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

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

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

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

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

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

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

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

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

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

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

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

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

Greg Combet (Charlton, Australian Labor Party, Parliamentary Secretary for Defence Procurement) Share this | Link to this | Hansard source

I rise to speak on the Aged Care Amendment (2008 Measures No. 2) Bill 2008. I do take great pride, in fact, in being a member of a political party that has always looked after the most vulnerable members of our society, and that is why I am pleased to address the bill that is before the House today. In many respects the way that we treat our ageing and elderly citizens reflects on us as a society. As our demographics and population change in the coming years, with an ageing population obviously, it is imperative that we ensure that our elderly residents who are entering aged-care facilities are provided with the very best service and support. My own electorate of Charlton is an area where a lot of people retire to, particularly from Sydney, and there is quite a high proportion of retired people in the population in my electorate, many of whom are in aged-care facilities.

The Rudd Labor government has been working hard in this area. We know how important it is in aged care to ensure that the maximum support is provided to people. Today I would like to take the chance, in speaking to this bill, to outline some of the measures that the government has introduced to help support our aged-care residents and to also address the specifics contained in the bill.

The government and the Minister for Ageing have been busy in this area in the first 12 months of government. The government has worked to build the funding for aged and community care over the next four years to reach record levels of more than $40 billion. In the first act of parliament that was passed by the Rudd Labor government changes were introduced to the funding of aged care in Australia which saw more than $1.13 billion in additional funding for the sector over the next four years. In the budget the minister also announced that the government would provide over $2 billion over the next four years through the conditional adjustment payment, or CAP, for providers to care for elderly Australians. This is twice what the Howard government had put into the CAP over the last four years. It brings the total Commonwealth investment in residential aged care subsidies to $28.6 billion over the forward estimates. To put that amount into perspective, it was a rise of 1.75 per cent, from seven per cent to 8.75 per cent, of the basic aged-care subsidy. It can be seen that the government is serious about endeavouring to provide the necessary support in this area.

On top of that, the minister also announced in the budget that the government would be providing $300 million in zero-interest loans to help the aged-care sector create the necessary number of beds in areas designated as high need. Also relevant to this area of policy, and to many residents in aged care, have been the actions taken by the government in relation to pensioners. In the budget, the government announced a number of initiatives to help assist pensioners and older Australians, and we are looking to do more. But the measures announced at the time in the budget included the increase in the utilities allowance to $500 a year from $107.20, the increase in the seniors concession allowance from $218 to $500 per year, the increase in the telephone allowance from $88 to $132 per year for those with an internet connection, and also the payment of a $500 bonus to eligible seniors which included all age pensioners. Those are some of the significant measures which apply to many aged-care residents.

The government has also announced an investigation into measures to strengthen the financial security of seniors, including a review of the age pension, and this review is part of the government’s wider inquiry into the Australian taxation system. I am very pleased that the government has taken this action and look forward to the findings of that report. It is something that I know that many of the retirees and senior citizens in my electorate are also looking forward to.

Not that long ago, I convened a forum within my electorate that was addressed by the minister, the Hon. Jenny Macklin, and the Treasurer, the Hon. Wayne Swan, and the members of my electorate who attended that forum made their views about this well known. But they also have made their views well known about the government’s response to the Economic Security Strategy because—further to the measures that I alluded to that were included in the May budget—financial support has now been provided and will start to be paid in the next two weeks to pensioners, to carers and to seniors, in the form of a $1,400 payment to singles, and a $2,100 payment for couples. As I said, these payments will be delivered in early December, only two weeks away, which should ease some of the extra financial demands that occur at this time of year. These payments constitute an immediate down payment on long-term pension reform which we expect to emanate from the inquiry into the adequacy of the pension that I referred to earlier. Apart from all of these measures, the government is also continuing to improve the provision of services to those in aged care.

The purpose of the bill before us today is to amend the Aged Care Act 1997 and the Aged Care (Bond Security) Act 2006 to address current inadequacies in these pieces of legislation. It also aims to provide for an effective level of regulatory safeguards for ensuring high-quality care for older Australians. It does this by addressing changes in business structures that have occurred since the Aged Care Act was first introduced and which have meant that applicable regulations and scrutiny have not been equally applied to all providers. We need to ensure, for the quality of care, that uniformity in regulation.

It also strengthens the protection of residents’ accommodation bonds, which often represent a lifetime of hard work and saving, through amendments to the current Accommodation Bond Guarantee Scheme. The bill also allows for a reduction of red tape for those applying for aged-care assistance, while also increasing the health and welfare protections for residents. So those, in general, are the provisions contained in the bill. I would now like to turn to dealing with each of those in greater detail.

The bill firstly addresses changes in business structures over the last 11 years, since the Aged Care Act 1997 was introduced. One of these changes has been the move in the industry from a situation whereby the owner of a facility was more than likely going to be the operator in an industry where the owner and operator may be distinct and operate separately. This has followed from a large increase in the level of investment in the aged-care sector from large corporate entities, management rights being then subcontracted. The current legislation does not specifically address these types of structures. This has led to a situation in which the relevant regulations have not therefore necessarily been applied equally to all providers. Amendments under this bill will ensure that the applicable regulations apply to both the owner and the provider of the accommodation, as was the original intention of the act.

Another similar inconsistency has arisen from these changing business structures, and that relates to the issue of related entities. Currently, large corporate entities can sometimes hide behind complex corporate structures when applying for approval for an aged-care facility. Normally, upon application, the Department of Health and Ageing will conduct an assessment of the company’s record in service delivery and its suitability to be approved to deliver the care in the future. However, the legislation as it currently stands does not allow for this examination to cover all related entities of a company, allowing some providers to escape scrutiny behind more complex corporate structures, whether they be deliberate or a consequence of the way a corporate entity and related entities may have evolved.

The changes under the bill will ensure that the department will be able to consider the record of related entities within a corporate structure when making decisions about approvals for a facility. These changes will help provide greater oversight and ensure that owners and providers are subject to the applicable regulations, as was intended. To this end, the bill also eliminates any confusion about which aged-care services are regulated by the legislation. The need for this clarification arises because some developers have placed aged care, retirement villages and disability or step-down care under the same banner. The clarification under this bill makes it clear that only aged-care services are regulated by the Aged Care Act.

The next area dealt with in the bill relates to the increased protection of residential accommodation bonds. As the minister noted in her second reading speech on 16 October, around 970 approved providers, which is about 75 per cent of all providers, held accommodation bonds with a total value of approximately $6.3 billion. That represents a huge amount of the savings of those who are in residential aged care facilities. These accommodation bonds are often the product of a person or couple’s hard work and their lifetime savings. It is therefore imperative that there be appropriate safeguards in place to protect those savings, which are held in the form of accommodation bonds.

In 2006, under the previous government, the accommodation bond guarantee was introduced. This scheme has the aim of protecting residents and their bonds in circumstances where a provider becomes insolvent or bankrupt. However, practice has shown that there are some loopholes in the protections provided, which are addressed by the bill before us. These amendments will therefore serve to increase confidence amongst residents and their families that their lifetime’s savings will be protected, as intended, under this scheme. From my point of view, this is an extremely important part of the bill.

The next area I would like to refer to involves cutting the red tape that is involved in the current system for people seeking access to care. Currently, many ageing Australians are subject to increased waiting times as their assessment for eligibility for the provision of aged care takes place. This bill allows for a significant streamlining of the process through the reduction of much of the associated red tape. The minister will hold further negotiations with the states and the territories on this issue in an attempt to ensure that the amendments in this bill result in real improvements in the time line for the assessment of people waiting to enter an aged-care facility.

Labor is also committed to ensuring that care recipients receive the best health and welfare protection. To this end, the bill includes a reform package designed to provide for the safety and welfare of residents. Firstly, there is a system of increased police check requirements, which will help to ensure that people with convictions for serious offences such as murder, sexual assault and physical assault are not employed to care for older Australians. The strengthening of that requirement is an extremely important component of the security of people in aged-care facilities. Secondly, there will now be a new requirement for providers to contact the Department of Health and Ageing when a resident is missing from a residence or has been reported as missing to the police. This will enable the department to take early action in reviewing the systems in place to ensure that all residents are as safe as possible.

Finally, the bill also makes clear that the department is to consider any action to be taken for breach of compliance of the relevant accountability principles in light of the threats to residents’ health and welfare as well as the interests of current and future care recipients. A similar provision used to exist, but the amendments within this bill ensure that this is given priority status and that there is no ambiguity about its importance.

In conclusion, the Rudd Labor government is committed to providing residents in aged care with the support that they need. As the federal member for Charlton, I am acutely conscious of the importance of this. It is why I have chosen to speak on this legislation. It is also why the government has introduced greater funding, has increased financial support for the sector and is providing stronger regulation of the sector. I would like to congratulate the minister and the department on their work in the development of this legislation and on ensuring that aged-care residents continue to receive improved care.

Darren Chester (Gippsland, National Party) Share this | Link to this | Hansard source

I rise to speak in relation to the Aged Care Amendment (2008 Measures No. 2) Bill 2008. In doing so, I congratulate the member for Charlton on his thoughtful contribution to the debate. I also seek to highlight the need for a whole-of-government commitment to meet the challenges of our ageing population. There is a growing awareness in the community that providing for the needs of our ageing population is a critical issue for our nation’s future. My electorate of Gippsland is following the demographic trends which have been recognised in a wide variety of reports. We have an ageing community and, with the continuing influx of sea-changers attracted to our magnificent coastal and country areas along with the Gippsland Lakes, the demand for services is expected to grow in the future.

Australia-wide, the number of people aged 65 and over is expected to increase from 13.4 per cent of the total population to 25.3 per cent in the next 40 years. In terms of the very old—those aged over 85, who tend to be the major users of aged-care services—the increase is equally stark, with a jump from 1.7 per cent to 5.6 per cent of the total population. I am reluctant to use too many figures when we are talking about aged-care services and the needs of an ageing population, because we would be wise to remember that each one of the about 150,000 people in permanent residential care is someone’s mum, father, best friend, uncle or auntie. These are individual people that we are talking about, and providing the best possible care for them in their later years is a challenge that we must all embrace. They each have individual needs and expectations, and providing those quality services, particularly for the frail and aged, in the most appropriate manner to meet their individual requirements is going to demand more flexibility and innovative thinking from us as policymakers in the future. I think it will also require a recognition that a one-size-fits-all approach simply will not work, particularly as it applies to regional areas. We will need to have more flexibility in funding and service delivery arrangements to meet the needs of different communities throughout Australia.

I believe that aged care is an issue that must be above party politics. In my early days in this place I do despair at times at the lack of genuine bipartisanship on a range of issues. In desperation to destroy the legacy of the previous government, the current administration is prone to overblown rhetoric about the achievements of the past. It is foolish and quite juvenile for members to claim the Howard government ignored the needs of older people or failed to do anything to improve aged-care services. But, equally, it is foolish and juvenile for members on this side of the House to suggest that everything has been destroyed in just 12 months. I think the two propositions are ridiculous and hold no weight in the wider community. People are looking for results from us and not endless bickering on such an important issue. The Howard government did make some significant improvements to aged-care services. It is up to the current government to build on them and to look towards the future challenges rather than focus on the past.

The Productivity Commission released a research paper in September this year titled Trends in aged care services, and it makes for very interesting reading, to say the least. The commission effectively sets out the challenges ahead for the government and it has found that there will be many more older Australians requiring the provision of aged-care services in the future. The models for providing those services will need to change to reflect the expectations and demands of the next generation of older Australians. The aged-care workforce will need to expand to meet the increased demand, and governments will need to ensure that the profession is well trained and suitably paid to attract workers in the future. I do not seek to be an alarmist on this issue, but I am concerned that our aged-care system is not well placed at the moment to meet all of those future challenges.

The Productivity Commission has highlighted many other concerns. The changing pattern of disease among the aged is expected to increase the proportion of frail and older people. As medical advances are made we can expect to live longer, often despite the existence of more than one serious health condition. The health needs of these people will become more complex and the training required to manage those conditions will become more onerous. The oldest and frailest will increase in number and it will require additional facilities and resources to provide care. Mr Deputy Speaker—without wishing to reflect on you at all—we all have a vested interest in ensuring that care is well organised for us when we get there in the future.

With the increase in the aged population, I think the natural tendency for people to remain in their own homes will continue to rise, and the range of services that will need to be provided will increase accordingly. We need to be planning now and taking positive action and the practical steps required to meet that increased demand. Our approach to the ageing population will require a whole-of-government response across every agency. There is no room for cost shifting, buck passing or the blame game when it comes to providing care for older Australians. I think all levels of government have a role to play and all departments need to be conscious of the needs of an ageing population and need to make their services, if you like, age friendly.

Those needs will naturally vary according to locations around Australia. If I may, I will speak for a moment about the electorate of Gippsland and the aged-care needs of my community. If we begin with the starting point that the overwhelming majority of older people seek to remain in their own homes for as long as possible then we need to provide services to allow that to happen. Gippsland has many rural and remote areas, and I accept that it is often difficult to provide services in parts of those types of electorates. Having said that, I also note that it is far more expensive to provide full-time residential aged care than it is to deliver services that allow people to remain in their own homes for longer. As long as it remains safe for them to do so, we need to provide services to allow people to enjoy their later years in their own homes.

If possible, older Gippslanders need to have the option of remaining in the community that they love, the community where they may have friends and family who are close at hand. This may require more innovative solutions to local problems. For example, public transport services are virtually non-existent in many parts of my region and in other parts of rural Australia. If we are going to encourage older people to hand in their driving licences when they become less capable of handling a vehicle then we will need to provide some form of alternative transport. Normally, it has not been seen as a federal government responsibility but our state governments have not always done their job in this regard. We need more frequent, flexible and more diverse public transport options to support older people in their communities. Community buses which have the flexibility to pick up and drop off at residential addresses may need to be funded, particularly in regional areas, through possibly liaising with the existing taxi industry or through better use of department of education funded school bus contractors.

Better servicing of our smaller regional communities will also demand consultation with the local centres. I am a strong believer in developing local solutions to local problems. We need to draw on that local knowledge; we need to draw on the practical experience and the common sense of people who live in these communities and engage them in the development of ideas and service delivery that will suit their community needs.

Public transport is just one of the issues facing older Gippslanders. We also need to support our carers, who are saving our nation a king’s ransom by caring for family and friends. The selfless work of carers needs to be better recognised and better supported in the future. It is often older women who take on the caring role, doing an outstanding job caring for partners or older relatives with only limited support from taxpayers. I was heartened to read recently that the Prime Minister is considering a new superannuation scheme for carers. We need to remember that these carers find it almost impossible to hold down full-time jobs. They are not in a position to make a contribution to their own super and when they reach retirement age—if they are not already there—they do not have the financial capacity to look after themselves. So I endorse the position taken by the government in this regard and I encourage the government to continue exploring opportunities to assist carers.

The recent announcement of a one-off bonus payment as part of the $10.4 billion economic stimulus package will be well received. I am surprised that, with a lump sum payment such as that, the government has not provided financial guidance for some people who are perhaps not used to receiving such a significant amount of money. Some families will receive $4,000 or $5,000 in one lump sum. It might be worth while in the future, if we provide those types of packages, to provide some extra support and guidance in the community to assist people in ensuring that they use the funds as wisely as possible.

In relation to pensioners and carers it strikes me as a bit bizarre that the government could never justify this payment as a matter of pure social justice but, when we have an international financial crisis, it is justified on an economic basis. Having said that, I note that I have consistently supported the provision of extra support for pensioners, carers and people with disabilities—certainly during the Gippsland by-election campaign and since then. I think the member for Charlton in his contribution referred to a down payment on long-term pensions reform. It is a much needed reform right throughout Australia and, I would imagine, it will have the support of both sides of the House in the future.

The need for better support for carers, including increased opportunities for respite, is a critical issue, particularly in regional areas and particularly if people are to have the capacity to remain in their homes for longer. There are already some excellent examples of service delivery directly to the home, and the district nurses who work throughout Gippsland are a classic illustration of my point. I had the personal experience in recent times of my father being terminally ill with cancer. The palliative care provided by the nurses in our family home made it much more comfortable for my father to be among family and friends at the time of his passing. The demand for these types of services in a compassionate home environment will only increase in the future. We need to be ready for it and we need to be training the staff and making sure they have support for what is a very stressful job.

One step removed from carers is the army of volunteers who are directly involved in providing aged-care services in our community. The Productivity Commission has rightfully acknowledged that volunteers will continue to play an important role in the provision of aged care. The commission noted that the potential pool of volunteers is actually expected to increase in the future. The challenge for aged-care providers will be to compete for volunteers and utilise them effectively. As the baby boomers age, we can reasonably expect to have more people in a position to volunteer their services. Although many of the boomers are in a better financial position than the previous generation, the cost of volunteering is an issue, particularly in rural and regional communities. For example, putting fuel in your car to assist with Meals on Wheels can be very expensive in some of our rural constituencies where there are routes of several hundred kilometres. We need to recognise that the goodwill of those volunteers can only extend so far, and reasonable reimbursement of expenses is something that I believe will be sought by volunteers in the future and be appropriate in many circumstances.

In terms of residential aged care, I believe the professional workforce remains a critical link. Without a well-motivated, well-trained and caring workforce, everything else will fail. From my experience in Gippsland, the workforce in the aged-care sector is doing a remarkable job in often very trying circumstances. As a new member of parliament, I have not actually visited every aged-care provider in my electorate, but I have been to several of them and I am endeavouring to get around to the rest of them as soon as possible. I have visited facilities in Sale, Maffra, Heyfield, Traralgon and Morwell. Without exception the staff have impressed me with their professionalism and their compassion for the people in their care. Theirs is not an easy job by any stretch of the imagination. They are confronted on a daily basis by the emotional and physical challenges of working with people who can be very frail or who are suffering the effects of dementia and other conditions. The people they look after do not always appreciate the work that they do, but I can assure them they are extremely valued in our community. The aged-care workforce in Gippsland often goes the extra mile to provide a happy home for the people in their care. I recently attended the AGM of the Sale Elderly Citizens Village, or Ashleigh House, as it is better known to the locals. A highlight of the meeting was the presentation of the staff long service awards for 10, 15, 20 and even 30 years of service. These are dedicated, hardworking staff who are making a difference in their daily roles.

It is with some hesitation that I note the bill provides for all staff to undergo police checks before working in aged-care facilities. I understand, of course, the motivation for these tough measures and I fully endorse the sentiment that the care and safety of residents must come first, but it gives me a vague feeling of unease that we live in a society of such distrust that such measures are deemed necessary. The Minister for Ageing in her second reading speech also spoke about a tougher enforcement regime, including an increase in the number of unannounced visits. We are right to have a tightly regulated aged-care sector with strict standards, and these accountability measures are an important aspect of the industry. Family members and friends must have confidence in the residential aged-care sector, and they need to know that their loved ones are safe and are being well cared for. Having said that, I also say that we need to make sure that families are not unduly alarmed when breaches are detected.

We had the recent experience of the Department of Health and Ageing imposing tough sanctions on the Lakes Entrance Aged Care Facility in my home town in East Gippsland. I would like to acknowledge the minister’s willingness to liaise with my office and to keep me informed on the situation. In small towns, where everyone tends to know everyone else, loose comments can be misinterpreted and may reflect poorly and unfairly on the staff involved and cause enormous stress within the community. I think the need for accurate and open dialogue in these situations is obvious. I do not wish to pre-empt what may occur in the future in relation to the future ownership of the facility in Lakes Entrance, but I simply make the point that it is highly regarded by the local residents. They are extremely keen to see the Lakes Entrance Aged Care Facility remain in place in the future. Naturally, the health and safety of the residents will be of paramount importance in that endeavour.

As I mentioned at the outset, meeting the needs of the aged-care workforce is one of the biggest challenges we face going forward. Retaining and attracting quality staff will demand more competitive rates of pay in the future and will also demand improving the work environment as much as possible. Although we are forecast to enter a period of increased unemployment, in the longer term we can expect a tighter labour market. There will be great competition among professions for a well-trained workforce. The aged-care sector must be in a position to offer its staff a reasonable salary with good working conditions and the opportunity to obtain the necessary training and qualifications for a successful and rewarding career.

The Minister for Ageing recently announced increased funding for aged care, and that is a good thing. It is claimed that 7,700 training places will be provided over four years for aged-care and community care workers, at a total cost of $41 million. As long as no-one pretends that we have solved the problem, this should be viewed as a step in the right direction. More steps will be needed in the future, particularly in relation to the financial viability of the aged-care providers.

I refer to the Grant Thornton aged-care survey, which examined the changes that have taken place since 2004 and received feedback and financial data from 700 nursing homes and hostels. Among the key findings was the statement that the average return on investment for modern single bedroom facilities was approximately 1.1 per cent. It is a major area of concern when you consider that consumer demand for increased privacy has led to the expectation that modern aged-care facilities will provide these types of rooms. I have visited many of the older facilities in my region and it is abundantly clear that people are expecting a single bedroom facility and a separate ensuite. The rooms that we may have built in previous decades do not necessarily meet the current demands in many cases. That does not reflect on the standard of care by any sense—the service provided by the staff is still outstanding. But there is an expectation that new facilities need to be built in the future to meet the demands and the needs of the ageing population. The increased cost of construction will also be an issue. It is hard to see the private sector getting too carried away about returns of 1.1 per cent per year.

There are also a couple of other points that I would like to make in this regard in relation to the bill. One is the need to consider the rural, regional or remote subsidies in the future. I fear that the smaller residential aged care providers may be financially unviable in the future. In small country towns, there is not going to be the demand to build bigger or more financially viable aged-care facilities. The government is going to need to address this issue in the future if we are going to be in a position to offer residential aged care in the smaller country towns that I have talked about. People may have lived their entire lives in those small country towns and may desire to stay there in their later years.

I also want to raise the point that others, including the member for Greenway in her contribution, have raised in relation to the assessment of care needs and the ability to make payments to aged-care providers retrospective. I understand that there is often a time lag after the assessment of whether a person needs low-level or high-level care. If a provider accepts a resident in low care and then is required to provide a much higher level of care, and if the assessment that they need high care is then backed up by an independent team, it is reasonable for the provider to be given retrospectively the higher rate for that period of care. In the interests of financial viability and the quality of service, it is important for the government to address this issue going forward.

The not-for-profit sector faces even bigger challenges when it comes to accessing funds for upgrading facilities or building new facilities. As the Thornton survey found, the not-for-profit sector has indicated that its deteriorating financial position has necessitated more commercial policies in relation to residential aged-care admissions. There is a concern that this approach has come at a cost to the financially and socially disadvantaged people in these programs. Many of the most socially and financially disadvantaged people live in rural and regional Australia. This is obviously a huge issue for regional communities like Gippsland that have a relatively low socioeconomic status. The survey found that the average anticipated building cost for new facilities was $176,000 per bed, excluding the land costs. This compares to the estimated cost of less than $85,000 per bed just five years ago.

My comments are not intended to blame or attack the current government. It is just a matter of highlighting the fact that we are facing some very real problems in relation to aged-care services in our nation. For my part, I have written to the minister to flag the concerns of my constituents. The issue of the conditional adjustment payment, or CAP funding, is a major concern for providers in my electorate. In response to the Hogan review, the previous government increased funding by $877 million over four years to provide additional financial assistance to residential aged-care providers. In this year’s budget, the current government increased the level of CAP, with the intention of providing an additional $407 million over four years. The providers in my electorate are telling me that this funding should be rolled into recurrent funding to give them more certainty in planning for the future. I understand that a review is underway and I strongly urge the minister to respect the views of industry in relation to those concerns about continuing financial viability.

I am an optimist by nature and in closing I would like to reflect on a few of the very positive initiatives that have occurred in the aged-care sector in my electorate. Just recently, I had the opportunity of officially opening the new St Hilary’s Nursing Home in Morwell. It provides accommodation and care for 51 Latrobe Valley residents and is a magnificent facility which is being provided by Baptist Community Care. There was a great deal of concern five years ago that the local community might lose St Hilary’s, and I am pleased to report to the House that the new facility is now up and running and is a credit to management and staff.

Likewise, I recently visited the Dalkeith facility in Traralgon, where there is a $50 million project underway to construct 154 independent living units alongside the existing nursing home. The first stage of 25 independent living units is well advanced, and the end result will be a village that provides a great lifestyle for people aged over 55 years. Its location, alongside the Dalkeith aged care facility, will be particularly attractive if a situation develops in the future where one partner requires a higher level of care than the other. I think it is these types of innovative solutions, which are being driven throughout regional areas, which will need to be supported by the government in the future. The village will be well equipped to help people remain in their own homes longer, and I am confident that this concept is going to be embraced by Gippsland residents who want the comfort of their own home and the security of living close to their friends and support services.

I also recently visited the new Heritage Manor in Maryvale Road in Morwell. It is another magnificent facility, with the potential for up to 95 beds. I understand that an application is pending for additional beds, and I will certainly be supporting the providers who have made such a major investment in Morwell.

Looking after the frail and the aged is a community responsibility, and I urge all members to work in the spirit of bipartisanship to achieve the best possible outcome for all Australians.

Sid Sidebottom (Braddon, Australian Labor Party) Share this | Link to this | Hansard source

I acknowledge the very positive contribution from the member for Gippsland. He may be interested to know that most of the economic and social indices studies of Gippsland and Braddon are very similar indeed. He mentioned, very rightly, at the end how his community is trying to come together to deal with some of the serious issues that are facing the aged-care industry, particularly the not-for-profit sector of it. I share with him that I have been working with my community to start to develop a regional model for aged care to try and look at how they can better and more efficiently support each other and, at the same time, retain the financial viability which is so necessary. I am more than happy to share that with the member at a later time.

Member for Gippsland, I also acknowledge that you made reference to the Minister for Ageing for her positive communications with you. The minister has always been very positive in her communications with us. She came to visit us. She met with all the providers and representatives of the industry in my electorate. I was very pleased with that. And I know that she is very determined to try and deal with what is a very complex area. I do not think any of us deny that. And I quite agree with you: the blame game is not going to solve this. We have to get on with this. The legislation before us today, the Aged Care Amendment (2008 Measures No. 2) Bill 2008, is an attempt, in part, to be able to do that correctly and to fix some anomalies that needed to be fixed. So I do thank you for your contribution, and I am more than happy to discuss our communities, which obviously share a lot in common.

I would like to start that way, because I think it is really important that, as the member for Gippsland quite rightly said, we are talking about people and, most especially, our aged community. I would just like to look at some of the statistics with you, Mr Deputy Speaker and colleagues, if I may, to highlight the challenges that face all our communities, particularly in regional Australia. Metropolitan Australia, through its critical mass, is able to have access to persons with greater funds, in order to deal with some of their issues. I know that there are many who cannot. But in regional Australia it is particularly difficult, particularly as we rely more and more on not-for-profit organisations.

I will give an example from my own area of the Cradle Coast. It is slightly bigger than Braddon and involves nine major municipalities, with a population of around 100,000. There are 16 aged-care providers, and the majority of those are not-for-profit. And each one tells me that, as much as they try, with all the best will in the world, financial viability is really a problem, as is attracting and retaining staff. I reckon that if, as a group, we were to sit down and, with common sense, start to look at the roles that are required of trained nurses, and at creating an intermediary nursing qualification for the aged-care industry, we would help them a great deal with this. We also know that they are burdened with red tape, with over-regulation. This bill attempts to tackle some of that—although some argue that it is just adding to it. But it is trying to deal with the anomalies. We have to look, as a group, at the areas of massive red tape and of accreditation; there is no doubt about it. And, of course, for these people, keeping the wolf from the centre door is really going to be an issue.

We have to look at how to best fund the aged-care services that we need. There are some words that some people do not want to talk about. The ‘b’ word is an example—the bond word—and other means of funding these very vital and much-needed services. We have to look at this. Some members were perhaps suggesting that these issues started with us. We all know that is silly. We have got to get on with it; we have got to have much more substantial reform, but this is the beginning from our point of view.

I would like people to note that over the next four years $41 billion—a record amount, which means that there are more who need it—is dedicated to aged care and community care, with $28.6 billion of that for residential aged care alone. Our greatest aim is to help people to age gracefully, productively, fruitfully and enthusiastically in their homes. But at some stage there are those who will take the option of residential care. That, of course, is changing. The nature of residential care is going from low care to high care. That is where the cost is but, unfortunately, the options to fund this are limited.

Just out of interest, 35.8 per cent of people in my electorate are 50-plus; 28 per cent are 55-plus; and 7.6 per cent are 75-plus. I suggest to you—and I am sure this would be reflected in Gippsland and other rural areas—that there is a tremendous demand coming for residential aged-care and community care services. It is huge. The Productivity Commission research paper Trends in aged care services: some implications is worth looking at. It says that, in 2007, there were around 2,872 residential aged-care providers in Australia. Of these, approximately 61.4 per cent are private not-for-profit; 26.9 per cent are private for-profit; and the remaining 11.75 per cent are government providers.

Speaker after speaker has pointed out that the aged-care industry has undergone significant change since the enactment of the Aged Care Act in 1997. A recent report by Grant Thornton, Aged care survey 2008, notes that the number of people receiving subsidised care has doubled between 1997 and 2007. In addition, the nature of the aged-care industry has changed significantly. Some say it has gone from a cottage industry to a multidisciplinary, multifaceted industry. It is enlightening to look at some of the other statistics associated with the industry. We know that the Australian population is ageing. Currently older Australians, aged 65 years and over, make up 13.4 per cent of the population, or 2.8 million, or one in seven Australians. The Productivity Commission report which I mentioned estimates that, by 2050, one in four Australians will be aged 65 or over. As individuals age, some form of assistance with personal and everyday activities is usually required. The latest available data indicates that 32 per cent of those aged between 65 and 74 years, and 86 per cent of those aged 85 and over, require some form of assistance. Consequently, there has been an increase in the number of people seeking to access aged care—whether it be in their home or in residential care.

A further trend relating to an increase in the number of people seeking to access aged care is that family structures have changed. The family unit may no longer be a primary source of aged care for increasing numbers of people as it has been in the past. That is a demographic and sociological fact. Another emerging trend is that people are entering residential aged care requiring a higher level of care, which I mentioned earlier. That is a highly costly service to provide, yet service providers have less ability to ‘charge’ for that service than they do for low care. That is an issue we have to deal with.

The legislation before us provides a regulatory framework for Commonwealth funded aged care, with the core objective of the legislation, as the minister has made clear on several occasions, being the protection of the health, wellbeing and interests of care recipients. The bill is part of a package of reforms designed to ensure that the approximately one-quarter of a million frail older Australians who are either in residential care or receiving community care services in their home receive high-quality care, that the often significant sums of money paid by care recipients are managed responsibly and that the regulatory framework is robust. I do not think any of us disagree with those objectives.

In the decade since 1997, when the Aged Care Act first came into effect, the industry has matured significantly and changed in nature. The setting is significantly different in 2008. The sector is evolving from a typically one-site, one-service cottage type arrangement to multisite, multistate and multiservice operations using complex financial and legal arrangements. The 1997 act as it is 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. I like robust discussion. I think it is very important to have that and to have contrary views. I myself might have some contrary views! But it all goes together to hopefully search out sensible answers and sensible policies. I was particularly interested in Aged and Community Services Australia’s submission in response to the legislation—a democratic right that they exercised—particularly in relation to the changes in the aged-care sector. I would like to share those with you, because I think they complement the intention of the package and maybe add some things for us to consider.

They reinforce the fact that almost two-thirds of services are and have always been provided by not-for-profit organisations. The corporatisation of aged care is still not as extensive as some would think, but it is a trend. Unless financial viability surrounds these not-for-profit organisations, I can assure you that either the corporate profit sector will move in or we will not have any services. Then it will be incumbent upon communities or the government to do something. ACSA writes:

These range from large church or community-based charities, who have operated multi-site and multi-service aged care services for several decades, to small, often rural services - supported by the input of social capital by local communities. The changes in ownership patterns described by the Minister are characteristic of the minority for-profit component of the industry but not of the industry as a whole. Nonetheless the Bill’s intention of keeping up-to-date with changes in private ownership and management structures is acknowledged and supported.

The amendments proposed reflect these and other developments in the sector, which I have mentioned, and are intended to ensure that the regulations keep pace with further industry developments. Technically, the bill amends the Aged Care Act 1997 and the Aged Care (Bond Security) Act 2006 to address current legislative inadequacies and maintain effective regulatory safeguards to ensure high-quality care for older Australians.

When the aged-care legislation was developed in 1997, 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 was then. 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, as I have already mentioned. 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.

The shortcomings of the existing regulatory framework are varied, impacting upon care providers, care recipients and the broader community. Under the current regulations 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 limit the ability of the department to make an informed assessment of a company’s record in service delivery and its suitability to deliver care in the future. The bill addresses this issue to provide better protection for residents and promote public confidence.

I note again that Aged and Community Services Australia cite in their observation of this point:

The potential for complex corporate structures to dilute responsibility for flaws in operational or financial performance is a risk shared by all service providers - by association in terms of risks to the reputation of the industry; and more concretely in terms of the measures introduced by the previous Government (the Accommodation Bond Guarantee Scheme) that would seek to recover bad debts incurred by one provider from the rest of the industry, notwithstanding their complete separation from any actions that may have resulted in such bad debts. Care will be needed however to prevent ‘considering the record of related entities’ becoming ‘guilt by association’ and being used inappropriately in support of compliance action.

It concludes:

Transparency of decision-making is essential to prevent this.

Similarly, under current arrangements, those pulling the financial strings may not currently be considered 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 the relevant provisions applied consistently to approved providers.

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. Increasingly, developers are putting aged care, retirement villages and sometimes disability or step-down care all in the same development—naturally enough—giving rise to uncertainty relating to the regulatory reach of the act. Changes to the regulatory and administrative framework will clarify that only the aged-care services are regulated by the act. This provision was also raised and supported by ACSA in its considered submission to the bill.

In recent years, there has been significant growth in the value of accommodation bonds held by aged-care providers. Out of interest, as at 30 June 2007 around 970 approved providers—that is, 75 per cent of all approved providers—held accommodation bonds, with a total value of $6.3 billion. It is obviously extremely important in terms of consumer confidence, and to maintain and increase the level of corporate investment into the sector, that the regulatory framework that governs these financial arrangements is as robust and as current as possible. Changes will ensure that any accommodation bonds or like payments that have been paid by care recipients for entry into aged-care services are fully protected under the Accommodation Bond Guarantee Scheme—or the guarantee scheme, as it is called—and that residents in similar circumstances are accorded similar protections. Since the introduction in 2006 of the guarantee scheme, which guarantees the refunds of bonds in the event that an approved provider becomes insolvent, experience has highlighted some areas in which the protections for residents could be strengthened. The bill therefore amends both the act and the bond security act to improve the operation of the guarantee scheme.

There are other issues related to this bill that I could comment on, but I would like to finish by saying that we do indeed have a major challenge in how we deal with providing aged-care services in our community both now and into the future. I think we need a lot more flexibility in the way we look at some of these solutions. I think we need a lot more consultation, particularly from providers. I am looking forward to working with the minister to develop a regional model, which I hope can be replicated throughout the rest of regional Australia, where our providers can retain their identity—because that is absolutely crucial in not-for-profit, community based aged-care services—where we look at the red tape involved and where we protect residents in a cooperative manner with the agencies that are required to do the accreditation and the spot checks. I want to thank the 16 aged-care providers in my community for the terrific work they do. Those individuals have been advising me and seeking clarification on aspects of our policy throughout. I am very pleased to have contributed to this important discussion on legislation affecting the aged-care industry.

Mark Coulton (Parkes, National Party) Share this | Link to this | Hansard source

It gives me great pleasure to speak on the Aged Care Amendment (2008 Measures No. 2) Bill 2008 as the aged-care industry and the issues relating to aged care are very important in my electorate, as they are in all electorates. I acknowledge the contribution of the member for Braddon. I was listening to him, and prior to him the member for Gippsland, and what came to mind was that aged care is a great leveller: we can live anywhere in this wonderful country, having had different occupations, different levels of wealth and different political views, but aged care pretty well brings all Australians to the same level. The issues that our old Australians face are universal right across the country.

It is highly important that, as representatives of our electorates, we do everything we possibly can to ensure that adequate aged care is in place for our residents. One of the things that we need to be aware of is confidence in the industry. At the moment, the industry is not feeling so confident; they are looking at issues of the future, with a growing bubble of people needing aged care. A friendly word of warning to the member for Gellibrand, the Minister for Health and Ageing: she needs to be careful that her words in her role as minister show her as an advocate for the whole of the industry, unlike the unfortunate statement she made some months ago when she said that her former role as a police officer stood her in good stead to scrutinise aged-care operators. The minister has a structure in place and people who are well qualified to undertake these spot checks. I suggest she remove herself from that level of scrutiny, because the aged-care industry and the staff are looking to her as an advocate for the industry rather than as a sheriff looking over their shoulder.

I would like to acknowledge many of the wonderful aged-care facilities in my electorate. The Naroo Hostel is in my hometown of Warialda, and that is where I cut my teeth on issues relating to aged care when I became the mayor of Gwydir Shire four years ago. Naroo is owned by Gwydir Shire, and it certainly gave me a great understanding of the complexity of aged care. It is with pride that I look at it now. Naroo has had an extension of another five beds. My father was the founding chairman of the committee that started the fundraising and initially built the Naroo, and earlier this year, prior to his passing, he was a resident there for some time, so he got to experience the benefits of his hard work in previous times.

In a vast rural electorate such as mine, aged care is very important, and it is very community specific because of the distances between towns. There are some magnificent facilities in my electorate, such as Fairview in Moree; Alkira Hostel and Lundie House in Gunnedah; Koonambil in Coonamble; and Pioneer House in Mudgee, where I had the great honour of opening extensions earlier in the year. They all do a magnificent job.

One that I would like to mention as a standout is Cooee Lodge in Gilgandra. The Gilgandra community have used aged care as a method of drought-proofing their community. They showed great foresight some years ago as they picked the changing trends in aged care. Now they have a magnificent facility for a town of 2,000 people. They have individual accommodation units, a hostel, a dementia wing and, associated with the MPS, a nursing home facility. People go into the individual units at quite a young age and become acquainted with the staff of Cooee Lodge, and eventually, as they age, they progress through the different facilities there.

Cooee Lodge was one of the first to recognise the changing face of aged care. The fact is that, with facilities that were built 15 or even 10 years ago, there was a focus—and the member for Braddon alluded to this—on hostel type accommodation. But with the increase in home care packages, older people stay in their homes for longer. The need for hostel accommodation is very much reduced. There is a much greater need for accommodation for high-care patients and nursing home patients. This is causing some problems right through the industry. The fact is that, for a lot of people in this hostel type accommodation, as they wish to move into high-care beds it is very expensive to change the facilities, to get them up to that accreditation level. They were built in a different time, and now we expect higher standards for our residents. Many of these places have to have doorways enlarged and ensuites installed. In some cases, unfortunately, it is cheaper to demolish what is quite a substantial building and start again because of the accreditation and the changing face of aged care. We are going to have to address this problem as we go along.

The other issue is the fact that residents going into high-level care do not have to pay a bond, whereas in hostel care there is the responsibility of paying a bond. I think nearly all of the facilities in my electorate are run by not-for-profit organisations. Corporate aged care has not reached my part of Australia. Many of these facilities were founded on the idea of bond-paying residents and now many of them go in there without the responsibility of paying a bond.

Previous speakers have alluded to the issue of bonds. In my electorate, they range from $25,000 to $270,000. There do not seem to be any guidelines to base this on. Where you have a small aged-care facility like the one in Walgett, with 10 beds, the community out there is really struggling with how they are going to keep that going. Obviously with that number of beds it is not viable. There is a possibility that the Whiddon Group of homes may, in a benefactor role, come in and take it over and expand it. But the issue is that, if you are in Walgett and you need aged care for your partner or your parent and it is not available in the town, if you have to go to Dubbo it is 2½ to three hours drive. If you have a husband or a wife needing aged care, that is virtually separating people who have been together for 50 or 60 years. It is terribly traumatic. So, even though smaller communities struggle to have a viable aged-care facility, we in this place need to make sure that we put in adequate funding and support so that they can have aged-care facilities, to keep their elderly people in the community where they belong, where they can have their friends and family around them.

One of the biggest issues at the moment in the aged-care industry in my electorate is the issue of the aged-care assessments—that is, ACAT assessments. There are a couple of issues with those ACAT assessments. One is that the New South Wales government has pulled back on its funding—the state governments fund the ACAT assessors—so there are not many of them on the ground. You have got to understand that an aged-care patient’s condition can change at such a rapid rate that an assessment needs to be done very soon because they will quite often undergo an episode of ill health or some sort of trauma and so they need assessment in order to be given the appropriate accommodation and financial support.

Another of the issues is that there is up to a six-week lag to get a patient assessed. Also, quite often the assessment is very much on the cautious side and we are having many people assessed as needing low care or hostel care who very quickly go into that high-care bracket but unfortunately the provider is only receiving funding for a low-care patient. Quite often they will have someone there for several months on $34 a day, which is the low-care rate, compared to $160 a day, which would be the rate for the high-care assessment. This is causing enormous financial strain on these facilities. That is something that needs to be addressed quite soon. That has been brought to my attention by many of the assessors. I was speaking to the managers of Cooinda Lodge in Coonabarabran only a few months ago and they mentioned that.

This legislation extends the power to the secretary of the department of health to determine accommodation bonds. That concerns me. I think that that should be left in the hands of Centrelink as an independent body. The opportunity for conflict in having the department assessing these bonds is certainly a backward step, and I would encourage that this stay with Centrelink.

With the bonds and the financial situation, I feel that there are quite a few people in my electorate that are in need of aged care but their families are reluctant to go that way because they feel that they may have to sell the home that they may have had hopes of inheriting on the passing of their parent. Unfortunately, for less than honourable reasons, they are encouraging their loved one or relative to stay at home when they really need to be obtaining care somewhere else.

Also, I have a very large Aboriginal population in my electorate and the issue of aged care within the Aboriginal community is very complex. In Gilgandra we have an Aboriginal specific aged-care facility, and it is grossly underutilised. The culture of the Aboriginal community of keeping their family close and also the financial ramifications of losing an elderly relative out of the family unit and the income that they would bring in mean that virtually no-one is utilising this facility. It is a very complex issue and we really do need to address the issue of the ageing of the Aboriginal community and how we can best meet their needs.

The other issue is the ageing of people with disability. People with disability age at a much faster rate, so they age much earlier. Quite often the people with disabilities have lived in a group home or in supported accommodation and their families are their friends—the people they have lived with for many years. Quite often, by the time they need aged care their parents have passed on and they have no immediate family.

There is no age-specific accommodation for people with disabilities. I have been working with Westhaven in Dubbo trying to come up with a solution and I was very pleased that the Parliamentary Secretary for Disabilities and Children’s Services, the Hon. Bill Shorten, came out a few months ago and could see for himself the need. One of the complexities is that aged care is the responsibility of the federal government but disability services are the responsibility of the state governments. Unfortunately, when you have an issue that crosses the state and federal bounds it is very hard to get it up. I am determined while ever I am in this place to pursue the concept of ageing in place because it is very distressing for these people, having lived in supported accommodation or a group home for many years, to have to go to an aged-care facility where they feel very uncomfortable with unfamiliar circumstances and do not have a lot in common with the other residents. Sometimes I think we are going to have to step out of our squares of government responsibility and, with great will, try to come up with a solution to help these people.

The other issue that has been mentioned is the aged-care bubble that is coming our way—the baby boomers that are going to hit the system in 15 years time or less. We on both sides of the House are going to have to address that because it is going to happen faster than we can adapt to it.

The other issue is that of the staffing for these higher numbers. I would like to put in a plug for the aged-care staff because they are the unsung heroes in our society but, unfortunately, they themselves feel that they are the poor cousins in the healthcare industry. There is very little recognition of them in the wider community. I would also suggest to the minister that she perhaps place a little more emphasis on the morale of the staff in aged care, They are highly educated—their accreditation levels have always been on the improve and they are undertaking continuous education—but possibly the thing that sets the aged-care staff apart are those personal qualities, such as their caring qualities, that enable them to work so effectively with older people. I see, as I am sure every other member here does, these wonderful people who go to work in aged-care facilities in sometimes very trying circumstances, particularly in dementia wings and places like that. But they have a feeling that they are the poor cousins, and we need to acknowledge the skills that they have and their qualifications and we as a community need to give them far more support than we do at the moment.

I will conclude on that note. I think that this bill addresses some of the issues that we confront at the moment. I have highlighted that we need to adapt to the future. I would also like to acknowledge that the aged-care legislation that we have been operating under for the last 11 years has done a very good job but, unfortunately, I believe that it has run out of puff and needs to be updated. But this bill, I think, is only going to be a stopgap measure. We are going to have to continue to evolve to attend to our aged-care needs in the future.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Aged Care Amendment (2008 Measures No. 2) Bill 2008. I do so because I think it is a sensible piece of drafting and it is important that we amend the Aged Care Act 1977 and the Aged Care (Bond Security) Act 2006. These acts set the framework for funding for aged care in Australia. As the Minister for Ageing said in her second reading speech:

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.

We have certainly seen an enormous evolution in aged care and the challenges that we face are enormous. In the next four years the Australian government will provide more than $40 billion in funding to aged care and community care, including more than $28.6 billion to nursing homes and hostels. Earlier this year the Minister for Ageing met with the Queensland Minister for Communities, the Minister for Disability Services and the Minister for Multicultural Affairs, Seniors and Youth. The Australian and Queensland governments reached what I would describe as a historic agreement to provide record funding to support services for vulnerable Queenslanders, particularly assistance for Meals on Wheels, community transport and help at home.

Queensland HACC has assisted more than 159,000 people in the last financial year. Under that agreement, which was reached by the Commonwealth and Queensland governments, there was a boost to home and community care services of about $1.2 billion over three years. In the early 1990s and prior to that the majority of those people involved in the aged-care sector had stand-alone facilities. They were almost like cottage facilities, often managed by a local community group or a local group of churches. Sometimes a private operator would run them and, over time, those kinds of facilities and operators have gone by the wayside. These days there are very few of those in either the profit sector or the not-for-profit sector. Many of the small operators have sold out to the big operators. Many of the small operators in the charitable sector, such as individual churches, or groups of churches, or communitarian groups, have approached organisations like Blue Care, RSL Care and other large providers to take over the running of their facilities.

Before I came into this House I was on the board of Queensland Baptist Care for 14 years. They run seven quality-care residential facilities. They range from hostels and nursing homes to respite care. Three of those facilities are in my electorate of Blair in South-East Queensland. Karinya is a 36-bed hostel accommodation facility and a 29-bed nursing home. It is located about seven kilometres off the Warrego Highway in Laidley. It is a beautiful area and it is a wonderful facility. Staff there have a wonderful approach to the residents. I agree with the comments made by the member for Parkes in relation to the commitment by so many people who work in this sector to the residents there. The kindness and the caring nature of the staff I have seen in places such as Karinya, in my electorate, is to be commended.

It is the same thing for Colthup Home in Ipswich, which is a much bigger facility, with a 33-bed nursing home, 15 community aged-care packages, 38-bed hostel accommodation and 13 unfunded hostel accommodation places. It is run by the Ipswich and West Moreton Baptist Association. My grandmother was actually the matron of the home. I remember as a young boy going up there and visiting people in the home. I can recall that they were in their 50s—people like Rev. Cyril Baldwin, Grandma Cran and other people I used to visit when I was a boy. But now we do not think of putting 50-year-olds in aged-care facilities. They are usually 80 or 90 years of age when they enter those types of facilities. My uncle, Merv Neumann, was administrator of that home for many years as well.

There is Elim Village in Raceview, which is a great facility as well. Both Colthup Home and Elim Village were run by the local Baptist churches, but eventually they had to be taken over and run centrally by Queensland Baptist Care. I give that as an illustration of just what the minister is talking about with this type of legislation. Those three facilities were run locally by local people, and now they are having to be run centrally by an organisation like Queensland Baptist Care, which has a turnover in the multimillions of dollars. That is why this legislation that is before the Main Committee today is so important. It deals with the realities of life in the aged-care sector. Those are just some examples of large organisations running local community facilities, albeit with local community support—from the local churches, the Ipswich City Council, the Lockyer Valley Regional Council and others.

The reforms in this bill were the subject of consultation with the profit and not-for-profit aged-care sectors. They relate to changes to the definition of ‘key personnel’ for the purpose of regulatory oversight by the Department of Health and Ageing. The reforms will mean that what I describe as the ‘money men’—those who financially control the aged-care facility—are the key personnel of an approved provider. DoHA will be better able to investigate and liaise with key personnel for the purpose of oversight and accountability. That means better protection for the residents who live in the facilities, and I think it is better for staff as well.

The amount of money held in accommodation bonds in these types of facilities and by the aged-care sector is quite enormous. As at 30 June last year, 970 approved providers—about 75 per cent of all providers—held accommodation bonds valued at $6.3 billion. That is an enormous sum of money. The aged-care sector is an enormous industry. The reforms will ensure that the accommodation bonds paid by our aged citizens upon entry into those facilities are completely protected under the Accommodation Bond Guarantee Scheme. This scheme guarantees the refund of bonds in the event of insolvency of the aged-care provider, and the bill that is before the Main Committee this evening improves the guarantee scheme. It also seeks to reduce unnecessary assessments by the aged-care assessment teams, or ACAT. In 2006-07, ACAT conducted a total of 189,000 assessments of older Australians in hospitals, residential and community areas. The reforms contained in this bill include changes to the aged-care principles. These relate to reducing the risks to older Australians by strengthening police checks to ensure people with very serious criminal convictions are not employed in the aged-care sector and do not come in contact with our older citizens.

A new approach is also legislated for. Aged-care providers will be compelled to report to DoHA when a resident has been absent without a reason and where there has been a report to the police concerning the absence. There will be amendments to the governing act, and this will ensure that what we talk about as aged care will be a better system in terms of functionality, governance and accountability, dealing with DoHA and dealing with residents and their families.

The bill is just part of the Rudd government’s plans to reform the aged-care sector and its funding. We have almost 3,000 nursing homes in Australia, with more than 170,000 beds allocated. As the minister has said on numerous occasions, we have the second longest life expectancy in the world after Japan. Presently there are 2.8 million Australians—or about 13 per cent of our population—who are 65 years of age or over. That number is expected to triple in the next 40 years, and the number of people over 80 years of age will double in the next 20 years.

The challenges we face in the aged-care sector are enormous. They did not arise on 24 November 2007 with the election of the Rudd Labor government. They have existed for a long time. Giving our older Australians access to high-quality aged-care facilities and services is a great challenge and will remain so regardless of which side of the political divide sits on the treasury bench. The Australian Treasury has estimated that, without any significant policy changes, we could find that what we spend on aged care in this country will increase from 0.7 per cent to 1.9 per cent of our gross domestic product by 2047. Clearly, how we ensure that our aged-care sector can remain viable is crucial to how we treat our older Australians, and it will say much about us—about our degree of charity and compassion and our view of equity and social justice—in the future.

There have been a number of reviews and reports in recent years commissioned by the government and the aged-care sector in relation to the future of aged-care funding and models for consideration. Perhaps the most significant—it is certainly the most well known—was carried out by Professor Warren Hogan in 2004. He was commissioned by the previous Howard coalition government. His review was entitled Review of pricing arrangements in residential aged care. It is not a particularly sexy title, but it is a very important document. I have had reason to speak personally with Professor Warren Hogan about what he found. I have listened to him speak on numerous occasions at aged-care functions in Queensland and elsewhere. His knowledge of the industry is very impressive. What became known as the Hogan review was considered by the Howard government and then simply ignored. His recommendations were thrown in the trash can.

A financial analysis has been conducted by Grant Thornton, a respected firm of accountants. It was conducted by Grant Thornton and commissioned by the Howard government in 2006. That report showed that more than 40 per cent of aged-care providers reported a loss in their residential aged-care segment results. Returns on investment had fallen from 5.31 per cent in 2005 to 2.95 per cent in 2006. The net profit per bed dropped by almost 30 per cent between 2005 and 2006.

This was not new. Backbenchers in the Howard government from Queensland repeatedly petitioned the Howard government to seek more bed allocations in South-East Queensland and Queensland generally and more funding for the aged-care sector in Queensland—without much success, I might add. Those people who work in the aged-care sector in Queensland know very well that the Howard government failed the sector. That is quite clear when you have a look at the submission to the federal government by the Aged Care Alliance which was submitted to the review of conditional adjustment payments, which is being conducted by the Department of Health and Ageing, the Department of Prime Minister and Cabinet, the Department of the Treasury, the Department of Finance and Deregulation and the Department of Veterans’ Affairs. That submission was put forward on 24 October this year. It is quite caustic about the Howard government. It says in the executive summary of the report:

The evidence of cost pressures and declining financial performance of many providers since 2004 is a consequence of long term Coalition policy.

Here we have RSL Queensland, TriCare, Queensland Baptist Care, Blue Care and other aged-care providers in Queensland—they are not card-carrying members of the Labor Party; it is not the miscos union; it is not the metal workers union; it is not the ASU—saying that what they are experiencing in Queensland is the direct consequence of the Howard government’s neglect of the aged-care sector in Queensland. They put forward some very interesting proposals. We will not agree with everything they say, but they certainly have played a very constructive role in arguing for further aged-care funding. The minister has taken the time on numerous occasions to meet with these stakeholders, and I commend her for it.

We are providing substantial financial assistance for the aged-care sector. We have announced a number of important measures in our 2008-09 budget—$293.2 million over four years for an extra 2,000 transition care places for older people. We have increased the level of conditional adjustment payment by 1.75 per cent, from seven per cent to 8.75 per cent of the basic aged-care subsidy. That means an additional $407.6 million over four years for investment in the sector. Certainly, in my many meetings with the aged-care sector in Queensland they have commended us for that.

We have increased the nursing workforce in residential aged care by encouraging up to 1,000 nurses to return to the nursing workforce over five years. We have provided an enormous amount of assistance. In my area particularly, we have received $1.5 million for the Curanda aged-care development project in the area west of Ipswich and, as part of our interest-free loans, $5 million for the RSL Care Milford Grange project in Ipswich. These are two practical examples of the Rudd Labor government making a difference in terms of the aged-care sector in the federal electorate of Blair in South-East Queensland. The commitment that we have made in terms of interest-free loans will see 1,350 new nursing home beds and more than 100 community care packages delivered in areas designated as high need across the country. This is about the Rudd Labor government showing compassion and caring for the people of Australia, and particularly South-East Queensland and the electorate of Blair. I commend the Minister for Health and Ageing for her work in this area.

The Rudd government is to be applauded, and the Howard government condemned for its failure in the area of aged-care funding. When aged-care providers say there is much to be criticised about the Howard government, it says it all. I commend this bill to the House. I thank the minister for her commitment to my electorate of Blair and the aged-care sector in South-East Queensland and Queensland generally. I thank the minister for bringing this legislation before the Main Committee.

Stuart Robert (Fadden, Liberal Party) Share this | Link to this | Hansard source

The Aged Care Amendment (2008 Measures No. 2) Bill 2008 seeks to amend the Aged Care Act 1997 and the Bond Security Act 2006. It is interesting that the member for Blair was saying that, whilst the new government does not agree with all parts of the aged sector, they agree with some. It is interesting that, if indeed the union movement were to speak, as they have with respect to Fair Work Australia, the Labor Party would be putting everything into there. Perhaps it all depends on who is speaking to the Labor Party; clearly the union movement gets a very strong hearing. Perhaps everyone else gets less. But let us move on.

The Australian population is ageing. Currently, older Australians aged 65 years and above make up 13.4 per cent of the population—2.8 million people or one in seven Australians. By 2050, the Productivity Commission estimates that one in four Australians will be aged 65 years or over. As individuals age, some form of assistance with personal and everyday activities is usually required. The latest available data indicates that 32 per cent of those aged between 65 and 74 years and 86 per cent of those aged 85 years and over require some form of assistance. Consequently, there has been an increase in the numbers of people seeking access to aged care. A further trend relating to an increase in the numbers of people seeking to access aged care is that family structures have changed. For increasing numbers of people, the family unit may no longer be a primary source of aged care as it has been in the past. Another emerging trend is that people are entering residential aged care requiring a higher level of care.

Aged care in Australia, though, is largely regulated by the Australian government, which funds the provision of aged-care services through subsidies of the costs of the residential care as well as capital grants. However, state, territory and local government regulation also impact the provision of aged-care services through regulations about matters including building planning and design, occupational health and safety, food preparation and consumer protection. The main areas of regulation by the Commonwealth government include allocation of aged-care places to approved providers of aged care, client eligibility to access those places, funding services, setting prices and quality control. In 2007, there were around 2,872 residential aged-care providers in Australia. Of these, approximately 61.4 per cent were private and not-for-profit, 26.9 per cent private and for-profit, and the remainder were government providers, at 11.75 per cent. Thus, residential aged care is largely publicly funded. The government provides most of the recurrent funding, with state and territory governments contributing to overall costs. User contributions by way of resident fees and charges provide the rest of the revenue. Government funding of residential aged care is mainly determined by the residents’ assessed care needs using the aged-care funding instrument.

Having said that, the government allocates new places to broadly match the target population, attempting to balance the provision of aged care between metropolitan, regional, rural and remote areas within each state and territory as well as the need for different levels of aged care. Once places are allocated, the government has an open tender to allocate those places to approved providers, who then have two years to make those places operational. According to the Productivity Commission, approved providers are also expected to ensure that a certain percentage of the places allocated to them are accessible to residents who cannot afford to pay an accommodation bond. Having established the parameters of the aged-care industry, I note that many provisions of the bill were announced by the Minister for Health and Ageing on 22 March this year.

The package, to be administered by the Department of Health and Ageing, sets out a range of measures that include increased visits to aged-care facilities by the agency and independent watchdogs, increasing the powers of the agency, expanding the requirement for all aged-care employees to undergo police checks irrespective of whether they have supervised or unsupervised access to residents, requiring investigative staff to check on both residents and paperwork in a facility and reviewing the act to fill in the gaps in the legislation as well as to improve the quality of the aged care. The package, I note, is consistent with the government’s pre-election commitment in relation to aged care. Surprisingly, the government has stated that it did consult with stakeholders about the bill—surprising because the aged-care facility providers I have spoken to have been somewhat aghast at some of the measures. The bill focuses far too much on compliance. Surprise, surprise from a Labor government: when it comes to big government and regulation, frankly, government knows best. There is far too much focus on compliance as opposed to alleviating the already overburdened regulatory system of the aged-care industry, which continues to be insufficiently funded.

Research published in the West Australian in October this year showed that many aged-care providers have been incurring ‘unsustainable operating losses’ and can hardly afford to keep existing facilities running. Such research indicates that high consumer demand for aged-care facilities is not being matched by investor interest, due to low returns, with recommendations for a review of funding and regulatory arrangements so as to boost investment. For the first time ever, it would appear, we have providers going into liquidation, an undersubscription of places, bed licences being handed back and decisions being made at board level not to apply for licences in the latest aged-care assessment round. That is quite an indictment of the existing government and its minister, whom the member for Blair lauded in such glowing terms. At a time when you would expect providers to be gearing up for an influx, services are getting leaner and older Australians are being left out in the cold. The average return on a high-care bed in a modern facility is approximately 1.1 per cent. Understandably, industry is unable to attract investors to the sector.

The over-regulation of the aged-care sector is also a significant concern. The case for less regulation was made in the Hogan review in 2004 and most recently in the Productivity Commission’s report on aged-care services this year. The Grant Thornton Aged Care Survey from this year found that the regulatory and pricing framework decreased the viability of the sector. Although this bill addresses some of the inconsistencies in the act, it does nothing to address the fundamental concern of over-regulation and the need for regulatory reform. So much for the member for Blair’s lauding of the current Labor Minister for Ageing.

According to the government, there would be no financial implications for the budget. They would say that, because, frankly, Labor are only concerned about their budget, their regulation and their compliance. It is expected that there will be significant financial burdens on approved providers in complying with the new and amended obligations under the act. I guess this was not factored in to the government’s thinking on the process. Additional and amended obligations proposed by the bill will also affect investor confidence in the aged-care industry.

Discussions with aged-care providers in my electorate of Fadden, which is the fastest growing electorate in the nation—an electorate with a higher than average number of elderly people—raised the following issues that the government is not addressing. I will turn first to parity of wages and conditions. In state run nursing homes and hospitals, wages and conditions are negotiable to include non-taxable FBT. Why is this not available in non-government homes? Look at bonds in high-care facilities. This is an issue that will have to be addressed as a matter of urgency. The current stock is ageing and providers have stated that they will not take up the ACAR funding round for stand-alone high-care places, because it is no longer viable.

The question needs to be asked: why does the Queensland state government not give rate relief to operators when New South Wales has had this relief in place for a number of years? The capping of fees payable by residents is another disincentive for operators. There is an argument for some form of deregulation of the industry that is not associated with extra service allocations. Given that the fees are attached to pensions and the coalition asserts that pensioners are underpaid, as the Labor government will not provide an immediate indexation to the current pension rate, does it not follow that providers are being underpaid?

There is a chronic shortage of registered nurses. Legislation requires registered nurses in high-care facilities 24 hours a day. There is documented evidence that notes the ageing workforce, as I mentioned at the start of my speech. Will the government review the idea of looking at enrolled nurses with acceptable qualifications equal to a registered nurse in the aged-care sector?

The funding to the aged-care sector has been increased over the years—especially by the Howard government. However, there has also been an extraordinary increase in the monitoring of homes and the compliance burden. This burden will apparently cause no extra cost to the Commonwealth—disregarding the extra cost to business, small business and other areas. Large amounts of money are clearly being paid across the Public Service to ensure that this high level of compliance occurs. In many instances, these compliance services cross over each other and add to the paperwork overload, as well as to the cost to establishments. This is thousands of dollars which could be spent on residential care.

Whilst I acknowledge that this bill is in line with the government’s pre-election commitments, it massively increases the compliance burden. It shifts costs on to providers, rather than the government. Whilst it lines up with Labor’s mantra of ‘bigger government, bigger compliance and bigger regulation’, I do not believe that the extra compliance is suitable for the aged-care industry. This government must do more to help the aged-care industry, especially as Australians are growing older. Indeed, we will all age. One day we will all need some degree of care. It is incumbent upon the government to address the issues now.

Bernie Ripoll (Oxley, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to speak on the Aged Care Amendment (2008 Measures No. 2) Bill 2008 in this place and to make some remarks. I will be making some remarks about the member exiting the chamber—the member for Fadden—in relation to some of the comments he made. There are a few truisms that exist in life. There are two that we all know very well, two certainties: one is death and the other one is taxes. But I think there are a few others that we ought to acknowledge in the discussion on this bill, and they are that we are all going to age and not only will we age but we will live longer; not only will we live longer but we will need more care in our older years; not only will we need more care but we will need higher levels of care; and not only that but it will cost the taxpayer a lot more as well.

This bill is really about addressing long-term structural regulatory and funding mechanisms to make sure that as a government and as a nation we are prepared to deal with those issues and to begin the process—and I think it is a continuing process—of ensuring the highest possible standard, the highest levels, of quality care in Australia for all aged and frail people, whether they are in care in a facility or home or whether they are in their own home or under some other mechanism of care.

I have listened to a number of opposition members speaking on this bill, and I did have a look at what the shadow minister said in her contributions in relation to aged care. What I can divine from all those comments is that on the whole we are actually keeping our promises. That is what the opposition are saying: on the whole we are actually delivering on the commitments we made; on the whole it is actually good legislation, it is a good bill. I read through and underlined a number of things Mrs May, the member for McPherson, said. She said that the opposition support the measures in the bill—not one or two of the measures but quite a few of those measures.

There is not so much an argument or a debate across the chamber; we all in the end need to do more. We heard that from the member for Fadden, who said that basically the Labor Party are keeping all of their promises: they have consulted widely. Labor have consulted not only with the sector, residents, contributors, owners and operators; we have also consulted with the unions. There is nothing wrong with that either because they actually represent all the people that work there. Through them we have consulted with all the workers. We have consulted with them directly as well. So, on the whole, the gist of the comments and the debate from the opposition has been quite simple: ‘While we support the bill, while we think it is a great bill and while you are meeting all your commitments and promises, we think you ought to do more.’ What a lovely, lovely thought on this bill from the opposition. If that is the strongest criticism they have of us, I am more than prepared to accept their criticisms on a daily basis. The reality is that all of those things are true. We are meeting our commitments, we are keeping our promises and we are also doing more—the bits that are left over from the previous 12 years of the Howard government, when they did not do more. What they did was more of the same. What we are doing is something a bit more innovative. We are dealing with the structural issues of aged-care provision. We are actually dealing with, at its very core, the principles that underline what will be the strength in the system in the years to come.

I also want to note that the opposition not only do support the principles of the bill but also acknowledge that we are keeping our election commitments and promises. I know that this is probably a bit unusual for them because they were more accustomed to having promises in two categories—the core and non-core promises; some that you kept, some that you did not and some that you completely ignored or forgot. On this side we think that aged care is too important to be merely categorised into core and non-core promises. We need to act and we need to make some substantial changes to ensure that for the next 40 years we actually provide the regulatory legal framework and the funding mechanisms for the future. All of us here need to make sure that as we age we do so with dignity, that there will be care facilities in place and that there will be enough workers in the industry—that we have put forward mechanisms making sure that we not only look after the people that need care but we also look after the people that care for them. I think that that is just as important.

These are not easy issues to deal with. These are complex matters and they are ones that require an awful deal of taxpayers’ dollars. That is not a complaint or some sort of objection; it is just reality that we will need a lot of money in this area.

I want to specifically raise the matter that this year the Productivity Commission released a research paper entitled Trends in aged care services: some implications and I think it is important that people do look at some of those significant issues that are raised in the report. It creates for you an image of the future that is quite startling. If anybody is interested at all in aged care they would understand that the future of aged-care is, I think, quite stark in this country and that we need to do more. I am very pleased to say that this bill is the beginning of us doing more; it sets the right path.

The demand for aged care over the next 40 years will be enormous. People aged over 85 are expected to increase fourfold in number by the year 2047. If you can imagine what that means in terms of government funding and government budgets, given the current systems that we have got in place, the figures are frightening: how many more people will be in need of care, of funding; how many residential aged-care beds will be required and the facilities that will be required. And all of this is at the same time that there is a lifting the standard of quality provision—very much like health. The conundrum that we all face is that while people are generally living longer, their health is not necessarily becoming better and their expectations of health provision, as in aged care, are growing exponentially as well. So we have got a lot of work in front of us. Approximately one in seven Australians aged 65 years or older will be in that group. They will make up 13.4 per cent of the population. By 2050, those people who are 65 or over will, let us assume, by that stage no longer be working and therefore no longer necessarily be contributing directly to the tax system. Yet, while we have fewer people contributing to the tax system, at the same time we are going to have more people needing it.

This bill is about setting forward a regulatory framework for Commonwealth funded aged care and at its core, as I said earlier, it is about the protection of the health, the wellbeing and the interests of care residents. That has to be the core; it has to be the principle that we apply. The bill is designed to ensure that the one quarter of a million, approximately, frail and older Australians who are either already in residential care or receive some sort of community care service in their homes receive high-quality care—the sort of care that we would expect for our own parents or for ourselves. For me that is the line that I draw; it is the frightening thought that one day I am going to need these services and I do not want to end up in a facility somewhere that ends up on the front page of a newspaper because of abuse, or poor services or some other issue.

We have already heard about some of those things from other speakers so I will not dwell on that, but that is the reality. While the majority of the aged-care sector is hardworking, caring, responsible and doing the right thing, properly managing their responsibilities in terms of the services they have to provide and the government funding and the funds of their residents, there are unfortunately some in the sector who, because of the open nature of the sector, can abuse their position. We have seen some horrible cases over the years, but I will not dwell on that. I just mention it in passing because it is important that we continue to improve the regulations and that we do not run away from the hard things that the government needs to do to ensure the community has confidence in our aged-care sector. I believe that on the whole there is confidence out there, but the horror stories that appear do undermine and weaken community confidence, so we need to make sure we are on top of those things. By putting this bill through the House, I understand with the support of the opposition, we will be on the road to continued improvement.

The industry has changed significantly over the past decade, as has been noted. It is very different from the way it was when the Aged Care Act 1997 first came into play. We have seen since then a change in the structural make-up of aged-care facilities, in the way they are owned and operated. What was once an environment of fairly small, cottage industry type service providers has turned into multisite, multistate, multiservice operations using complex financial and legal arrangements. There is nothing wrong with that. That is the evolution that occurs in any sector when perhaps better financial systems or ways of operating are found to improve efficiency and deliver better services. But as a government we need to ensure that our regulations keep pace with what is happening in the sector. Again, that is what this legislation is about. Often those sorts of complex arrangements create unintended consequences. We are setting out to make sure that we keep pace with the consequences that arose in the 10 years since the Aged Care Act was passed and with further industry developments.

The bill also amends the Aged Care Act and the Aged Care (Bond Security) Act in relation to bond security. Because of a number of legislative inadequacies, the amendments are to maintain an effective regulatory safeguard for older Australians. There is something like $6.3 billion being held in trust through these bonds from care residents. It is a lot of money, it is other people’s money and it needs to be properly administered. There needs to be confidence about this in the wider community and by the people who are literally putting their houses on the line to provide these bonds. The funds have to be managed in a proper, fair and equitable way, and they have to be protected in case of the liquidation, insolvency or collapse of a particular provider. I can speak from some experience, having been involved with some segments of the Queensland aged-care sector. I applaud their contribution and I am very satisfied with the level of involvement they have had in trying to work with the government to make sure we understand directly what the issues are for the providers and owners in the sector. We need to understand the complexities of the structures for those in the sector and the costs involved not only in maintaining aged-care facilities but also in building new facilities and the interaction between what the government provides, what they can provide through private funds and what they hold in bonds.

The issue of the cost of employment, of wages, is a very serious and real one, and it is something that I do not believe that any of us can shirk or get away from. We need to understand that one of the crisis areas of aged care is aged carers themselves—their remuneration and the conditions that they have to work under. We need to strike the balance between responsibility, assessments and the quality assurance that we want aged-care facilities to have. At the same time, we need to make sure that there is the right care environment, because it is about care. In the end, we are talking about people; we are not just talking about a commodity. We are talking about our parents, our grandparents and, one day, ourselves. We expect a high level of care. We want people who are looking after us to actually feel something and to understand that when you become a frail, older Australian it is a very difficult time. I think we need to balance all of those issues. Having and maintaining an effective regulatory regime with safeguards is all about doing that, and that is what we are setting out to do.

There are also changes in the way that providers deliver quality services. The suitability of some providers may have changed over past decades. What was once a cottage industry type provider may, over the years, in a much more complex environment with higher demands, higher assessments and higher quality expectations and standards, no longer be capable of providing that level of care. Therefore, there needs to be a review of the way that we assess those providers. This legislation does that. I am also very appreciative of the way that the minister has dealt with making sure that the security extends to not just the operators of these facilities but also the owners, because there can be a real disconnect between those who are the structural, board-type owners, such as those who work through managed funds and trusts, and those who are actually the operators. The existing legislation does not cater for that occurrence. The decision makers, who are often pulling the financial strings and making, therefore, very important decisions, do not come under the present legislation. This amendment will rectify that. This amendment will mean that not only operators and owners but also those that are involved through trusts and boards are considered to be key personnel.

There are a broad range of issues being dealt with in this legislation. It is about making sure that, in the end, we clarify a number of services. Retirement villages and other different set-ups may now have multilevel care. You may find that a provider that once just delivered a particular type of service now has multiple services on site, such as aged care, frail aged care, care for people with disabilities and care for young people with disabilities. This legislation deals with understanding and acknowledging that the act must be regulated specifically to those in aged care so that it does not rope in other people in the one facility and create unintended consequences. I am very pleased that we have been able to do that.

As of 30 June 2007, there were around 970 approved providers, and 75 per cent of all approved providers held accommodation bonds. As I said earlier, those total around $6.3 billion—a substantial amount of money. We want to maintain consumer confidence and maintain and increase the level of corporate investment. We want to ensure that, by putting the right frameworks in place, we give confidence to the private sector, to the corporations that want to be involved and invest. For them to put their money on the table, the right regulations have to be in place. That is what we are doing through this legislation.

The bill also clarifies a number of key responsibilities for the Secretary of the Department of Health and Ageing when considering the imposition of sanctions against aged-care providers, with the core principle being the protection of health, welfare and the interests of current and future care recipients. It is the way the responsibilities of the secretary of the department ought to be. We have made sure we have gone out to the sector. We have made sure that we have consulted with the community. We have made sure that we have consulted with those people who are involved, because we cannot do this alone. We cannot just do this from the perspective of government. We have to take an approach of working with the industry and the sector to understand what their issues are.

This bill does all of those things. It also makes some minor operational changes, improving the administration of the legislation so that it operates more efficiently and effectively. This is about cutting away red tape, simplifying processes, ensuring that you get the right mix between the demands and the responsibilities you place on aged-care providers, as opposed to the demands you make on them in providing care for the people for whom they are responsible.

I am proud to say that the government have been working closely with everyone in the sector. This is a very important and essential area of services that are provided in the community. The government ought to continually review our own operations and the effectiveness of the regulation and ensure that the taxpayers’ dollars that we put into that area are efficiently and properly expended and, at the same time, ensure that we provide the right sort of care for people. I want to be able to confidently walk out into my community and talk to those providers and ensure that they understand why we are putting this measure in place. So far, the feedback that we have had from them is good. It is quality feedback and it supports the principles that the government have set forth in this legislation.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to address the Aged Care Amendment (2008 Measures No. 2) Bill 2008. Investment in the aged-care industry is becoming more tenuous by the day, particularly in a vast regional and rural electorate such as my seat of Grey. I have at least 50 registered aged-care facilities in my electorate. It is the nature of the seat; many of the communities are small and spread out. Many of these facilities are run by state authorities, but there are more than 50. At least six registered aged-care facilities have expressed to me a need to expand. I know there will be more, because I have not yet had an opportunity to speak to them all. They need upgrading and expanding. Many of the facilities in these rural towns were actually designed some years ago. Many of them are almost 30 years old and, in many ways, are probably reaching their use-by date. I suspect people of my generation have much higher expectations of what aged-care accommodation should be and will shy away from many of the facilities currently there. Major investment is needed to upgrade these facilities.

There has been a big push for home care and for keeping people in their homes for as long as possible, and I applaud that. But it will still not meet the huge demand that is on the way—the bulge of the baby boomers. Peter Costello’s Intergenerational report identifies that the percentage of the population over 65 is expected to more than double over the next 40 years, from 2.8 million to 7.2 million. Even more disturbing is that, in that time, the proportion of people over the age of 85 is set to increase by 200 per cent, to five per cent of the Australian population. This will create an unprecedented demand for aged accommodation. Demand will soar and so will hospital and medical costs. It is a fact of life: if we live longer, we will cost more to keep alive and we will cost more to house. Taxes will fall and outputs will increase in the aged-care industry.

I turn to the meat of this bill and that is regulation.  I fear perhaps increased regulation, even though I note the member for Oxley’s closing remarks about the rationalisation of regulation. It seems to me that there is more compliance in what is being proposed. One of the great frustrations of the industry is in fact over-regulation—three levels of government all piling on the red tape. All residents deserve to be protected, all residents deserve to have the highest quality of care, but we need to take a common-sense approach. I think more time is sometimes spent in ensuring that every worker has signed off on every line of every document to ensure that they can always prove in a court of law that, whatever went wrong, it was not their fault.

Recently, a major provider in my electorate contacted me—because I have been talking to a number of aged-care providers—and provided me with a small list detailing the operations of the aged-care facility over a couple of months. I would like to read it:

October: unannounced visit. Aged care accreditation agency. Outcomes audited were continuous improvement, pain management and infection control. No action required by the nursing home to meet standards. Our full three-year audit is less than eight weeks away.

October: triennial fire inspection. Four outcomes that require attention. All completed.

November 20: state government auditing of catering and infection control. Already audited by local council in October. Were passed on all expected outcomes in infection control by aged care accreditation agency just one month ago.

December 15: three-year accreditation audit. Aged care accreditation agency. Timetable received includes all 44 outcomes, including those audited in October this year (see above)—pain management, infection control and continuous improvement. Also includes audits covered by triennial fire inspection and state government catering service. All to be re-audited again.

December 16: HACC, Home and Community Care, South Australian government audit of day centre. Also includes audit covered by triennial fire inspection and catering service. Outcomes to be audited again.

December: date to be notified. Fire re-audit by the local brigade to ensure a triennial fire inspection, as noted above. Outcomes have been completed. This will be our fourth fire audit in three months.

December: date to be notified. WorkSafe SA, covering all aspects of OHS and WorkCover also audited by a number of the above audits.

They go on to say:

I realise that our residents and clients deserve the best possible services that we can provide. I realise that governments at all levels provide large amounts of money that need to be accounted for. However, surely we can have some coordination between all levels of government to least acknowledge that the outcomes of audits should be recognised in all audits, regardless of local, state or federal interests (e.g. fire safety, catering, cleaning et cetera) so that our staff and residents and clients do not get bombarded with a program as outlined above on a regular basis. This level of auditing is overwhelming.

We can all see just how difficult it becomes to run that type of institution. It says it all: ‘Don’t strangle us. Don’t drive good people away from our workforce.’

My electorate is dotted with small to medium-sized aged-care facilities. I spend time travelling and talking to most of them. We are, as I said before, facing an ageing infrastructure but we have a bottleneck on supply and we need to ramp up that supply. In fact, we seem to have reached some kind of plateau at the moment. Almost all of the aged-care facilities in my electorate are not for profit. If the not-for-profits stop investing, we are in deep trouble. If we cannot make a business case for a not-for-profit organisation, then who on earth can? One of the majors in South Australia, Elder Care, have publicly announced that they are building no new beds, are doing no renovations and cannot continue under the current arrangements. This is a major concern. They list a series of problems with the new aged-care funding instrument, with very few pay points for low care and rafts of new levels of compliance, with new costs and no means of recovering these costs. The day-to-day operating costs have reached the point where, as I said before, the system has plateaued.

There was investment going on up until as recently as 12 months ago, but it seems that, with the extra compliance requirements, the change in investment and the credit squeeze, things are getting tougher, not easier. As I said, when a major institution like Elder Care pulls out, it leaves a great hole in the market, as I am sure you would be aware. Capital investment, as pointed out in the Intergenerational report, will come because of the pressure of the over-85s. Over-85s mean high-care aged care. We need the next wave of investment. We need some new impetus, because pressure is building up. I believe the government will have to consider some form of base capital funding to achieve these ends. One of the major suppliers of aged care in my electorate, in a large regional centre, pointed out to me that they consider the costs of construction of new facilities in the country to be 40 per cent higher than in the city. There is no way of recouping this cost from the target group.

It is time—and I know this has been raised by a number of speakers in this debate before—that parliament considered the possibility of bonds for high care. It has a certain symmetry about it. I think we all know it makes sense that, if people are compelled to pay bonds to go into low care, when they move out of low care and into high care or if they come in at a high-care rate they should also be required to pay a bond. We have shied away from this, and different governments and oppositions at different times may have raised concerns about this, but it is something we are going to have to address because of the great bottleneck facing us.

I was speaking to a nursing home in Whyalla—and I will name this particular one: Whyalla Aged Care—which was granted an operating licence for 20 new beds. They have recently handed back their licence; the two years had expired and, because they could not raise the capital, they had to surrender their licence. That is symptomatic of what is going on out there. We may have the operating subsidies but we just cannot raise the capital to build these facilities—which comes back, as I said, to the issue of bonds.

The government’s move with the pension bonus in the $10.4 billion stimulation package is welcomed. But it does actually lead to what I am sure is an unintended consequence in the aged-care industry, in that it sidesteps accommodation costs. If the government had elected to give an increase in the pension, then the accommodation fees would rise as a percentage of the pension. This is a one-off bonus, and a substantial bonus. Most pensioners are facing rising costs of living—except those who live in aged-care facilities. If you assume that 10 per cent of their pension income is disposable to them and the other 90 per cent is going into their accommodation, then they get the bonus but the accommodation facilities do not. I realise that the previous government had also used a number of bonuses to pensioners. But such a bonus will not flow through into the aged-care industry, as one would think it should. So the facilities cannot pass on their rising costs until pensions rise.

In closing, I would just like to say that I believe that an across-the-board pension increase will help address some of these issues in the aged-care industry, but we do need investment in capital infrastructure and I think we have to address the day-to-day running costs of these aged-care facilities. I hope that this regulation will not add more costs to these facilities because, as I pointed out, they are already struggling under this great burden. I hope that it will help. I am fearful that it will not and that we will have to go back and really bash some heads together in those three levels of government to make sure we get some common sense operating in this field.

Tony Zappia (Makin, Australian Labor Party) Share this | Link to this | Hansard source

I, too, rise to speak in support of the Aged Care Amendment (2008 Measures No. 2) Bill 2008. This is a very welcome bill and a bill which will go a long way towards ensuring that people who are admitted to nursing homes can be admitted with a lot more confidence not only for them but for their family members.

In the years ahead the number of older people who will need to be cared for in Australia will rise substantially. The previous speaker, the member for Grey, made that point as well. But I just want to reiterate some of the statistics in respect of the ageing nature of our population in Australia. It is expected that in about 40 years from now 25 per cent of Australia’s population will be over 65 years of age. That is an almost 100 per cent increase on the present figures of around 13 per cent of our population being 65 years of age and over. My understanding is that the number of Australians aged 85 years and over—and, again, the member for Grey made reference to this—will increase fourfold, from around 400,000 people today to around 1.6 million in 40 years time. That figure is particularly relevant because those people are more likely to be living in nursing homes if they reach the 85-year age mark. So it is clearly the case that caring for Australia’s ageing population is becoming a critical policy area for federal, state and local government. Again, I commend the member for Grey for acknowledging that all three levels of government do have a responsibility when it comes to caring for our aged.

It is even more critical because in about 40 years time the ratio of working Australians to older people, which is currently about five to one, will have dropped to around three to one. That is, for every older person aged 65 years and over who has retired there will only be about three working people, and so the economics of it all has to be factored into government policy development over the years to come. Compounding the problems for the government is that not only is the ratio of retired to working people increasing rapidly but also, with most households having both husband and wife in the workforce, there is less ability for family members to care for older people and enable them to remain in their own homes for longer. So you can see that all of these changes will add to the demand for the provision of additional retirement villages and nursing home places for older people.

Former Governor-General Sir William Deane said that how we treat our most vulnerable and disadvantaged is the ultimate test of our worth as a nation. The aged are some of the most vulnerable within our society. It certainly will be a test of our worth as a nation when in years to come we look back at how we as a nation cared for the aged in our community. It certainly is particularly the case that elderly people who are cared for in nursing homes are vulnerable. If they could take care of themselves, the reality is that they would not be living in a nursing home. It is because they cannot and they need assistance that they are there in the first place, so they are truly some of the most vulnerable.

Those who are in nursing homes should be cared for with the compassion and dignity they deserve. Again, it was interesting to hear some of the other comments, including those of the member for Grey when he referred to the baby boomers looking ahead to what they might have to expect when perhaps one day they are put into a nursing home. It is sad to think that perhaps the changes and the improvements that we are seeing in this sector are driven by our own selfish needs. I would have thought that they should be driven more because we are a compassionate and caring society. I quite often use a simple test when looking at the way we treat people. I simply say: treat people the way you would like to be treated yourself. If, in what you are proposing, you can pass the test of that question, then clearly you are doing what is fair and reasonable.

This bill addresses a number of inadequacies in existing legislation relating to the provision of aged-care services. In particular, the bill streamlines the assessment of frail older Australians to ensure more timely, consistent and quality assessments. It ensures that any accommodation bonds or like payments paid by frail older Australians for entry into aged-care services are fully protected under the Accommodation Bond Guarantee Scheme. It modernises the legislation so that it applies to all approved providers regardless of their corporate structure—and if I have time I will talk about that later on. And it links approved provider status to the allocation of aged-care places. The objective of the legislation is to provide better protection for the health, wellbeing and interests of care recipients. The bill is part of a package of reforms that are designed to ensure that approximately one-quarter of a million older Australians who are either in residential care or receiving community care services in their own homes can have greater confidence in the system.

It is interesting to note that this government has allocated some $40 billion over the next four years to funding aged-care and community care services in this country. That is a substantial amount of funds. Of even greater note in respect to this bill is that some $28.6 billion of it is going into nursing homes and hostels, so it is clear that this government is making a significant commitment in responding to the needs of the aged people within our community.

The aged-care sector is, as other speakers have noted, both growing and evolving. It is an industry that is learning as each year goes by how we can better look after the elderly within our community. The aged-care industry recognises that and is responding to the changing needs of society. Government regulations must also therefore be adapted so that they properly respond to the changes occurring in the aged-care industry, and this bill quite properly has been the result of extensive consultation with the aged-care sector.

Over the years I have had many discussions with providers in the aged-care industry and I have visited most of the aged-care facilities within my region. It is my observation that most providers provide a high level of service and care. It is also my observation that many providers operate on minimal profit margins and in recent years many have found their resources and finances stretched to the limit. They find themselves doing more with less. Ultimately, however, the care recipients will suffer if this trend continues—and government regulations, while essential, are not the only response required.

One of the issues raised with me in a visit to a nursing home in my electorate recently was the wage differential between aged-care staff and hospital staff. Hospital staff receive higher remuneration. Aged-care operators compete for the same staff as do the hospitals and they find that they have difficulty recruiting and maintaining quality staff. If they are to pay staff higher wages then either fewer staff will be employed or another service will be cut. Either way, the end result is not good for the care recipients. In that respect I am pleased to see that the Rudd Labor government has committed some $41 million over the next four years to create an additional 7,700 training places for aged-care and community care workers. This is an important step because it will enable aged-care facility providers to recruit staff that they desperately need and perhaps they will not be competing with the hospitals for that staff. This is just one of the many issues raised with me in the course of my discussions with a range of aged-care service providers. On another occasion I might talk about some of the other issues that have been raised.

The consistent message from all of the providers is that it is becoming increasingly difficult to remain viable. Financial pressures inevitably lead to cost cutting and in turn to a lot lower standard of service. I noted with interest a newspaper report earlier this year reporting that in Western Australia some 360 bed licences on offer from the federal government were not taken up because the capital costs of establishing the beds could not be justified by the return expected. The same report stated that Western Australia had a 2,000-bed shortage. So on one hand we have a shortage; on the other hand we have bed licences on offer that are not being taken up because the return is clearly not there. I do not know whether those bed licences have since been taken up but, given the general shortage of beds, it is evident that claims by the aged-care industry that the sector is struggling financially have some validity.

I am also aware of and have sympathy for claims by the industry that bed licences are sometimes wrongly tied to geographical regions. Again, I could talk about a personal case that I dealt with in that respect. At the very least there should be more flexibility in determining who the bed licences are awarded to, albeit that geographical location may be one of the relevant determining factors. It should certainly not be the only factor.

I want to turn to some of the specific measures addressed in this bill and I will begin with the improvement in the assessment process. I am aware of many examples where people were waiting lengthy periods to be assessed or reassessed for admission to a retirement facility. Admission to a nursing home is often a last resort for family members who have been caring for a person and who as carers have put themselves under incredible hardship and burden. Most turn to a nursing home when they simply can no longer cope because they cannot provide the care and support needed by the recipient. Often that occurs because the care recipient’s situation degenerates quickly and unexpectedly. The inability to relocate the person into a nursing home causes huge stress on the carers and more suffering on the person in need of the care. Streamlining the assessment process will be a very welcome measure for both the recipient of the care and for the families concerned.

I take this opportunity to raise a matter relating to the accreditation of aged-care facilities. Currently, the accreditation of such facilities is carried out by a private agency which acts on behalf of the Commonwealth. It is my view that the accreditation and the inspection of such facilities should be carried out by government departmental officers and not by private agencies. It is my understanding that facility licences are issued for a three-year period. If that is incorrect I stand to be corrected, but that is my understanding. Prior to a licence being issued an inspection of the facility is carried out to ensure that all relevant standards are complied with. Ad hoc inspections are also carried out during the licence period. It is also my view that, where an inspection of a facility is carried out within the licence period and the facility is found to comply with all the standards, that facility licence should be extended for another full term from the date of that last inspection.

The member for Grey referred to the number of inspections and compliance measures that nursing homes have to go through on a regular basis, and I certainly share some of the concerns that he raised about that. The administrative workload and therefore the costs that could be saved by both the Commonwealth and the provider are considerable, and those resources could be put to better use.

I was recently contacted by the operator of a nursing home in my electorate of Makin about this very matter. He told me that the time required and the costs incurred in preparing a licence renewal application were considerable. Recently, as a result of a random inspection in the midst of his licence period, he was required to respond to some issues raised during the inspection process. From the information provided to me by the operator of the facility, the issues raised appeared to be trivial and perhaps pedantic. Nevertheless, the operator has at considerable cost responded to all that was requested by the accreditation agency and had the centre reinspected. In six months time he will have to go through the whole process again, because his current licence expires in 2009. Surely we can have a better process in place. I urge the minister to consider my suggestion of extending the accreditation period in such cases.

In this particular case the operator has been operating the facility since 1982. He extended it in 2006 and now has a 50-bed facility. He spent around $61,000 in the last year alone in responding to the inspection of the accreditation agency. Most of that money went to a management agency which he had to employ to submit all the relevant documentation and go through the process. His staff simply did not have time to do it. Some $17,000 went to the accreditation agency, which charges a fee for its service. These are not insubstantial costs; they are significant costs. I certainly do not suggest that the inspections should not take place or that the centres should not be properly accredited. What I do suggest is that, if a centre has gone through this whole process and been found to comply with everything that is required, the licence period should then recommence for a full term. I ask that the minister look at this particular issue.

I also welcomed the changes which strengthen the bond guarantee scheme. As other speakers have noted, there is some $6.3 billion as at 30 June that is currently held in bonds by the aged-care sector. It is a lot of money. In the midst of the current global financial turmoil we have seen just how quickly large amounts of money can disappear and be lost. We have also seen individuals lose their life savings. Instead of being millions of dollars it might only be several thousand or tens of thousands of dollars, but when it is your life savings it means a lot to you. Knowing that their money is much safer as a result of strengthening bonds certainly makes a lot of difference to the peace of mind of those people who are possibly going to be admitted into nursing homes and to the peace of mind of their family members.

It is important that we have a viable aged-care sector which the public can have confidence in and that we have a sufficient number of aged-care beds available, but it also makes economic sense. Too often elderly people are kept in hospital because there is not a bed immediately available in an aged-care facility and they are not well enough to return home. In such cases the public daily cost of a hospital bed is far greater than that of a nursing home bed. Of additional concern is that the hospital bed is being occupied and staff time is being taken up to care for a person who would be able to receive all of the care they require if they were placed in a nursing home. I commend the Rudd Labor government for allocating $293 million for 228 additional transition care places, which will accommodate some 1,710 older Australians each year and enable them to transition from hospital to a nursing home until they have recovered enough to move back into their home.

The last point I want to make is in relation to some of the operators. I said earlier that, from my observations—and I have inspected most of the centres in my region and have worked alongside many of them in a whole range of ways—most of them are good operators. In fact, the majority of them are good operators, and the staff that I have come across are genuine, caring, compassionate people. But, sadly, that is not always the case, and I was disappointed to learn that earlier this year, as a result of some inspections, 500 employees in the aged-care sector had been underpaid by about $114,000. Whilst that money is being recouped, it is disappointing that that is going on. Unfortunately, the reality is that the regulations and the inspections that are required to ensure that that does not happen have to be worn by the rest of the industry, because, as in all cases, you have to legislate for the worst possible scenarios. It is sad that, as a result of those kinds of practices, good operators in the industry have to suffer.

As a result of that same inspection, I understand that 21 per cent of the aged-care facilities were found to be in breach of the Workplace Relations Act. Whilst the Workplace Relations Act is a matter that we can debate at another time, it is also important because it highlights this: if you are employing staff and perhaps not paying them appropriately, or if you are not paying them for the hours that they have worked, one can conclude that they are working under stress, and if they are working under stress there is every likelihood that they will not be able to provide the appropriate level of care and service for the people they are entrusted to look after.

This is an important bill and, as I said earlier, it is part of a $40 billion package of support that the Rudd government is providing for the aged in this country. It is a bill that is certainly welcome because it improves the care that will be provided and it will improve the confidence that families will have when older people are admitted to nursing homes. I commend the bill to the House.

Michael Johnson (Ryan, Liberal Party) Share this | Link to this | Hansard source

I am pleased to speak on the Aged Care Amendment (2008 Measures No. 2) Bill 2008 on behalf of the people of Ryan, whom I represent here in the federal parliament. It is a great pleasure to speak on an important bill that goes to some very important issues. Any bill to do with aged care is a bill that affects, indirectly if not directly, every single Australian. Whether we like it or not, one indisputable fact is that we are all ageing, and national governments need to have, front and centre, policies in relation to aged care. It is acknowledged that we have an ageing population and we must focus on how to deal with this so that, in their later years, all Australians have a life of dignity and respect.

This bill is largely without contention, although there are a couple of reservations that the opposition has, and I might touch on one of those in the time I have. The legislation provides the regulatory framework for Commonwealth government funding for aged-care providers and provides protection for aged-care recipients. The principal objectives of the bill are to address current legislative inadequacies and to maintain effective regulatory safeguards to ensure high-quality care for frail older Australians; to promote public confidence in the aged-care regime; to provide a regulatory framework that is appropriate in an evolving corporate environment; and to ensure, as far as is practicable, that the financial interests of care recipients are protected.

Since the Aged Care Act 1997 came into effect, the industry has matured significantly, and it is probably fair to say that, some 10 years after that act came into force, it really is a very different type of industry. The setting in 2008 has evolved into multisite, multistate, multiservice operations where there are many complex financial and legal arrangements in place. But the last decade has seen a significant increase in the level of investment in the sector from large corporate entities, and the regulatory framework and contemporary business practices must mean that legislation needs to keep up with these changes. It is always difficult, in the legislative context, to keep up to date with changing and evolving technology, but we must try to do so. It is always difficult, in the legislative context, to keep up with changing business trends and innovative business practices, but it is the role of legislators and executives to keep our eye on the ball.

As I touched on in my opening remarks, I am pleased to speak on this bill because, when I was elected to the federal parliament in 2001, a central part of my maiden speech was on our ageing population. I would like to revisit that, because it is of interest to the people of Ryan that their federal member spoke on this issue in his first speech to the parliament, on 13 February 2002. In relation to public policy issues that I flagged I had an interest in, I said of aged care and the ageing of our population—because the two are intimately related—in my maiden speech:

The first public policy issue I wish it to be known I have a genuine interest in tackling concerns the ageing of our population. This issue is indisputably one of the most critical public policy issues facing our nation at the beginning of the 21st century. As Australia is not alone in this challenge—with most of the industrialised countries of Europe, as well as Japan in our region, confronting this issue—we must seize every advantage that goes with being the first to address the challenge.

The two main reasons for Australia’s ageing population essentially lie in the consistent decline in our fertility rates, combined with the increasing life expectancy of the baby boomer generation. When today’s baby boomers were children, they outnumbered the generation of people over 65 years by four to one. In the next two decades, for the first time, older Australians will outnumber the children of Australia. The first of the baby boomers reached 55 in 2001. It is calculated that by 2030, people over 50 will comprise 40 per cent of our population. Moreover, a quarter of the Australian population will be 65 years of age or over. By comparison, today the number of Australians aged 65 years or over is some 12 per cent of the population.

I end this section of my maiden speech with the following:

With forward projections showing that there will be more Australians over the age of 65 than at any time previously, the challenges confronting our country in a range of policy areas will be unprecedented.

This bill goes to some of those policy challenges and tries to tackle them. Whether it does so effectively, time will tell; whether we have to revisit this piece of legislation, time will tell. I hope it is a good bill and that it does its job. I think it is a reasonably good bill. The opposition has some reservations, but I am pleased that the government is focusing on this area, because, as I said back in my maiden speech, this is an area of immense importance to the country. The people of Australia are counting on their members of parliament, their executives and their legislatures to come up with good policy, with good funding models and with good regulatory regimes to protect our older Australians.

I refer the House to a very good and interesting article in Urban Connection on the profile of Australians. It referred the reader to ABS stats and talked of the population of our country growing from 20 million to more than 25 million between 2006 and 2031. It made this observation:

Those aged 55-plus represented 4.87 million people, or 24% of the population in 2006. By 2031 the number of over-55s will be 8.26 million, or a staggering 33% of the population …

I know that constituents of mine interested in policy in this area will be interested in the table in this Urban Connection journal, because it gives a very good breakdown of the demographics of the country, both contemporarily and projected as well. This is very relevant to this bill because this bill talks about legislation that will protect Australians in the future who will be in aged-care facilities. In 2001, the age bracket 55 to 64 was 10 per cent of the population. By 2031, that will rise to some 13 per cent or 3.189 million. If we go to the 65 to 75 bracket, currently that makes up seven per cent of the population or 1.338 million, whereas in 2031 11 per cent of the population will be in that bracket, or 2.856 million. The table breaks it down further into different age brackets. The total population in 2001 was 19.184 million and in 2031 it will be 25-plus million. They are very revealing and significant figures and policy makers should take them into account when they craft legislation.

I will now make reference to some of the provisions of the bill. The compliance factor is one that is of a little bit of concern to me. We must remember that primarily those facilities have as their very primary task the physical care of those in their jurisdiction or responsibility, so we have to be careful to get the balance right. We cannot have carers tied up in compliance so that they are not able to take the time to give quality care to their residents. There may well be additional financial burdens on approved providers in complying with the new and amended obligations under the act. At a time when many operators are in fact exiting this industry, the sector could be in a little bit of difficulty, so we have to be careful that the impossibly tight margins that they might be operating under are not made worse in the longer term. These obligations imposed by the bill may affect investor confidence in the aged care industry, so we have to keep an eye on that. This may have an impact on the number of bed licences available overall across the country. No doubt, many electorates will experience bed shortages. I draw the attention of local members who have an interest in this policy area to be aware of that.

Section 22 talks about losses. I want to touch on this, because this is quite important. Under a new financial instrument, the aged-care funding instrument, which commenced in March, assessments of older Australians entering aged care facilities do not often marry up with their actual care needs. What we find is that a reassessment needs to be undertaken and there are month-long delays before this takes place. During this time, a facility providing a high level of care only receives a low-care subsidy. If the resident is reassessed as being high care, the higher level of subsidy is not backdated to when the resident entered the facility. Facilities could potentially lose money and become less viable as organisations and bodies that take care of Australians in need of such care. We have to be careful with this provision and keep a spotlight on it. We do not want to have a situation where there is a negative financial impact on providers. We must note that if they are under significant economic constraint, we do not want the overall negative financial impact to mean that they close their doors. The last thing that this country needs in the context of an ageing population is to have facilities close their doors unnecessarily.

I might also note that I am under the impression that during this consultation process between the government and the industry the industry was led to believe that this inequity that I touched on about the gap between the care need and the care given was going to be addressed in the legislation—in other words, the funding was going to be made retrospective to reflect the care provided. But this clearly has not come to fruition.

Section 65 is significant, because it talks about the increased power to impose sanctions. The bill provides for a widening of the power of the federal department to impose sanctions on behalf of future aged-care residents, with the imposition of sanctions to act as a deterrent to future non-compliance. Let me say again that compliance with legal obligations is fundamental. But we have to go back to the starting point, and the starting point is getting regulatory requirements balanced. We have to make sure that compliance requirements are not counterproductive to what we are trying to do in the parliament or to the legislation’s purpose and spirit. There are considerable powers to impose sanctions and to revoke licences in the bill. It is not a trivial element of this bill. I hope that providers do not find themselves in the position where a licence revocation becomes an issue. The uncertainty and complexity in the bill is something that I want to put on the record. I go back to the central purpose and spirit of what we are trying to do, and that is to provide a legislative regime that at its heart protects recipients of care.

As someone who was in the Howard government for two terms of its 11½ years in government, I have no hesitation in saying that I believe that the Howard government left an excellent aged-care system in place. The former Howard government placed significant emphasis on wide-ranging reforms to deliver a higher quality and more affordable and accessible aged-care system that met the needs and preferences of older Australians. The Howard government’s reforms, as I touched on earlier, began in 1997, when the new aged care act came into force.

One of the elements of that act was the introduction of a national quality assurance framework for residential aged care that combined accreditation, certification and the aged-care complaints investigation scheme. These measures, I believe, have given the community a greater confidence in the quality of care and services and the standards of accommodation, as well as fundamentally protecting the rights of older Australians. The coalition does place significant importance on older Australians having quality care. We must do that in the years ahead. The government, no doubt, has goodwill in this area and has a genuine desire to do so as well. It is a question of balancing funds and priorities, which is the greatest challenge of government.

In my concluding remarks, I want to talk about the demographics a little bit more, because they are fundamental. We are an ageing population. I suspect that the majority of Australians do not turn their mind to such a significant public policy statement, but I also suspect that, if one were to have a conversation with them, most Australians would be very concerned about how their national government and indeed the opposition confront this policy challenge and ask what sorts of policies and ideas that we have. It will, whether directly or indirectly, impact on all of us, whether we become residents or we have loved ones in residential care. This must be central to how we govern, because it has enormous implications, not only in the social space but also in the economic space.

I will end my remarks on a couple of points that will be of interest to Ryan constituents who might read my presentation. There will be some 2.8 million people aged 65-plus. They will be 13 per cent of the population. There will be some two million people aged 70-plus, which is some 9.3 per cent of the population. By 2047, there will be seven million people aged 65 years and over, which will be a quarter of our population. In 2007, there were five people of working age to one person aged 65-plus. But in 2047, there will be some 2.4 people of working age supporting each person aged 65 years or over. During the 20th century, life expectancy rose by 30 years in developed countries. Let me make the interesting observation that the number of people over 100 years of age will increase from 2,860 people today to 78,000 Australians by 2055. That is an interesting and revealing figure.

Over the next 40 years—the next four decades—the number of Australians aged over 85 will increase some fourfold. These figures from our demographic profile clearly demonstrate that the ageing of our population is unquestionably one of the biggest social and economic policy challenges confronting our nation and our government, whether it is a Labor Party government or a federal coalition government. Both sides of the parliament must have aged-care policy right up there, because it cuts across every sphere of our national profile. I am pleased to speak on this bill, as I was to touch on this public policy issue way back in 2002, when I was a new member of the parliament of Australia.

Dick Adams (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I heard the member for Ryan praising the previous government. He did not praise the present government for implementing its election promises. The Hogan report was a little bit lightly done by the previous government. It was a work commissioned by the previous government, but it did not act on the recommendations in a very big way. I do not think that the honourable member should praise the previous government very much, because I do not think that it really did get on with the work. But the Rudd government has started to do so by meeting its obligations under its election promises. The minister should be praised for the work that she has done in getting the Aged Care Amendment (2008 Measures No. 2) Bill 2008 to the parliament.

The bill seeks to amend the Aged Care Act 1997 and the Aged Care (Bond Security) Act 2006 to strengthen the aged-care regulatory framework so that it reflects the current structure and nature of the aged-care industry. Aged care in Australia is largely regulated by the Commonwealth government and has changed over the years. The Commonwealth funds the provision of aged-care services through subsidies of the costs of residential care as well as capital grants. However, state and territory and local government regulations also reflect on the provision of aged-care services in matters which include: building planning and design—the spending of those capital grants that the Commonwealth provides; occupational safety, which is an important area covered by state regulations; food preparation, which is also of vital importance; and consumer protection. Those are all covered under state and territory laws.

The Australian population is ageing. Currently, older Australians, aged 65 years or over, make up 13.4 per cent of the population—that is, 2.8 million or one in seven Australians. I am told that the Productivity Commission estimates that by 2050 one in four Australians will be aged 65 years or over. That is the difference: presently one in seven, soon to go on to be one in four. Those are very interesting figures. As individuals age, some form of assistance with personal and everyday activities is usually required. The latest available data indicates that 32 per cent of those aged between 65 and 74 years and 86 per cent of those aged 85 years and over require some form of assistance. Consequently, there has been an increase in the number of people seeking access to aged care. A further trend relating to an increase in the number of people seeking to access aged care is that family structures have changed, whereby the family unit may no longer be a primary source of aged care for increasing numbers of people as it was in the past. Another emerging trend is that people are entering residential aged care requiring a higher level of care. I think that is because people stay in their homes longer. We notice this trend in an electorate like Lyons, which I have the pleasure and honour of representing, where many country and regional people stay in their homes until much later in their lives.

As mentioned earlier, when the act was initially enacted the typical business structure was one where the owner of the aged-care facility was also the operator of those facilities, and the regulatory regime of the act reflects that type of structure. On the other hand, the owner and operator of a facility now have distinct and at times separate roles and responsibilities. In addition, there has reportedly been an increase in the level of investment in aged-care services by large corporate entities and in aged-care services being combined with other kinds of services within the same facility. The aged-care regulatory regime provided for in the act does not at present adequately address these changes.

The bill proposes amendments to the act to address the different business structures currently involved in providing aged-care services, to improve and extend the regulation of aged-care providers. First, the bill proposes to amend the act to clarify that the act regulates aged-care services and that approved provider status relates to approval given for the type of aged care and specific services provided, and for the allocation of places. Second, the bill proposes to amend the act by expanding the entities involved in providing aged care which are subject to scrutiny and regulation, thereby trying to address the current limitations on the secretary to consider the record of related entities and those who influence executive decision making of the aged-care facility. It is pretty important that we have that regulatory role defined so that we know who we need to address concerns to or who is responsible for not meeting standards. In the current situation, obligations under the act cease when approval status is no longer in force, thereby excluding former approved providers from the regulatory regime and including an entity whose approved provider status is not yet in force because the entity has not yet been allocated any places in the regulatory regime.

The bill also proposes amendments expressly focused on the protection of the needs of the aged-care community, as well as aged-care recipients’ health and welfare and, of course, all their interests. Within the context of increasing numbers of people seeking to access aged care, the bill proposes amendments to streamline assessments by the ACATs, allowing for more timely and consistent assessments for aged care. Also, this bill proposes amendments to the Aged Care (Bond Security) Act to ensure that the bond guarantee scheme would apply in relation to both current approved providers and former approved aged-care providers who continue to have outstanding bonds.

Now I just want to touch on some aspects of aged care as they affect my electorate, the great electorate of Lyons. Aged care is becoming more and more sought after as families try and cope with an ageing parent or parents who can no longer look after themselves. We all face these situations in our own lives as we get older, and those of us who have faced these situations with our parents know the issues. It is a terrible wrench to have to make a decision for one’s own family, and sometimes government policy stands in the way of making the right decision. This bill helps to ensure that the provisions of the current act accord with changes in the aged-care industry, as well as addressing certain gaps in the current aged-care regulatory framework. I agree wholeheartedly with this bill.

Now I think we should start thinking smarter and be more flexible in the way we look at aged care. I believe that we should be looking for more models that allow the children, in some cases, to invest in some infrastructure such as an aged-care unit as part of a complex so that people’s parents, and later the people themselves, can move into something more manageable when old age overtakes them. At the moment there are private retirement complexes, but sometimes these are not equipped to be staged through some independent living units to hostel low care and then to high care. These are left to governments to provide. Perhaps, as part of our superannuation or some other tax-saving venture, models could be developed so that working children could provide for their parents in the private sector.

Ageing is a part of life, and the fact that many government aged-care homes are bursting at the seams with long waiting lists means that some of our parents are not being looked after in the way we would like. Many families struggle to keep their loved ones at home with them despite the enormous extra workload this sometimes entails. Then problems such as Alzheimer’s or the onset of dementia drive the family to seek more permanent help. I see this in my electorate all the time. There is a lot of shifting around before a person is permanently located. But one of the comforting things for those people’s loved ones is to be able to take them to their last home every so often to reassure them that some things do not change. If, as occurs now, the families have to sell their homes to raise the bond for the nursing homes then there is no chance for the family to provide some comfort for the parent. Somehow we have a long way to go to allow people to age gracefully and have their latter years still remain meaningful and happy. Nursing homes and some retirement centres are seen as the last resort, yet they could be just another stage in one’s life that could be just as enjoyable and positive without the cares of looking after a big house or garden. We should allow people to be able to move from their houses to a nursing home and to other places such as smaller independent units without a great deal of difficulty through pension considerations, selling the home and those issues. We need to explore those avenues much more.

The question of couples being kept together is also seen as difficult. In the case of the Ouse hospital in my electorate, which was providing some aged care as well as being a very outdated hospital, the first casualty was a couple that was moved out of the region. They were separated and moved away from their friends. They were both over 90 and in reasonable health when they left. They returned briefly for the day to celebrate their last anniversary together. Within days of that, one died and was quickly followed by the other. They were in good hands when they went, but they were on their own and away from their friends and relations. They had nothing to live for. I see this repeated again and again. This should not occur as it occurred in the decisions that were made in that instance.

We must be cleverer at how we treat our older people. Many can stay in their own homes for longer if they have help. Couples could be kept together with a little bit of rearrangement and with help they can care for each other. Families can help if there are more flexible tax and superannuation scenarios so that the financial burden of ageing can be part of the family package with all contributing. Design of buildings, both homes and care places, can be critical in the comfort and safety of our older people. Such simple things as waist-high power points, no steps, and rails appropriately placed—all as part of the basic design—are so easy to do but are rarely done.

Food too is an important part of a feeling of comfort and wellbeing. Most country hospitals used to grow their own food, have a few chooks and have access to country recipes from local people employed in the kitchen. I know how good that can be because my mother, Joyce Adams, was a cook at the Toosey hospital with her sister. They not only knew the favourites of the people they cared for but their background in the sort of cooking done in the area was key to keeping not only the patients happy but the staff and surrounding workers, who would pop in for morning tea or come and visit their relative who was enjoying still being part of the community.

I support this bill and I would like to mention a couple of nursing homes that I visited recently in my electorate when I opened some extensions. One was at Grenoch in the town of Deloraine. It is a long-serving nursing home that has been amalgamated with the local hospital. They have moved forward in a very positive way. They have a great auxiliary which has put tremendous work into providing the comforts for people who reside in that wonderful nursing home. They also did some work on McNeill House, which is part of the nursing home. It is named after Brigadier John McNeill, who played an interesting role in the town. The refurbishments have allowed McNeill House to be refurbished to resemble a home from the 1950s or 1960s, which is the period in which the residents appear to be most at ease in their dementia. So that is a wonderful thought process which has achieved a great deal for aged care in that region.

I also had the honour of officially opening the refurbishment of a wing at Tandara Lodge in the town of Sheffield. There were some very excited people at the opening and it was wonderful to celebrate the 30th anniversary of the nursing home. Many people have made a great contribution to this home over the years. I was able to talk to several of the people who have been there from the very beginning.

One of the exciting things I saw in the refurbishments to Tandara Lodge was a small gymnasium. A gymnasium in an aged-care home is a new phenomenon. The equipment is not readily available in Australia. It is made in Finland and consists of rehabilitation exercise machines that are computer controlled. They told me of a woman who came to the nursing home in a wheelchair and within one month was up and walking with a walking frame. So her quality of life has improved considerably because of the hard work and clever thinking of the staff of the nursing home. I should also mention that the ethics in the nursing home are of a high standard.

I praise the minister for the work she has done in getting this bill before us. I support the bill and look forward to it passing the parliament as the Rudd government fulfils more of its election promises.

Luke Hartsuyker (Cowper, National Party, Deputy Manager of Opposition Business in the House) Share this | Link to this | Hansard source

A society is judged by the way in which it cares for those people who cannot care for themselves. The assurance that any elderly Australian who needs care will have access to safe, secure and compassionate aged care is of the utmost importance.

The aged-care industry in Australia looks after some 760,000 people in their own homes and around 145,000 people in residential facilities. Residential care services are the most resource intensive aged-care service and will become more important as Australia’s population ages and our society changes.

Before I move on to the significant challenges facing the aged-care sector, it would be inappropriate not to mention the hardworking and dedicated staff and management who work in the aged-care industry. One of the privileges of being an MP is having the opportunity to travel to nursing homes for various functions. Over the years I have met at these events hundreds of highly skilled and dedicated nurses and support staff who brighten the lives of so many older Australians. Nursing homes are not easy places at which to work. Residents may have a variety of complex needs and are often struggling with physical and mental illness and injury. Despite these difficult circumstances, staff consistently provide high levels of care.

The Rudd government inherited a world-class aged-care system. The Howard government implemented wide-ranging reforms of the aged-care system, beginning with the Aged Care Act 1997. Our Aged Care Principles introduced a better payments framework and a national quality assurance framework for residential aged care, which combined accreditation, certification and the Aged Care Complaints Investigation Scheme. These measures gave the community greater confidence in the efficiency and quality of care in Australian aged-care facilities. These measures have also protected the rights of older Australians. In government, and now in opposition, the coalition places a strong emphasis on ensuring that older Australians have access to high-quality aged care.

Australia’s aged-care industry is at a crossroads. Australia is ageing rapidly due to lower birthrates and longer life expectancy. Currently, about 2.8 million Australians, or 13 per cent of the population, are over the age of 65 and about half of these require some sort of assistance to carry out their regular daily activities. By 2047, the number of Australians over 65 will have jumped to seven million or 25 per cent of the population. In 2007, there were five people of working age to support every person over 65. In 40 years time the number will be only 2.4.

Estimates show that, in 2055, Australia will have 78,000 people over the age of 100, compared with just 2,860 today. Over the next 40 years, the number of Australians aged over 85 will increase by 400 per cent from 400,000 to 1.6 million. This ageing of our population will present massive social challenges for Australia over the coming decades and will place considerable pressure on the budget. Without wholesale changes to the aged-care system in Australia, there is a risk that future generations will not have guaranteed access to residential aged-care facilities, a fundamental principle of the Aged Care Act 1997.

Locally, my electorate already has one of Australia’s oldest population bases. According to the 2006 census, 20 per cent of people living on the mid-North Coast are over 65, compared to the national average of 13 per cent, and 14 per cent are over 70, compared with the national average of just 10 per cent. A new report from the New South Wales government has shown that the over-65 population in Coffs Harbour is growing by five per cent per year. By 2016, there will be 18,000 people in Coffs Harbour over 65. This presents a massive challenge for the government and the aged-care industry. ABS figures show that the mid-North Coast is well above the national population averages for people aged 50 and above, meaning that my region will feel the effects of Australia’s ageing population much more than many other areas.

In addition to these figures, the recently released Grant Thornton report paints a grim picture of the future of the aged-care industry. The report surveyed almost a quarter of Australia’s residential aged-care facilities, and the findings of the survey are very concerning. The simple message of the report is that Australia’s aged-care needs are increasing and our preferences are changing but the aged-care sector is not well placed to respond to these changes.

Many people are now choosing to stay in their own homes for as long as possible. This option is often better for everyone involved as it allows the resident to stay living in familiar surroundings and the government saves money in comparison with formal care. However, this has led to a large increase in the ratio of high-care patients in residential care. In 1998, only 58 per cent of permanent residents were assessed as requiring high care. By 2007, 70 per cent of residents required high care. For both government and providers, this represents a significant increase in costs.

The preference for privacy and personal space is also having a major impact on the viability of many aged-care providers. It is much more expensive to care for two people in two single rooms than to care for two people in a shared room. Over the past decade, the average number of people in a residential aged-care room has decreased significantly. One would expect that these trends will continue into the future, requiring considerable investment in new high-care facilities. The increase in high-care residents and single-bed rooms has eroded the financial returns of aged-care providers. I quote from the report, which said:

Providers of residential aged care services are experiencing low and deteriorating financial returns at a time of unprecedented demand for high care services. This is particularly the case for the modern, single room facilities most preferred by consumers       … These results reveal a lack of incentive to renovate old facilities, or to build new ones, representing a threat to the viability of the residential aged care sector.

At the moment, there is no incentive for providers to build more aged-care places. After expenses and depreciation, the average return on investment for a single-room service is 1.1 per cent. For a new residential facility, providers expect to pay about $176,000 per bed in construction costs, excluding land. In 2003 that figure was only $80,000. Modern single-bed facilities are more expensive to build and bring lower returns than traditional multi-bed facilities. In fact, shared bedroom facilities provide returns almost double those of single-bed facilities.

The low returns available to aged-care providers have led to aged-care approval rounds being undersubscribed in some states. In some areas, providers are actually handing back their bed licences. Low returns also impact on not-for-profit aged-care providers. In their submissions to the inquiry, not-for-profit providers indicated that their deteriorating financial positions had led to the implementation of more commercially focused admissions policies. This change comes at a cost to financially and socially disadvantaged Australians.

Earlier, I mentioned that the average return on investment for a modern aged-care institution is around 1.1 per cent. Unfortunately, some aged-care providers have been losing money—to the point where a number of providers have recently closed facilities. The distress this causes for residents, staff and families is very obvious and unfortunate. The Grant Thornton survey suggests that these closures are likely to become more common unless the underlying problems with regulation and pricing arrangements are addressed.

I am familiar with the aged-care situation in my electorate, and I have regular contact with aged-care providers in my area. I recently received an email from a provider who noted the challenges facing the aged-care industry on the mid-North Coast. The provider listed a number of concerns. Firstly, the new aged-care funding instrument has actually reduced the funding for incoming residents compared to the previous system. With the rapid increase in costs and overheads, this poses a serious risk to the viability of the sector. My constituent went on to note that an aged-care facility in New South Wales with about 150 residents can expect a workers compensation bill of around $300,000 a year and insurance costs of about $50,000. Add to that the sharp increases in electricity, gas and water prices and an aged-care facility must pay out hundreds of thousands of dollars before a resident receives a minute of personal care. To put it simply, costs are rising and funding is not keeping pace.

If this continues, the industry will be unviable within a very short time. One aged-care facility in my electorate calculated that it would be almost $180,000 per year worse off for just 30 residents under the government’s new funding instrument. The only thing that prevents this huge loss is the ‘grandparenting rule’, which does not allow the funding for existing residents to decrease. The inclusion of the grandparenting rule in the new funding instrument makes it clear that the government was aware that the new funding arrangements would result in decreased funding for the aged-care industry. As current residents pass away or move on, new residents will not be under the protection of the grandparenting rule, and many will therefore attract lower funding. Over time, this will decrease the funding base of aged-care providers and further threaten the viability of the aged-care sector.

To help with the construction of new facilities, the government has implemented a zero-interest loan scheme. In theory, this is a worthwhile initiative. Unfortunately, like so many other programs that the government has bungled, its implementation is imperfect and this has prevented the funding from getting to where it is most needed. As I have stated, my electorate has one of the oldest population bases in the country, yet we are not considered important enough to warrant inclusion in the zero-interest loan scheme. This will make it less attractive to build new aged-care facilities on the mid-North Coast and will eventually disadvantage the older constituents in my electorate. This is just another example of the Rudd government’s contempt for senior Australians.

The aged-care industry needs a minister who will stand up and fight for the industry. The industry needs a strong voice in the media and in government to support and advocate for the future of the aged-care industry. Instead, the minister has demonised the industry, focusing almost entirely on the handful of providers who are not up to standard. Instead of providing more funding, the minister has overseen an increase in costly surprise inspections.

The industry feels that the Minister for Ageing has spent her time talking down the quality of care given by providers and inferring that they are greedy. The minister should be praising the majority of providers and their staff, who give the highest quality care and are working on very tight budgets. The following quote is taken directly from a constituent’s letter. He said:

Please acknowledge the aged care industry. They are not asking for rewards, they are just asking for adequate funds to provide the high level of care that the minister is so vocal in saying she wants to give.

Because of the difficulties facing the aged-care industry, it is essential that the government create an environment that makes investment in aged care attractive. Investors and providers need to know that adequate funding is guaranteed. They need to know that the regulations and enforcement regimes are consistent. They need open channels of communication with the minister and her department. Most of all, they need to know that they will be viable into the future. Unfortunately, this bill does not achieve these outcomes.

The bill before the House today will address a number of regulatory issues in the Aged Care Act and the Aged Care (Bond Security) Act. When the Howard government introduced the Aged Care Act in 1997, the typical business model involved the owner of the facility also managing the facility. The regulatory framework reflected the nature of the industry at the time. Over the past decade, we have seen a different business model emerge. Often the owner or developer of a facility is quite separate from the manager of the facility. Investment in aged care by large corporations is also becoming more prevalent.

The difference between the regulatory framework and the modern business model has created inconsistencies in the application of the regulations, and this bill attempts to rectify those problems. Under the current legislation, key personnel in an aged-care facility are under scrutiny to ensure that the regulations are adhered to. Because of the change in business models, the people who control the finances of an aged-care facility may not be ‘key personnel’ as defined in the legislation. This amendment will alter the legislation to allow scrutiny of all relevant people. This amendment also clarifies the rules surrounding the co-location of different types of facilities on one property. Some providers have constructed retirement villages, nursing homes and disability or step-down care in one location. This amendment will clear up uncertainty as to how the regulations apply in these cases.

One important part of this amendment is the changes to the Aged Care (Bond Security) Act. As of 2007, aged-care providers held about $6.3 billion in accommodation bonds. Since the introduction of the accommodation bond guarantee scheme in 2006, some parts of the legislation have been identified as perhaps needing strengthening to protect residents. This bill will amend those areas and better protect resident accommodation bonds.

Although this amendment does achieve some worthwhile goals, it falls down in two areas. The first area is aged care assessments by the ACAT team. Under a new financial instrument introduced in March, some older Australians enter residential aged care needing a higher level of care than they have been assessed as needing. Because of this, a reassessment may have to take place. There is often a delay of several months before the reassessment is completed. During this time, the provider may be providing high care to the resident while receiving a subsidy at a lower level. This leaves the provider out of pocket. During the consultation process for this bill, providers were led to believe that this problem would be fixed and providers would be able to receive retrospective funding to cover the period when the care provided and the government subsidy did not match. Unfortunately, this is not the case and providers will still be out of pocket if a reassessment is needed. With providers already struggling to remain viable, this problem must be resolved quickly. It is issues such as this that cause providers to lose confidence in the minister and, as a result, lose confidence in and the desire to invest in the industry.

The other major issue with this bill is the introduction of subjectivity into the regulations. This amendment hands unprecedented power to the Secretary of the Department of Health and Ageing to impose sanctions on an aged-care provider. The new regulations will even allow the secretary to impose a penalty or sanction in the event of a possible future breach of rules or guidelines. The power handed to the department is subjective, leaving providers with little certainty about the way in which aged-care regulations will be monitored and breaches punished.

Aged care is a vital industry in this country and it should be supported. The minister has failed to support it with anywhere near enough effort so far. There have certainly been a range of concerns raised with me about the minister’s stance in relation to the industry, and she certainly needs to improve her game. The coalition is absolutely committed to a high-quality aged-care system for this country, and I wish the minister would follow the coalition’s lead.

Peter Slipper (Fisher, Liberal Party) Share this | Link to this | Hansard source

As I have to be on duty as Deputy Speaker in the main chamber at 8.30, my speech on the Aged Care Amendment (2008 Measures No. 2) Bill 2008 will be somewhat shortened. It is important always to recognise the importance of older Australians and the role that they have played in making sure that as a nation we have the freedom, stability and way of life that makes us the envy of people throughout the world. As undoubtedly the shadow minister has pointed out, the ageing of our population is the biggest social issue that Australia faces and it will present considerable budgetary pressures. A number of years ago I held an aged-care forum in the electorate of Fisher, which is on the Sunshine Coast in Queensland, and I was staggered to hear that, given the longevity of aged Australians and given modern medical advances and increased health expectations, the aged-care industry will in the near future have to expect that people will live to 120 years of age. That of course is a wonderful outcome as far as health is concerned, but it does present real challenges as far as management of this important area by the government of the day is concerned.

Let us look at some demographics which undoubtedly the shadow minister has previously emphasised to the parliament. In Australia today we have 2.8 million people aged 65 or more—that is 13 per cent of the population—and two million people aged over 70—that is 9.3 per cent of the population. By the year 2047 we will have seven million people aged over 65, and that will be 25 per cent of the population. In 2007 there were five people of working age to one person aged over 65, but just 40 years later we will have 2.4 people of working age supporting each person aged over 65. During the 20th century, life expectancy rose by 30 years in the developed countries, and the number of people aged over 100 will increase from 2,860 people today to 78,000 by 2055. So the situation I outlined is a wonderful opportunity to harness the talents of older Australians but also, as older Australians have increased health needs, presents certain economic challenges. Over the next 40 years the number of Australians aged 85 will increase fourfold.

Let us look at aged-care statistics. There are currently 2,870 accredited aged-care facilities throughout Australia with 150,000 residents. Interestingly, only six to seven per cent of people enter aged-care facilities. Aged-care facilities are horrendously expensive for the community, but it is only appropriate that any government provides support to those people to whom our nation owes so much. Having said that, because most Australians, even most older Australians, do not actually enter these facilities, there is always a balance in looking at the funding needs of those people who do need assistance as against the requirements of the general population.

When the Labor government was elected just 12 months ago, it inherited a first-class, I would almost say a world-class, aged-care system. That is not to say, of course, that there cannot be improvements. I have to say that this bill does include many positive measures. Let us face it, regardless of the politics we have, we all support improved assistance for older Australians, and I think most people would acknowledge the debt that we owe them. This bill aims to introduce safeguards and protections to the laws affecting the aged-care sector in Australia. It comes at an appropriate time, when the aged-care sector is truly at what some could describe as a precarious and dangerous crossroad. The Labor government says that its changes aim to protect the residents of aged-care facilities and to ensure that the standard of care they receive is maintained at the highest levels. We would expect that in a nation such as Australia.

These are changes that must be successful in order to ensure that the number of aged-care beds available is able to keep up with the demand that is expected to continue given the ageing of the Australian population. The bill suggests that the standard business models that were in place when the Aged Care Act 1997 was implemented are not as common today and that there is much more variety in the industry. I believe this is undoubtedly correct. New business models have been applied to the industry. We continue to have some owners and operators running particular facilities, but we increasingly see investment and input from major corporations. That is not a bad thing, but one has to make sure that the quality of care is always good and that the clients of these facilities receive the assistance that we expect them to receive.

In the aged-care industry, as in most Australian industries, over time the influences and pressure of modern commerce, the influence of international economic factors and the impact of economies of scale on many former cottage industries have encouraged considerable change. This is not necessarily a bad thing in itself, but it is a fact of life that must be recognised and addressed. The aged-care industry has certainly been subject to much change. The Liberal-National government built a strong and successful aged-care sector over its terms in office. Sadly, there is currently a danger that change for the sake of change may well erode some of the gains made in the industry.

Labor says that the present legislation—that is, the Aged Care Act 1997—is regarded as not being as effective as when it was first introduced. Labor says that this is because of the evolution of the industry over the past decade. Labor claims that the legislation is not as effective in monitoring and guiding some of the complex corporate entities that are active in this industry. To a certain extent, the government is correct, but one ought to recognise that in the aged-care industry we no longer have a one-size-fits-all sector. The government claims that it is mindful of the need to have the protection and care of the elderly and the frail as key motivators of those providers in the industry, and I certainly hope that is the case. The legislative modifications also claim to offer better protection to residents and confidence in the sector. It is sad, however, that the government, after about 12 months in office, has eroded the confidence of many industries, including the aged-care industry.

The Aged Care Act 1997 was introduced by the former Liberal-National government and had the effect of improving public confidence in the quality and standard of care provided to older Australians. The Liberal-National aged-care reforms helped stabilise the industry and introduced a unified system for care and for payments. It brought in a standard quality-assurance system and a system by which complaints were investigated. The bill currently before the chamber seeks to ensure that all of those who have an interest in the aged-care industry also face direct responsibility for maintaining standards. The bill seeks to ensure that those who work behind the scenes, so to speak, are also subject to scrutiny for the operations in which they are involved. I think that is important.

Older Australians are living in desperate times and have been ignored by the Labor government since it came to power. The former government, the Liberal-National government, introduced a number of reforms that assisted the aged-care industry. Honestly, we had built confidence and enthusiasm in the sector. This interest has waned over the past 12 months and now, in Western Australia—parts of which the honourable members for Kalgoorlie and Forrest have the honour of representing—there is an undersubscription in aged-care places. It is vital that older Australians are not ignored any further. Frankly, it is a situation we have not previously heard of. The Labor government hopes to boost the industry through these reforms. However, it is vital that funding is maintained at adequate levels to ensure that further infrastructure can be built so that the undersubscriptions are prevented and so that competition by providers for places continues in order to provide an effective and efficient aged-care sector. While this bill is to be welcomed, and many of its provisions are certainly positive, the Labor government needs to lift its game in the aged-care sector so that the needs of older Australians are able to be met.

In closing, let us just look at the economics of an ageing population. I do not resent money being spent on older Australians because, let us face it, they are the people who have made Australia the country it is today. But Australian government spending on health is projected to increase as a proportion of GDP from 3.8 per cent in 2006-07 to 7.3 per cent in 2046-47. The growth of real GDP per person is projected to slow because of the ageing of the population and this will equate to a fall in living standards. With a stagnant labour market and increased lifespan, which I have outlined previously, the standard of living of Australians will fall in the years ahead. Spending on health and aged care is projected to grow significantly over the next 40 years, due to improved and more expensive drugs and medical technologies. Therefore, earlier in my speech I outlined that the major challenge confronting Australia today is the ageing of our population. That is a challenge. It is also an opportunity. It is a challenge that we should welcome because it is great that health standards are improving, that medication is improving, that technology is improving and that life expectancy is improving. But, accompanying those benefits, we will have a situation where increased spending will be required on aged care and we will need increased monitoring to make sure that those people who are in facilities are appropriately cared for.

There would not be a member of parliament in the House who has not had complaints from constituents in relation to aged-care facilities. I personally believe that most aged-care facilities try to do the right thing and, indeed, do the right thing. I would like to place on record my admiration for the carers and the nurses and the people in those facilities, because they do do a wonderful job. But it is important to make sure that we benchmark that performance. We have always got to think: how would we feel if our mother or father was included as a resident in one of these facilities? But, more importantly, we have to look at our communities—the communities we are privileged to represent.

I welcome this bill. It is a positive bill. The government, though, needs not to take its eye off the ball with respect to aged care. The government needs to continue to recognise the importance of older Australians. Very little has been done by the current government for older Australians since the government was elected on 24 November last year. Older Australians have not been given the attention that they should. Many older Australians tell me that they feel that the current government has, in fact, almost wiped them—that they believe that, because they are old, because they are not working, because they are not actually contributing the taxes they once were, somehow they are worthless individuals. I just think that is an appalling attitude and I would ask the government to reconsider. I know that the honourable member opposite is a person who does not share the approach of many people in his government and that he is genuinely interested in older Australians.

Having said that, I am pleased to join the debate on this bill. I am pleased to support the good parts of this bill. I just want to encourage the government to pull its socks up. The government can do better. The government should do better. And, in the remaining time this government has, it is important that it does do better. I commend the bill to the House.

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source

I rise to speak on the Aged Care Amendment (2008 Measures No. 2) Bill 2008. This bill amends the Aged Care Act 1997 and the Aged Care (Bond Security) Act 2006. The Rudd government would have us believe that the purpose of this amendment bill is to address the current legislative inequities and maintain effective regulatory safeguards for ensuring high-quality care for older Australians. The coalition left a world-class aged-care system to the Rudd government. We delivered wide-ranging reforms and record funding for high-quality, accessible and affordable aged care.

We all know that Australia has an ageing population. People aged 65 or over currently make up 13 per cent of the population. But in the next 40 years this figure is expected to rise to seven million people, or 25 per cent of the population. There is also expected to be a significant increase in the number of people aged 85 and over, from 1.7 to 5.6 per cent of the total population. For this reason, the aged-care system does need to adjust and grow with our ageing population to reflect trends in the aged-care sector and meet future challenges.

A Productivity Commission report on aged-care trends released in September highlighted a number of issues in projecting that future demand for aged care will become markedly more heterogeneous. This is due to increasing diversity among older Australians in terms of their care needs, cultural and linguistic backgrounds, preferences, expectations, personal income and wealth. The coalition introduced a number of measures to address aged-care trends and projected future industry deficits. Labor’s amendments to the aged-care system do not properly acknowledge either the current state of the industry or future directions addressing a more diverse aged-care demographic. This bill does not, as claimed, ensure high-quality care for older Australians—certainly not for all older Australians, especially those in our rural and remote regions.

Aged care is an issue in my electorate of Kalgoorlie as it is for the rest of Australia; in some ways, however, it is more so. The Australian government system of assessing suitability for its funded aged-care places recognises that conditions associated with ageing generally affect Indigenous people substantially earlier than other Australians. Therefore, the target demographic for Australian government funded aged care is frail older persons aged 70 years and over or 50 years and over for Aboriginal and Torres Strait Islander people. My electorate is nearly one-fifth Indigenous—18.3 per cent. In fact, I represent 5.7 per cent of the total Indigenous population of Australia, or about 26,000 Aboriginal people. Based on these criteria, at the last census there were at least 10,459 people in my electorate who fell into the target group for government aged-care planning. Provision of aged care in my electorate faces other challenges, as I will explain.

Anyone who heard me speaking about the failure of the government’s National Rental Affordability Scheme to meet the needs of regional Australia would now be aware that the housing crisis in parts of regional Western Australia has had a severe impact on service industries. Unfortunately, aged care is one of the service industries that has fallen victim to this predicament. My fellow members have heard me refer many times to a housing crisis on the north-west coast of my electorate. Land costs are higher, construction costs are higher, rental and of course capital purchase costs are higher, accommodation costs for staff are higher and readily available accommodation is practically nonexistent.

Service industries like aged care struggle to compete against mining industries. For example, a multiskilled support worker in residential care gets less than $20 an hour and less than $40,000 a year before tax, but in mining towns of the north-west an average rental house is worth double that, if you can get one. One aged-care service provider in Broome says that housing is the main limiting factor for staffing. They are able to locate staff but staff cannot afford the very high rents. This provider has therefore developed its own staff accommodation, which it could fill two or three times over. Fortunately, this situation is not widespread, but these communities still need aged care. Our older Australians have every right to spend their twilight years with dignity in their home towns or at least near their home country.

The Productivity Commission report on aged care which I referred to previously says that metropolitan areas have just over half of all staff in the aged-care sector but two-thirds of the clients. In regional areas, the ratio of staff to clients is about even. In rural and remote locations, 25 per cent of Australia’s residential aged-care staff look after only 11 per cent of the clients. There are various reasons for this—for example, smaller facilities and fewer or no outsourcing opportunities. The upshot is that staffing costs are much higher in rural and remote areas. Quite often aged-care providers can only get inexperienced workers, with a rapid turnover as untrained or unprepared staff struggle to cope with the heavy workload. Staffing shortages put pressure on new staff as well as existing staff. In cities, aged-care providers can rely on staffing agencies, even though this means that staff are inexperienced and unfamiliar with the clients. In rural and remote regions, aged-care providers usually do not have that option.

The Productivity Commission also said that there may also be a requirement for culturally appropriate aged-care services in rural and remote regions, which can significantly increase costs. As things now stand, aged-care facilities in rural and remote areas are a very bad business proposition. Perhaps this is why about 45 per cent of Australia’s aged-care residential places are offered by religious or charitable providers. But they cannot afford to run at a loss any more than a provider who is in it for the profit motive can.

A pressing and common problem for smaller rural and remote towns is that they may not have enough residents to work profitably under current funding models—that is, they cannot achieve an economy of scale to stay in business. The residents of these small towns are equally entitled to receive aged-care services without being uprooted from the familiar surroundings they have spent their lives in, raised children in, helped to build and chosen to live in. Aged-care providers suggest that, under current funding models, any rural or remote aged-care facility with fewer than 50 or 60 residents will find it hard to remain viable.

Kalgoorlie-Boulder is a regional city, but providers tell me that the provision of aged care there costs a lot more than the same service would in Perth. In fact, I am told that regional aged care can cost up to 40 per cent more than in Perth. Everything is more expensive, from staff training, to transport, to food, to care products. This is partly due to freight cost loadings and partly because in regional areas services are limited. Aged-care providers have to take what they can get and do not have the option to shop around and save money. This all means that the funding is quite simply inadequate in regional areas. As I mentioned, there is also a flow-on effect from the housing crisis, which, for regional facilities, means they are unable to attract staff, since staff cannot afford or cannot obtain housing. Because these regional facilities typically run on a very, very tight budget, they are unable to offer pay incentives to subsidise staff housing.

As several other speakers have noted, aged care is at a crisis point. ‘Crisis, emergency, catastrophe, disaster’—I believe that describes how residents of the Olive Laird Hostel at Carnarvon on the west coast of my electorate felt a year ago, when they were told that their home, the aged-care facility where they thought they were spending the rest of their lives, had no choice but to relocate them and close down. Not only was this very bad news for the elderly who lived there at the time that the hostel was forced to close; it effectively left the residents of some 1,300 kilometres of Western Australian coastline without an aged-care facility. The Olive Laird Hostel was a casualty of the lack of economy of scale that I have been talking about. The hostel had only 10 residents, plus a number of community clients, when it was forced to close its doors, but it was effectively the only residential aged-care facility between the towns of Geraldton and Port Hedland—some 1,300 kilometres. That left the residents of some 1,300 kilometres with no aged care. When the Olive Laird Hostel closed, its residents were located as far away as Perth, 900 kilometres or a full day’s drive to the south.

One of my constituents who had spent her life in Carnarvon, whose husband is buried there and whose family still lives there was one of those who were relocated to Perth after 70 years in her home community. How do you explain to someone who has lived in one community all her life and has never called anywhere else home that she will be moved, not just a short distance away but a great distance away, to a different facility, a different set of doctors, health staff and carers, a different town or city and a different climate and environment far away from family and friends? That is not how anyone should have to spend the latter years of their life, but that is what has happened to the residents of the Olive Laird Hostel in my electorate. You can understand why the senior citizens of Carnarvon and the surrounding region are now very distressed at the prospect of having to leave their home and move a world away to access residential aged care.

A better and more flexible funding model is needed. Some aged-care facilities have to rely on charitable funding, often from religious institutions, to survive. They should not have to, but sometimes they do. The Olive Laird Hostel in Carnarvon was operated by the Churches of Christ Homes organisation, which found itself having to subsidise the operation quite extensively before having to close it down. In my home city of Kalgoorlie-Boulder we have, among others, two excellent aged-care facilities run by Little Sisters of the Poor. Little Sisters of the Poor has grown from one woman helping the elderly in France in the 1800s to a mission which runs homes for 14,000 residents in 31 countries on five continents. The Little Sisters have been in Kalgoorlie for more than 30 years. They cater to different levels of aged care with a 29-place hostel and a 20-place nursing home, with a full capacity of 49 places.

Little Sisters of the Poor is right on the borderline of financial viability; in fact, they run at a loss all the time and are subsidised by the national Little Sisters of the Poor organisation. I happen to know that the sisters working in the Kalgoorlie facility take part of their monthly stipend to feed the aged-care residents. In 2007, both of the Kalgoorlie facilities failed to meet the 44 audited standards. This came as a great surprise to the local community because no-one has had a bad thing to say about the Little Sisters of the Poor in Kalgoorlie. It was widely acknowledged that their standard of care was exceptional. When the Little Sisters failed to meet their audited standards last year, the mother superior said the standard of care had never been compromised, which no-one in Kalgoorlie doubted, but the paperwork and the records were not up to accreditation standard. After doing some catch-up with recordkeeping, the Little Sisters met accreditation standard and passed their subsequent audit on every count.

No-one, least of all the residents, questioned the aged care provided by the Little Sisters of the Poor. The residents themselves are as devoted to the Little Sisters as the Little Sisters are to them and were horrified to think that anyone would question the standard of care. This is a classic example of how organisations like this, devoted wholly and solely to looking after their residents and struggling to meet staff requirements on the ground, can also struggle to deal with the accompanying paperwork. Those in the industry acknowledge that residential care can suffer because of the ridiculous amount of time paperwork takes away from the residents. It was even suggested to me that an aged-care facility which focused on meeting its bureaucratic requirements before the needs of its clients could have the best paperwork and the worst care. The legislation I am talking about tonight only increases the bureaucracy and the paperwork required of these dedicated organisations and their staff. Centres with a small population have no chance of sustainability under current funding models. It appears that the Rudd government writes its policies for the city and metropolitan population. Regional citizens do not count.

I have been talking about the aged-care crisis in my electorate, but it is not just my third of Australia; it is national. Ever since this legislation was first read, we have seen more and more evidence of critical inadequacies in the aged-care sector. We hear that, far from the former strong competition for bed licences, providers are now handing them back at a time when we need more and more bed licences to be taken up to cater for current and future demand. We are seeing stories in the media about residents who have suffered from malnutrition or dehydration. For example, one Western Australian provider was placed under sanction by the Department of Health and Ageing, but both the provider and the industry’s peak body, Aged and Community Services, agreed that staffing issues were a big contributor to the problems experienced at that facility.

For the aged-care sector to grow to meet the needs of the next generation, let alone the current generation, it has to be an attractive proposition for providers—and for both employers and employees alike. We have to be able to attract more interest from the private sector. We also have to stop organisations like the Churches of Christ Homes closing down facilities because they cannot afford to run them. We have to stop organisations like the Little Sisters of the Poor failing audits because they are so overworked that they do not get the paperwork done.

In my home state of Western Australia, operators rejected 360 of the 1,000 bed licences in the 2007-08 funding round because they could not afford to build or staff facilities. That paragraph alone says a great deal about the inadequacy of this legislation. It purports to be the be-all and end-all and the most current, up-to-date process of addressing all of our needs in aged care, and it fails miserably. I repeat: operators rejected about a third of the 1,000 bed licences available in the 2007-08 round because they could not afford to build or staff the facilities under the payments that are currently afforded by this government. The Bethanie Group, one of WA’s biggest aged-care providers, has handed 100 bed licences back. Another provider acknowledged their declining levels of service and dealt with it by closing beds rather than trying to fill staffing shortfalls with temporary staff and having to deal with the associated problems.

I repeat that the industry is in crisis. We are talking about people’s lives and their right to spend their twilight years in comfort and dignity—in the city, in their home towns or near their traditional country. The government must take this seriously and come up with better and more appropriate funding models and a more appropriate way to address these extremely vital issues. This relatively toothless and ineffectual piece of legislation will only make life harder for our struggling aged-care providers. It is long on spin and short on substance—as, unfortunately, we have come to expect from this Rudd government. The government owes it to all Australians, particularly those in rural and regional areas, to do better.

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

I acknowledge the contribution from the member for Kalgoorlie—or should I say the member for Durack?

Barry Haase (Kalgoorlie, Liberal Party, Shadow Parliamentary Secretary for Roads and Transport) Share this | Link to this | Hansard source

To be.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Danna Vale (Hughes, Liberal Party) Share this | Link to this | Hansard source

I welcome the opportunity of speaking on the Aged Care Amendment (2008 Measures No. 2) Bill 2008. This bill is of concern to an increasing number of Australians, especially those older citizens in my electorate of Hughes. My electorate includes the western part of the Sutherland shire, which makes up about 70 per cent of my electorate and extends further west to include the Liverpool CBD and the Liverpool suburbs of Chipping Norton, Moorebank, Holsworthy, Hammondville, Wattle Grove, Pleasure Point and Voyager Point. Across the electorate several superior aged-care facilities provide for the needs of our senior residents in a variety of modern high-quality accommodation in which they receive high-quality professional care. I would like to acknowledge the excellent service provided at Hammondville Homes at Hammondville, Scallabrini Village at Chipping Norton, Thomas Mitchell Nursing Home at Illawong, John Paul Village at Heathcote, Thomas Holt Retirement Village at Kirrawee, Chesalon Nursing Home at Jannali, Warena Gardens Hostel at Bangor and Lark Ellen Nursing Home at Sutherland.

In striving to ensure that the provision of aged care is of the best quality and delivered to aged residents under the principles of the world’s best practice, this bill seeks to amend the Aged Care Act 1997 and the Aged Care (Bond Security) Act 2006 to address inadequacies identified in the current legislation and to provide for the maintenance of effective regulatory safeguards to ensure the best quality care continues to be delivered to our older Australians.

The former government’s reforms placed significant emphasis on delivering a high-quality, affordable and accessible aged-care system. The previous coalition government’s reforms began in 1997, when the Aged Care Act 1997 and the Aged Care Principles introduced a unified residential care and payment system. The Aged Care Act 1997 is the main legislation that regulates the provision of aged care in Australia. Also introduced at the same time was a national quality assurance framework for residential aged care, combining accreditation, certification and the Aged Care Complaints Investigation Scheme.

Many Australians are already aware that we have a real challenge in the provision of aged-care services in the Australia of the future because of the expected increase in the number of ageing Australians. This is often referred to as the ‘greying’ of Australia as older Australians become the dominant cohort in our demography. Currently, there are over 2.8 million Australians over the age of 65, and approximately half of those require some level of assistance in their daily lives. This is expected to increase to seven million people or 25 per cent of the population by the year 2047.

In my state of New South Wales, the population projections were released this week and the number of those over the age of 65 is expected to increase by 111 per cent by 2036. So it is not necessary for me to add that this ‘greying’ demographic is presenting a massive challenge for all levels of government in Australia. This ageing cohort is going to have a significant impact on how aged-care services are delivered in the future—not only in terms of how governments will respond to the increased demand but also in terms of the growing diversity of care needs of older Australians and their individual preferences due to the differences in personal affluence.

These and related aged-care issues are discussed in recent papers that have been released to contribute to the discussion. I refer to two: the Productivity Commission research paper which looks at trends in aged-care services and the Grant Thornton aged-care survey. The Productivity Commission, in its research paper entitled Trends in aged care services: some implications, analysed major trends in both supply and demand for the next 40 years. The commission identified a number of challenges for the future, including increase in demand, the required care needs and the workforce that will be required to deliver services for an increasing number of ageing Australians. The commission identified that the significant increase in the demand for aged-care services in the future is a result of both a sizeable decline in fertility rates since the 1960s and an increase in life expectancy through advances in medical technology and public health initiatives. Those aged over 85 are the main users of aged-care services and their numbers are expected to increase at least fourfold by 2047, and that will present a massive challenge for all levels of government again.

Care needs are also expected to change. It is expected that the shifting pattern of disease and infirmity amongst the aged is going to increase the proportion of frail older people with more complex care needs. For example, the incidence of dementia and Alzheimer’s is expected to increase amongst the aged population.

We are also seeing an increased preference for independent-living apartments by senior citizens as they exercise a desire for greater autonomy and choice in their lives. Independent living, because of the government’s policy of ageing in place, can be supported by community care packages as our seniors advance in years and become more frail and dependent on support.

These changes in care needs and demands for services, along with the challenges arising from a tightening of the labour market over the foreseeable future, will have serious implications for the aged-care workforce. The commission says that the evidence suggests that over the next 40 years there will be difficulties in securing an adequate supply of personnel with the necessary skills to support the delivery of aged-care services. This is going to be accentuated by competing demands from the acute care sector and other industries.

The Grant Thornton aged-care survey looks at the impact of changing demand on the aged-care industry. It received responses from 686 facilities, representing almost 25 per cent of all facilities in Australia. It looked at performance of the facilities, building costs of new facilities, demand for services, funding and service quality. The survey looked at earnings before interest, tax, depreciation and amortisation per bed. Unfortunately, the trend in provider performance is declining. It is stated that this is due to the costs escalating faster than the increases in subsidies.

Increased building costs of new aged-care facilities also compound the problem for governments as well as providers. This is due to both an increase in the cost of construction and the changing expectations of consumers of high-quality living accommodation standards. Consumers are demanding private, modern bedrooms compared to the past, when the usual practice was to provide shared bedroom accommodation.

The survey found that single, private bedroom facilities have poorer returns than shared, high-care facilities. In fact, the survey estimates that the average return for single, private room facilities is only 1.1 per cent, which is not at all attractive for potential investors. The poorer return on single, private rooms reflects the greater investment required to operate large, modern facilities that need to meet consumer demands and government requirements. This has resulted in many operators deferring or abandoning plans to develop or redevelop their facilities. The survey also indicates that many of the new aged-care places allocated by the government remain unused or have been returned. It was even reported that there was an undersubscription for aged-care places in some states. While significant investment has been made in modern aged care, the survey shows that many of Australia’s aged-care facilities remain dated.

While the previous government’s reforms introduced a unified residential care and payment system as well as a national quality assurance framework for residential aged care, it also combined accreditation certification and the Aged Care Complaints Investigation Scheme to ensure aged-care clients and their families that we are serious about delivering the high-quality care that our senior citizens so rightly deserve. However, the Rudd government has ignored older Australians and has undermined the aged-care industry and all the hardworking, professional staff who work in the industry.

In the past there has been strong competition for aged-care places across the country. But the present undersubscription for aged-care places shows just how seriously underfunded this sector is at the present time. I understand that some providers are handing back bed licences, and the Rudd Labor government appears to be indifferent to the growing crisis in this sector.

I often have discussions with many of the local aged-care providers in my electorate and I understand the challenges they face in maintaining the provision of high-quality aged-care facilities and services. One of the leading aged-care providers in my electorate recently wrote to me regarding some of the issues that face those organisations trying to provide aged care of the highest quality for our older Australians. The letter reads:

• We have not received additional packages since our original allocation of 20 in 2002, yet we have continued to successfully utilise all 20 packages plus carry an additional, unfunded 5-18 packages—currently 10—for the past five years.
• If we are unsuccessful this year, it will severely limit our want to grow and provide services to those who are in need of them.
• Many of our existing unfunded packages and those we have researched and found to be needing community care will require permanent residential care, thus putting additional pressure on our hostels and nursing homes and it will also jeopardise our practice of ageing in place.
• We want to continue to deliver our quality service and we have the infrastructure and flexibility already to deliver to the extra packages. More packages will allow us to continue this now and into the future. We have the backing of an enthusiastic, specialised organisation including our advisory board, CEO, DON, coordinator, maintenance team and administration staff. Our plans to reach out to isolated areas will be severely restricted.
• We have the capacity and the enthusiasm to continue servicing the aged in our region and we will continue to do so, even if we receive less than the maximum number of packages sought. However, the extra packages will allow us to employ additional staff, especially those trained to care for the increasing number of care recipients we have suffering with dementia, including those referred to us from ACAT.
• We can also practice ageing in place more proficiently thus allowing care recipients to remain in their own homes longer, offer respite as required, relieve the pressure on residential care and, when the time comes, allow the transition into residential care to be less traumatic because care recipients have already experienced aged care, so it’s not as strange or hard for them to accept care, and in most cases the decision to enter residential care becomes theirs and not someone else’s.
• Receiving fewer packages will not impact on our current quality of care but will impact on the demand for this care because aged persons in our region would be unable to access it and will also limit the expansion of services to our existing clients, remembering that we are already servicing an extra 10 unfunded packages.
• The way our population is ageing we need money / packages now to save increased costs and care later on, as well as coping with the waiting list and extra clients that we have now, over and above the 20 packages we have managed with for over 5 years.
• Because we can offer Low Care and High Care (permanent & respite) at John Paul Village, we can ‘extend’ Ageing in Place to those care recipients we service in the general community as well as those we have in the village. Thus providing continuity of care if / when their needs change.
• One of the advantages of Community Care Packages within a retirement village environment is that clients can avail themselves of the services of the village, as well. For example; daily meals, hairdresser, the podiatrist, bus trips, social outings, transport and onsite activities conducted by our RAO’s. This availability of existing services can also ease the burden / cost for the financially disadvantaged because we are able to offer most of these services at reduced cost.

Following these concerns expressed by my local aged-care providers, I strongly urge the government to consult with and to listen to those organisations that are providing at the coalface the care and services of the aged-care sector. We all understand that the demand is going to increase significantly in the near future. It is better to refine the delivery processes and to get on with it right now. The overarching purpose of this bill is to provide certainty and safety for those currently receiving aged-care services and those who may need to access such services in the future, as well as assuring their families. I support any measure that secures the future of our older Australians and I support this bill.

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

in reply—I am very pleased to have the opportunity to sum up debate on the Aged Care Amendment (2008 Measures No. 2) Bill 2008. Recent data released in September 2008 by the Australian Bureau of Statistics shows one in four Australians will be aged 65 or over by 2056. Australia now has the world’s second-longest life expectancy rates, after the Japanese. Women in the wheat belt of Western Australia and on Queensland’s Sunshine Coast have one of the longest life expectancy rates in the world. These figures suggest why caring for our ageing population is one of the major challenges facing our nation this century. That requires careful planning, adequate funding and comprehensive safeguards to ensure the protection of our older Australians.

The debate here has highlighted the importance of achieving a balance between protecting the needs and rights of individual frail aged persons entering aged-care homes and the long-term viability of the aged-care sector. For too long there has been a lack of national leadership on this very, very important issue, but the Rudd government takes this responsibility very, very seriously. The Aged Care Amendment (2008 Measures No. 2) Bill 2008 provides the most extensive changes to the aged-care regulatory regime in 10 years and is also the first broad change to the Aged Care Act under this government. The bill is part of a range of measures that address current inadequacies in legislation and enhance protection for residents. This includes ensuring that any accommodation bonds or like payments paid by older Australians for entering into aged care are fully protected under the Accommodation Bond Guarantee Scheme.

In the decade since the Aged Care Act came into effect, the aged-care industry has seen a significant increase in investment by large corporate entities. We have seen aged care grow from a cottage industry with a typical one site, one service set-up to a very complex sector with very intricate financial and legal arrangements and, in many cases, with dozens of operations. The regulatory framework must keep pace with the shift in business practices to ensure scrutiny of those pulling the financial strings and to ensure that, regardless of the corporate structure adopted, the relevant protections and provisions apply to aged-care providers.

This government has recognised that a considered response is needed for these major areas of change if we are successfully to meet the future challenges of our ageing population. The bill before us will better protect residents and will promote public confidence in the aged-care industry. Under the new arrangements, regulatory scrutiny will apply to those pulling the financial strings, who may not be currently considered as key personnel. This change will not include all leaders within the organisation unless they are actively involved in making financial or managerial decisions which will affect the executive decisions of the aged-care service.

Under these new arrangements, providers will need to identify those pulling the strings, as the approved provider is in the best position to identify these specific persons. A prescriptive approach was not practical for this measure, given the complexity and diversity of some of the modern organisational structures and roles within aged care. Under the new arrangements, church leaders, for example, who do not involve themselves in the executive decisions of aged-care services will not be included, as the department will only need to be notified of those who should be accountable. This record of related entities will be considered when making decisions about approvals to ensure a sound assessment of a company’s record in service delivery and of its suitability to be approved to deliver care in the future. Aged-care providers will not be able to avoid accountability through sophisticated business structures.

We have also made changes to the regulations surrounding accommodation bonds held by the aged-care sector. This ensures that comprehensive consumer safeguards are in place to protect residents’ funds. The Accommodation Bond Guarantee Scheme will equitably cover bonds and like payments and those bonds held by operators even if they lose their approved provider status. We have also responded to the calls from consumers to reduce aged-care assessment waiting times. This will achieve greater efficiencies through streamlined assessments and the reduction of red tape.

Two specific measures have also been included in this package by amending the principles. The first one requires notification to the Department of Health and Ageing if residents have been reported to the police as missing. The second one extends the police check requirement to restrict people with serious convictions from working in aged-care homes regardless of whether they are supervised or unsupervised. These changes are very important and directly address the safety of residents in our nursing homes.

I would like to now take the opportunity to address some of the matters raised by the member for McPherson. Firstly, I would like to acknowledge that the opposition essentially supports the amendments that are contained within this bill. I would like to respond to concerns raised about section 22 of the act in relation to high and low care. Those who were in the House 11 years ago may recall that with a stroke of a pen the former Prime Minister reintroduced the high and low care divide without going back to clarify the operation within the Aged Care Act. This has resulted in the issue that the member discussed. As stated, the Rudd government is committed to a considered approach to policy changes for aged care. The government has undertaken to review the implementation of the aged-care funding instrument after 18 months. This review will include its interface with aged-care assessments. This review will be conducted in a measured way to ensure sound outcomes for providers and aged-care recipients.

Another issue raised was the reporting of missing residents. To set the record straight, requiring that the department be notified when a resident has been reported to the police as missing will not restrict the basic human rights of older Australians. Nor will it restrict the freedom of movement of residents. A notification of the department will only be required when the approved provider has decided that a person is unaccountably missing and it is sufficiently concerned that it has notified police. The department’s response to the notification will be proportionate to the risk posed to the residents of the particular service. For example, there is likely to be no follow-up if the missing resident turns up having spent the day with family or friends. However, if a resident is reported as missing from a dementia ward and the provider’s explanation of the context indicates that there may have been some inadequate monitoring processes in place, the department’s response will be one of concern for the safety of all similar residents of that service.

The member for McPherson also raised concerns about amendments to section 65 of the act, which in the past has required the department to consider the desirability of deterring future noncompliance when imposing sanctions on an aged-care service. Indeed, these amendments clarify the current intent, purpose and power of the legislation. There is nothing new in this particular section. The changes will simply alleviate confusion and reflect past and current practice rather than expanding the range of matters taken into account. What should be noted is how rarely the department needs to impose sanctions. Currently, sanctions are enforced for 14 services out of a total of nearly 3,000 aged-care homes across the nation. Precompliance activity is generally sufficient to educate, encourage and assist providers to address areas of noncompliance and natural justice steps are part of this process. The compliance process only commences when the provider has not adequately responded to precompliance activities or where the degree of risk for care recipients requires stronger actions by the department. The compliance process is designed to ensure that noncompliance is remedied without delay and that care recipients do not remain at risk.

Finally, let me be very clear that there will no surprises for providers in the amended aged-care principles. Changes in the principles are consequential to and flow on from the act. The changes accurately reflect the policy intention outlined in previous consultation and explanatory material and in discussions with stakeholders.

Before I close, I would like to thank all of those who have been directly or indirectly involved in the development of this reform package. Insights offered through consultations with those in the aged-care industry and consumer representative groups have helped us to identify the best means by which to improve the system and provide further protection for the 170,000 older Australians living in our nation’s nearly 3,000 aged-care homes. These changes complement the government’s record funding of more than $41.6 billion over four years to support aged and community care. Indeed, within residential care, on average the government is providing record funding of $41,500 per resident each year. These changes will increase consumer confidence and maintain the level of investment within aged care. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that the bill be reported to the House without amendment.