Justine Elliot (Richmond, Australian Labor Party, Minister for Ageing) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

Caring for our ageing population is one of the major challenges facing our nation this century—it requires careful planning, adequate funding and comprehensive safeguards to ensure the protection of our frail, older Australians.

The government takes this responsibility very seriously and is committed to the highest quality of care for older Australians.

I am pleased to be able to demonstrate our commitment in a very concrete and real way today, by introducing the Aged Care Amendment (2008 Measures No. 2) Bill 2008.

The bill is part of a package of reforms designed to ensure that frail, older Australians who enter in residential care receive high quality care, that the significant sums of money paid by care recipients are managed responsibly by the aged care provider, and that the aged care regulatory framework is robust.

In the decade since the Aged Care Act 1997 (the act) first came into effect the industry has matured significantly.

The setting in 2008 is significantly different from what existed in 1997.

The sector is evolving from typically a one site, one service ‘cottage’ type to multi-site, multi-state, multi-service operations using complex financial and legal arrangements.

The act as currently written does not scrutinise these complex corporate structures to the same extent as it does the business model that existed when the act was first developed.

Another feature of the sector in 2008, not envisaged in the 1997 legislation, relates to the provision of a broad range of aged care services within the one facility.

This bill addresses each of these major areas of change in a considered way to meet the challenges of the 21st century.

When the aged care legislation was developed 10 years ago, the typical business model adopted by aged care providers was one whereby the owner of the facilities also operated the aged care facility.

The regulatory framework reflected the ‘cottage’ nature of the sector as it then was.

In recent years a different model of aged care has emerged, one in which the owner and operator of a facility have distinct roles and responsibilities and may function quite separately.

The last decade has also seen a significant increase in the level of investment in the sector from large corporate entities. The regulatory framework has not kept pace with this shift in business practice.

This lack of consistency between the regulatory framework and contemporary business practice means that the regulations have not been able to be applied equally to all approved providers regardless of their corporate structure.

Under current arrangements, those ‘pulling the financial strings’ may not be currently considered as ‘key personnel’ for the purposes of regulatory scrutiny.

Amendments to the range of people considered to be ‘key personnel’ of an approved provider will ensure an inspection of those pulling the financial strings, and that the relevant provisions apply consistently to approved providers.

Presently, there is limited capacity for the Department of Health and Ageing to consider the record of ‘related entities’ when making decisions about approvals, which unnecessarily and inappropriately limits the ability of the department to make an informed assessment of a company’s record in service delivery and its suitability to be approved to deliver care in the future.

The bill addresses this issue, to provide better protection for residents and to promote public confidence in the industry.

The changes outlined in the bill will ensure that the legislation holds large aged care providers as accountable as smaller ones, and that no entity can avoid their accountabilities through sophisticated business structures.

It will enable the department to consider the record of related entities when making decisions and considering approvals.

The requirement for more comprehensive assessment of applicants for approvals also provides better protection for residents and promotes much greater public confidence in our aged-care system.

Very importantly, the bill also eliminates ambiguity about which aged-care services are regulated by the legislation. Increasingly developers are putting aged care, retirement villages and sometimes disability or some forms of step-down care all in the same development, and this gives rise to uncertainty relating to the regulatory reach of the Aged Care Act.

Changes to the regulatory and administrative framework will clarify that only the aged-care services are regulated by the Aged Care Act.

This provides greater certainty for care recipients and providers about their respective rights, obligations and protections.

These changes are a critical structural platform for other changes and for ensuring the ongoing protection of aged-care recipients.

Significant sums of money are held on behalf of residents—these accommodation bonds—and often represent most of their life savings.

As at 30 June 2007, around 970 approved providers held accommodation bonds, with a total value of $6.3 billion. Comprehensive consumer safeguards must be in place to protect these funds.

Since the introduction of the Accommodation Bond Guarantee Scheme in 2006, which guarantees the repayment of bonds in the event that a provider becomes insolvent or bankrupt, experience has highlighted some areas where the protections for residents could be strengthened.

This bill addresses these issues and ensures that accommodation bonds and similar payments paid by residents for entry into aged care services are fully protected under the guarantee scheme.

I will now turn to the way the bill addresses the increase in the number of people seeking approval for access to care.

In 2006-07, aged care assessment teams conducted a total of 189,000 assessments of frail older Australians across community, hospital and residential settings.

This requires significant resources to enable timely assessment of care needs.

The government is committed to meeting this need.

However, we also recognise that there are ways that we can do business better in order to reduce waiting times for our elderly Australians.

The bill addresses this issue by streamlining assessments and reducing red tape.

Following these amendments, negotiations will commence with the states and territories so that the greater efficiencies provided for in this bill will result in improvements in the timelines of assessments for older people.

Finally, and most importantly, the reform package ensures that the protection of residents is of the highest priority.

The reform package includes changes to the Aged Care Principles, which very directly address the safety of residents.

Measures to be included in amended principles include reducing the risk of potentially unsuitable people working with vulnerable older Australians, and this is done through strengthened police check requirements.

This ensures that people with convictions for very serious offences such as murder, sexual assault and physical assault are not employed to care for older Australians.

This change will be put in place through an amendment to the Accountability Principles.

A new measure requiring providers to raise the alarm with the Department of Health and Ageing is particularly important for protecting residents who are absent without a reason known to the home, and who have been reported to the police as missing.

This will enable the department to determine whether appropriate action has been taken and to ensure that the service has systems and processes in place to ensure the safety of all residents.

This change will be established by amendments to both the act and the Accountability Principles.

Finally, changes to the act will make certain that when the department needs to take action against an aged-care provider for noncompliance, and is considering both the safety of the residents and the rights of aged-care providers, the department must give the most weight to whether the noncompliance threatens or would threaten the health, welfare or interests of current and future care recipients.

While this has always been the intent of the legislation, this requirement will now be placed front and centre so that there can be no doubt about what is the paramount consideration.

In addition, the amendments will make some minor operational changes to improve the administration of the legislation so that it operates effectively.

Subject to the passage of the bill through parliament and the development of associated changes to delegated legislation, it is proposed that the package of reforms will take effect from 1 January 2009, with a transition period for some of the reforms until the end of June 2009.

This transition period will ensure that aged-care providers and residents have an opportunity to prepare for, and become familiar with, these changes.

These changes have been the subject of consultation with the aged-care industry and consumer representative groups, which has helped shape this bill.

To ensure smooth implementation, the government will continue to work collaboratively with our older Australians, their families, aged-care providers, unions and professional bodies, and we will be listening very closely to their views.

I am very pleased to be able to introduce this bill and announce the package of reforms of which it is part.

The reforms strike the right balance between maintaining contemporary, effective regulation to protect vulnerable and elderly people and delivering change to reduce the regulatory burden for aged-care providers.

They also complement the record funding by the Australian government to support aged and community care.

Over the next four years, the Australian government will provide more than $40 billion funding to aged and community care, including more than $28.6 billion to nursing homes and hostels.

These changes will promote public confidence in the aged-care system, ensure the regulatory framework is appropriate in an evolving corporate environment and, most importantly, provide the best possible protections and quality of care for our older Australians.

Debate (on motion by Mr Lindsay) adjourned.