them in particular. Goodwin Aged Care Services in Farrer in my electorate has commenced construction of 19 new independent living units. These units are an example, considering our rapidly ageing population, of what we need to be doing. The Goodwin aged care independent living units have been designed to comply with or exceed the adaptable housing code. This means that residents will be able to remain in those homes much longer and receive more care as they age and/or become frail. It will delay or remove the need for many of those older people to enter into those aged care facilities, given the facility that has been constructed for them now.

The units have more space for residents, who may need wheelchairs, and for their carers. There will be a call system with around-the-clock monitoring in case of emergency. The bathrooms are designed for easy adaptation as the care needs increase, and the bedrooms allow for a mechanical lifter. I commend Goodwin Aged Care Services for this initiative. The Goodwin people have a longstanding excellent reputation in this town. I have been interested in adaptable housing for several years now—it is particularly interesting when we are talking about housing accommodation for older Australians. I believe it is the only way that we can ensure that we look after our ageing population into the future. I have a view that wherever possible the adaptable housing code should apply to any aged care facility or independent aged housing for older folk. In fact, we should almost be mandating it, if we were strong enough to take it that far.

We had an exhibition house built in a housing development on the north side of Canberra. It was completely and absolutely adaptable. It was built in a normal housing display village, just to show people that you can construct houses with easily removable walls, lift-up or drop-down cupboard levels and all sorts of things. I think the more we move towards this model of specialised housing for older people, should it suit them, the more we will help people and alleviate the need for people to move on.

In conclusion, I support this legislation being debated here today. I wish it had been here a little while ago, but we have it today and I am pleased to be able to support it. I know that older Australians out there who are in the position of requiring that security in a prudential fashion for their bond payments will feel all the better knowing that these positions have now been adopted by the government.

Gavan O'Connor (Corio, Australian Labor Party, Shadow Minister for Agriculture and Fisheries) Share this | Link to this | Hansard source

It gives me great pleasure to participate in this debate here in the chamber today on the Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005, because aged care is an issue of serious concern to my constituents. The overall objective of this legislation is one that Labor supports, and Labor will be supporting the passage of these bills through the House.

As I said, the overall objective of the legislation is one that we support—that is, to provide greater legislative security for bonds that receivers of aged care services are required to provide in order to access care. Bonds constitute the initial payment that residents often pay approved providers in order to access a service and are usually refundable when they leave the service. Because bonds often constitute a significant proportion of a resident’s life savings, it is extremely important that adequate and comprehensive protection arrangements are put in place to secure the bond payment. I believe there is bipartisan support from both sides of the House for these measures; and the sooner these provisions are implemented, the better for residents and their families.

Australia does face the ageing of its population. That has huge implications for policy in a number of important areas, particularly aged care, health and housing. For example, by 2040, 25 per cent of the population will be over the age of 65. In the Geelong area—and that is the area encompassed by my electorate—we have certain pressures that are contributing to the growth of the aged care industry in our region. We have the internal population demographics; we have movements from the Western District to Geelong and the coast, and we have the sea change effect where people are moving from major metropolitan areas to the coastal regions in the Geelong area. That simply means that the ageing of the population in the Geelong region is going to be a very important factor that will have to be factored into the policies that are developed at the local council level and at state and federal government level to accommodate these changing demographics in this particular part of Australia.

The City of Greater Geelong has a statistic that persons over 65 years of age constitute 15.2 per cent of the population. When compared with the statistics for Victoria, we see that that is a higher figure, as the statistic for Victoria for people over the age of 65 is 13.3 per cent of the population. So the situation is already there in a structural sense, and the demographics are moving in such a way that there will be a significant demand for aged care services in the future.

This has been recognised in the economic development documents that have been produced in Geelong over the time that I have been the member for Corio. The Kelty taskforce report, way back in the early 1990s, indicated this particular trend and the importance for Geelong and its region to start planning now to accommodate an increase in the number of aged care residents and, in effect, to make it an important pillar of Geelong’s economic development into the future.

As I understand it, well over 70 per cent of aged care providers levy bonds on residents. This situation is reflected in the enormous growth of bond contributions in recent years. For example, in 1996 we had around half a billion dollars going into bonds but by 2004-05 that had risen to some $4.3 billion—quite a staggering growth over that period. Correspondingly, there has been a growth in the average bond figure that has been paid by residents. In 1996-97, that stood at some $26,000, and by 2004-05 that had risen to $127,000. That particular bond payment forms a very important part of a person’s long-term savings, and it is appropriate that governments and oppositions support measures that are designed specifically to improve the security of the bond moneys paid by residents.

There is a very simple reason why this legislation is necessary. Under existing arrangements, there is not 100 per cent security for people who pay over these particular bonds. As the Minister for Ageing stated in her second reading speech:

... if a provider becomes bankrupt or insolvent, the resident is not guaranteed the return of their bond balance, because the resident ranks as an unsecured creditor under corporations and bankruptcy law.

Stripped back, that simply means that there is not 100 per cent security for people who put up bond money in the case of a situation where a provider goes bankrupt or insolvent. So it is important that we close off this situation so that all Australians can have 100 per cent security in this matter. I know that in my electorate there are providers who would welcome this piece of legislation, and, for aged care residents and their families across the board in the community, this adds a new dimension to the security that is provided for their bonds. On their behalf, I reflect here in this chamber their support for this piece of legislation. The objectives of the legislation are laid out very clearly in the minister’s second reading speech. The minister said:

... the government’s key objectives are: to improve the efficiency and sustainability of the aged care sector and to strengthen the management of bond moneys to reduce the likelihood of providers becoming insolvent or bankrupt and being unable to repay bond balances; to strike a balance between the added security for residents that is provided by this strengthening and the financial impact of the new arrangements on the sector’s viability and its standing with the capital markets, including its ability to construct and maintain aged care homes and pressures that might flow onto subsidies, user charges and the quality and continuity of care; and last ... to ensure that all residents who pay bonds receive their full entitlement to the balance of the bonds that they have paid in the event that the provider becomes insolvent or bankrupt.

This piece of legislation will pay 100 per cent of the bond balance owed to residents with interest in the event that a provider becomes insolvent or bankrupt and is unable to meet its financial obligations to residents. I do not think there would be any member on either side of the House who would have any objection to a piece of legislation that had those objectives in it.

The aged care sector is a growing sector in the Australian economy, and many people might be interested to know that it is currently the ninth largest employer in Australia and a significant employer in my electorate of Corio in the Geelong region. I have mentioned before that Australia’s population is ageing and in another, say, 45 years people aged 65 and over will represent one-quarter of our population. That changing demographic will, as I have said before, exert quite significant pressures on the national economy and in various other policy areas such as health and housing.

An interesting statistic has been provided by Aged and Community Services Australia. Their budget submission states that approximately one-half of older women and over one-third of older men will use residential aged care at some time during their life and many more will access community care services. I guess all of us at some stage are going to have to confront this situation and decide what sort of care we are going to access in our latter years. I have a particular philosophy—I have had it for a long time—that you run with the ball and die with your boots on! It may well be that I am one of the fortunate ones who will drop over playing ‘super Rules’ football or some other activity—but maybe not; maybe I will be like the honourable member for Paterson, and we may even occupy the same aged care home if I decide to go interstate and live out my days. But, be that as it may, whether or not we access these services, there are plenty of people now who access them and who need the security—and certainly in the future.

Aged and Community Services Australia have listed the key areas for investment that the current government must look at in the budget they are going to present in May. We know that the Treasurer has been raiding the pockets of working people for well nigh on a decade. That is why we have a surplus that is in the billions, and it is incumbent on the government to start investing in the sorts of areas that Aged and Community Services Australia have identified in their submission. Those areas for investment are: service availability, particularly community care and services for clients with high-care needs; meeting the increasing costs of high-quality service delivery; a sustainable capital raising system; the planning regime, which is a very important one that I will speak a little more about; support for rural and remote service delivery; recruitment and retention of an appropriately skilled workforce; and enhancing the efficiency and effectiveness of government expenditure on aged and community care through streamlined administration.

I do not think there would be a member on either side of the House who would have any problem with that set of objectives and those areas for investment that have been articulated by Aged and Community Services Australia in their prebudget submission. Indeed, they do so on behalf of the many community aged care providers and not-for-profit organisations in my electorate, such as St Laurence services and the multicultural aged care hostel which has been built under the auspices of the Geelong Ethnic Communities Council, just to name two. It is very important that the government take on board these objectives, because they do reflect off the floor the concerns of the general community about future investment and the need for it in this very important sector.

In their prebudget submission, Aged and Community Services Australia mention the planning regime, and this is where local government is extremely important to the planning of aged care services at the local government level. My plea goes out to the City of Greater Geelong to make this area a very important priority in their planning schemes. We must have land allocated to the purpose. I have said on other occasions that there are parcels of land in Geelong that are now in what would be considered to be inappropriate inner city use, and they could be turned over to the aged care sector to make state-of-the-art precincts where residents can access appropriate aged care services.

I have spoken in this House before on this matter, as far back as 2 and 3 December 2002, when I raised particular concerns about a nursing home development not far from where I live. This was the Glenburn nursing home proposal. Two quite extraordinary things happened. The Commonwealth health department allocated an extra 30 beds to this facility. At the same time, the City of Greater Geelong gave planning approval for the expansion of the facility. The important thing to recognise about the Glenburn instance was that this was an inappropriate planning development for the location of the particular nursing home. I had this to say at the time:

Given that the current facility is located in a residential area, subject to heritage overlay provisions and near the base of a railway overpass on an extremely busy thoroughfare, handling thousands of vehicular movements per day, how was council officer approval given for an expanded nursing home involving the demolition of residential properties and the construction of a two-storey commercial operation in this residential heritage area?

I went on to say that there were two central questions surrounding the Commonwealth health department approval and the local government planning approval. I said:

These are two central questions which spawn a myriad of ancillary questions relating to council approval processes, planning considerations, VCAT deliberations, care and safety of the aged at Glenburn, residents’ rights and appropriate nursing home developments in the whole Geelong region.

The interesting thing about this development was that the doctors who serviced the facility had extreme concerns about their duty of care and their liabilities under medical indemnity insurance. And the Country Fire Authority had even stated that the facility would pose a huge risk in the case of fire.

I note the presence of the honourable member for Corangamite in the chamber today. At that time, he joined me in a bipartisan approach to the minister, questioning the allocation of these 30 beds, on behalf of residents, and trying to get this matter addressed and the situation changed. The honourable member for Corangamite, in true bipartisan fashion, facilitated my access to the minister on behalf of my constituents. We put the case. We did not have any success in that, but the questions that we raised were valid ones. I understand that the proprietor has now on-sold the beds and that the future of the facility at this location is in doubt.

This once again highlights the importance of local government planning in the provision of aged care in this country, and particularly in the Geelong region. As I said, I note the presence of the honourable member for Corangamite in the House today. In Geelong today there is a scandal about local government and the planning processes. There are real questions being asked about this matter, and no doubt they will be asked on the floor of this parliament in the future.

Having said that, let me say that the matter of the Glenburn nursing home may well be a matter—and we will examine this—that could be referred to the municipal investigator, who is looking at these matters at the local level in the Corio electorate. The need for local government to get the planning right and the need for greater coordination between state and federal governments in the provision of aged care services are a very important issue for Geelong residents. With the march of time—and the honourable member for Corangamite will no doubt echo these sentiments—all of us might be looking down the barrel of spending a stint in these nursing homes. Some of us will reach that destination earlier than others, with all due respect to the honourable members who are in the House at this time.

But be that as it may. The sorts of protections that are given to residents all along the line and the planning that takes place are very important. In this bill we have enshrined a set of measures that will no doubt give greater security to my constituents in the electorate of Corio to ensure that they get good, high-quality aged care services provided in the best locations where they can access other services. I will be supporting the legislation.

Peter Andren (Calare, Independent) Share this | Link to this | Hansard source

The Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005 will strengthen prudential requirements and further protect the contribution of aged care residents through their accommodation bonds.

The bond security bill sets up a scheme through which the government will be able to repay outstanding accommodation bond balances to an aged care consumer or their estate in situations where an aged care provider defaults on such repayment as is required under the aged care legislation. Such bonds, it will be remembered, are an investment vehicle for aged care providers to enable the building up of sufficient funds to provide the urgently needed capital spending requirements of the sector that were identified more than a decade ago in the Gregory inquiry and were introduced by the government in its aged care reforms of 1997 and later.

Under the provisions of this bill, the Commonwealth carries the risk for attempting to recover the outstanding balance of the bond from the defaulting aged care provider. The bill also contains administrative steps that must be taken so that a levy on all aged care providers can be imposed under the levy bill. The levy bill itself will enable the Commonwealth to impose a levy on aged care providers so as to recover amounts it cannot obtain from those defaulters. The amendment bill strengthens existing prudential requirements related to accommodation bonds, especially in relation to liquidity, record keeping and disclosure.

There is no doubt that the aged care sector is far better resourced than it was in 1996 when I entered this place. Many years of neglect had seen the standard of aged care facilities slip alarmingly, with poor care facilities and many older people located in country hospitals, for example, who by any standard were nursing home patients, not hospital patients. Thankfully, that situation is gradually, though not entirely, being turned around.

Figures from 1995-96 and 2005-06 show that the contribution from the Commonwealth has increased from $3 billion to $7.3 billion. There is no doubt that the reforms and changes to the contribution regime from aged care residents in low-, medium- and high-care facilities has helped enormously to rectify the formerly sad state of aged care accommodation in this country.

However, there is a long way to go. While the current structure and funding model with its mix of public and user-pays has helped lift aged care standards, I fear and know there will be a logjam of demand for high-care places in not too many years. The success of community care packages enabling older people to stay at home longer will create future demand not for hostel or low-care but for medium- and in particular high-care places—and I know the bricks and mortar are just not there. While the increase in the number of community care packages certainly met a need in recent years to accommodate those 90 per cent or thereabouts of older people who want to stay at home, I believe we run a risk of supporting this most economic of aged care options while ignoring the increasing build-up of need for high care, the most expensive option.

Currently the formula for allocation of aged care places is 108 services per 1,000 people over the age of 70. There are many arguments about how fair this formula is and how applicable it is across the board—compare a high retirement area with a high mortgage belt area and a younger demographic outer metropolitan area, for example. However, that is the formula that we have to deal with, with just 40 of those places available for high-care residents. I am told that figure has not changed since 1984. I ask the minister whether the demand for high-care places vis-a-vis low-care and community packages has not changed, or why it has not changed, over that time. Indeed, is that ratio still the same? I doubt it very much. Forty-eight of those 108 places are available for low-care and hostel places, while 20 places are allocated to community care packages.

My point is that we need to urgently review that figure of 40-odd high-care places, with many people cared for by community packages reaching a point where they really need high care. They are in their place with Meals on Wheels, a visit from a nurse or a volunteer carer, perhaps, or a weekly home and community care package visit. I believe—and I have thought this for a long time—that these packages, while providing the quantity of services, really lack the increasing level of quality required. I would like to see those community care packages in the short term be at least a ‘bed and breakfast’ option where a community care nurse gets the person mobile or comfortable in the morning and ensures that they are looked after as they go to bed at night. That is not an ideal circumstance, as we all know of people in their own homes who are alone for those long hours of a night. In many and an increasing number of places and cases, I think that they are fast reaching the age where they will need not low-care but high-care nursing home accommodation.

Where will those high-care places be if we keep the formula carve-up as it has been for the past 22 years? Surely we know there has been an increase in the proportion of aged in our population, and it is going to reach significant proportions—I cannot quite remember the figure, but in the order of 25 per cent of people over the age of 65—by the year 2025.

Despite the fact that we are going to have a shortage of the resources to build these places, we do not require an accommodation bond for high-care places. That accommodation question has been a political rather than a rational policy issue, in my book. That political decision—and I see Deputy Speaker Barresi nodding his head—will lead us to a funding crisis. We do not have the resources to build the high-care places unless we look at the bond option. No-one, I would suggest, is looking at taxpayers providing all this capital in the years ahead, given the looming figures for the ageing proportion of our population. We cannot expect the young income earners of the next 20 or 25 years to provide all of the care for the aged by way of an extension of the aged care sector as part of our hospital process, given the enormity of the problem we are facing in upgrading our hospital care and, as I will mention in a moment, our need to care better for our disabled.

So let us not go down the emotive road we travelled in 1997 when the family home was said to be threatened. The family home perhaps should be the equity against which a bond is raised in many situations—except the most obvious hardship circumstances—with draw down limits on bonds and the interest receipts used to build new care places. I cannot see any other funding option, given the call on our tax resources in the years ahead and notwithstanding the fact that at the moment we happen to have a pretty attractive sort of a surplus. Let us look at our hospital and education options as well. If we do not go there in providing high-care aged places, we will be in real strife.

There are other aged care issues in my electorate that are pertinent to this debate. Indeed, in Oberon, another aged care model—the multipurpose service model—is largely funded by the state health department, but the aged care component is the responsibility of the Commonwealth health department. I hope the health minister, who has received a letter on the Oberon situation from me on two occasions, is able to find a staff member to return the calls in the next day or two so I can report back to that Oberon community about their statistics, which show that the population projections for that area have rapidly overtaken the projections from the official figures.

Although a new deal has been signed up to on this MPS for the next three years, these new figures show that those provisions will be far short of the requirement for an area that, like many around Australia, is enjoying in many economic respects the benefit of the tree change phenomenon, with many people retiring to just west of the mountains as a lifestyle choice. But I think we are going to find that the realities are overtaking the official census figures. It will be interesting to see how this year’s census figures stack up in many parts of this state, particularly in my electorate, compared with the last one. I suspect there is a big sea change under way in areas that were regarded as sleepy rural communities in years past.

I think we have to revisit the issue of accommodation bonds for high-care nursing homes if we are to provide the capital required to meet the surge in bricks and mortar infrastructure that we are going to need over the next two decades. I think the superannuation industry could not find a more secure guaranteed investment than aged care, and surely the super funds of today providing the wherewithal for the funding of aged care tomorrow is a more than satisfying scenario.

Getting back to these bills, the Hogan report in 2004 noted the large amounts of money being held in accommodation bonds and pointed out that there was little protection available. Rather than establishing a guaranteed fund via a levy on industry, the Commonwealth will act as guarantor for the bond balances. However, it will then levy the industry on a needs basis. The industry supports this ‘good guys’ arrangement whereby good providers bail out the defaulters. The industry’s argument is that such a system does not lock up potentially large amounts of bond money that could otherwise be used by the providers for capital expenditure. I must say that I was staggered to note from the Bills Digest that the average accommodation bond being levied on new residents in 2004-05 was $127,618. I had not familiarised myself with these bond figures for the last year or so, and on checking that figure with the library I was told that there has been a quantum leap almost from $90,000 or thereabouts to $120,000 in the space of a couple of years.

While market forces can dictate what bonds are charged in many areas, while people are happy to pay for five-star accommodation and the extra provision of services and so on and while bonds can only be levied on residents who have assets in excess of $30,500, it seems to me that the enormity of the cost of aged care infrastructure is dramatically illustrated by this average bond figure. Perhaps it is the lack of a cap. It shows the funding challenge we face in providing aged care accommodation into the future.

It is not as if all this money is available to the aged care sector. They can only draw down a legislated amount. They can derive the benefits of the interest at the bond rate of about eight per cent, but if the fund of bond money increases then obviously the interest returned increases, and I wonder whether we are creating a huge bowl of public assets in these bonds which is serving no greater purpose than delivering an interest component and tying up an enormous amount of money. Given that the cost of a high-care bed must be heading towards $100,000 per annum now—it was about $60,000 10 years ago—it suggests to me that it is an enormous cost that we are looking at here, and we are not going to be able to solve this unless we get very creative and non-political about the way that we access the resources needed.

Catholic Health Australia and the industry have supported this process and I do commend the government for this bill and for its contribution to aged care over the past 10 years. There is no doubt we faced a crisis by the middle of the 1990s, and successive coalition aged care ministers have each made a strong contribution to the sector, but I suggest we will face another crisis in the near future unless some tough economic and political decisions are made. Dementia care is one issue in particular that needs addressing, as is the viability of low- and intermediate-care accommodation providers in smaller rural communities and those multipurpose services who are catering for the aged care as well as the health needs of more and more smaller communities. I do not know that we have quite got the funding figure right there yet.

Another area that is tacked on to this whole issue is that of the severely disabled younger and middle-aged members of our community. Even in the rare circumstance of nursing home care being available, an aged care facility is not suitable for the young or the middle-aged disabled. This, along with mental health care, is also an area of almost hidden care, particularly in country areas. We need far more care places, and respite care in particular, for those many thousands of carers who devote their lives and their own health in saving this country many billions by caring for disabled people in their own homes. We owe these people the very best of care facilities for the disabled, particularly for those who are getting 24/7 care from their loved ones, much to cost of the health of many of those carers. We owe these people as much attention as we have given aged care in the last decade and we owe much more attention to that build-up of high-care aged in our community whose families are going to be knocking on the door for places that just will not be there if the current funding formula continues to apply.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

Before getting into the substance of the Aged Care (Bond Security) Bill 2005 and cognate bills, there are a couple of issues I would like to mention. Firstly, I would like to congratulate the former Minister for Aged Care on her conduct in this ministry and the minister prior to her, Kevin Andrews. In his contribution the member for Calare made a few comments that I agree with. Given the circumstances of the mid-nineties, the circumstances that surround aged people today and the demographics of aged care, the government has made substantial changes and substantial gains in an effort to come to grips with current aged care problems and the problems we will be facing in coming years. That is not to say that everything has been fixed and there are no challenges, but I do think that the government does deserve some congratulations on the way it has handled this portfolio in particular.

I still have some concerns that from time to time the amount of paperwork involved in the administration of aged care facilities consumes quite a lot of the finances that are channelled into those facilities. The broader community may well have to make some decisions further down the track. I am told that the administrative costs are up to 30 per cent of the operating costs, and some expectations of the broader community should be adjusted to take account of those costs. There is no doubt in my mind that, due to the burden of administration, some of our aged people do not have accommodation because the money is going into administration rather than accommodation.

I also recognise the government’s efforts in the way the multipurpose service model has been developed—and I am sure government members here today would be fully aware of this. I pay credit to a predecessor of mine, Ian Sinclair, who, after retiring from parliament, became involved in a committee that looked at the needs of regional communities, particularly smaller communities, in relation to health and aged care and the models that could be developed. Some years back there was great concern and fear about the multipurpose service model—or MPS, as it is called, though I think they should rename it. I am pleased to say that, in my electorate at least and I think in most country electorates, that fear has been alleviated.

The model is an outstanding success that does have some benefits for the costs of running an operation and also delivers to smaller communities an aged care facility which is run together with a health care facility. During the mid-nineties there was a risk that the smaller hospitals would be closed and that aged people would not be able to live out their twilight years in the community whence they came. I am pleased to say that in New England there are a number of multipurpose services that have been approved and constructed or are under construction at the moment. They include Emmaville, Guyra, Walcha, Bingara, Barraba, Bundarra and Tingha. They have been embraced by the community, and by the health service too, which is state run. For those in the gallery, the MPS model is one where state and federal governments work together, which is quite strange, but it does happen from time to time. The state government provides the health service part of the structure and the federal government provides the aged care beds. As I said, it is working very well in those smaller communities, which were—in their own minds, at least, and in the minds of others—at risk of losing their facilities.

I am reminded of a lady from a little town called Emmaville in the north of my electorate. Emmaville is one of those smaller communities that was campaigning not to lose its hospital. An MPS was established with aged care beds as well as hospital beds as most people would think of them. I visited that town for a public meeting and this lady said to me, ‘We need more beds. You’re the federal member; go and get them.’ I guess all members of parliament have heard that from time to time. Of course you have to explain that there is a formula and that, within our electorate, we are not doing too badly under the formula et cetera. But that was not sufficient: ‘We need more beds.’ I mentioned that it had not been open for long. She said, ‘Well, it’s full.’ Then she made a comment that really hit home to me—one of those comments that make it worth while being a member of parliament. She said, ‘We need more beds because people who left Emmaville to go to the coast or the city want to come back because there is now an aged care facility for them to be in.’

That said to me that, in terms of infrastructure, aged care—and also telecommunications, but I will not mix the debates—is absolutely critical if we are to turn around the loss of population from regional areas. There are cost-effective models now like the MPS that send signals to people before they leave, whereas in my story those people have responded to that signal and want to go back and live out their later years in the community where they made a contribution. I think it is a significant message that should not be missed. There has been a failing in the past, but I think that model is having a significant impact on the decisions people make about their futures. If you know that there is nowhere you can be looked after when you are older, you will leave when you are younger. Obviously we then lose all those advantages of country communities such as the extended family and so on. So I pay credit to the government, which perhaps is a shock to some of the government members, for the work it has put in.

Another issue I would like to raise—which the Prime Minister has been involved in, and on which the former minister had a keen ear—is young people in nursing homes. There are something like 6,000 young people in nursing homes at the moment. For a whole range of reasons—including the facilities they need, the various treatments they may need access to and the general atmosphere of being a young person in an old-person’s home—they are inappropriately housed. I know that the Prime Minister has elevated that issue to COAG, and I am hopeful that the states and the Commonwealth will debate it at the upcoming COAG conference.

In my electorate of New England, the community came together about 12 months ago under the leadership of Challenge Armidale. We have been working on a submission which presents a regional model. The former minister has that submission and I am sure the new minister has it as well. This submission looks at a model which not only is appropriate for young people in nursing homes but which fits into regional communities, and we believe the costing is reasonable enough to be given due consideration by the new minister, the Treasurer and the government. I ask the parliamentary secretary to take that model on board. You may well have seen it before, but have a good look at it, because a lot of work has gone into it by a whole range of health and aged care professionals.

Christopher Pyne (Sturt, Liberal Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I visited your electorate and had a look at them.

Tony Windsor (New England, Independent) Share this | Link to this | Hansard source

That is right; you did too. But that was prior to this model being developed, and we believe there is some significant detail in the submission which should be considered, particularly if this issue is to go before the COAG conference.

There is one other issue I would like to address, which is from time to time described to me as ‘double dipping’ by aged care homes. I do not mean that in a derogatory sense. Aged care homes are expensive operations to run. I am sure that from time to time some members of parliament have had aged parents go through the aged care assessment process—I believe that assessment is open for 12 months—be admitted to an aged care facility as a low-care patient and, within weeks of admittance, be reassessed as a high-care patient. Being admitted as a low-care patient allows the accommodation bond to be formulated and charged, and reassessment as a high-care patient allows a degree of double dipping. That area needs to be revisited in terms of the way that is happening.

I ask the parliamentary secretary to look at the way the aged care assessment teams are doing their assessments and the occasions on which the change in the assessment from low care to high care takes place very quickly and allows the homes to access funding additional to the accommodation bond. It seems to be a problem that is developing. I am hearing anecdotal evidence—I am searching for proof at the moment—that there may be instances where the community care people are removing their services from people who have essentially been assessed as low-care patients so that they are pushed towards admittance to aged care facilities and then, once admitted, reassessed as high-care patients, which allows this double dipping to occur. I ask the parliamentary secretary to take that on board.

I will be supporting the legislation. I ask that at the COAG conference these young people who are inappropriately housed in nursing homes be given due consideration and that we do not develop a model in which country people miss out because the scale of the operation makes it uneconomic. In terms of the MPS process that I mentioned earlier, the government has been a partner with the state governments to construct a model which is not only cost-effective but which delivers services to country people. I ask the Prime Minister to follow through on his commitment on young people in nursing homes and bite the bullet on this issue. The real measure of a society is how we treat our elderly and those who are afflicted by disabilities through no fault of their own. Given the nation’s economic circumstances, this is the time when we should bite the bullet for those young people who need extra care.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I intend to address the issues that this legislation covers, but I also want to comment on some of the problems which exist in aged care—problems which this government has constantly failed to address. It is an area where the consumers, the providers and everybody connected with the industry and the services is very upset and concerned about the government’s performance. Essentially, the purpose of the Aged Care (Bond Security) Bill 2005, the Aged Care (Bond Security) Levy Bill 2005 and the Aged Care Amendment (2005 Measures No. 1) Bill 2005 is to enhance the protection available to residents of aged care facilities who have paid accommodation bonds which are paid on entry by non-concessional residents of low-care facilities, by residents of high-care facilities with ‘extra service’ status and by some residents in multipurpose services. I would like to join with the member for New England in emphasising just how effective multipurpose centres are. If there is a model that can be taken on board by this government, it is to go further down the track of multipurpose centres and to work with the states to see if we can deliver better services to people in rural communities. Currently, I am under the impression that the government is more concerned about utilising state governments to—

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! It being 2.30 pm, the debate is interrupted in accordance with the resolution agreed to yesterday. The debate may be resumed at a later hour and the member will have leave to continue speaking when the debate is resumed.