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

I rise to speak on the Aged Care (Living Longer Living Better) Bill. I do so with some interest as I believe aged care is one of the great challenges that confronts this nation. Particularly in an area such as the one that I represent, the difficulties of caring for our older Australians are somewhat magnified. Nine per cent of our population is aged 70 years or older. By 2050 over 3.5 million Australians are expected to use aged care each year. At the moment there are about 8,000 outlets providing aged-care services across Australia. By 2050 it is estimated that aged-care expenditure will be three per cent of GDP. Our population is living longer and living with more health conditions than ever before.

Aged care is a highly regulated industry and I have got to say that the impact of red tape and the burden of compliance are threatening the viability of aged-care facilities across the country. Across the nation only 40 per cent of aged-care providers are operating in the black and I suspect that in my electorate a number of providers facing financial difficulty would be somewhat higher than that. There is an increasing demand for aged care but the pressures on the aged-care sector are making it particularly hard. The $1.6 billion cut from the aged-care funding instrument, ACFI, under these reforms has placed it under substantially more pressure. Indeed, in the last financial year the average aged-care provider in my electorate believed they are about $100,000 worse off on their bottom line.

The alarm bells started to ring for me in 2008-09 when the member for Richmond was the Minister for Aged Care. I can remember very clearly a statement in this place when the member for Richmond said that her background as a police officer had her placed very well to clamp down on unscrupulous aged-care providers. While everyone obviously wants proper care and does not want unscrupulous behaviour, I think that showed that minister's and this government's understanding of the aged-care industry. What the aged-care industry does not want is red tape and overt compliance; they want support. The aged-care staff very much feel like the poor cousins in the healthcare sector. Wherever I go I see aged-care workers doing an incredible job. Not everyone can work in aged care. Not only do you have to be physically able to undertake what is now becoming quite a strenuous occupation, you have to be blessed with a certain personality, a caring personality, an unflappable personality and a personality that enables you to be kind and generous in very difficult circumstances. I can say with complete confidence that in the aged-care sector in the Parkes electorate that is very much what I see.

We have seen a change in aged care over the last 20 or 30 years which is in some ways putting pressure on the industry. Many people now are cared for at home. This package of bills largely focuses on increased home care packages. I essentially do not have an issue with that, but what that has done is change the face of aged care. Many of the facilities that were built as hostel type accommodation now are struggling to find residents seeking hostel accommodation but there is a much higher demand for high-care beds. In some of these facilities that does create a problem because the infrastructure is not there for the high care. Indeed, in some cases the upgrades involved mean it is nearly easier to start again and build a new facility.

The Productivity Commission report Caring for older Australians that came out in August 2011 had a raft of recommendations. Unfortunately, this legislation cherry-picks only a few of those. The Senate is undertaking an inquiry which is due to report on 31 May and the shadow minister, Mr Dutton, has moved amendments to delay the final passage of these bills until we can see the report of that committee. I think that is a sensible and fair approach to this. It is a great frustration to me that in this place we quite often deal with very complex issues that contain a lot of information but seem to be dealt with in a five minutes to midnight approach where there is a rush to get them through. So I support the amendment that we see the final report of the Senate committee so that we have got all the information before us before we make our final decision.

There are limitations with this legislation that I can see already. Rural and regional providers are in a unique situation. Where metro services can specialise, can have niche operations, in rural towns you have to have a broad range of services available, quite often with the one organisation. This is the same with the disability sector: when you have a smaller population you have a large range of different care needs but a smaller number. I can use my home town of Warialda as an example for this. Warialda has a district population of roughly a couple of thousand people. The local council originally constructed Naroo, an aged-care hostel-type facility. Indeed, my father was the driving force and initial chairman for Naroo. Over a period of time the demand has grown, and Naroo has been extended twice, partly funded by federal government grants and partly funded by contributions from the local community. Indeed, the last extension—when I was the Mayor of Gwydir Shire—cost that community well over $1 million, and it was full the day it was finished. At the moment, the Warialda community has obtained a low-interest loan of $3 million from the federal government to construct another wing on Naroo. It will be dementia-specific for caring with people with high-care and dementia needs.

A small community needs to do that because you need the services in a small town. You need to have a doctor to treat you. You need a hospital if you need higher care. You need to be able to spend your later years within your local community. You need to be surrounded by family and friends so that, when you are in a stage of needing higher care, you can have your family around you. While in a larger metropolitan area having someone a suburb or two away might not be a big deal, it is when the next provider is an hour's drive away—and we have seen this in Warialda. One of the driving things that we have seen for this facility in this community is couples who have been together for 60 or 65 years and one of them has dementia or needs higher care. It is not available in the local town. They are sent to the nearest available facility—an hour away—and, after 60 years, that couple is essentially torn apart. The member of the relationship that is not in care quite often does not have the ability to do that travel. If they can, it is only once a week.

I have seen that all over my electorate. Indeed, I have couples in Lake Cargelligo where one of them is in care in either Griffith or Condobolin, and essentially the other one cannot be there to provide the necessary care. I know with dementia care that, while people get the best of care, there is nothing like having a family member who can come in every day to provide some form of certainty, whether it is feeding or just mental stimulation. We need those places. Aged care is very important in my patch. The town of Gilgandra has done a wonderful job providing an aged-care haven for their residents. They have actually done such a good job that now people are coming from other areas to retire and ultimately end up getting higher care in Gilgandra from what is available there. In Coonabarabran, Moree, Dubbo and Mudgee there are great facilities.

There are some communities in stress. At Cobar, Lillian Brady Village Nursing Home is having a lot of problems at the moment. It needs an upgrade. There are 40 people in care there, and the local community, because it is small in population, is struggling to support that organisation financially. In Lake Cargelligo we do not have high care. The NPS does provide some beds there, but for dementia specifically there is not that care. So we are seeing people from that community being torn asunder.

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

Who should pay?

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

We have an interjection from over there. I think the member from Tasmania, whose electorate is known in my area as a horse paddock in size, might want to have a greater understanding of the issues of communities such as Cobar, Nyngan or Warialda. Those communities provide a service and have a place within the Australian economy. Those communities such as Cobar provide a lot to the gross domestic product of this nation, and the people living there are just as entitled to services. It is surprising that a member from Tasmania, which only survives on the largesse and subsidy of the mainland, could even make such as comment.

Ms Anna Burke (Speaker) Share this | Link to this | Hansard source

The member for Parkes will ignore the interjections and return to the topic.

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

Apologies, Madam Speaker. The point I make is that people should be able to be cared for in their own community. They should be able to spend their last days in their local community. People do not often speak about this, but you should be able to die in your local community. Being able to die amongst your family and friends is very important, and I have to say I have had enough of the people of my electorate being shunted off in an ambulance in the last days of their lives, away from their loved ones, to have palliative care in a larger regional centre. I quite frankly do not care who pays for it as long as someone does.

This is complex legislation. Aged care is the elephant in the room as far as the Australian economy and community are concerned. We need to come to terms with it. We need to find out the results of the Senate inquiry. We need not to rush into this and to do this with due process.

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

These bills are very important and should pass. There should not be these hold-ups being mentioned by the member for Parkes; that is just playing games with this very important legislation. It should be passed in the parliament, and the opposition is frustrating that by bringing in amendments and saying they want to wait for reports out of the Senate—absolute nonsense! The whole aged-care industry of Australia is calling for these bills to be passed, and they should be.

We should not consider Australia's ageing population as a disadvantage to our country. As we are growing older we are living longer and with better health. By 2050 the proportion of people aged 65 and over is expected to increase from 13 to 23 per cent—from around three million to over eight million people. We have to start thinking differently about ageing. Australians can now expect to have an extended period of healthy, active retirement that we would never have thought about a few years ago.

Our challenge is to make sure that, as we live longer, we continue to lead happy, healthy, productive and connected lives. Older Australians have the energy, experience and wisdom to contribute to business, education and the community, and we need to be more creative in the ways we encourage and support these contributions.

Therefore, the Minister for Mental Health and Ageing, Mark Butler, has been going around communities, listening to their ideas and needs. I had a forum recently in my home town of Longford where about fifty people contributed their ideas and beliefs about ageing. These consultations were part of many all around Australia and, as a result, these bills are being put forward to implement quite a revolutionary aged-care package.

The bills relate to the Living Longer Living Better aged-care reform package, as was announced on 20 April 2012. The package encompasses a comprehensive ten-year plan to reshape aged care. The Aged Care (Living Longer Living Better) Bill 2013 is one of five bills amending the Aged Care Act 1997, and related legislation, to give effect to the Living Longer Living Better reforms. The legislative package comprises: the Australian Aged Care Quality Agency Bill 2013; the Australian Aged Care Quality Agency (Transitional Provisions) Bill 2013; the Aged Care (Bond Security) Amendment Bill 2013; and the Aged Care (Bond Security) Levy Amendment Bill 2013; as well as the Aged Care (Living Longer Living Better) Bill 2013.

The Aged Care (Living Longer Living Better) Bill 2013 implements reforms in four key areas: changes relating to residential care; changes to establish a new type of care, home care; changes relating to governance and administration; and changes that are minor, administrative or consequential. These bills: amend the Aged Care Act 1997 to remove the distinction between low-care and high-care residential care; provide for a means test combining income and assets tests, and annual and lifetime caps, on means-tested care fees; provide for a dementia supplement, veterans' mental health supplement and workforce supplement to be payable to providers who care for eligible care recipients; enable care recipients to choose the method by which they pay for accommodation, including by a fully-refundable lump sum, a rental-style periodic payment, or a combination of both; replace community care and some forms of care delivered in a person's home with home care; extend the Community Visitors Scheme to people in home care; appoint and provide for the functions of an Aged Care Pricing Commissioner, require the commissioner to prepare an annual report, and provide that an independent review of this package is undertaken and provided to the minister by 1 July 2017. The eight acts are to make consequential and technical amendments.

Through these bills we have established a new type of care, home care, to replace community care and certain types of flexible care currently delivered in the home. As part of these reforms, this government has already increased the number of home-care places, with over 5,800 additional places available just this year. This will continue to increase each year with the total allocation of home-care places rising from around 60,000 to almost 100,000 over the next five years. From 1 July 2013, four levels of home care will enable consumers to access the packages that best suit their needs.

In addition, there will be two new supplements: a dementia supplement and a veterans' supplement. These supplements will be available across all care levels for consumers whose care needs might be greater due to dementia and for veterans with mental health conditions who may also need greater support.

A new workforce supplement will also provide additional funding to eligible home-care providers so that the workforce can better meet the needs of consumers. The new supplement will mean more workers can access more appropriate pay and improved training and development.

The aged-care workplace will be better and it will be safer. We will seek to ensure that the increasing numbers of elderly people remaining in their homes are not socially isolated by extending the Community Visitors Scheme from residential care to home care as well—a great initiative.

I know that, in Lyons, Tasmanians have sent us a resounding message: that they want to age at home. But the need for residential care will continue to grow. To support this, from 1 July 2014 the different treatment for low-level and high-level residential care will be removed. There will only be one type of approval for permanent residential care. Anybody assessed as needing permanent residential care will be able to access any residential care service that meets his or her needs at the time of entry into care.

These approvals will not lapse, unless expressly time limited, so there will be fewer reassessments and it will be easier for consumers to access the care that they need—something that I think consumers are asking for constantly. These changes will mean continuity of service will be available from home care through to residential care. They will make it easier for people to move through the system. From 1 July 2013, all new home-care places allocated to providers are offered on a consumer directed care basis. From 1 July 2015, all new and pre-existing home-care places must be offered on this basis.

Consumer directed care is the future of aged care. This means that consumers will work with their home-care providers to choose the elements of care that best suit both their needs and their home-care package budget. This does not require legislation but will be a condition of the allocation of home-care places.

Secondly, care recipients and their families in residential care will be able to purchase additional amenities or supplementary care. Through these bills, we will continue to allow residential care places to be offered on a dedicated extra service basis, whereby an agreed set of extra services are paid for under one fee. Importantly, care recipients, whether or not they are in an extra service place, will also be able to opt in and opt out of additional amenities offered by the provider.

Thirdly, the bills change the arrangements relating to accommodation payments for residential care. For the first time, consumers will have real choice and real control. Approved providers will continue to be required to enter into an agreement with each care recipient in relation to accommodation payments. Importantly, care recipients who can afford to contribute to their accommodation costs will have real choice regarding how they pay for their accommodation. They will be given the choice to pay either a fully refundable deposit or a periodic payment, or a combination of both. They will also be able to draw down periodic payments from that refundable deposit.

In relation to home care, the bills will introduce new income-testing arrangements from 1 July 2014. All home-care recipients may be asked to pay a daily fee of up to 17.5 per cent of the single basic age pension amount, as is the case now.

In addition, those who can afford to may also be asked to pay an income-tested care fee. There is already an income-tested care fee in community care. The new arrangements will ensure consistency and will embed protections for consumers. While some home-care recipients will need to contribute more to the cost of their care through an income-tested care fee, safeguards are being introduced.

For example, no full-rate pensioner will pay an income-tested care fee; no care recipient will be asked to contribute more than the cost of their care; no care recipient's home or other assets will be included in assessing their capacity to pay an income-tested care fee for home care; and there will be both annual and lifetime caps on income-tested care fees.

Once a person reaches the applicable annual or lifetime cap, they will pay no more income-tested care fees. The annual cap in home care will be from $5,000 to $10,000, depending on the income of the person. The lifetime cap will be $60,000 and all caps will be indexed.

The Living Longer Living Better series of bills are historic and will allow a fundamental change in how aged-care recipients, workers and providers can develop a modern, fit-for-purpose aged-care system. These bills build the foundations for reforms now and in the future. They also give force to a major review, to be undertaken in 2016-17, to ensure these reforms meet and continue to meet the needs of Australians. This review will focus on measuring the effectiveness of the reforms and will determine further steps which can be taken to reduce supply controls and increase choice for consumers.

Overall, these bills build on the work of the Productivity Commission to begin a 10-year program of reform to improve Australia's aged-care system. So it is really important that these bills pass the House of Representatives and then go on to the Senate. They should not be held up by the opposition wanting to play politics—and that is what they are doing. There has been a lot of press today, asking everybody in the industry about this legislation. I did not read one article which said, 'No, we don't want these bills to pass.' I think it is really important that members on the other side of the parliament really put pressure on their shadow minister and tell him to stop playing politics and to get on with passing these bills. People want these changes.

The member for Parkes, who preceded me in this debate, took exception when I interjected during his speech. He was speaking about his own electorate and how there were some very good nursing homes, and I am sure there are. I am sure there is great care within them and I am sure their communities make great contributions. But so does mine and so do those in electorates of members all around the country. But you have to find ways to fund them. It is difficult to find ways to continue to fund regional areas when you have small centres with 40 to 50 beds.

The member for Parkes also referred to getting workers to work for very low wages. Nursing homes have very low income levels for people who are carers. It is difficult to get people in there. We have to endeavour to improve workplace issues such as those. It is no good trying to run away from them; they need to be focused on.

People want to stay in their homes. Home care will start to deliver more of that. I think that is critically important and it is what people have been asking for for a long time. We have to get developers to look at independent living units and to build units around the country for people to go from a three-bedroom house to a unit or a smaller centre. They need to do that. People want it and we need to make sure that that happens. I certainly hope we can pass these bills this week and I call on the opposition to get behind them and give them full support.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I rise today because I have serious reservations about these bills before us: the Aged Care (Living Longer Living Better) Bill 2013 and cognate bills. In the consultations that I have had with the aged-care sector in my electorate I have not heard that there is a unanimous approach to these bills being passed. As a matter of fact, I have heard the opposite. I have heard that they have real concerns about these bills. I have wonderful aged-care providers right across the electorate of Wannon—whether it be in Maryborough, Ararat, Hamilton, Portland, Warrnambool, Mortlake, Casterton or Cobden; you can go on and on. A lot of them are small aged-care providers. A lot of them are not-for-profits. A lot of the aged-care facilities were built through community fundraising.

People in these communities are committed to seeing these aged-care facilities continue into the future, because they have a real belief that in country areas where you grow up, where you live, if it is your desire, that is where you should be able to spend the last part of your life. You should be able to do that within your community where your family is and your friends are. This is vitally important to these communities, and they want to make sure that there is a future for their facilities.

I am not certain that this bill provides that, and the aged-care providers in my electorate are not certain that these bills provide that. They have real concerns with these five bills. They have concerns, to start with, with the process. Like everything the Gillard government, and before it the Rudd government, has done, there have been process issues. There has been a real lack of proper consultation. There has been the idea that: 'We know best, Canberra knows best and we will just dictate how it will work and consultation will work. These are the bills that we want to introduce. This is the program we want to introduce. These are the policies that we want you to follow and you will abide by them. We might allow some minor tinkering around the edges but we will dictate to you what our approach will look like.'

It is not a proper, ground-up policy approach where you consult with industry. You do not only consult with those big providers in the major capital cities; you venture out into the regions, into the country, into the rural heartland of our nation and ask those who are providing services, often in difficult circumstances: what could it look like for you as well? What would help you and your facilities? How can we guarantee that you have a future as well? The government sadly did not do that.

The process has been flawed—and the process in this place has been flawed. We have a Senate inquiry still to hand down, and yet the government are trying to rush these bills through. What sort of a sham is that? Why couldn't they at least wait for the Senate inquiry to finish? Eighteen months we have been going through this process and, all of a sudden, we have got to hurry on. All of a sudden the government is saying: 'Oh no, we must expedite this.' Why can't we wait? We have been waiting 18 months; wait a few more days for the Senate inquiry to hand down. You never know: there might be something in there that you should listen to, government. You have been out and consulted again with the industry. I have had aged-care providers in my electorate who have gone to a lot of trouble to make submissions to this inquiry and, once again, you want to treat them with disdain. You go through the process but you are paying lip-service to it. You will not do the right thing by the sector. They are burdened by red tape, and yet you say to them: 'Report. Give the information that you want to give to this Senate inquiry.' Now it is absolutely clear from this process that you are not interested at all in hearing what that Senate inquiry has to say.

Steve Georganas (Hindmarsh, Australian Labor Party) Share this | Link to this | Hansard source

Order! Member for Wannon, one moment. I am reluctant to interrupt him but the use of the word 'you' is directed at the Speaker. I would ask him to come back to direct his comments through the chair, not at the chair. It is a common mistake on both sides of the House, and occupiers of this chair are trying to make sure that we correct the record to our advantage at the end of the day in terms of the way members address the chamber.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Thank you, Mr Deputy Speaker, and you are absolutely correct. I refer to the Gillard government and I do not in any way reflect on your good self, because you are obviously doing an outstanding job. Sadly, the Gillard government in this case is not. As a matter of fact, once again they is showing through their process that they are doing a deplorable job. You keep up your outstanding work, Mr Deputy Speaker. I only wish the Gillard government could follow suit, especially when it comes to these bills.

Eighteen months—what have they done in those 18 months? The first thing was the $1.6 billion cut from the aged-care funding instrument under these reforms, so they have placed more pressure on the system and then just let the dialogue dribble along. Then all of a sudden they want to rush this process through. The Gillard government should have learnt their lesson, that process is important to a properly functioning government and, once again, we are seeing the process fail us as a national parliament. Sadly, the impacts are going to be felt, especially when it comes to the smaller not-for-profits in regional and rural areas that provide outstanding services to our elderly Australians.

It is worth noting what the issues are with this package. They are real issues and they boil down to four areas. The first is the workforce compact. Any legislation around the workforce compact needs to be delayed until we can fully understand the implications of it, especially for smaller providers. The workforce compact has the potential to make many facilities economically unviable. The government has not provided the funding to facilities to make sure that they can afford the cost of the workforce compact.

So it is all very well saying that we would like to pay more to those who work in aged-care facilities—very noble and very true in intent. But if it means that facilities are going to close—so, rather than paying people more, you will actually not be providing them with a job—then you have to think twice about what you are doing.

There is a real issue here. This workforce compact could lead to facilities becoming unviable because it is not being properly funded by the government. The government is saying: 'Yeah, sure, we want this. But we won't provide you with the money to do it.' That is not the right way to go about things.

We then have the accommodation payments. Once again: what is the impact of these payments? What impact will they have on the long-term viability of the sector, especially in regional areas? Will the bonds work outside of large capital cities? Once again, there are real questions to be asked here. Has the government thought through this process? Has it thought, 'Okay, it might have one impact in this region; it might have another impact in another region'? No, it has not done that, sadly. There are real deficiencies here.

There is also the red tape, the specified care and services—the continued red tape. Has the government sat down with the sector and really looked at the implications of that? No, they have not. This is why aged-care providers in Mortlake, Cobden, Casterton, Hamilton and Camperdown are terribly concerned by these bills, as they are also in Maryborough and Warrnambool. There are real issues with this legislation.

What would a coalition government do instead, if the Australian people elected us at the forthcoming election? We would have a much better consultative approach. We would actually sit down and discuss, talk, liaise and work with the sector to come up with a four-year provider agreement, which will give the sector certainty for four years and then further into its future.

It is a sensible approach. It is one which gives certainty to the sector. It is one which means the sector is fully involved in how a funding agreement would work. It has worked elsewhere. We have seen this policy work in other areas, so there is no reason why it would not work in this area. That is the approach that we will take. We will make sure through that four-year funding agreement that the specific requirements of different parts of the sector are taken into account.

I would like to thank the shadow minister for coming down to the electorate of Wannon and hearing the concerns that our aged-care providers have about the current government's approach. Those providers understand there are serious flaws there, and the shadow minister understands there are serious flaws there for our part of the country. I would like to thank her for doing that.

I give those aged-care providers in my electorate a commitment that I will work with them to make sure that our four-year approach, our four-year provider agreement, makes sure that their future viability is enhanced and not, as it will be under this package, threatened. I will make sure that I get the shadow minister down again to ensure that the providers' views can be properly heard in how we put the provider agreement in place. As the member for Parkes noted in his speech, it is vitally important for our smaller rural and regional communities that there is the funding there to ensure those aged-care facilities can continue.

Sure, we want to make sure that people can stay in their homes longer—absolutely right. That is where we should continue to direct funding. But where people cannot stay in their homes, where they need care, we have to make sure that it is provided and provided, where we can, in all those towns that need it—especially where there are existing facilities, because they provide employment to those towns.

As a matter of fact, many rural and regional towns, as our population ages, are seeing the benefits of becoming aged-care providers. We want to make sure that the towns can encourage people to come to their facilities and use those facilities. They actually see it as an economic opportunity for the future. We do have great facilities. We do have the workforce that is willing to work in these facilities and that is why we can really make sure that the four-year provider agreement, if we are elected, can really benefit our regions through the good country care that can be provided through those aged-care facilities.

These are very important bills. They deserve the scrutiny that the opposition is determined to give them. We are not just going to wave these bills through; we are not going to let them go through before the Senate inquiry has reported. We want to make sure that the government is held to account on these bills, because they are too important. They have the potential to threaten the ongoing viability of the aged-care facilities in my electorate and in electorates right around country Australia. We will hold these bills to account, we will put the amendments that need to be put, and we will hold the Gillard government to account. The process has been a sham. The consultation has been a sham. And, if we do not hold the government to account, the end result might be a sham.

Ken Wyatt (Hasluck, Liberal Party) Share this | Link to this | Hansard source

I rise to talk on the suite of aged-care bills and the amendment. Australia is in the process of change. We are undergoing a significant transformation as we experience an ageing of our nation's population. Australians are living longer than ever before and subtly, yet surely, this shift will define the lives of the next generations of our country. We can expect that a fifth of our population will be over 70 years of age by 2051. Our country will have to contend with challenges such as a shrinking of our tax base from six workers for every retiree to 3.2 workers for every retiree by 2047. We will be facing an extraordinary increase in reliance on health services and a far greater demand on aged-care services.

It is critical that as policymakers we are preparing for our nation's future in every way, but specifically in how to face the challenges of an ageing population. It is critical that we have a separate debate about the best possible ways to approach the changes that we will inevitably face and how this can be managed while keeping our nation's economy strong.

This week we will see two very clear and distinctive alternative plans for our nation's future. We will see a government in chaos and confusion, a government that is scrambling at the last minute to redo their homework sums before the deadline. In contrast we will see a strong, united coalition team that is prepared, willing and able to lead this country into a better and brighter future, a team that has a strong vision for Australia and the practical plans to ensure that we get there. These two integral differences—the two choices that Australians will make this year—are illustrated in this debate about aged care.

The Aged Care (Living Longer, Living Better) Bill 2013 and related bills are a ramshackle packaged offered by this government. They have failed to address the key industry concerns and challenges of addressing real reform for our seniors. This is a wasted opportunity for us to have appropriate and real reform in this sector that will provide stability in the years to come. This package of bills fails miserably to do just this. The aged-care sector—which I have been consulting with in my own electorate and more broadly—has faced five years of neglect from those opposite and now definitive action is needed to ensure that aged-care services are providing effective care for older Australians.

Debate on this package of bills is rushed. My question to the minister is: why the rush? This government has spent over a year sitting on its hands after announcing its aged-care plans, but it has failed to bring any legislation before the parliament. The minister is now attempting to rush through this legislation. The minister has brought forward the reporting date of the Senate Community Affairs Committee inquiry, reducing the amount of scrutiny and consideration given to legislation that will amount to significant fundamental changes to the aged-care sector. Already from the Senate inquiry we know that the department is unable to answer many of the questions raised in these bills and that, instead, the minister's department has advised that the detail would not be released until after these bills were passed by the parliament.

Why is this government so determined to avoid proper scrutiny of the finer detail of this legislation? Why is it so determined to push it through the parliament without adequate time for consultation? This is a particularly pertinent question, as most of the legislation does not come into force until July 2014, and that which comes into force in July this year can be dealt with within existing legislation. As I said earlier, this is a policy area that requires significant reform, but it cannot be done on the run. It needs time to ensure that the changes will benefit the sector and the older Australians it cares for. With such an emphasis being placed on aged-care services in the coming years, it is vital that we make well-informed, sound judgements now to avoid ad hoc, bandaid patch-ups later. Might I also refer to a couple of comments from LeadingAge, an aged-care group: every 71 minutes, another older Australian is denied the care they need; $90 million is the recurrent shortfall between income and the real cost of care for those in residential facilities; and 83,000 new beds need to be built in the next nine years, at an estimated $17 billion, to cater for the emerging needs of the elderly.

The Productivity Commission's report recommended a shift from the current ratio system of aged-care licenses to a system where aged care would become part of the health system. It was clear that the amount of red tape and regulation faced by the sector needed to be reduced. Additionally, the Productivity Commission report recommended: the creation of a single Australian seniors gateway agency; that funding be replaced by a single, national care co-contribution regime which would apply across the aged-care system, whether services are delivered in the community or in a residential aged-care facility; greater transparency of care prices; and a range of capital funding options and contributions for accommodation costs.

This package is another example of Labor spin at its best. When the government announced this package, it tried to have us believe that it was putting an additional $3.7 billion toward aged-care funding. Unfortunately, the figure for new funding was closer to $577 million—a small portion of what was promised and what is being called for by the sector itself. This government is attempting to pass off cost-cutting measures and funds shifting as new spending. The most disappointing result of this is that this legislation acts more as a smoke-and-mirrors measure rather than a true problem-solving policy direction. This package of bills does not resolve viability issues for aged-care service providers.

This package of legislation effects changes in four key areas: residential care, home care, governance and administration, and the administrative and consequential changes. The bills will mean that those who enter residential care from 1 July 2014 will face a new means test calculator combining income and assets tests. There will also be new annual and lifetime caps on means-tested care fees under this plan. Under these bills, those in home-care situations will face changes to the way that home-care subsidies and fees are calculated. Many care recipients will be required to contribute more to the cost of their care under income-tested care fees. New annual and lifetime caps will also apply to income-tested care fees. Additionally, a new Aged Care Pricing Commissioner will be established to make decisions on pricing issues.

These bills will add even more regulation to an already overburdened sector. The biggest failure of this package is its failure to address the already over-regulated nature of the sector. The current structure of the aged-care industry already flags some serious concerns about the ongoing viability of service provision. This is an issue that providers have been extremely vocal about. With a major reform of the sector, it was assumed that it would be one of the fundamental points addressed by the government. Unfortunately, the minister has glossed over this concern and has even gone so far as to introduce new red-tape measures, which will make it even more difficult for service providers. Up to 89 per cent of aged-care facilities are set to face 'unrecoverable' losses of revenue under these changes. Anecdotal evidence suggests that aged-care nurses are spending a third of their time on paperwork. This is an incredible regulatory burden that is directly detracting from their ability to provide care to patients. This legislation increases the red tape, which will result in even less time for patient care and much more time on paperwork.

Service providers in my electorate have contacted me regarding these bills to express their deep concerns about the implications for the industry. Already, we are aware that 60 per cent of aged-care facilities are operating in the red due to the increasing compliance demands of government. Providers are handing back their licences and walking away from the sector, because aged-care service provision is simply no longer viable. Under these changes, as revealed by the Senate inquiry, aged-care facilities with less than 60 beds will be so severely impacted that they will be forced to either shut down or amalgamate with other facilities. Even those with more than 60 beds will be under increased pressure with less funds for patient care. Take this example from one service provider: under the changes, they will receive $31.92 less for a patient each day, amounting to $220 less a week. Couple this with increasing wages and it becomes very difficult for a service provider to continue to provide the same level of optimum care to patients. While we are already calling out for additional aged-care beds, the last thing that we can afford to be causing through policy implementation is a further shortage of aged-care beds.

Senior Australians are finding it more and more difficult to obtain places in aged-care facilities. Not only this, but they are finding it more difficult to access the services they require in the context that they desire. There is a pervading opinion held by both older Australians and health professionals, and supported by a growing body of evidence, that the aged-care sector is unable to adequately provide for the complex needs of Australians. This is adding momentum to a growing trend that Australians want to spend longer in their own homes and receive care while remaining in their own homes.

The fear that more Australians are having about being able to access aged-care services should be of serious concern to the government, which is simply not doing enough to address these concerns under this legislation. The government has not listened to what the sector is calling for. Despite its protestations, this government has not undertaken appropriate consultation with industry to determine what is needed. Instead, this government is attempting to ride roughshod over the industry and force changes that are not practical.

We are aware that the proposals the government provided to industry were rejected by providers. Rather than true reform, we now know this is no more than a move to unionise the aged-care sector. Another particularly concerning factor about the way that this legislation has been shaped and the compliance that it intends to thrust upon aged-care service providers is the way that it is seeking to underhandedly increase the union presence in this sector. These bills will mandate a workforce compact and this compact is not supported by aged-care service providers. It will force them into enterprise-bargaining agreements that will effectually subsidise union membership in the industry.

The workforce supplement will see aged-care providers with 50 or more beds required to enter into enterprise-bargaining agreements simply to access funding. This is no less than a blatant attempt to increase union interference under the guise of legislative reform. Further, the minister cut $1.6 billion last year from the Aged Care Funding Instrument in order to finance this $1.2 billion workforce compact. In the words of one of my local aged-care service providers, it is 'taking funds from direct care and placing it into a pool set aside for wage increases without allowing anything to go to on-costs; furthermore, it is totally unaffordable because for every dollar received, the employer has to find another $2 on top of whatever we have committed to in our EBAs.'

This legislation is taking money out of service provision and redirecting it to union dues. This is not a good outcome for the thousands of older Australians whose care will be jeopardised through the loss of funding from services. It is the thousands of Australians who will be adversely affected through these changes for whom we need to be making the right decisions. This is our opportunity to have reform of aged care done well, in a way that assists providers to ensure the best quality of care is provided to Australians in the context that they wish to receive care.

These bills simply do not have the detail about what these changes will be and there is a very short-sighted attitude from those opposite, who are trying to push through these changes without seeing the outcome of the Senate inquiry into what the implications will be for the industry itself.

Darren Chester (Gippsland, National Party, Shadow Parliamentary Secretary for Roads and Regional Transport) Share this | Link to this | Hansard source

I rise to speak in relation to the Aged Care (Living Longer Living Better) Bill 2013 and cognate bills, and to express my support for the amendment moved by the member for Dickson. These bills are the legislative response to the government's aged-care reform package, which was announced in April 2012. As I move around my community of Gippsland and talk with representatives from the aged-care sector and with the aged-care providers themselves, I have been concerned that this government does not have the confidence of the industry when it comes to delivering this reform package. That is why I support the amendment put forward by the member for Dickson to defer this debate until the Senate committee has reported. I do not trust this government to get it right on this very important issue. I know that may sound harsh, but I will give you one example of this government's dubious motives in relation to aged-care reform—and the member for Hasluck touched on it in his address.

I have a copy of the Living Longer Living Better documents sent to aged-care workers by the minister and I share the member for Hasluck's concern that this is just a union membership campaign. But it is not just members of the Liberal Party and members of the National Party who are raising this concern, as the industry itself—including some of its peak bodies—is raising concerns in relation to the minister's motives on this issue. I quote from a media release of 24 April 2013. It was distributed by the Victorian branch of Leading Age Services Australia and the headline was 'Government delivers another "monumental stuff up" for age services'. It went on to say that the peak body for age and community care 'has heavily criticised the Minister for Ageing, Mark Butler, and the Department of Health and Ageing for last week's Workforce Supplement mail-out'. It said Leading Age Services Australia CEO John Begg described the mail-out as 'deplorable interference and a true waste of government money', saying it was an example of government attempting to influence workers outside the normal course of the industrial relations process. The media release went on to say, in quoting Mr Begg:

"The government does not control or dictate wages outcomes for any approved provider and does not pay a single aged care worker. This is a plain interference with the relationship between employers and employees."

"Providers across the country view this as a backhanded action by the government to unionise the age services workforce, by promising wage increases without any commitment of real funding" …

Mr Begg went on to describe the package of information in the mail-out as 'propaganda, printed and posted at great cost to taxpayers' who, along with the age services sector workforce, certainly deserved better. I have one other quote from Mr Begg which is worth repeating here this afternoon:

"What the public need to know is that the funding model for aged care is woefully inadequate, not based on the true cost of care and not properly indexed. This is yet another example that the government does not fully understand our business of providing care to our ageing population" …

So it is not just a matter of coalition members coming into this place and seeking to score points for any political purpose. These are very real concerns being raised by peak bodies within the industry—in this case Leading Age Services Australia's Victorian branch—and the government would be wise to listen. It is simply hard to trust the government when the industry groups are so scathing in their assessments of this legislation. I also refer to the comments made by the shadow minister when he moved this amendment. I think he makes the case very well as to why there is a need to defer consideration of all this debate until the Senate committee reports. The member for Dickson said:

The government trumpeted the release on the day as a revolution for the sector. The government continues to claim that this policy is a $3.7 billion investment when it is not … Looking at the finer detail, the proposals are nowhere near as ambitious as first made out. That has been a current theme across the last six years under the stewardship of this government. The government is saving over $560 million through means testing, and they include that as part of the so-called $3.7 billion investment. Over $2½ billion is being redirected from existing programs, including $1.6 billion from the Aged Care Funding Instrument. Places and funding are to be transferredfrom residential care to home care, and funding will be cut from the Long Stay Older Patients initiative. The net investment over four years is just $284.6 million, not $3.7 billion.

The industry knows that this government is trying to ram through its legislation without giving full details of the regulations. The shadow minister has belled the cat in relation to the fact that the so-called $3.7 billion investment is really a $284 million one. I call on the government to come clean with the Australian people—and come clean too with the aged-care services providers, the aged-care workers and older Australians who may require care in the future—and acknowledge that there are many, many problems with the legislation before the parliament.

Like some of the earlier speakers, I have the opportunity to visit aged-care providers in my electorate on a regular basis. Quite possibly the greatest concern that is expressed to me is the issue of the ongoing financial viability of the residential service providers and the difficulty in ensuring that regional Australians have the opportunity to age in place, that regional Australians have the opportunity to remain in their communities when they have a need for additional services. On top of that there is a concern about the regulatory and bureaucratic burden becoming so onerous that it is all becoming increasingly difficult for the not-for-profit sector, which is such an important part of the industry in regional Australia. There is the concern for the not-for-profit sector that it will simply not be able to deliver services into the future.

I am someone who believes there is a right way and a wrong way to grow old in your community and I think the government has an important role in ensuring the right way for regional Australians is that they have the dignity of remaining in their community for as long as possible, to be supported in their own home if that is their choice and, if necessary, to access residential care in their own communities. The aged-care sector in my electorate is well served by hardworking and dedicated staff. I would be the first to acknowledge that they are not particularly well paid for the work they do. Theirs is a difficult task. We are also well served by some extraordinary board members, many of whom give decades of service to their local aged-care provider and donate their time, particularly in the not-for-profit sector. Then we also have people who volunteer to fundraise to support the services in my community. So there is a real partnership and a real willingness in regional communities to make a contribution to ensuring that older Australians have the opportunity to remain in their homes or in their own communities for as long as possible.

I would argue that Gippslanders and many other communities around regional Australia are actually already committed to helping meet the needs of an ageing population. But there is a real concern in my community and throughout regional Australia that this government has not been on their side over the past six years. This government has promised a lot in relation to aged care but has delivered precious little in terms of results on the ground in supporting older Australians in their communities. So there is a growing awareness in our community that providing for the needs of an ageing population is going to be one of the most critical issues facing a future federal government. The figures are well known. Across Australia the number of people aged over 65 is expected to increase from 13.4 per cent of the total population to 25.3 per cent of the population over the next 40 years. In a community like Gippsland, which has some highly sought after retirement destinations, we can certainly expect to follow that baseline trend. We also know that as medical science advances we can expect the number of very old Australians, those aged 85 or more, to increase as a proportion of the population. We know that people will be living longer in the future with more complex health needs. We know that the staff required to support them in aged-care facilities and through the residential care arrangements—so the staff required for those services—will have more complex training needs as well. I acknowledge that the government has a pivotal role in working in partnership with the aged-care sector to ensure that ageing occurs in that dignified manner I referred to earlier.

These people, particularly in regional communities, cannot be catered for with a one-size-fits-all approach driven out of Canberra through some bureaucratic model. These people have their own individual needs; they have their own individual expectations; and providing services to the frail and aged in the most appropriate manner to meet these individual requirements will demand flexibility and innovative thinking. I do not believe that this government, and the bureaucracy based here in Canberra, has grasped the need for that flexibility and innovative thinking when it comes to regional communities. The one-size-fits-all approach which is repeatedly driven out of Canberra and into our regional communities is simply incapable of recognising the expertise that is on the ground and the willingness of community volunteers to participate in solving some of these problems. I urge the government and the bureaucrats based in Canberra to respect the people on the ground, to listen to their view, particularly in regional communities like Gippsland, and listen to the genuine concerns that have been presented during the course of this debate over the past 12 months.

We will need to have more flexibility in funding and our service delivery arrangements to meet the needs of different communities across our nation. I do not want to be alarmist in saying this but I am concerned that our aged-care system right now is on the verge of crisis. I do not believe it is well placed at the moment to meet the recurrent or the future needs of an ageing population. The industry representatives who talk to me, as well as the board members and some of the workers in the aged-care sector, say that it is getter harder, rather than easier, to provide a financially viable service, as I said, particularly in our regional community.

The regulatory burden which I referred to before is becoming increasingly onerous and is stifling investment. It is also destroying confidence in the future of the industry. There is no-one who works in the aged-care sector who thinks that health and safety requirements should be weakened or diminished in any way, but the amount of red tape and the time spent in mindlessly filling out forms, and that time commitment being taken away from the aged people themselves, are a major concern. It is embedding an additional cost in the structure of running these organisations which is becoming increasingly frustrating for the operators, particularly in the not-for-profit sector where there are so many people of enormous goodwill donating their time to try to provide those services throughout rural and regional Australia.

Like most of those in this place, I am a very big supporter of making sure that older Australians have the opportunity to remain in their home for as long as they want to, if that is their wish, and as long as it is safe to do so. That presents some additional challenges in places like Gippsland—and, I acknowledge, also in Maranoa—where there are many rural and remote areas. There are cost challenges in moving staff around those communities and providing services on the ground. I also acknowledge it is more expensive to provide full-time residential care in those communities. But it is much easier and cheaper for governments if they can ensure that people have the access to services in their own home rather than moving to a nursing home-type environment too early in their life. As long as it is safe to do so, we need to encourage people to remain in their own homes in their later years and enjoy a healthy and active retirement.

In addition to the professional services and the workforce that will be required to support this choice that people will make, I believe there is a real opportunity for us in this place to make sure that we get better at providing opportunities for volunteers to work in this space as well and giving them the skills to support older Australians. As the baby boomers retire we know there will be a bigger pool of potential volunteers out in the community, and Australians have a strong ethos of supporting others through volunteering. As the baby boomers retire we need to make sure that the regulatory burden is not so cumbersome and so bureaucratic that it stops people from volunteering to assist their fellow Australians—in this case, older Australians in their own home. I see a real opportunity for this government and future governments to support the choices made by older Australians to remain in their own homes, so not only utilising the professional workforce but also ensuring that our volunteers have the skill base and are given the opportunity to make a contribution after their days in the paid workforce are over.

I said at the outset that the coalition has legitimate concerns about the timing of this legislation and the unseemly haste of the government to get it through before the Senate committee reports back. I call on the government to show the community more details in relation to the regulations which are proposed to underpin these bills. I fear that it will be up to a future coalition government—if, indeed, the coalition is successful in September this year—to clean up some of the mess that will exist in the aged-care sector.

As I travel throughout regional Australia, boards have expressed concerns about their financial viability, about the regulations and new layers of bureaucracy being imposed upon them. I call on the government to respect the amendment proposed by the member for Dickson and to delay the debate on this bill until the Senate Community Affairs Legislation Committee has the chance to fully examine the impact of these changes on providers, older Australians, their families and carers.

Alan Tudge (Aston, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Aged Care (Living Longer Living Better) Bill 2013 and the package of bills before us. The aged-care sector is at a crossroads. We have an ageing population. We have providers who are operating in the red, and we have a sector which has been reviewed and reviewed and reviewed but is not getting any reform to address its problems. This package of bills before us does not address the problems either. Indeed, they may just make things worse. The sector urgently needs reforms and urgently needs the governments that can guide the sector through the many challenges it faces. Unfortunately, I do not believe that this government has the capacity to do that.

In the time that I have available I would like to talk about four things. Firstly, to provide a bit of context within which we debate this package of bills and debate the aged-care sector more broadly. Secondly, to discuss some of the problems facing the sector right now that need to be addressed. Thirdly, to go through the bill itself and point out some of the issues which we have with the bill. Finally, to talk about what the coalition's alternative proposals are.

Before doing so, I make a point about the process in arriving at this situation. The member for Gippsland made this point also. This package of bills is supposedly in response to the Productivity Commission inquiry and the recommendations made by the PC. Those recommendations were made well over 12 months ago, and it has taken this long for those recommendations to be placed into legislation and brought into the House. Now we have the situation where the government is trying to rush through the legislation without proper scrutiny and without proper thought as to the implications of the bill. Furthermore, this is without proper consultation with the sector. I support the amendment to the bill which the shadow minister for health has put forward, which would see the Senate committee inquiry complete the course of its work before we debate the bill further. To me, that makes sense. We have a process in place that can further analyse the bill and further discuss with the sector what some of the issues are so that we can improve upon the bills if possible.

I go to the first substantive point to look at where we are at the moment. What is the context in which we are debating this particular package? There are three things. The first is that we have an ageing population, which means that there will be much more demand for aged-care services. At the moment, around nine per cent of our population is aged 70-plus, but this is expected to rise to 13 per cent by 2021 and rise again to 20 per cent of the population by 2050. Those aged over 85 years, who are the main users of aged-care services, will increase from about 400,000 people today to about 1.6 million people by 2050. We are going to have a huge increase in demand for aged-care services over the years and decades in front of us.

The second contextual point is that despite this massive demand on the horizon we have an aged-care sector which is seriously in strife at the moment. Indeed, many are struggling to stay afloat, and only about 40 per cent of aged-care providers are profitable at the moment and operating in the black. This means that over half of our providers are losing money today and are at risk of failing. At a time when we have this huge demand, this is of great concern to all of us here in this parliament and it should be of great concern to residents across Australia.

The final contextual point is that we have had review after review of the aged-care sector in the last six years under this Labor government. There have been 20 reviews and three Productivity Commission inquiries, but despite all of those reviews and those inquiries we still have not had proper reform to address some of these issues and the structural problems I have just articulated. Those reports, particularly the Productivity Commission reports, that I have referred to have been very good ones. They have outlined the problems in the sector and they have outlined the nature of the demand going forward. They give a clear picture of what needs to be done. I have found that in my discussions with my aged-care providers in my electorate they echo many of the problems identified in the Productivity Commission's report and in the other reviews which have occurred over the last few years.

Most recently, I had a roundtable discussion with many of the aged-care providers in my electorate, along with the shadow minister for aged care. We discussed many of the issues. They all do a fantastic job under pressing circumstances, and they raised three particular matters. Firstly, they talked about the amount of paperwork which they currently have to deal with. One of the providers from my sector pointed out that about 30 per cent of nurses' time can be filled in completing paperwork—not attending to the residents of that facility but just doing paperwork. It is a ridiculous situation. Secondly, they pointed out the general difficulties in making ends meet and that many of them are struggling and cannot necessarily see a rosy horizon in front of them. Thirdly, they discussed how the regulations on top of further regulations are making it increasingly difficult for them. Finally, they discussed the problems which they foresee in the package of bills in front of us.

This package of bills has been rushed into this parliament and has not had full consideration and consultation with the sector. There are issues within this bill which need to be addressed. The first is that it does nothing about the burden of red tape and paperwork upon a sector already struggling to cope with the cost of government compliance. These bills are in addition to other changes in the Living Longer Living Better aged-care package, and the burden of red tape has already been increasing through the implementation of the Aged Care Funding Authority, and this bill does nothing about the strangulation of aged-care providers by this red tape. How does filling out yet another form ensure that the quality of service in our aged-care facilities is improved? Again and again they say they are spending more time on red tape, and this particular package just adds to the burden of it.

The second issue which aged-care providers have raised with me in relation to the package is the potential spike in labour costs which will be caused by the workforce supplement. The coalition is committed to seeing the wages of all workers rise. Under the Howard government, real wages increased by 20 per cent. However, wage rises must be sustainable and they must be affordable. At a time when only 40 per cent of aged-care providers are operating in the black, one must ask the question: how will they pay for the higher wages which the government is insisting upon through this package? I am worried that this will place further pressure on providers, particularly in my electorate, and potentially put some out of business altogether.

Providers such as Baptistcare have expressed their concerns to the government directly and publicly, stating that for every $1 they receive under this workforce supplement they will need to put in an additional $3. While the government is claiming that this is a direct government subsidy to boost wages of low-income workers in these aged-care facilities, when it comes to the crunch the government is only providing a quarter of the overall cost of this wage increases. The CEO of Baptistcare summed it up when she said:

We are losing money out of the system faster than we are getting money in.

There is real potential that without proper consultation these changes will cause a crisis in aged care, creating even more problems than they are apparently solving.

The third critique of these bills is there is a blatant attempt to unionise the aged-care workforce through the workforce supplement. All the aged-care sector have raised this; almost everyone you speak to is aware of this tactic. Under the supplement, providers with 50 or more beds need to enter into an enterprise bargaining agreement in order to access the funding. Those with fewer than 50 beds do not have to enter into an EBA. However, they must comply with the conditions of the supplement in order to access the funding. This is a blatant attempt by the government to force our aged-care workers into unions. It seems that the government cares more about boosting union mates at United Voice or the ANF and the disgraced Health Services Union than it does about getting genuine reform in the aged-care sector. We are not the only ones that have raised this issue. Many have raised this publicly and many have raised this privately. Almost every speaker on this side of the House has made the strong point that this is trying to re-unionise the workforce rather than trying to help the aged-care sector.

Let me come to my final point—that is, the coalition's commitment to the aged-care sector. We understand the sector needs real reform from a government that is fair dinkum about the aged-care sector. It needs reform from a government committed not to increasing red tape and pushing its own political agenda through forced unionisation but to ensuring that our aged-care providers survive and thrive. The coalition is committed to the delivery of a high-quality, affordable and accessible aged-care scheme that meets the needs and preferences of older Australians. Our proposal is that for the first time in Australia we will institute a four-year agreement for aged-care providers which will address the pressing concerns faced by the sector.

What this means in reaching an agreement is sitting down with peak bodies and negotiating, consulting and working out an agreement of mutual benefit to the government and the sector, in much the same way that the Pharmacy Guild agreements are struck. Overseeing this agreement will be an aged-care provider agreement working group which will flesh out the details of the agreement and listen to the recommendations contained in the Productivity Commission inquiry and any other relevant reviews. We will establish an aged-care provider agreement steering committee of keys stakeholders to oversee the administration and the implementation of the agreement and to provide advice to the minister on a regular basis. Most importantly, this agreement-making process must be rooted in reducing red tape not increasing it. It must also be rooted in the actual concerns of the aged-care sector today and into the future. If we do not get this right and we do not get a system which is sustainable and affordable and where the aged-care providers themselves can operate with surpluses rather than deficits then we will have a further crisis in the aged-care sector.

As I said at the outset, the statistics show that there will be enormous demand on aged-care providers in the years and the decades ahead. We will have four times as many people over the age of 85 by 2050 than we do today. Those people will need aged-care services. But if the aged-care sector is not thriving, if it is not operating in the black and if it does not have the support, the reforms and the cooperation of a government wishing to see it thrive then I fear many residents will not get the aged-care services and provisions that they will need in the future. I commend the amendment to the House and recommend that the further debate on this be postponed until the Senate's inquiry has been completed.

Judi Moylan (Pearce, Liberal Party) Share this | Link to this | Hansard source

I begin by complimenting my colleague the member for Aston on a fine speech and for highlighting some of the difficulties and the challenges that we face in this sector. I welcome the opportunity to raise some of the issues and concerns which have been made known to me by people in the aged-care sector in Western Australia and, indeed, in other parts of the country. Over one million older Australians currently receive aged-care services. As life expectancy continues to grow, the proportion of people requiring complex care for conditions that present later in life, such as dementia, will grow as well. The aged-care sector is already under significant strain. Without clear efforts now to address the persistent structural weaknesses in the system, it will buckle under the future pressure.

The suite of reforms contained within these various bills, known as the Living Longer package, is another attempt to bring much-needed reform to the sector. That attempt has been going on for many years and I had some considerable involvement with it in 1996. But if it falls well short of the many positive recommendations that the Productivity Commission outlined in its 2011 report Caring for older Australians then we are not doing the job we need to do in this place. In that report the Productivity Commission noted a number of critical deficiencies with the current system. Among the list is that aged-care services are limited; the quality of care across providers is variable; the coverage of government subsidies is inconsistent or inequitable; there are difficulties in obtaining finance, particularly to build high-care residential facilities; and there are significant staffing constraints in the industry. Each of these is a critical deficiency that must be addressed to ensure that a viable aged-care industry can continue in the future to provide the services that will increasingly need to be provided.

But the suite of reforms currently proposed is just as likely to exacerbate those persistent problems rather than ameliorate them. A glaring example is last year's $1.6 billion cut to the aged-care funding instrument. The ACFI is the principal method of providing financial assistance for the personal and lifestyle costs of residents in Commonwealth subsidised residential care. With Aged and Community Services Australia warning during the 2012 budget that only 40 per cent of aged-care service providers are operating in the black, this blow will further affect the financial viability of a number of aged-care providers, particularly those in rural areas, which have always really been problematical. They have special challenges.

That cut of $1.6 billion is now being used to fund a compact that has been struck between the government and the unions in an effort to increase the notoriously low wages of staff in the aged-care industry. But instead of delivering a uniform rise, as is much needed, the compact will only serve to create a greater gulf in the sector's wages. That is because to access the workforce supplement, which is intended to boost the wages of employees, providers must substantially increase wages before they are eligible for further government funding. Aged and Community Services Western Australia in their submission to the inquiry into these bills by the Senate Standing Committee on Community Affairs noted that 'in one instance, a 31-bed residential care provider has estimated that to receive $17,000 from the supplement, it will cost them an extra $30,000 to meet the government's requirements'. By crafting this so-called assistance in such a manner, the government is really being disingenuous. Those small providers that already rely on government assistance, and I have to say many of those are in regional and rural areas of Australia, have no ability to meet such wage increases, yet it is precisely these workers who require it the most.

Julie Christensen is the CEO of Narrogin Cottage Homes. I have known Julie for many years, Narrogin until quite recently having been part of the Pearce electorate. Julie candidly described the effect in her evidence to the Senate committee, saying:

I am very happy to let the committee know right now that we will be one of those who will not be signing up for the workforce supplement. We cannot afford it. I know Ray was saying it was two for one, but in my particular case, if you look at our on costs, I think you will find that it is 3.25 for one. I am running at a loss now. I am hoping we will balance the books next year. I cannot afford anything else. I cannot afford to expose my community organisation, and the assets that belong to the community, to risk, and the decision to sign on to the supplement would put my facility and my organisation at risk.

I know the facility, I know Ms Christensen. It is being well run. She is a very experienced operator, and this again is a facility in a country town. These are people who really do know what they are talking about.

With a significant number of aged-care providers being not-for-profit organisations, as this one is, any additional costs must be passed on to those that they are caring for, or those extra costs result in loss of staff, or lower standards in the facilities. This was confirmed in the handwritten submission by LHI Retirement Services, a South Australian aged-care provider that cares for over 1,000 residents and is also a not-for-profit organisation. LHI noted that these bills 'clearly add significant costs, in some cases over 200 per cent'. It went on to say:

LHI will receive $140,000 from Government in the first year under these changes, but will be required to contribute a further $240,000 from its own resources. This will result in staff reductions and poorer services to residents.

So rather than increasing staffing levels or providing more assistance to aged care, as the Productivity Commission has identified as being necessary, these changes will do exactly the opposite. It must be stressed that this is not, and should not be, a choice between higher wages for carers and the ability of the sector to accommodate that. These pressures are the direct result of a deliberate policy choice by the government. The model chosen by the government forces providers to choose between paying the higher wages that carers deserve and the standard of the facilities that the aged-care residents enjoy. That is a reprehensible step.

Despite claims that the government is investing more in aged care, it should be noted that Commonwealth own payment outlays, that is, payments for areas such as aged care, have had zero indexation for the 2012-13 period and are estimated to be only increased by 1.5 per cent in 2013-14. Yet operating costs for aged-care providers have increased, on average, between 3.5 per cent and 10 per cent per annum. The cost of providing aged-care services is clearly outstripping the piecemeal funding that the government is putting in, but there is no clear commitment from the government to remedy this situation.

Another example of the government's desperate bid to shore up its books can be found in the changes relating to accommodation bonds. Currently, where a person has financial capacity to help pay the cost of their care, they are required to pay an amount relative to the standard of care they are receiving. Payment can be made one of two ways. The most common is for a person to pay a large upfront amount, usually through the sale of their home, which is drawn down over time. Any amount unused after care is no longer required is refunded. These are called RAD bonds. The other method is to pay a daily rate through a person's pension or own funds. This is called a DAP bond. Under the asset and income tests changes in these bills, it may be more beneficial for a person to pay a daily rate rather than to pay a RAD bond. The policy rationale for this move was outlined by the ANZ Bank in its submission to the Senate inquiry. It noted:

… the RAD bond pool is currently circa $12 billion. DAP bonds are less than 10% or circa $1 billion in notional value. The government guarantees the providers' RAD liability to repay residents upon leaving a residential facility. Treasury apparently sees this $12 billion RAD liability as an unacceptable contingent liability of Government.

As a result, the ANZ concluded

… the proposed changes would seem to be an implied policy change that over time RADs are replaced by DAPs.

It warned:

A significant shift from RAD to DAP would potentially have adverse consequences for the financial viability of many providers as well as curtailing investment appetite.

That would be a disaster for the aged-care sector.

The change is significant as the large upfront payments are used by providers to fund construction, renovation or expansion of their facilities. That is why the government then guarantees the RAD liability: the person's funds are in the bricks and mortar of the building. Without the upfront pool of money, providers will either be unable to meet new demand or will have to borrow more money to provide facilities. Clearly, the bank is warning that this could become very difficult.

The submission to the Senate inquiry by the Aged Care Guild sets out the potential consequences of this policy shift. It gives the example of a 100-bed facility that would cost $20 million to build. On all its metrics, such a facility would be comfortably within the loan-to-value ratios that banks use as a ceiling for the amount of money that will be loaned for construction and operational costs. The guild went on to explain that if 60 per cent of new residents chose to pay via the daily rate then in only two years the net debt of that facility would go from $5 million to over $12 million, breaching all the covenants that the bank would set. It means that the facility would be completely unviable and would have to be shut down.

With the number of people requiring aged-care facilities set to more than triple by the year 2050, getting these policy settings is absolutely imperative. It is not an optional extra; it is absolutely necessary, and we need to recognise in this place the growing pressures on the sector. I support the amendment that has been brought forward by the member for Dickson to delay these bills until the Senate inquiry has had the opportunity to report on the bills, at the very least because passing the legislation as it is in this place could certainly have major ramifications for those providing for the aged-care sector now and in the future.

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Link to this | Hansard source

There are few more pressing issues that face Australia today than that of aged care. Our population is getting older: today at least one out of every seven Australians is aged over 65, and that number is predicted to double in coming decades. By 2050 over 3½ million Australians are expected to use aged-care services at some point each year. This issue of aged care is of great significance to my electorate of Wentworth, where there are more than 40 aged-care facilities and 11,000 residents over the age of 75.

I have visited many of the very fine aged-care facilities in Wentworth. Only last week I was at the Montefiore Home in Randwick being given lessons in making challah by the residents. There, as I have been at the other aged-care facilities I visited in my electorate, I was impressed by the commitment of the staff, the range of activities and strong relationships that have been developed and, of course, the use of the very best technologies and medical science to maximise the experience of the residents and their quality of life.

However, achieving high standards in aged care is never easy, and it is becoming increasingly difficult. There is growing and alarming evidence that the aged-care sector cannot provide the care that Australians expect. Despite an increase in demand, only around 40 per cent of residential aged-care facilities are operating at a profit. At a time when there is increasing demand for services, providers are walking away from the sector due to the lack of viability in providing high-care beds and the increasing compliance demands of government. Providers are handing back licences, and senior Australians are having to wait longer and travel further to find a bed, thereby placing higher pressure on the public hospital system and on families. This is in stark contrast to the situation under the coalition government, when aged-care places were highly sought after.

The Productivity Commission reported on this matter in 2011, and the slowness of the government in responding to it, of course, is a remarkable feature of this debate. It took the minister over 250 days to respond to the Productivity Commission report. But, in any event, the report, Caring for older Australians, set out the key difficulties confronting the aged-care system. It is difficult to navigate. Its services are limited, as is consumer choice. Quality is variable. Coverage of needs, pricing, subsidies and user co-contributions are inconsistent or inequitable. Workforce shortages are exacerbated by low wages, and some workers have insufficient skills. What was called for was real leadership and real change. Instead, there was, as I said, over 250 days of nothing happening before the minister finally responded to it. The report from the commission recommended a reduction in regulation over price and supply in aged care, recognising that overregulation in the industry was a major impediment to investment. However, this package of bills intends, contrary to the recommendations of the Productivity Commission, to introduce additional regulations to pricing. Labor, regrettably, has ignored the bulk of the report's recommendations and merely cherry-picked those that suit its agenda.

Let me turn to how this disappointing package directly impacts my own electorate of Wentworth. I recently visited the Advantaged Care aged-care complex in Bondi and met with the managing director, Mr Michael Kresner, to discuss the current policy environment for aged-care service providers. Mr Kresner made a submission to the Senate inquiry on these bills. This is the inquiry which should be allowed to complete its report before the debate on these bills is concluded in this House; the government is not prepared to do that.

In any event, Mr Kresner expressed very real concern about the package. He noted that the Productivity Commission's report into aged care recommended a reduction in the regulation of pricing in aged care to encourage an innovative, sustainable and strong future aged-care industry which would have the flexibility to deal with our ageing population's expectations. This is a quote from his submission:

Due to the relatively high proportion of wage costs to overall return, providers are using too many high level resources to meet regulatory compliance and do not have the … head space or flexibility to think out of the box to deliver on the flexible care models the public is calling for.

…   …   …

Market driven accommodation bonds, has given investors the confidence to invest, know they will be able to pay back debt to acceptable levels and achieve returns that justify investment over the long term … oversupply has often led to providers cutting their bonds to achieve occupancy in the short term.

His submission says that, in the eastern suburbs of Sydney and the south Gold Coast, there has been an:

… over supply in recent years where providers have had to be intensely competitive.

The government's proposed package of bills adds yet more red tape to an already over-regulated industry. The coalition, on the other hand, has committed to cutting a billion dollars of red tape and regulation costs on business each year. We will make sure that we maintain a high standard of care and safety but will create in this industry a regulatory environment that allows aged-care providers to do what they do best—looking after senior Australians. Labor's proposed package is seeking to further regulate pricing in aged care, and that will have the effect of restricting innovation and threatening the viability of our industry in a period where investment desperately needs to be encouraged. In every industry, putting a cap on the price will drive capital away. Mr Kresner is one of the few people who are investing in aged-care facilities today and he has built four new aged-care facilities in the last decade, investing close to $70 million in the process.

Speaking with aged-care providers in my electorate, such as Mr Kresner and Howard Smith from Greengate, two major, detailed issues with the bills have emerged as common problems for providers: the regulation of accommodation bonds, on which I have just touched, and the Aged Care Workforce Supplement. Accommodation bonds are an important part of the funding model for aged-care providers, being refundable deposits that residents pay for living in an aged-care facility. They allow operators to repay debt for constructing new facilities. Accommodation bond pricing is currently market based. The new legislation proposes regulating accommodation bonds, including introducing a new bureaucrat, the pricing commissioner, to determine bond pricing. For bonds over $400,000, which is the majority of the bonds in Wentworth, there are no defined approval criteria. It is unclear how the pricing commissioner will determine the price for these bonds or whether the decision will be discretionary. Accommodation bond pricing approval will not be determined for another year, apparently, which will lead to further uncertainty for the industry, and there is unlikely to be any appeal rights if applications fail or pricing is reduced.

The proposed regulation of accommodation bonds is highly troubling for operators and has created significant uncertainty. Indeed, investment in the sector has been significantly reduced because of this uncertainty and, for many operators, has ceased since 2010 when the Productivity Commission commenced its report. This uncertainty is set to continue until at least the middle of next year when the pricing commissioner commences issuing its pricing approvals.

All of this is a terrible outcome for the aged-care industry, given that the sector already suffers significant underinvestment, especially relative to the forecast demand. We have to ask: why is this government seeking to limit private investment in aged care when the baby boomers are starting to consider where they will live when they become old and infirm?

Those operators who are already in the process of constructing new premises have based their investment decisions on accommodation bond pricing in the current market. If the pricing commissioner does not approve their proposed pricing, and with no appeal rights, what will this mean? Will they be immediately in default of valuation and debt-funding covenants? What motivation is there to provide choice for aged-care residents when the government determines pricing, not the market? The coalition believes that the quality and choice of accommodation for residents will be reduced—and that, of course, has been the tenor of the submissions made to the Senate inquiry.

I now turn to the matter of the Aged Care Workforce Supplement—this union recruitment scheme using public money to build up the ranks of the United Voice union. The $1.2 billion workplace supplement, which will supplement the wages of some in the industry, is an issue of particular concern to the coalition and has been consistently raised as a major concern by aged-care providers in the community. Under the proposed workforce supplement, providers with more than 50 beds will have to enter into an enterprise bargaining agreement and meet certain workforce obligations to access funding under the supplement.

The draft guidelines require aged-care operators to enter into union-endorsed enterprise-bargaining agreements to access additional funding, to then pass on to staff through higher wages. This mirrors a very similar pattern of behaviour that we saw in the early childcare sector, with many childcare providers being strongarmed into entering into enterprise-bargaining agreements after the government introduced the Early Years Quality Fund. The government is encouraging the United Voice union to approach workplaces to sign up staff, with the promise of extra government money if they do so.

This promised supplement comes right on the heels of cuts to the Aged Care Funding Instrument. The speed at which this was followed by the introduction of this access measure clearly indicates that the government seeks to reward only those providers who have workers with union membership.

This is a significant change to the industrial relations environment where aged-care providers are not required to enter into an enterprise-bargaining agreement above and beyond the current regulatory environment of compliance with modern awards and National Employment Standards. The supplement is better described as a government-funded, taxpayer-funded, union-driven membership drive, dressed up as a funding reform.

The Presbyterian Aged Care Network, whose affiliate Presbyterian Aged Care NSW runs services in Paddington in my electorate, noted in their submission to the Senate Community Affairs Legislation Committee on this legislation that they are concerned that there are fundamental flaws in the proposed mechanisms for the supplement. They believe that the supplement will not achieve its goal of improving aged-care wages, especially for those people on award rates whose employers may not be able to afford the percentage margin above the awards required to be eligible for the supplement.

The government's aged-care package, which the House is debating today, has been beset by delay and just seems to add unnecessary red tape to what is an already highly regulated area. Having established the Productivity Commission inquiry, the government took the best part of a year—over 250 days—to respond to the recommendations and then largely ignored the recommendations of the Productivity Commission, cherry-picking a number of those recommendations. Not all of the measures in this legislation are misconceived; there are some worthwhile elements among it.

What the legislation does not do is provide the impetus or the incentive for the improvement of aged-care services in Australia. In an industry that has been crying out for liberation from the excessive regulation, red tape and heavy costs which, as Mr Kresner describes, are associated with that, the government is now imposing further costs.

The coalition supports high standards and efficient regulation to provide high-quality care and service to the increasing number of older Australians in aged care. But nothing, except perhaps more recruits to the trade union, is gained by adding unnecessary and ill-thought-out red-tape measures to an industry which is in desperate need of more innovation and more creativity. That can only come from an industry which is accorded greater economic freedom. The government is seeking to deny that. It is a classic example of one of the failures of this Labor government. At the end of the day, this government does not believe, as our side of politics knows, that the role of government is to enable Australians to do their best; it profoundly believes and is quite convinced here in this sector, as in every other sector of our economy, that the government's role is to tell Australians what is best and, in so doing, it fails to respect the innovation, the intellect, the energy and the enterprise of Australians and the innovation that will flow from it.

Andrew Laming (Bowman, Liberal Party, Shadow Parliamentary Secretary for Regional Health Services and Indigenous Health) Share this | Link to this | Hansard source

I rise to speak on the Aged Care (Living Longer Living Better) Bill 2013 and cognate bills. Australia has a proud tradition of fine aged-care services and I think everyone in this chamber who has travelled around this great nation and who has visited an aged-care facility is, by and large, genuinely impressed with the quality of care that is offered, in the context that it is an increasingly challenging space in which to be working. We have of course the demographic shifts that have been alluded to earlier in this debate, with the proportion of Australians over the age of 70 increasing from nine per cent to well over 20 per cent by 2051. But we also have the great challenge that this is fundamentally a private-sector-driven area of health and welfare, so we always need to have the appropriate amount of government support: not too much and not too little.

As I look back over the last five years my observation, with a focus on the health portfolio, is that many of the challenges that beset our health system in 2007 still remain today relatively untouched and unblemished. They are still here today, mostly not addressed. I acknowledge that there has been negotiation around funding agreements but, on the frontline in health care, we have many of the same challenges that we faced five years ago. That, I think, is a significant criticism of the current federal government if for no other reason than that it has been recognised by the COAG Reform Council, which noted just last week in their report that we are fundamentally a less happy population with our health system, with 24 per cent now waiting more than 24 hours to see a GP as compared to just 11 per cent in 2010. We are facing all of those social challenges in our health and welfare system. We are still waiting just as long for operations as we were in 2007. There have been some minor improvements in A&E through some performance payments but, by and large, we have a health system with very little change.

Contrast that with the aged-care sector and you will see a very different story. This has been a sector effectively in suspended animation, desperately in trouble, with only 40 per cent of our providers in the black and most of them holding on desperately by their fingernails, waiting for some kind of reform. When you are in free-fall and facing ground rush, I accept that you will grasp any kind of parachute you can.

With respect to this legislation, it has already been clearly pointed out by speakers from the seat of Wentworth all the way through to the seat of Grey, in some of the most remote parts of Australia, that the challenges are the same. We have seen a tricky shift where we have effectively taken money out of the funding instrument and we have moved it into a union recruitment tool in the guise of higher wages for staff who desperately deserve that. Everyone is smart enough to see that.

In my contribution I want to ensure that some of those observations are read into Hansard for posterity. I have an enormous amount of regard for Minister Butler and his approach to many of his affairs, but I do find this last-minute, rushed arrangement that was rolled out in Western Sydney just a month ago was genuinely beneath him. The minister looked around for an aged-care facility in which he could make the announcement. Not being able to find one he, instead, chose a church in the hope that perhaps some old people behind him might make it look a bit like an aged-care facility. It was patently ridiculous. There is very little support in this sector for the goodwill within this framework of bills; certainly not for the delegated legislation that is to come sometime later but that none of us can yet read. But I acknowledge that many in that sector are desperate for anything. When it is this late in the game, and when services are this close to the bone, I acknowledge that they will grasp at anything. Effectively, we have an offer to increase wages in a context where many services are unable to pay them. More importantly, no matter how much one offers in increased wage deals through union enterprise-bargaining agreements, if you are ripping it out first from the funding tool, then it is almost futile in a negative feedback loop where some centres will simply not be able to survive. I acknowledge that, if you are a centre of less than 60, you are exempted from those EBA arrangements but the majority of our providers in metropolitan Australia are a tick over 60 and are all faced with this reality.

It is a lot of money—$1.6 billion. It amounts to tens of thousands of dollars; in fact some centres on average have to find around $125,000. The most preposterous thing of all is, in a game where we are trying to provide certainty to the private sector and confidence to invest—let's get this right, Deputy Speaker Murphy—aged care is not an area where the government provides the majority of the services; we are utterly reliant on private providers. To provide this 28-day buffer where one can move into an aged-care facility and only after 28 days make a decision on whether you pay upfront or in designated allocations over time is akin to me selling my house, having someone agree to buy it and then 28 days later saying, 'No, I have changed my mind: I am just going to rent it.' That is what you are doing, Mr Acting Deputy Speaker, and I ask you to reflect on that.

The merits of someone who is building for the future and providing services for our seniors having to wait 28 days only to be told, 'Sorry, we've decided to rent and try, not to buy' effectively imperils your entire business model. How do you take that to a bank? How do you convince a bank to lend on those grounds? It is enormously difficult because, believe it or not, when you build an aged-care facility you cannot, 28 days after they finish the completion of a structure, say, 'We've decided to pay it off in allocations over the next five years.'

I would like to include from my own electorate the comments of Paul Mitchell, CEO, from Adventists Aged Care, who said these are the two key issues:

The rest of it is all just machinery of government. Under the proposed changes, a resident can make these decisions 28 days after they move in and in our facility in Victoria Point they are having a series of expansions: 89 new beds to be completed by September. That is part of stage one and that will be completed prior to this legislation applying, but stage 2 is now at risk of not happening at all.

So there you have it from the front line. How do you go back to a bank and explain to them that you want to receive millions of dollars in borrowings only to not be able to pay it back until you receive allocations or contributions over years? This facility in my electorate will simply have to face refinancing and the risk of not being able to proceed at all.

What we have here is a very, very clever recruitment tool for the unions and it is very clearly included in union propaganda, even from the minister's own union. There was an effort to modify the scoring tool so that less money could be given to providers, only to see more money given to workers, and hope that that somehow balances out. It is a murky approach, and some of the most senior aged-care experts in the country have said it is not the way to do business.

The other great criticism that was mounted in the defence of this legislation was a very serious accusation of rorting. I do not know whether this government has a preoccupation with singling out professions and claiming that there is a problem with rorting, and then never providing that evidence, but using that as the basis to proceed with often significantly flawed or biased legislation. We saw it in the cataract rebate debate in 2009 when an entire profession was traduced on the grounds that they were rorting the system—for goodness sake, providing more vision to Australians by doing cataract rebates and this was rorting.

We had the same claims made against the dental profession in an effort to bring down the CDDS and effectively close out 96 per cent of Australia's dentists from being able to deliver care to the sickest of Australians with chronic disease—all based on this claim of rorting. We saw threats to the dental profession to scare them into not providing dental care with the possibility that they would never be reimbursed. Ultimately, the CDDS, which could have been easily refined and improved, was instead terminated: September, no new entrants; November, all work to be completed. The result of that is that, right now, we see Indigenous Australians having to scavenge for $300 dental vouchers from public hospitals to get urgent dental work done. That is another health outcome in 2013 under this Prime Minister, all based on the proposition of rorting by professionals.

We do not have to do it that way. We can work with the profession. We can work with the sector, and of course there will be elements of rorting everywhere one goes. That is the job of the legal system. That is the job of a department doing appropriate audits to address those providers and those examples. What is the first thing that happens when a minister talks about rorting in the aged-care sector? Mr Acting Deputy Speaker, I put to you that my parents, and others who might some day be in an aged-care facility, say: 'I wonder if I'm being rorted. I wonder if this place is rorting me. I wonder if I'm being ripped off.'

I think that the blackening of our wonderful aged-care sector is not only regrettable but patently avoidable. We do not need to do that to get legislation through this place, nor to advance the interests of our aged-care sector. It does not need to be divisive. It does not need to attack the providers and it does not need to set up these envy based attacks between the tenant and the builder; the aged-care provider and the resident; and the provider of a health service and the recipient of one. There is another way, but in five short years this has been a recurring pattern of behaviour from a government that should know better and could do better but instead has chosen the low road of traducing providers.

I would like to make an observation about union recruitment, because this has been picked up by many providers. It is very obvious that this funding instrument has been linked to these supplements. The amounts are comparable. The first thing that aged-care providers say is: 'What is taken from one hand and provided to the other leaves me how much more worse off?'

It is clearly a case of a simple transfer. What we have is an obligation to enter into these enterprise-bargaining agreements and, as I alluded to a little bit earlier, I wanted to read out exactly what appears in the minister's union's own propaganda. It simply says:

Most employees on award wages need to negotiate an Enterprise Agreement to get the pay rise.

And it continues:

To win a good agreement, all potential members are urged to join United Voice to speak with one voice in negotiations.

It could not be any simpler than that. I think the obvious observation is that the money that is being provided from government coffers, through union-negotiated wage increases, is in turn paid as union fees to unions. What is it spent on? Let us reflect on where that money is spent. It is a fairly obvious assertion of mine that the money is effectively being diverted for political purposes. I think that too is regrettable. We do not need to draw the fine aged-care sector into those kind of murky dealings. It is not just me saying that; I did want to include the comments from Ray Glickman, who said we are effectively:

… stripping money from the care of our frail older people. Not only that, but the only way to re-access these care funds will be via deals with unions.

Our frail elderly are being sold short, and this redirection of existing funding, by adding further pressure to an industry at breaking point, will inevitably impact on the wellbeing of the most vulnerable in our society.

Leading Age Services, LASA, say that the compact is strikingly similar to aged-care reforms, and is 'tinkering at the edges and will not address the real issues faced by the industry'. They say that 'older Australians have been shunted off to one side' and:

… This government is not providing care based on need it is delivering a system of aged services with an imposed fiscal limit. This is why every 73 minutes another Australian is denied access to aged care.

Lastly, I wanted to quote this comment, from Catholic Health Australia's CEO, Martin Laverty—who, I concede, made balanced comments:

A government contract for services should not in our view stipulate an industrial outcome. Aged care providers and their staff should be free to determine above award employment arrangements at a local level, reflecting the circumstances in their workplace.

And it could not come any clearer than that.

These should be way more than just administrative changes; they should be way more than shunting money into the pockets of our unions. Our aged-care services are without doubt the finest in the world. They have waited for five years for this and they should have received far better.

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

I rise to speak on this cluster of Living Longer Living Better bills. We have had six years of this government, or five and a half years at least, and now they are desperately trying to leave a legacy, something they can hang their hat on. But six years is more than enough. They are trying to make last-minute sweeping changes across a whole range of policies.

I point out that the end of this parliament is destined to be 27 June, just 15 sitting days away now, and yet the government is trying to put through this cluster of bills. And it is not only in aged care—the government is also legislating in relation to: the Gonski report, which is a negotiated mess; the NDIS, which received bipartisan support but is largely unfunded, certainly beyond the four-year period; and the unfolding disaster of the NBN. It is pointing once again to unplanned and unconsidered policy made on the run by the government, and Australia is paying a dear price for it.

Why would we leave this legislation to the last four sitting weeks of parliament? Why on earth couldn't it have been looked at last year, in the midterm of the government? Didn't the government have any ideas about what they were planning to do with the sector? Did they just dream it up in February or March or April and then decide to legislate it in May in the last four weeks of the parliament? It is another version of the NBN, planned on the back of a napkin at 30,000 feet; hardly a considered policy. The Living Longer Living Better bills are unfortunately in the same boat.

The government actually guillotined the report of the Senate Community Affairs Committee, which was scheduled to report in June. To suit its political timetable, it cut that committee's work in half—or cut it off prematurely—and rushed the legislation through. It is a lack of consultation once again with the industry. The industry is seriously confused with the government's actions.

The last round of reform was the aged-care funding instrument reforms which were activated in February, the ACFIs. You have to hand it to the minister, the member for Port Adelaide—he is a very clever little gentleman; he convinced the industry that a $1.6 billion cut was in their interests. The industry actually came out and supported the changes to the ACFI bill, but the minister had a few cards up his sleeve and the aged-care industry did not realise what they were signing on for. The minister maintained the ACFI had to be reformed because of unusual claims, but there has not been one prosecution in the five years. Like the minister for immigration speaking about 10,000 illegal 457s, it would appear they are just making it up.

In their abundant generosity, the government propose to give $1.26 billion back in a workforce supplement, supposedly to address pay equity for women. That is a very good cause, but to take the funding out of the actual caring arrangements, to take it out of the pockets of the providers that have the task of providing day-to-day care to the people in their care, is simply not good enough. This workforce supplement is not enough in the first instance—and I will come back to that in a little while. It requires people who work for providers who have over 50 beds to sign on to an enterprise bargaining arrangement. Those bargaining arrangements of course are sponsored by United Voice, the Australian Nursing Federation and that bastion of integrity and honesty, the Health Services Union. It is a cosy little deal, isn't it, where a wage increase for low-paid workers is tied up with the implication that they should be driven to union membership? Of course, if the provider has fewer than 50 beds, that is not compulsory, and at least that is a small ray of sunlight.

The Senate committee took ample evidence in this area that the supplement was not sufficient to pay the extra, that small aged-care facilities in particular are just not able to find the extra money because the workforce supplement will not cover the full wage increase. Mrs Julie Christensen, CEO of Narrogin Cottage Homes in WA, summed it up well when she said:

I am very happy to let the committee know right now that we will be one of those who will not be signing up for the workforce supplement. We cannot afford it. I know Ray was saying it was two for one, but in my particular case, if you look at our … costs, I think you will find that it is 3.25 for one. I am running at a loss now. I am hoping we will balance the books next year. I cannot afford anything else. I cannot afford to expose my community organisation, and the assets that belong to the community, to risk, and the decision to sign on to the supplement would put my facility and my organisation at risk.

That is a very strong comment. Marie-Louise MacDonald, the board director of Masonic Care Alliance, said:

The workforce subsidy … is a major concern. We as an organisation and all of our alliance have EBAs which pay above the awards. We all want to do well by our staff and in our own way we put in place a number of things around family friendly environments and rostering around those needs and such to retain our staff. We would love to give them more money … The problem is that the subsidy is a shortfall for what we actually need.

I would like now to touch on how that affects the aged-care facilities in my electorate. South Australian aged care is in crisis, I must say. I speak to them often, and I have quite a number in my electorate. But it is an interesting situation in South Australia, where 50 per cent of the beds in Grey, or thereabouts, are controlled by Country Health, which is the state government.

I will give you a little bit of history, if I may. This has come about because, in a lot of small towns, small hostels were built, separate from hospitals, and over a period of time the hospital boards and the hostels amalgamated their administration, so we had one board within the town that would care for both institutions. This made sense. It worked well. In fact, I was chair of one such organisation. It worked well because the aged-care facility was able to tap into the hospital's expertise in a number of areas. It was able to use things like hospital kitchens. They were able to utilise mutual staff between the facilities. So there were all kinds of spin-offs to do this.

And then, of course, the South Australian government, in its infinite wisdom, decided to do away with local hospital boards and take over the management of those centrally. It installed health advisory committees, which are called HACs—quite an unfortunate name, I must say—and they have been largely disempowered. That local management has shifted hundreds and hundreds of kilometres away to Adelaide. What it has left them with is, in many cases, 10-, 15- or 20-bed community aged-care facilities. They are all under this magic figure of 60 beds, which we are now told is the number you need to make your facility break even.

In the electorate of Grey we have 209 beds, which are in three facilities that have more than 60 beds. By comparison with urban Australia, this is a very low figure, and it reflects the fact that we do not have very large communities—large cities, if you like. We have 284 beds in private institutions of fewer than 60, and they are under extreme pressure. And there are 444 beds that are controlled by Country Health, all under the 60 placement that I was speaking about just a moment ago.

It is a fact of life that facilities that operate in rural and remote areas have much higher operating costs. Quite often, they need to use agency staff to keep their numbers up and keep up the quality of their care. Even the supply of food, electricity, water and all those kinds of things in country areas come at a higher cost, yet they are rewarded in exactly the same way as the city facilities. So you can assume that, if 60 is the magic figure in the city, it will almost certainly be higher in the country. A number of the providers that are running facilities of that size tell me they are really struggling to make ends meet, particularly since February when the ACFI fees changed—the assessment procedure. In my opinion, that would mean that probably 80 per cent of these facilities are suboptimal and losing money, and that is a very scary place to be.

I know that we have already seen bed licences handed back within the electorate. We also know, because the generational review tells us so, that Australia is facing an ageing population and an explosion in the number of beds that will be needed to cater for our ageing population, yet none of these facilities has the ability at the moment to build extra beds. It is a hand-to-mouth existence. Every day is a challenge for them. What we need is some long-term vision in policy. I am concerned that this robbing Peter to pay Paul action that the government has taken to get to this point is bad for all of those facilities. By 2050, we are told, there will be 3½ million Australians using aged care. I hope that I am one of them. I am not planning to get away from this place soon, but I am hoping that by 2050 I will be one of them!

Mr Dutton interjecting—

Perhaps I will be joined by the member! But it is a great challenge for all of us. I am very concerned for those facilities in my electorate. I think we are at the sharp end, the coalface, if you like. When small towns and communities and moderate-sized communities are already facing great difficulty with their facilities, this push now to force the payment of higher wages on them—which is exactly what the workers need—if unfunded or not fully funded, is another arrow in their back. Thank you.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

I rise to make a few very brief comments. The Greens are supporters of aged-care reform, and the Senate inquiry that our Senator Rachel Siewert has been participating in has canvassed quite a number of issues and gone into some detail about the operation of the Aged Care (Living Longer Living Better) Bill 2013, so I will leave it to her to make our party's contribution about those issues when the matter reaches the Senate.

One issue that I would like to place on the record, though, concerns the interaction between the aged-care system and those who find themselves homeless or at risk of homelessness. I raise it because, while it may seem tangential, it is related to this bill for reasons that will become clear. As you would imagine, if you were someone who was homeless, you might find yourself in a pretty difficult situation when it came to finding aged care that suited your needs. First of all, there is the basic issue of actually encountering an aged-care service in the first place and being able to sit down and have that conversation with them. Unlike those of us who have family members who will care for us and may go and make the inquiries on our behalf about what would be an appropriate aged-care service, if you are homeless you probably do not have someone to do that for you. It may actually take the service itself conducting outreach, going to where you are—and you might be sleeping rough; you might be in a shelter—and saying to you, 'We can look after you.'

Secondly, people who have been homeless for a long period and find themselves getting aged-care services are going to have issues, by and large, that the rest of the people who find themselves in aged care will not necessarily have. Being homeless ages you prematurely, so by the time that you find yourself entering aged care you may have—people do have—a large number of health issues that others do not necessarily have and may require intensive support and care. And, of course, there is the question of behaviour and interaction with others. If you have been homeless for a long period of time then you have learnt to survive and get by, and that does not necessarily involve interacting with others in the way that people who have lived in stable housing all their lives would. You are putting people together who may not have had stable accommodation arrangements for most of their lives.

I have had the privilege of visiting the Wintringham service, who have gone out of their way to be an aged-care provider for people who have been homelessness or at risk of homelessness. They have devised a system that provides quite a high level of care to the people who end up living there. They provide surrounds and physical environment that have won international awards and international acclaim. They have been awarded by the United Nations for the buildings that they provide for people who have probably lived a pretty rough life up to that point. As an employer, they are pretty beloved as well, with one of the lowest staff turnover rates I have ever seen, which resulted recently in their being recipients of an award from the Minister for Employment and Workplace Relations, who visited them recently. Perhaps the most admirable thing about the way that Bryan Lipmann and his team have conducted themselves at Wintringham—and have been able to expand from Flemington in my electorate out more broadly as far as Avondale Heights and elsewhere outside of my electorate—is that they have been able to make the service operate within the existing funding systems and set themselves up as an aged-care provider for homeless people. When you walk into one of their places, it is not is what one might call a 'normal' aged-care environment with a smattering of homeless people; almost everyone who is in there has been homeless or at risk of homelessness.

They are currently facing a dilemma that may affect their future viability. It is not to do with this legislation, I hasten to add, but to do with changes to the funding system that may threaten their operation. That is not something that is said lightly by the people who have spent a long time building up such an excellent service and are devoted and extraordinarily committed to it. This issue has been canvassed during the Senate inquiry. It has been raised with the minister. I understand and greatly appreciate that the minister has spoken to the operators of Wintringham and, I understand, other operators as well. It is our position that this issue should be resolved before this package passes the parliament, because we want to make sure that when this parliament rises—having hopefully dealt with this broader issue—places like Wintringham are able to continue. Wintringham have enjoyed support from all sides of politics. Former prime ministers have visited them. I do not think it would be anyone's intention that there be any threat to their viability, given the service that they provide and given what the consequences would be if there were to be no aged care for homeless people. I am encouraged that this issue will be resolved before this package is passed. On that basis, I commend the bill to House.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

I call the member for Dunkley and thank him for his patience.

Bruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Link to this | Hansard source

Thank you, ma'am. I am always courteous to the chair and so happy to give my colleague the member for Melbourne a bit of a clear run. Who knows? There might be a modest number of opportunities in the months ahead, but I thank him for his contribution. Wintringham are of particular interest to me as well. Not far from my community they operate a very interesting integrated facility which deals with a number of special needs clients in an appropriate environment that provides some dignity and respect and often deals with members of our community that slip through some of the structures that are put in place. It is a good model and an interesting model.

This is an interesting debate too. I was just enjoying a conversation with the minister and talking about where we are with this. I cannot help but feel that the Aged Care (Living Longer Living Better) Bill 2013 and related bills are a statement of intention where so much of the meat is not available. That is where the concern has been raised with me, not just once but repeatedly, by aged-care providers in my community.

For those who do not know the magnificent Mornington Peninsula, it is a mecca for all things virtuous. That includes its appeal as an aged-care destination. We seem to have a number of providers that appeal to particular sections of the community, the Vasey RSL facility being one where the veterans community travel from wide and far to be cared for in a wonderful facility in my electorate just south of Frankston. But we see that we have quite a significant aged-care provision task, not just for our own community but for people attracted to it from afar. At the same time, we have seen a number of providers exit the industry. It is just too hard for too many. We have seen local councils deciding that they would exit the sector now rather than be faced with more regulatory imposts, more capital burdens with increasing standards of facilities and a greater degree of regulation making an already difficult task incredibly challenging. We have seen not-for-profit organisations who quickly add that they are not only not for profit but not for loss either. They would like to be not for loss, but they have not been able to achieve that objective. And there are a number also facing substantial capital outlays in the years ahead deciding that this is not the business that they wanted to be in, even though many have had generations-long involvement.

From my own experience on the board of an aged-care facility, where we actually ran a private hospital to fund its operations—they were in the old CAM and SAM funding days—that was character building. I stayed quite closely involved with that organisation and hear of their challenges. Some of the ideas embedded in this package of bills sound fairly innocuous on the surface but leave them with complete uncertainty about where they will be when these changes are implemented: some of those proposals around having a pricing regulator; some of the ideas that you need to satisfy a new agency about your capacity to charge extra service fees; the arrangement about resident contributions versus more of a daily rental model and where that will leave them in terms of their conversation with the banks about accessing finance for facility upgrades; even something that is for some passe but for them very real, the impact of the carbon tax; and whether what is left after all their operating expenses, assuming that everything has gone just swimmingly, leaves a very thin margin with which they could then go to the bank and say, 'This is our capacity to service a loan.' These are the real-life challenges facing the aged-care sector.

These are some of the concerns that caused the government to have to engage the Productivity Commission in examining what the future looks like for the aged-care facility, where the Caring for older Australians report was provided. The government took many, many months to consider its response to that report and then waited 11 more months to actually bring these bills before the parliament.

In that hiatus, aged-care providers have just been left wondering what is going on. They know the ageing population is a major social issue for our country. The aged-care providers know that about nine per cent of our population are aged over 70 and that that will increase to a 13 per cent share of our population by 2021. They know that more than half of aged-care providers are currently operating in the red, and many of them do not see any black ink emerging from this package of bills.

There is also concern about the capacity not only of the sector but also of the staff to support the sector in meeting the expected demand into the future. This leaves many aged-care providers wondering just what the future looks likes. They have this package of measures, but that does not really answer some of the compelling concerns that they have. Why has it taken so long? Why the headline argument of $3.7 billion? It looked fantastic in the media, $3.7 billion. People thought it looked great—and the government got all the accolades for that headline that they hoped for—only to realise that only a small fraction of that amount was coming from the government and that aged-care providers were going to have to explain to their residents that $3.2 billion was actually coming out of their pockets. Many in the aged-care sector thought that their relationship with those they care for was moving away from being about the care and wellbeing of their residents to one of cost collection and debt recovery to make sure that money was coming out of those residents. These are the concerns. This is the real-life set of challenges that many in the aged-care sector face.

The workforce issue is quite compelling. You hear people talking about the number of workers needed to provide care into the future. I heard General Cosgrove talking about that and highlighting those concerns. There is a union recruitment strategy where there is some assistance, through a supplement, for those costs of providing the labour force, but you have to be hooked into United Voice. What a cunning plan for a union recruitment strategy. They are saying, 'Yes, you've got some wage and salary pressures, and workforce costs that are adding to other costs, such as the carbon tax,' and, in this case, even propositions about the government withdrawing from the marketplace in terms of the insurance that is provided in bonds and the like—all of these things adding to the costs—and then there is a tantalising offer of a supplement, but you need to have a United Voice enterprise-bargaining agreement.

As was reported in some of the submissions to the Senate committee inquiry, for each dollar you might get out of that, you are actually fitting yourself up for $3 more in costs, and those costs keep escalating into the future. Many in the aged-care sector are saying, 'This is kind of not the help we're looking for, where you take an existing problem, amp it up and turbocharge it, give us a fraction of the money needed to cover the cost impost, but lock us into even further financial stress for the future.' We have seen those concerns highlighted, yet the government seems not to want to address those.

That is why I think the amendment moved by the shadow minister, my friend Mr Dutton, is so important. There is so much that is unknown about the operationalisation of these bills. We have seen the words, we have heard talk of a new assessment instrument and we have seen providers wondering just how that is going to work, given that it has been framed in the context of there being such a huge amount of rorting going on—that there is such enormous mischief out there that we need a new instrument. That does not build confidence, even in the area of creating a new regulator to put a cap on bonds. The Prime Minister said, 'People have paid $2 million for their bond,' but we think there is one person, one person in the country, that has paid a bond at that level, in a spectacular condominium type environment—hardly typical. But this is where you see the government over-egging the exception to create some kind of justification for intervening in a whole range of ways that seem completely over the top and that, in the eyes of many in the aged-care community, are just further regulation of a sector that is already incredibly burdened by regulation.

So we have these bills but we do not have many answers. We have a Senate committee inquiry that has not concluded its work. We have a government that sat on this process in terms of both its response to the Productivity Commission and the astronomical period of time before this coathanger set of legislation was introduced. All the meat is in the regulations, which really go to how they will be operationalised. We do not have those, but we are expected to pass these bills. This is one of the problems that the parliament has faced under this divided and dysfunctional government. It is all done, not at the 11th hour but more like at 10 to 12—and it is now so time critical. A hiatus created by government inactivity has been responded to by this indecent haste to pass legislation on which many fundamental and substantial questions remain unanswered.

So we present this amendment, through the shadow minister, about the importance of proper consideration of these bills and how really the Senate standing committee should be given an opportunity to report. That would seem good process, because there are good people with a very heartfelt and selfless commitment to the care of the frail and aged in our community who have put their hearts and minds into making submissions. The least the parliament can do is respect that effort. The least the parliament should be required to do is embrace that input. Why would you have a consultation process and invite submissions through a parliamentary process yet in this chamber expect us to deliberate on these bills without the benefit of the conclusions that the Senate committee might arrive at? So I commend that amendment because it is a sensible amendment. It goes to sure-footed and sensible policy. It goes to legislative action that is informed by evidence, not responding to assertions that have been found to be very much wanting—and I draw your attention back to this $2 million bond 'problem', which actually represents a rare exception and is hardly the rule and hardly a precedent on which policy should be formulated.

In the area of the instruments themselves and allegations of people gaming the current funding instrument, I know, again from my feedback from the aged-care providers in my community, that they await with horror the audit team coming by. Here we have aged-care professionals working day in, day out, night and day on care plans and care requirements, just waiting for the Star Chamber audit team to come by, to make a decision just like that and to be—in some cases conveyed to me—quite unresponsive to the material that is put before them. In other cases, there is the assertion that gaming is going on to the cash-flow advantage of the aged-care providers, and then, after much trauma and anxiety, the audit team leaves perfectly happy with the arrangements. I just wonder what is going on there.

We know, and I know from my time as the Minister for Veterans' Affairs, that often, when people need residential aged care, the simple fact that they are getting it sees an improvement in their wellness. It is the simple fact that they are surrounded by people who care for them. There is the emotional and intellectual nourishment of what I would call silly talk, just trying to work out what is going on in the world, solving the world's problems over a cup of tea, wondering why the Tigers did not fire on all cylinders on Saturday night. These are the big questions that many talk about in aged-care facilities, but that emotional, social and intellectual interaction can improve wellness. The care plans that are put in place not only maintain a person's wellness; they can add to it. Yet then questions like, 'Have you overspecified the care needs?' are raised because the person is more well than those care needs would suggest. Yet it is that very care that has brought about that improvement in people's wellness. These are some of the concerns that aged-care providers grapple with under the current arrangements, where so much of their time is paid to filling out paperwork, reports and regulatory burdens, yet, when these audit processes are activated, all of that red tape seems not to amount to much. It does not seem to be given the great weight that the operational requirements place on them.

This is why I think that this resolution is important and the amendment should be supported by the House. This is why I think the coalition's view that there is a need for a four-year aged-care rolling funding provider agreement would be a sensible and mutually respectful way of going about aged-care reform in this country. This is why then you would not have the great surprises that have dogged this industry for so long. This is why you would then see people re-entering to be providers in that field and see the professionals that work hard in it respected and valued for their expertise. This is why they would not have to fear yet another government agency coming and getting involved at a time when the sector is already fatigued by the so-called reform and reviews that currently exist and could focus their energy on the care of their residents. I hope the aged-care sector can survive the almost two years of suspended animation while the Aged Care Funding Instrument debate has evolved. We still need to know more about how sensory loss and other requirements are cared for. There is so much work to be done in here. It should be well informed. That is why I think that this House should consider the Senate's deliberations before concluding a view. (Time expired)

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

I certainly welcome the opportunity to speak on the Aged Care (Living Longer Living Better) Bill 2013 and related bills today. However, I have to express my concern that it has taken over a year for the government to bring this legislation to the parliament, and now it wants to push it through without any further proper consideration.

There seems to be a theme in recent times, and I point to the disastrous media reform bill as the most significant example, given that most of the provisions of these bills do not come into force until 1 July 2014. And those that do come into force by 1 July this year can be enacted under current legislation. I ask the question: why the big rush?

Many issues have been raised about the complexity of the bills, but the Department of Health and Ageing are yet to answer them satisfactorily. Despite promises of reform, five years on there is very little evidence of real change on the ground. We have seen the government take on review after report after review, the recommendations of which have been ignored or used to prompt more reports. Our aged-care system needs urgent change to provide viable and effective aged-care services for older Australians. But the Living Longer Living Better package does not resolve many outstanding viability issues for providers.

The $1.6 billion cut from the Aged Care Funding Instrument under these reforms has placed substantially more pressure on this sector. The five bills only cherry pick a few recommendations from the Productivity Commission report Caring for older Australians. They also add more regulation in what is an already very highly regulated sector. I say it is a very highly regulated sector, but to highlight some of the dysfunction that exists under our current aged-care system I would like to talk about one facility and a facility that we are hoping to establish in my electorate.

The Star of the Sea Nursing Home on Thursday Island is not a new facility. It caters for around 30 aged-care and respite residents. It is perched on the water's edge—appropriately, given that the Torres Strait Islanders are a seafaring people—and overlooking the very picturesque Torres Strait towards Hammond Island. You would expect that this would be a haven for our elderly Torres Strait citizens, but unfortunately it has had a very troubled history in recent years.

In October 2010, a nursing agency temp went on ABC Radio to describe the facility as 'understaffed, unsafe, filthy and the residents are not being properly cared for'. It prompted a review by the Department of Health and Ageing and a full replacement of the board.

The facility received two sanctions from the Aged Care Standards and Accreditation Agency relating to risks to the health and wellbeing of the residents. Townsville based Congress Community Development and Education Unit Ltd took over management of the facility in June 2011, and when I visited the facility around September of that year I conceded that the situation was certainly better. But, even so, I was horrified at the standard of the accommodation and the common areas. It prompted me to write a letter to the Prime Minister in September 2011, warning that the poor state of the facility, including structurally unsound gutters, rusting doors and louvres and the absence of secure units for dementia patients—there was a lack of security in the boundary fencing, which could allow elderly patients access to the sea—could very well lead to patient deaths. I stated in that letter:

This unacceptable situation requires everyone's urgent attention in my view as it could be seen as an elder abuse issue. My greatest fear is that someone will die before this problem is properly addressed.

That was in September 2011.

After financial troubles, CCDEU handed the management of Star of the Sea over to BlueCare in December 2012. I visited Star of the Sea in April this year, and I must congratulate BlueCare for their work. The grounds are immaculate, the staff are friendly and committed, the rooms and common areas are clean, and the patients look very clean and relaxed.

However, not everything is rosy. All of the areas that I raised concerns about back in September 2011 had remained and had, in fact, further deteriorated. Eighteen months later there are still rusting drainpipes, rotten window frames, unsafe staff accommodation. In fact, the staff accommodation has been shut down for 18 months and condemned. Staff are living in units that were provided for aged care patients. So the number of clients the facility can accept has been reduced because a lot of the accommodation is now being used by staff members.

There is other stuff there too. There is one small area there that is supposed to be an activities room. It is not much larger than a bathroom and it is next door to the pan room. It is totally inappropriate. There is no outdoor area at all for clients to sit. They are confined to a very small area where there is a TV. It is also the eating area. Another area of great concern is the lack of security fencing. Stray dogs are constantly wandering through the facility and there is a very real concern about the possibility of one of these residents being bitten by one of these dogs. Also there are numerous cases of inebriated locals taking short cuts through the facility, which is hardly seen as a secure facility for people when they are in great need.

The big question I have to ask is: despite the best efforts of the staff, why have these issues not been addressed? The Star of the Sea has been waiting for $2.1 million that had been promised by the federal government over 18 months ago—$1.7 million through the Department of Health and Ageing and another $400,000 from the ACAR round. The $400,000 was to build a deck outside to at least allow the aged residents to be able to get some enjoyment by sitting outside rather than being confined to this small area, which is the only one available at the moment. The facility is being run on an absolute shoestring despite management chasing these funds from the department numerous times. They are still to materialise. It is an absolute disgrace. I had to go to the local media to try and address the situation.

Given the status the aged have in Aboriginal and Torres Strait Islander society, families should have complete confidence in putting their family members in this facility. I understand that in Torres Strait culture family members tend to stay at home for much longer than they do in other cultures, so by the time they come into these facilities they have a much higher need for care.

After the article was published, I heard only a fortnight ago that some funding has actually come through. However, I was disappointed. It was not the $2.1 million promised 18 months ago but was only $1.1 million. They need something like about $4 million just to fix the existing problems there and get the staff accommodation open so that they can start to look at providing more rooms for ageing Torres Strait Islanders.

The cost of bringing this up to provide the additional high-care unit and dementia unit, I am told, is something in the vicinity $19 million. For the $1.1 million, it means it is well out of reach at this point in time. When we have a look at the commitments that we have for securing a future for our Indigenous Australians—I think this is the only dedicated Torres Strait Islander facility in the country—it is a national shame. The only reason it happens this way is because of the lack of scrutiny by the national media. I think this particular appalling situation needs to be addressed.

The second example I would like to talk about is the proposed Mossman District Nursing Home. For 14 years, Marj Norris and the Mossman District Nursing Home Committee have been fighting for the establishment of a facility in this regional town. It has been an incredibly long journey—fundraising, obtaining a commitment of land, and year after year applying through the Aged Care Approvals Round for the bed allocations and capital funding they need to proceed. I honestly do not know how Marj and the committee have done it, but as of today they are still waiting to hear the outcomes of the latest round, which they applied for back in December. The red tape and regulation that they have had to deal with and overcome are just baffling. The guidelines they have to meet are very, very rigid, extremely difficult and time consuming. DoHA do not give much notice as to when they will put out the notifications, and applicants need to provide a lot of supporting information to comply. In Marj's own words:

The issue is that we are seeing quite a dramatic increase in people with Alzheimer's, our aging population is increasing, and we are getting more and more 90-96 year olds requiring high care immediately.

This is very problematic and the government needs to acknowledge this very urgently.

We are absolutely determined to keep going because we cannot imagine any government being so short-sighted as to feel there is not a need for facilities here in the north.

Feedback from the previous Aged Care Approvals Round, in which the committee were unsuccessful, showed that the assessors had little grasp of the realities of living in a regional area. They stated that people could easily access residential care in Port Douglas or Cairns, conveniently ignoring that Cairns is a 75-kilometre journey away. While I accept that Port Douglas may be closer, Mossman is a very close-knit farming community where generations have lived within a stone's throw of each other. It has quite a different feel to the more transient tourist town of Port Douglas. In addition, the communities around Mossman, including Newell Beach, Cooya Beach and Mossman Gorge, have very strong Indigenous populations. For Aboriginals and Islanders, it is culturally important that their elders are on country when they pass. The opportunity to have dedicated beds at an aged-care facility in Mossman would be ideal.

In 2011 the committee partnered with the Salvation Army's Aged Care Plus, an extremely well-respected organisation with years of experience in aged care. The Salvation Army themselves have recognised the value of a nursing home at Mossman, and their decision to do what they can to progress this project is fantastic. Given that the nursing home has a huge amount of community support and generated more than 300 letters of support with its application, I can only hope that the outcome of this next round will be positive. It concerns me that small communities like Mossman tend to get overlooked. The needs there are very real. The families are close-knit and it is very difficult—we do not have the benefit of public transport, so it can be impossible for older family members to visit their loved ones in care. It is important, where we can, to keep them in the community.

On the aspect of Indigenous aged care, I have to say that we are not doing it well at all. I have serious concerns about a number of aspects. I am not going to have an opportunity to raise them here at the moment, but we need to start looking at a lot more culturally appropriate services for our Indigenous older citizens, particularly in the area of Indigenous traditional healing, where opportunities are being denied at the moment in our facilities. That is to the great detriment of our older Indigenous citizens. We seriously need to look at that area of care and we need to modify our models to be able to accommodate those special needs, particularly in relation to traditional and culturally appropriate healing methods, which I can assure you are very effective in this community. We also need to give serious consideration to the efforts of the Mossman community, who for well over a decade have worked very hard to get something that is very much needed within their community.

Mark Butler (Port Adelaide, Australian Labor Party, Minister for Mental Health and Ageing) Share this | Link to this | Hansard source

I would like to thank all members for their contribution to the debate on these five bills, the Aged Care (Living Longer Living Better) Bill 2013 and related bills, which give effect to the government's $3.7 billion commitment to aged care. I particularly thank the Chief Opposition Whip for his contribution and indicate that I will come back to him about some of those funding issues in relation to Star of the Sea.

The government has been working with the sector for more than two years to develop a package of reforms that strikes the balance between what Australia wants in an aged-care system and what aged-care providers and government can responsibly deliver. Extensive input through working groups, public consultations and industry briefings have helped build these reforms. Through talking and listening, Australians will now be getting the aged-care system they want and deserve. These bills implement an end-to-end aged-care system, one which provides consumers with greater choice and greater control, provides more sustainable and modernised financing arrangements and ensures independent advice and oversight to support these changes.

We know there is increasing preference among older Australians for greater flexibility in aged care, including independent living arrangements and increased choice. Additionally, there are greater expectations regarding the quality of care and the services being provided. Aged care will no longer be left to chance. People will get the aged care they want and need no matter where they live or what their financial means. Australians have told us they want to stay in their homes for as long as possible. It is through these reforms that the government has helped people to achieve this. Australians will be able to make their way more easily through what, until now, has been a complex, fragmented system with more choice, more control, more support and more independence. This government is delivering real reform in a sector that has not had any significant change for well more than a decade. These bills are an enormous step in ensuring the aged-care system is sustainable into the future.

I can indicate that the government will not be supporting the amendment moved by the shadow minister. We do look forward to receipt of the report of the Senate inquiry into these bills and the debate that will naturally follow in that chamber. That debate will include many matters canvassed in the contributions by members on these bills in this place. One such matter, by way of example, will be the need to develop a homelessness supplement for providers primarily caring for people who have previously been homeless. I commend the bills to the House.

Kirsten Livermore (Capricornia, Australian Labor Party) Share this | Link to this | Hansard source

The question now is that the words proposed to be omitted—that is, Mr Dutton's amendment—stand part of the question.

Ms Anna Burke (Speaker) Share this | Link to this | Hansard source

The question now is that this bill be read a second time.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.