Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I rise to speak on the Aged Care and Other Legislation Amendment Bill 2014, to which I will seek to make amendment at the end of this speech, and the Health and Other Services (Compensation) Care Charges (Amendment) Bill 2014. In relation to the latter bill I want to state Labor's support for what is a common-sense amendment. Together these bills overcome the impediment to recovering past care costs for home care provided to a care recipient who received a compensation payment. This simply brings home care into line with existing arrangements in residential care, and Labor will not stand in the way of common-sense amendments such as these. Likewise the amendments to the Healthcare Identifiers Act. We will support the implementation from 1 January 2015 of stage 2 of the aged-care gateway known as the My Aged Care website. That amendment will allow for the collection, use and disclosure of relevant data for use on My Aged Care.

The gateway is a key component of Labor's Living Longer Living Better aged-care reform package, which we brought in in the last parliament. Living Longer Living Better ensured the aged-care system was fit for the 21st century—a century which will be defined by an ageing population. Living Longer Living Better ensures aged care remains sustainable as more and more Australians require that care. The gateway ensures older Australians will have access to up-to-date information, greater choice and more flexibility as we transition to consumer directed care.

The Aged Care and Other Legislation Amendment Bill is part of a budget measure. Those opposite made it clear before the election that they had no intention of honouring Labor's commitment to developing and giving fair reimbursement to aged-care workers—workers in the aged-care sector who are amongst the lowest-paid workers in the country. This bill reflects decisions made and removes reference to the aged-care workforce supplement from the list of supplements provided by the subsidy principles. The amendments which I will move address the impact of those and other changes which threaten to undermine the viability of Labor's reforms—reforms which once had bipartisan support, reforms which were supported widely by the aged-care sector, consumer groups and the general community.

The Abbott government has made unnecessary cuts to aged care in spite of the fact that Labor had done the heavy lifting in ensuring the sustainability of the system through the long-term implication and implementation of Living Longer Living Better. The Abbott government made unnecessary cuts which were never mentioned to the sector, to consumer groups or to the community prior to the last election. The Abbott government did this in spite of its assurance that it would be a government of no excuses and no surprises. While the Liberals and the Nationals flagged their disdain for the workforce supplement prior to the election, what they failed to do was come up with any ideas, any solutions or any alternatives to the workforce crisis facing the country which will only exacerbate into the future.

The aged care workforce in this country is under tremendous pressure. Aged care is becoming more and more complex as we deal with the intricacies of dementia and other age-related chronic diseases and issues. The workforce supplement was introduced by the former federal Labor government to assist and address some of the issues in aged care, particularly the low pay, the limited professional development and the limited career advancement opportunities for those who worked in the sector. The workforce supplement gave additional funds to the sector to enable the sector to invest in their workers and improve its profitability.

The 2010 Intergenerational report outlined that the nation would see a 300 per cent increase in workers needed to care for an ageing population by the middle of the 21st century. The Abbott government has no plans in relation to addressing that challenge, but they did act with speed and a certain dexterity to remove the workforce supplement upon coming to power. This is in contrast to the slow and apathetic way it has handled dementia care. Within 18 days of coming to power, the Liberal-National Party government opposite had its minister axe the workforce supplement—18 days it took. The supplement had only been in operation for 86 days. It was a $1.2 billion provision and they got rid of it by legislative instrument. They could not prevent $100 million being claimed by the aged care sector.

We sought in the Senate to disallow this instrument in December last year. However, on 10 December 2013—and this is really important and relevant to the bill—the Abbott government suspended standing orders to push through an allowance motion which prevented any payments of the workforce supplement for aged care workers. It took just 32 minutes to rip $1.1 billion away from some of the lowest paid workers in the country. More than that, they gagged debate, preventing Labor members on this side of the chamber from telling the stories of their constituents. The minister himself did not have the courage to come into the chamber and left it to an assistant minister who does not even have responsibility for the area to move the necessary motion in the House. That is what happened on 10 December last year in relation to the workforce supplement, the subject of the legislation before the chamber.

That was the week that the Abbott government had abandoned Holden workers. It was the week they ripped away money that was provided by the former federal Labor government for child care workers. A one, two, three punch to the head of the lowest paid workers in the country, some of them. It was a mean spirited hat-trick that ended that week by abandoning aged care workers in the country. In the lead-up to Christmas 2013 we saw the Abbott government acting like the Christmas Grinch, giving Australian workers no hope, no support and no future in three sectors.

There has never been a worse time to abandon the aged care sector or aged care workers. For the first time in our nation's history we have more people turning pension age each year than turning working age. This has placed enormous stress on the system. The current government needs to outline its plans to ensure a well-equipped, appropriately reimbursed workforce. But to date it has not done so. Unfortunately, the Abbott government prefers to play politics than addressing the serious issues in relation to the aged care sector. One of the things the government could have done but did not was ensure that the repurposed aged care workforce supplement of $1.1 billion was used strategically. Instead, all they did was simply top up subsidies with no conditionality nor any expectation that those funds could be used for workers in their wages, in their conditions or their professional career development. I understand and appreciate that about 70 per cent of aged care expenses to the sector are salaries. But with no conditionality there is nothing to ensure that that money is available and will go towards the challenge of making sure the lowest paid workers in the country get the necessary wages and conditions they deserve.

The Australian Nursing and Midwifery Federation reported that nurses working in aged care are generally paid less than those working in hospitals. In fact, for a registered nurse level I there is a difference on average of almost $210 per week or 17 per cent nationally. The aged care workforce is one of the largest service industries in the nation, employing over 250,000 people and catering to the needs of over one million older Australians. It accounts for one per cent of GDP in terms of Commonwealth funding alone. It is an industry that will continue to grow. It will grow faster than the mining sector, faster than the resource sector, faster than manufacturing, faster than tourism.

As shadow minister I hear from constituents across the country on a whole range of issues in relation to aged care. One of the biggest issues raised constantly is staffing. But not one of those people opposite have talked about this issue. I have been to many, many aged care facilities across the country, from the APY lands in northern South Australia to the suburbs of Adelaide, to my home state of Queensland—all over the place—and I have seen the most wonderful, dedicated, compassionate and caring people. Many people have told me this: they do it because they love the people; the don't do it because of the money. They treated like a vocation or the missionary calling. But it should not have to be that. It is unfair to penalise our aged care workers because of their loving commitment to serving and caring for vulnerable Australians.

I trust the minister has taken the time to speak to the Council of the Ageing, Alzheimer's Australia or Palliative Care Australia. They are not trade unions. They do not represent nor do they purport to represent workers; they represent also often the oldest and most vulnerable Australians. They will tell the minister, as they have told me—and they will tell any member of this chamber—the importance of the development of a suitable workforce. Liberal and National party members will try to tell us, of course, that the market will sort it all out. It reminds me of the words of The Castle's Darryl Kerrigan—'Tell 'em they're dreaming'—because it will not happen. We need action at a federal government level. We took action when we were in government, and those opposite need to. They need to do it, but they will not. They think the market will solve the problems.

The sector has been hit with a horror budget. It has undergone major changes, particularly in the way that the care is financed. Understandably there is some angst in relation to residential and home care funding because the changes took place for many in the sector from 1 July this year. But from 1 July 2015 there will be major changes to home care. As I mentioned before, while these changes have caused some angst and concern and worry, they have not been surprised. Since 2012 the sector has had to deal with the challenges of Living Longer Living Better. The process of reform when we were in government involved extensive consultation and collaboration with some of the peak bodies I mentioned before—

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Indeed!

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

indeed—and cooperation with older Australians, National Seniors, LASA, the community, aged care providers—big providers like Domain, Opal and HammondCare, Blue Care et cetera—and other organisations. We consulted with organisations like these.

Given the massive changes, you would have thought the new minister and assistant minister would have been available and would have consulted with the sector. In May this year in the budget, what did we see? Cuts that were never flagged in the Real solutions blue document—the bible of the coalition; cuts that were never flagged when they came to power. We saw cuts that the sector were not consulted about, cuts which placed an even greater burden on the sector and which led to more expensive aged care for all Australians. And the budget saw the slashing of $653 million to the aged care payroll tax supplement. This is in spite of the assertion before the last election that they would be a government of no surprises—it was a great surprise to the aged care sector, I can tell you!

The Commonwealth government, regardless of which side of politics was on that side of the House, had for 40 years committed to the concept of competitive neutrality and the provision of some sort of aged care payroll tax supplement. Why? Because we wanted to make sure that the providers who are in the for-profit sector were not disadvantaged compared to the not-for-profit sector. In a single stroke this government erased all of that and put more pressure on the sector. The Aged Care Financing Authority's report on funding and financing of the aged care sector in July 2014 reports that the average net profit before tax margin across the sector is just 4.3 per cent. Most businesses, whether accountants or lawyers or doctors, would be horrified by such skinny margins. It is 4.3 per cent, but it is actually getting worse because in ACFA's inaugural report it was 5.6 per cent. So the margins are shrinking, the profitability of the sector is shrinking. And of course what this government does is hit this sector, it hits them really hard—$653 million in cuts.

What they did not do is talk with the sector before this happened. What the sector needed was assurance and certainty. They needed to make sure they had the necessary finance to develop that workforce that I talked about, and they needed to be profitable. Those opposite always talk about their experience in private enterprise and the need for a profit, but they made sure the sector did not have the profit to provide the wage increases and better conditions the workers needed. Daily expenses for residents have grown by six per cent even though the average revenue per resident increased by 4.6 per cent. Axing that supplement is a slap in the face for the industry, which expected that it would have that money to make further investments in important refurbishment and infrastructure improvements as well as providing improved wages and salaries. Leading Age Services Australia estimates the axing of the aged care payroll tax supplement will see revenue losses of $2,600 per resident each year. No wonder the sector is up in arms and furious with the government; these cuts undermine the sector's ability to invest in the workforce.

On top of this, after the May budget in 2014—after the sector had developed its plans, its staffing arrangements and all of that—the Abbott government, those opposite, announced the axing of the dementia and severe behaviours supplement. To continue a familiar theme: no consultation, no warning and the sector had no idea it was about to happen. The dementia and severe behaviours supplement was introduced by the Labor government on 1 August 2013. It was part of the measures from Living Longer Living Better, which was designed to assist with people who were worse off—the most severe cases of dementia. A $16-a-day supplement provided additional financial assistance to approved providers in recognition of the additional costs of caring for people with dementia and severe behaviours associated with a diagnosis of a relevant medical condition. There is a neuropsychiatric assessment; clinicians and the department were involved in the design; it had bipartisan support. The supplement had been operating for six months, however, before the government realised that the sector had been engaged in oversubscription. It took another four months before the government let the sector know what was happening—and that is right, guess what? They axed the supplement: no consultation, no warning and no idea how to dress it.

Then they claimed it was all our fault. They had been in power, by the way, for months and months and months and months and months. Surprises and excuses from the government, which they said they would never do. They shocked the sector. The assistant minister even went so far as to claim this was a problem not entirely of the government's making. I am unsure how the oversubscription during the last 14 months of supplement introduced a month before the change of government, with bipartisan support, could be anything other than the current government's responsibility. It is not for the Labor opposition to engage in the monitoring and overseeing of a supplement. They are in power; it is their responsibility. They have an assistant minister to do this. The job fell on those in the current government, but they have this born to rule mentality; they get into power and do not do anything except, of course, make it harder for workers.

So we have a situation where those who care for the most vulnerable Australians in aged-care facilities do not have the funding to provide the additional resources and care they require. Effectively they are paying the price for a government marked by incompetence, inattention and inaction. How do we know this? We know it because of the FOI documents. We know it because we were asking questions of the government in relation to this. And guess what? The assistant minister did not even have an adviser in his office during this time. If we had not raised the issue, the current government would not even know about it.

The axing of this particular supplement in relation to dementia means that families and loved ones of those suffering from dementia in residential care will have to step in and provide support, where the funding was meant for residential aged-care providers to provide the diversionary support and personal care that was necessary. The funding was there as a top up to make sure they had the necessary ability, financially, to do so. I know there was oversubscription—it cost about $100 million. But this is a government that thinks it is okay to spend $22 billion on a Paid Parental Leave scheme. That is $100 million for the supplement compared to $22 billion for a Paid Parental Leave scheme.

Aged-care providers consider this a body blow. It is a body blow to the sector, with lame excuses and nasty surprises. This is a government which has no interest in the area of aged care. The sector has undergone major changes. We talk about $13.3 billion of Commonwealth expenditure each year in relation to the aged-care sector, but the government has taken its eye off the ball. They have no minister for ageing. They have an assistant minister whose major responsibility is the NDIS. They have an assistant minister who did not even have an departmental aged-care adviser in his office until March this year. Seven months after the election he finally gets an adviser in his office, and the government finally realises, after we ask questions, that there is a problem. The government did not realise there were issues with this implementation because of its own incompetence and inattention to monitoring. They are in government; they are in office; but they must not be in power. The government only realised this when Labor's shadow parliamentary secretary, Senator Polley, asked about the uptake of the supplement during the Senate estimates process. What the government came to learn was the dementia and severe behaviours supplement had blown out tenfold under their watch. It had been estimated that this supplement would be used to support just one per cent of dementia sufferers in residential aged care—about 2,000 people per year who exhibited the worst, and often the most violent, behaviours—at a cost of $11 million in the first year. The figures show the aged-care providers were receiving supplements for about 22,000 people, which is about the number of people expected to have severe dementia, at a cost of over $100 million in 2013-14.

Rather than blame Labor, the Abbott government should thank us for drawing this to their attention because clearly they had not even noticed it. They were not engaged with the issue. The department then went out to engage in a review. There was a review—we know this from the FOI documents—at which they said they would consult with the aged-care sector about it. But no-one I know knew about this review. It happened out of the minister's office with the department's assistance. No-one that I have spoken to was consulted by the government before they axed the supplement.

This lackadaisical approach is clearly evident in another factor: the undersubscription of the dementia and cognition supplement in home care and the veterans' supplement in home care. These are supplements given to veterans, and those at home, suffering from dementia. The previous Labor government, as part of its $268.4 million package to tackle dementia had introduced supplements to address dementia for those in the home. Some of these supplements were undersubscribed by $34.2 million. They were undersubscribed because there was a machinery of government change. The department has not been focused and the minister has no attention to detail. The dementia and cognition supplement in home care had a budget allocation of $42.1 million, yet providers had only claimed $12 million. We have not heard a peep out of the minister in relation to that. What is going on? The money has been available to the sector for those people at home with dementia who need help; the money is available but it is not being rolled out. Talk about incompetence, inattention and apathy from the minister. What is happening with the department in relation to this? Why isn't the money going to those people in their homes who need it? Again, it shows a lack of oversight and monitoring.

If the Abbott government was committed to aged care they would not have axed the dementia and severe behaviours supplement and left nothing in its place. They have no plans to deal with that. What they should have done is improved validation and audit, consulted with the sector and addressed training and communications. They should have discussed all of that, and done all of that; but none of it was done and we know this because of the FOI documents. We know they did none of that. They just axed it.

This is an incompetent assistant minister who is heartless when it comes to axing the workforce supplement and incompetent when it comes to the issue of dementia. They are underfunding it when they need to fund it. They are not getting the money out when they need to. They are not arguing the case with the ERC and the cabinet to get the extra money necessary for the dementia and severe behaviours supplement. Talk about taking your eye off the ball!

They should not have axed the payroll tax supplement. That has major implications and the sector is up in arms. There is no strategy to deal with the workforce. The workforce supplement has already been axed and is gone. What is happening with this bill is the cleaning up of any reference to the workforce supplement, the history of which I have outlined in this speech. I cannot let it pass without moving an amendment. I move:

That all words after 'That' be omitted with a view to substituting the following words:

'whilst not declining to give the Bill a second reading the House notes that the government has failed to:

(1) provide alternative assistance in meeting the demands of the aged care workforce;

(2) ensure repurposed funds be utilised for workforce pay, conditions and development;

(3) consult with or inform the aged care sector of Budget cuts including the axing of the $653 million Aged Care Payroll Tax Supplement;

(4) consult with or inform the aged care sector of the axing of the Dementia and Severe Behaviours Supplement until after the 2014 Budget; and

(5) oversee the management of aged care funding as evidenced by the over-subscription of the Dementia and Severe Behaviours Supplement and under-subscription of the Dementia and Cognition and Veterans' Supplements.'

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Gary Gray (Brand, Australian Labor Party, Shadow Minister for Resources) Share this | Link to this | Hansard source

Yes it is.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that this bill be now read a second time, to which the honourable member for Blair moved as an amendment that all words after 'That' be omitted with a view to substituting other words. If it suits the House I will state the question in the form 'That the amendment be agreed to'. The question now is that the amendment be agreed to.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

It gives me pleasure to rise to speak on the Aged Care and Other Legislation Amendment Bill 2014 and the Health and Other Services (Compensation) Care Charges (Amendment) Bill 2014. I wish the member for Blair every bit of luck with the amendment that he has moved. Indeed, he referenced the Living Longer Living Better initiatives by the previous government. If I remember rightly they were a response to a Productivity Commission report on the aged-care sector called Caring for older Australians. The tragedy is that, whilst Australians are living longer, it is no thanks to the Living Longer Living Better proposals that were put forward by the previous government. The Productivity Commission's Caring for older Australiansreport was a fine review. Unfortunately, the previous government dropped the ball on their initiatives.

There was a lot of time spent by the member for Blair talking about the Aged Care Workforce Supplement, but much of the workforce supplement was nothing more than a union drive. On this side, we have put the money that was allocated for the workforce supplement back into the hands of the providers. We have put that $1.5 billion back into the hands of the providers, because it is in our DNA to believe that the local providers at the local level tend to know what is best. It is not up to government to be dictating who should be getting what. The quantum of money is there, and we believe that those at the coalface, the people working in the sector, are best placed to decide how that money is to be allocated. That is exactly what we have done. One and half billion dollars was allocated by the previous government to their workforce supplement, which was, for all intents and purposes, a flawed and inequitable system, with the clear objective of coercing union membership within the sector. Unlike Labor, we do not believe in a central planning system. It has been proven around the globe not to work. Indeed, allowing those providers to allocate the funds in the way that they see fit is a far better alternative.

I want to touch on a number of aspects of these bills before the House, and on the dementia supplement in particular. As to the dementia supplement, and the shrill cries from those opposite in terms of the changes that we have made: this was akin to and of NBN proportions; it was akin to pink batts; it was akin to the Australia Network. It was a program—well intentioned, no doubt—that blew out tenfold. The incapacity of those opposite! And to be lectured by those opposite about managing money really is quite farcical.

But the bills at hand are important bills and the changes that are proposed are far-reaching and go to the demographic challenge that we face as a nation, because Australia's population is ageing rapidly. We are all looking to develop a fairer and more sustainable system. It is the responsibility of government, in the context of the funds that we have available—funds that come from the taxpayers of Australia—to make sure of planning, and that we develop a sustainable system that is able to be funded into the future.

I would like to touch on the area of the ageing population and the changes that we are seeing in our nation. These things are true nowhere more than in my home state of Tasmania. Indeed, Tasmania has the largest and most rapidly growing aged population of all the Australian states. We are talking here about how to address this issue, as we age.

I reference also the good work that has been done by Natalie Jackson, formerly the chief state demographer, at the University of Tasmania; Brendan Churchill; and also Lisa Denny, who is undertaking the work previously done by Natalie. They have conducted extensive research into the challenges that Tasmania's ageing population presents us with, and that has led to an informed conversation on how we tackle this. And there are not necessarily negatives but opportunities that come with those changing demographics that we are all about to be confronted with. It is happening right across the country. In a relatively short period of time, Australia has transformed from a comparatively youthful population to an accelerating ageing population, resulting in a growing level of government dependence and support.

Countries like Australia have enjoyed a period of economic prosperity led by the social and economic changes of the post-war baby boom. Our society was transformed into wealthy, healthy, educated and prosperous communities, due mostly to the young age of the largest sector of our community. But, as the baby boomers enter retirement age, the advantages that that generation provided us with are starting to be reversed. In 1960 there was one person aged over 65 for every 10 people of working age. Today, it is roughly five people of working age for every person aged over 65, and it is predicted that by 2050 there will be only 2.8 people of working age for every person aged over 65. These are challenges, but they also opportunities. Spending on health and ageing as a proportion of GDP is projected to rise from 22 per cent in 2015-16 to 27 per cent of GDP in 2049-50.

Lisa Denny and her Tasmanian demographer colleagues have a far more positive outlook on the challenge of this ageing population than some others. Indeed, Tasmania and Australia will need more people in the workforce and increased productivity. We should be encouraging higher skilled migration numbers to boost the workforce. But there are also demographic and economic opportunities for young Tasmanians—and other Australians, as well—facing the challenge of dealing with our ageing population. Within seven years, the last of the baby boomers will start to leave the labour market. But the effects of that huge loss to the workforce and the economy will be tempered by the arrival of the new baby boom of the mid-2000s. We should never forget that the baby boomers will continue to consume. They will continue to be an opportunity. They will continue to be, as they have for all of their lives, a major economic driver for our country.

Remember, the generation born in the early- and mid-2000s—this other little hump that is an anomaly if you look at the declining birth rates in this country—will be bigger in total than all the baby boomers. It makes for a very interesting context, if you consider it. It is an opportunity that, as a nation, we just cannot miss. Between 2003 and 2012 there were some 2.85 million children born in Australia, representing an increase of 13 per cent over a decade. This generation will enter a workforce demanding tertiary educated and highly skilled professionals to stem the economic and fiscal impacts of population ageing. They will enter a workforce not only waiting for but celebrating their arrival. That is why the changes that our Tasmanian state government is making in high school education are so important, encouraging more young people to continue on from year 10 and into year 11 and year 12. It is why the changes that the Minister for Education, Christopher Pyne, is proposing around deregulation of the higher education system in Australia are absolutely critical to the opportunities for our country over the next 20 and 30 years.

I want also to highlight one of the real success stories in my state of Tasmania, and I have mentioned it before in this place. The work done by the University of Tasmania is an absolute example of where universities are going to be able to compete in this space—that is, when they identify a gap in the market and when they respond to that appropriately. The University of Tasmania offers a Bachelor of Dementia Care, and it comes off the back of a MOOC—a Massive Open Online Course—that it offers in dementia care. It sets all of the records. It breaks the records for the completion rate, as far as MOOC is concerned, because there is no cost and it can be accessed by anybody. Generally speaking, MOOCs only have a very small completion rate. In the case of the dementia care course offered by the University of Tasmania, the completion rate of the MOOC is almost 50 per cent. The conversion from those that do the MOOC to the Bachelor of Dementia Care, which now has over 1,800 students studying the bachelor course at the University of Tasmania and is the third largest course in terms of enrolments at the university, is off the charts in terms of what typically happens for these sorts of conversions.

Women born after World War II tended to wait until their children grew up before they returned to the workforce. Young Tasmanian women are returning to the workforce much sooner after the birth of their children—and that is true right around Australia. The generation which will need to look after our post-World War II baby boomers will have the opportunity to become highly educated and to meet the demand of aged-care services. The potential for this new generation to alleviate the economic challenges of an ageing labour market is great. This is our challenge but it is also our opportunity, with that demographic bump that we see in the mid-2000s. It will be the responsibility of the existing and future governments to invest in this still-untapped resource of people, particularly during their years of further education and training.

The government reforms, such as we are debating in this place today, are, indeed, of immense importance, and lay the groundwork for that. The bill seeks to make amendments to the Aged Care Act 1997 to reflect the implementation of the 2014 budget measures to re-purpose the aged care workforce supplement. I think I have explained why we need to make these changes. The key elements cover a range of areas in terms of residential care. In this debate, of course, there always is a very big focus on residential care, but the reality is that only about five per cent of Australians use residential care. The majority of Australians surveyed—I think, 70 per cent—would choose and would prefer, given an opportunity, to stay in their own homes. I think that is very understandable. That is why it is important that the policy around aged care also focuses on a whole range of other services that older Australians might access, including in-home care and other things.

First and foremost, nothing changes for those people that are in residential aged care at the moment. We are asking those people that can afford to contribute to the cost of their residential aged care to do so. Nobody would think that unreasonable. It is important, also, to remember that there are caps within the system—the annual cap being $25,000 and the lifetime cap for anybody being $60,000. Those contributions to that lifetime cap include contributions that were made to home care—any time spent using home care services. If, in future years, somebody decides to go into a residential aged care facility, that lifetime cap of $60,000—in terms of a contribution to their own care—will be those credits. The credits for the payments that they have made in home care will be able to be used. Fairer assessments in terms of means-testing capacity to pay is an important part of this legislation, and there is greater choice. On this side of the House, we believe that people should have the choice. One of the benefits of a consumer driven system is improved choice. This is the direction that we would like to see aged-care going. In the same way that you see with the NDIS and the fine work that Minister Fifield is doing in this space, it is about giving consumers choice. This is fundamentally what we believe is the best thing, that local providers not big government are the ones that can make the very best decisions about what people need increasingly as they age.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

Whilst Labor do not oppose the Aged Care and Other Legislation Amendment Bill 2014 and related bills, what I think is important in this debate is to highlight the unfair cuts that are going on in the aged-care sector by this government. Labor oppose funding cuts to the sector—cuts which are also another broken promise. These cuts mainly go to the development and retention of the workforce, a workforce which is going through significant change to try to meet the demands of the sector, a workforce which at the moment is largely low paid yet has high skills.

This sector is in a workforce crisis at the moment because there is no retention system in place to ensure that quality aged-care staff stay in the sector. The staff say that it is not because of a lack of love for the job because they love working in the sector; it is the low pay that they receive that becomes a disincentive to stay. The staff also say that the workload involved continues to increase and this workload will continue to increase even more as a result of the funding cuts by this government.

Central to the former Labor government's plan for the Living Longer, Living Better package was a $1.2 billion workforce supplement to improve the pay and conditions, and enhance the training and career structures of those working in the sector. It was aimed at addressing a growing need for workers in the aged-care sector, which suffers from a high turnover, low pay and poor work conditions, and faces increased demand for staff in the future. This is an issue that is not just relevant to the metropolitan areas; it is across the whole of Australia. Some of our regional electorates will be hit the hardest by these cuts because it is the regions where we have high proportions of our residents becoming older and where fewer and fewer of our young people are staying to live. The challenge to get people to live in the regions, just like in every other care sector, continues to be a major problem.

The aged-care workforce has had a very high turnover and features some of Australia's lowest paid workers. These are not just my words; this is the research and the basic facts. The $1.2 billion workforce supplement was going to deliver pay rises for some of the 350,000 aged-care workers, people who earn very little—nurses who are paid less than those who work in hospitals, people who dedicate their lives to ensuring that our older Australians have the quality care and the dignity that they deserve in their final years.

The new aged-care workforce compact that was introduced by the former Labor government was an important step to ensure that Australia had a professional workforce, essential to building a quality aged-care system for older Australians. Labor acknowledged in government that if you want to have a quality aged-care sector that met the demands of the community, you needed a well-paid, well-funded, aged-care workforce. From 1 July 2013, aged-care workers employed by providers who met the conditions of the aged-care workforce compact were going to receive better pay and conditions through an associated workforce supplement. It was the former Labor government that acknowledged that governments have a role to play in partnering with the sector and the community to ensure that the people working in that sector were high quality and well paid. Whether it be a hospital, an aged-care facility, a child-care facility or a school, government needs to acknowledge it has a role to play in ensuring that staff are well paid and well trained, and that there are well-funded facilities for them to work in.

The compact was a good start for those working in the sector and it supported some of the most vulnerable workers, up to 90 per cent of whom are women and over the age of 45 and working part time. The reform by the former Labor government and the workforce supplement was going to help some of our lowest paid workers—women over the age of 45, part time, the very same demographic that this government is hitting in other parts of the budget. Again, it is another broken promise by this government.

The former Labor government worked with industry and the community to ensure that they had jobs that they could count on for women working in this sector. Yet what we have seen from this government is not only an attack on their working conditions but also an attack on almost every other aspect of the household budget. Whether it be fuel, family tax benefit or any number of budget measures introduced by this government, they are going after the exact same workers who will be affected as a result of funding cuts this government will make to the sector.

The aged-care workforce is one of the fastest growing sectors of our economy, as our ageing population continues to grow, particularly in regional areas like my electorate of Bendigo. But over this decade, Australia faces a shortage of just over 100,000 aged-care workers. The core problem has been poor wages and working conditions for this profession. Melanie O'Gorman, an aged care worker and United Voice member, said:

As aged care workers, we're dealing with people's lives and their families.

We want to give our clients the dignity they deserve but it's hard with high staff turnover, low pay and poor working conditions.

I love my job and I want to be respected for the important work I do. This Compact is a step in the right direction.

These are Melanie's words. She loves the job, she loves the sector, yet because of low pay, her colleagues have considered leaving the sector, as has she. There are other attacks from this government in this year's budget. Axing the aged care payroll tax supplement is another blow for for-profit aged care providers. The sector is reeling from the cessation of the aged care payroll tax supplement from 1 January 2015, worth $653 million over four years. This government is so narrow sighted. They just think of their own bottom line; they do not think of the impact their cuts will have within the broader community. The affect will be that providers will need to recoup this saving by increasing accommodation charges. Pressure will be put on bargaining outcomes for a workforce that is already suffering from high turnover. Further the cuts will erode the capacity of the sector to increase staffing levels and pay and conditions for some of the nation's lowest paid workers. This is just a silly decision. In many ways it is a tax on workers and it is a tax on jobs.

The workforce continues to be in crisis. In Bendigo, we had a recent example of what is going on in one of our facilities. Health Workers Union members recently rallied at the 50-bed Golden Square aged care facility. They protested with family members, raising their concern about AdventCare leaving residents with unqualified staff providing medication to residents during the night shift. The workers say that this is because of funding cuts, because the facility is trying to break even and simply cannot afford to hire the qualified staff they need. This sector will be in crisis if we do not address funding and the need for a well-qualified and well-paid workforce.

The solution is not 457 visas or overseas workers. Some have suggested, 'That's fine. We'll just bring in overseas workers.' More and more Australian nurses and midwives will be left without jobs because of the loosening of restrictions for overseas workers, which this government is planning to introduce. Recently, The Australian reported that 457 visa foreign workers, including nurses, would be able to be employed on salaries of up to 10 per cent less than the salary of Australians working in the sector. That is not going to lessen the crisis we have in aged care. We will improve the aged care crisis not by bringing in cheaper overseas exploited labour but by funding the sector properly, ensuring that workers in the sector receive decent pay and conditions, lifting this sector to be a quality sector which is on par with our hospitals and with the health and ageing sector.

The ANMF does not support the use of temporary migrant labour at the expense of Australian nursing graduates who are not only fully qualified but are ready, willing and able to work. I agree with the ANMF. We need to ensure, if we have qualified staff ready to work that yes, there is a position available to them and yes, it will be at an appropriate wage with appropriate conditions. Australian nurses should be offered the jobs first before bringing in overseas workers. Furthermore, I agree that we should not be creating the competition in the workplace where an organisation has the option of either hiring an Australian nurse or an overseas worker at 10 per cent less.

If this government wants to make it easier for employers to hire overseas workers on cheaper wages, we will see the creation of an underclass of workers receiving less for doing the same work. That is fundamentally unfair and it should not be allowed to happen. If graduates walk away from nursing, Australia will suffer an entire lost generation of highly-educated health professionals. It will continue to be a problem for this country. This is just unacceptable.

The solution goes back to one of the points I made at the beginning. Central to the Living Longer Living Better package is a well-paid, qualified professional workforce. We have people going into nursing degrees who will come out qualified and ready to work. We need to ensure that the jobs available for them are respectful of their skills and qualifications and receive pay at an appropriate rate. For aged care facilities to do that, government needs to partner with them to ensure they have the funding.

I would like to highlight other concerns which have been raised with me. Recently, a number of people have spoken to me about problems they are experiencing as advocates in the sector. Home care packages and the government's changes mean clients are given more choice, which is a good thing, improving flexibility and improved services for the clients. They said that while this is a good thing, the problem that they were experiencing locally is that because of cutbacks in Centrelink and DHS services they cannot get their applications assessed. They have people in our electorate, in Bendigo, waiting and wanting and ready to go into aged care spaces where there are beds available but they are stuck in the processing of their applications, they are stuck in the Centrelink queue. This is a problem that can only be resolved by increasing the number of people working in DHS to resolve this backlog. They talk about the need for government to continue to partner when it comes to building new facilities and making sure that we have that co-investment available. These are just some of the local issues that have been raised.

The Australian population is undergoing a profound change. Yes, we are all living longer. Yes, there is a baby boom about to retire; and yes, they say it will fall to my generation to pick up the tab. I disagree. We can legislate in this House now. We can invest in funding now to ensure that we are ready to meet those challenges. That means restoring the workforce supplement. That means investing in the people whom we require to work in this sector for the long term.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on a matter of great importance to my electorate of Ryan: the Aged Care and Other Legislation Amendment Bill 2014 and the Health and Other Services (Compensation) Care Charges (Amendment) Bill 2014.

The electorate of Ryan, which I am honoured to represent, has 13 nursing homes and care facilities within its boundaries. As you can imagine, this high number of care facilities makes nursing homes a valuable and necessary part of the community in Ryan, and this bill seeks to address a shortfall in wages for this sector by reprioritising $1.5 billion in the Aged Care Workforce Supplement.

Since it was introduced by Labor, this supplement was only paid to those workers who were covered by an enterprise bargaining agreement; with those workers who were not covered by such an arrangement left out in the cold and more or less forced to join a union in order to access a better pay rate. This is yet another example of union bullying of workers—many more cases of which have been outlined at the Royal Commission into Trade Union Governance and Corruption. Join the union, pay your fees and get the pay rise—which will just cover the cost of the union fees, leaving workers in the same position they were before the supplement was paid. Yet again, Labor and their union masters are looking after their own nests and turning their backs on the real workers—the party for the workers having a party on the workers.

However, the coalition government believes all workers should be given the opportunity to access better wages in the aged-care sector, regardless of whether they belong to a union or not. This is why it is vitally important to reinstate this money stripped away from some workers and packaged as a wage supplement when all it really was is a way for the union to get paid out of the government coffers.

And of course, where does that money end up? In the campaign war chests of Labor candidates all over the country—

Ms Butler interjecting—

like those interjecting now. And how do we know this is where this dubiously appropriated money came from? The political donor registry kept by the AEC.

In the year before the introduction of the supplement, United Voice, the union for aged-care workers, spent more than $214,000 for their Labor mates. In the year after the introduction of the protection racket called the Aged Care Workforce Supplement, that figure increased a staggering 513 per cent. Yes, Mr Acting Deputy Speaker Broadbent, you heard that correctly: 513 per cent, to more than a million dollars—all money funnelled from aged care funding via a clever little device called the aged care workforce supplement tied to union membership. Those opposite care so little for the real workers of this nation that it beggars belief that they can even mouth the words 'party of the workers' when evidence like this is tabled in this place.

Fortunately, the workers in the aged-care sector have a good friend in Minister Andrews who is looking to make a real difference to the actual wages of those in the front line of aged-care delivery. By returning the supplement money to the general revenue stream for aged-care providers, an extra $1.5 billion dollars will be available for wage increases up to 2018.

While we have seen unions bleat about the inequity of this measure—no doubt because their bottom line will take a hit—aged-care providers have applauded the move as necessary to better wage outcomes for all aged-care workers. But of course this money for the supplement had to originally come from somewhere. This wasn't new money allocated to the sector by the reckless spending of the former Labor governments. No, it was ripped from the care provisions for older Australians. That is right: the Labor Party actually took money from those in need of quality care in order to funnel it back into their own campaign funds by intimidating aged-care staff into joining a union or otherwise they would not get the pay rise.

The best word I can use to describe this act is despicable. It is not enough that they held a gun to the head of workers; at the same time they were dangling older Australians off a cliff. I am reminded of the valiant and hardworking horse, Boxer, in Orwell's Animal Farm, who, after years of hard work, was sent to the knackers rather than into the happy retirement he had been promised by the pigs. That is the promise given to workers by those opposite: if you work hard, you can enjoy your later years, but they will not hesitate to take away the money for your care to distribute amongst their cronies by whatever means necessary to make sure they are looked after first. Perhaps in Orwellian tradition we should amend the names of the Leader and Deputy Leader of the Opposition to Napoleon and Squealer.

Under the amendments proposed by this bill, aged-care workers will be better off in actual real terms with more money in their pay packets and with no need to pay protection money to a union. No wonder unions oppose these amendments. Their relevance is again being brought into question as they seek to fleece the Australian taxpayer.

In short, Minister Andrews is at the forefront of fighting for workers in aged care to get the pay rise they deserve by stopping a supplement that channelled money into unions and Labor. Now that money will go into the pockets of the workers who very much deserve it.

Coupled with the Aged Care and Other Legislation Amendment Bill 2014 are minor changes to the Health and Other Services (Compensation) Care Charges (Amendment) 2014 which make it easier for the Commonwealth to recoup expenses for the care of people in their own homes should that person receive a compensation payment. This already occurs if a person is in a care facility but not if they are in home care. This change seeks to address that imbalance.

To each individual, the cost of this reimbursement of government funds is not paid for by them but by the party paying the compensation. It will be incumbent on solicitors and legal firms representing their clients to ensure the cost of this recovery is accounted for in their final claim. While the amount of savings is only small—$500,000 to a million dollars per year—this is about addressing the inequity of people in a care facility having to pay the costs of their care while those who are cared for at home do not.

In closing, I can understand the groans from those opposite at the thought of their campaign funds being $1½ billion worse off. But, of course, those groans are not out of concern for the aged-care workers, nor indeed for those residents of an aged-care facility, because those opposite are concerned not with the wage outcomes for workers or quality care for older Australians but with feathering their own nests and the nests of their puppet masters. The sensible changes in these bills will benefit those who need it the most—the aged-care workers of Australia. I commend the bills to the House.

Terri Butler (Griffith, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in the debate on the Aged Care and Other Legislation Amendment Bill 2014 and the Health and Other Services (Compensation) Care Charges (Amendment) Bill 2014 and to support the second reading amendment that was moved by the member for Blair, as a very sensible and wise second reading amendment. I also take the opportunity in so doing to correct some of the unfortunate errors in the talking points that have apparently been provided to members from the government side of the House. We just had a contribution from the honourable member who spoke previously that suggested that somehow the workforce supplement was tied to union members—which of course is absolutely incorrect. You could not get a more incorrect assertion in the House, I do not think. This suggestion that the supplement was tied to union membership is utterly, utterly wrong.

I would say, with respect, that it is quite galling to hear members of a political party which has complete form on tying funding to workplace relations policies come in here and lecture Labor members about promoting collectively bargaining and suggesting that collective bargaining is not good for the 'real' workers—whatever that is supposed to mean. In fact, that is quite untrue; collective bargaining promotes better pay and conditions for workers. It clearly does. That is why, I would submit, with respect, that the Liberals and the Nationals hate collective bargaining so much and have always used workplace relations policies to promote individual bargaining—in other words, the old divide and conquer mechanism aimed at keeping workers less able to exercise power to get better pay and conditions for themselves.

During Work Choices we had some pretty awful provisions in the industrial relations legislation that were about prohibiting content that could be agreed to between workers and employers in enterprise agreements. But, even going beyond those provisions, the Building Code and the implementation guidelines under the Building Code had even more prohibited content and even more restrictions on what employers and employees could agree to in enterprise agreements, and it was, of course, a condition for getting government procurement jobs to comply with those implementation guidelines—not to mention in the higher education sector funding for universities being tied to those universities implementing the then Howard government's radical anti-collective workplace relations agenda aimed at dividing and conquering staff and preventing them from negotiating for better pay and conditions.

So to come in here and somehow suggest that any government that is trying to undermine collective bargaining is the friend of the worker is not only wrong but also offensive. We know that you do not have to be a member of a union to have a collective bargain. Contrary to what the previous speaker just said, you do not have to be a union member to have a collective bargain in this country. The legislation explicitly provides for collective bargains where people are not members of unions. So to suggest that this workforce supplement was somehow connected or related to union membership or that it was a condition of getting the supplement that your workforce by in the union is utterly, utterly incorrect and misleading. The government and the staff who have put together the talking points for members opposite might want to go away and rethink those talking points, because they are wrong and they ought not to be relied upon further.

What we actually know about the workforce supplement is that it was the central part of the Labor Living Longer Living Better package. That Living Longer Living Better package was a 10-year strategy for reform of our aged-care system designed to provide older Australians with the aged care that they want and need no matter where they live and no matter their financial means—in other words, classic Labor policy; Labor policy that cares for people no matter how rich they are, in accordance with their needs. Part of that LLLB package, as it is called—the Living Longer Living Better package—was the $1.2 billion workforce supplement which was aimed at improving pay and conditions and enhancing training and career structures for those working in the sector.

It is important that we actually address workforce planning issues—as the second reading amendment says, we need to deal with workforce pay, conditions and development—because we have, as has been said here today, an ageing population. In fact, members would be well aware of the document, Blueprint for an ageing population, created by a panel led by Everald Compton, in cooperation with Per Capita—the think tank—which looks at some of the opportunities for the ageing population. That blueprint talks about the shift in our demographics towards becoming an older Australia and having a higher proportion of people over 65—having people living longer.

We know that the population generally is ageing and we also know that the workforce in aged care is ageing. I was privileged to hear a presentation from demographer Bernard Salt last year where he told us that, on his review of the census from 2006 and 2011, there had been a change towards an older workforce of registered nurses in aged care. He said to us that, as at the 2011 census, 49 per cent of aged-care registered nurses were aged 50 or older. That is quite an ageing profile for a workforce in itself trying to grow to meet the increasing demands for aged-care services in this country. So we know that there is going to be more demand for aged care, because of the ageing population. We know that we need to do something about workforce planning in aged care, because the workforce is getting older and, because of the pay, conditions, training opportunities and career opportunities, there is a high turnover. One example: if a registered nurse can get paid more in a hospital than in an aged-care facility, the incentive to change is obvious.

We know that aged-care workers work incredibly hard in incredibly difficult and challenging jobs. In my previous life as a lawyer, I represented people in the aged-care industry and so I heard firsthand of some of the pressures, the struggles and the burdens on them. Of course, working in aged care, they are very caring people. It is a lot to take on to go into aged care. We know that there will be more demand, and the Productivity Commission's report Caring for older Australians predicted that we will need three times the existing aged-care workforce by 2050. So the high turnover, the low pay and the increasing demand meant that it was obvious to Labor that we needed to do something to improve pay and conditions in the aged-care workforce. That is why we introduced the $1.2 billion workforce supplement, which was to deliver pay rises for some 350,000 aged-care workers—people who earn very little as it is and who are dedicated to caring for the elderly. Everyone in this chamber will have a grandparent or a parent who needs aged care, and one day we will all need it ourselves, if we are lucky enough to live to an old age. We are quite concerned with the redirection of the $1.2 billion workforce supplement funds. The funds will now be given directly to providers, with no guarantees or conditions that that money will support workers through pay increases, improved conditions or professional and career development.

We know there is no silver bullet with respect to aged-care reform, but we can be certain that cutting aged-care funds, as this government has done in its budget, is certainly not going to help. We are going to continue to hold this government to account about what it is doing to deal with those workforce planning issues for the aged-care sector. Of course, this government is doing all it can to make it harder for people to, for example, get a higher education but rather are making it more expensive to get a higher education. The idea of real interest on university degrees will mean that if you go into a lower paid occupation rather than a higher paid occupation, it will take you longer to pay off the same degree, because it is income contingent—depending on your taxable income. Also, because you are taking longer to pay off the same degree, you will pay more because of the higher interest rate—in some cases substantially more. So it is yet another imperative for graduates when they leave university to take the highest-paying job that they can. That is going to contribute to workforce planning issues for the low-paid industries, like the caring industries. People already take a penalty for going into lower paid industries. They already take the penalty of lower take-home pay. To make that worse by making it more expensive to have the same degree as someone who might go into the same type of occupation in a higher-paid workplace is reckless. It is contrary to good workforce planning proposals.

Given that there are already difficulties for aged-care providers in terms of workforce planning—high turnover of staff in the sector—it is quite disappointing that there are other measures that are going to affect aged-care providers. The first budget of this government, of course, provided a surprise hit for the for-profit aged-care sector. It is reeling from the cessation of the aged-care payroll tax supplement from 1 January 2015, which is a cut of $653 million over four years. We know that the aged-care sector is not exactly known for massive profits. The Aged Care Financing Authority reports that the average net profit before tax margin across the sector is just 5.6 per cent. So it is a slender profit margin as it is. This hit, with the $653 million cut in the budget, is going to cause some difficulty for profitability for the sector. It is obviously going to mean higher prices for consumers as providers scramble to recoup. It may have other ramifications as well.

I was at a meeting of community carers, including aged-care sector providers, last week convened by the Camp Hill Healthcare practice, a multidisciplinary practice led by GPs in my electorate in Camp Hill. The community nurses had convened a round table, and I have got to say there was a lot of discussion about some of the pressures facing aged-care providers today and some of the confusion that this government's approach has been causing. There are a number of issues, but one of the issues that was raised was the difficulty in providing respite beds in caring facilities. With slender profit margins, with some very, very uncommercial things that aged-care providers would like to be able to do—such as provide respite care—it is something that is crucial but quite uncommercial for providers, as I understand it. The last thing that governments should be doing is making it harder for aged-care providers to turn a profit, and that is why it is a disappointment that this massive cut is being levied on aged-care providers in the budget.

Labor has expressed concern not just with the cut in the budget with respect to aged care but also with what has happened since the budget with the cut to the Dementia and Severe Behaviours Supplement. We introduced the supplement on 1 August last year as part of the Living Longer, Living Better package to tackle dementia. We all know that dementia is quite a challenge for aged-care providers, and those of us who have family members who have been affected will know just how much of a challenge it can be for the family. The Dementia and Severe Behaviours Supplement provided additional financial assistance to approved providers in recognition of the additional costs of caring for people with dementia and severe behaviours associated with a diagnosis of a relevant medical condition. Approved providers could claim an extra supplement of $16.15, annually indexed per day in respect of an eligible care recipient. But, on 26 June 2014, the Assistant Minister for Social Services announced during a dorothy dixer question in question time that the supplement was ceasing as of 31 July 2014. So not only was it a surprise—a post-budget announcement—but it was a surprise that had no consultation and was announced with very little notice to the sector. In spite of the assurances that he had consulted with the industry, providers had been kept in the dark and were really shocked with the decision. I know that people in my electorate have been concerned about this change as well. As I understand it, there has been only one roundtable discussion about the issue but no resolution. The Prime Minister's ministers could have been working with the Department of Social Services and aged-care stakeholders to address the issues around the original design or compliance and validation of the assessment instrument for the supplement, but they just axed the supplement, after the budget process, in a complete surprise move.

It really gives the lie to the pre-election promise to be a no surprises and no excuses government. We should not be surprised about that because before the election the now Prime Minister said basically whatever he thought it would take to get him elected. We heard him say that there would be no cuts to health, no cuts to education, no changes to the pension and no cuts to the ABC and the SBS. None of those promises has been honoured; not a single one of them has been honoured. It is very disappointing to see a first-term government bring in a budget that not only is an attack on the living conditions of Australian people but is going to make medical assistance more expensive. (Time expired)

Keith Pitt (Hinkler, National Party) Share this | Link to this | Hansard source

I rise to speak on the Aged Care and Other Legislation Amendment Bill 2014 and the cognate bill. The previous government's workforce supplement compact was a flawed and inequitable system with a clear objective of coercing union membership in the sector. It dictated how aged-care providers could spend the funding. Repurposing the workforce supplement was a coalition election commitment to increase the basic subsidy provided to aged-care services for residential care, home care and flexible care.

The coalition government suspended applications for the supplement in September 2013 and consulted the sector to ensure the supplement was flexible and allowed providers to target their areas of greatest need. Unlike Labor, the government does not believe in central control and command and believes that those who deliver care are best placed to know where investment is needed. We have returned the previous government's workforce supplement into the general pool of aged-care funding so that providers can spend the funds in their greatest areas of need. Between 2013-14 and 2016-17, $1.1 billion will flow to providers. This includes a 2.4 per cent increase on top of normal indexation of care funding for eligible aged-care programs from July this year. All programs previously eligible for the workforce supplement will receive this funding.

Aged-care providers in regional, rural and remote areas will receive a $54 million boost in funding through a 20 per cent increase to the viability supplement. This funding boost will help improve the capacity of over 950 services in these areas to provide quality aged care. The government is also reviewing current employment and training initiatives in the aged-care and disability services systems to develop an aged-care workforce development strategy.

The most common complaint from consumers and their families is how hard it is to find information on the services they need. So this bill implements stage 2 of the My Aged Care gateway from 1 January next year. My Aged Care gateway is a national website and contact centre. It provides information and support to older people and their families as they consider their aged-care options. The website will empower consumers through greater transparency and the ability to compare options and prices. For the first time, all accommodation prices will be published in one place. It will help consumers locate services in their local area and provide referrals to assessment services and service providers. The My Aged Care website also features a fee estimator, which is an online tool that allows people to enter some information about their income and assets and receive an estimate of the fees they may be asked to pay by an aged-care provider. This will be an invaluable tool to help older people and their families plan and prepare for entry into aged care.

Only five per cent of Australians over the age of 65 live in residential aged care. We know that most people want to remain living in their own home for as long as possible, which is why we are increasing the number of home care packages. There will be an additional 80,000 over the next 10 years. Making the decision to enter residential aged care is difficult for anyone at the best of times, but the complex web of services, subsidies and eligibility criteria can seem at times almost impossible to navigate. What can be even more frustrating is the waiting time for assessment and bed shortages.

In the Wide Bay aged-care planning region, which includes my electorate of Hinkler, as at 30 June last year there were 2,856 allocated residential care places and 2,226 in operation. In other words, there are 630 beds that are funded by the federal government but not yet built by providers. The department has determined that the beds are required, but for various reasons providers    are not investing. However, in my local Bundaberg NewsMail, a local newspaper from the northern end of my electorate, there is good news. In the coastal town of Bargara construction has commenced of a $25 million facility with 160 beds besides the Palm Lake Resort. The dozers are on the ground as we speak. This is good news for the residents of my electorate. I congratulate the Palm Lake Resort group CEO, Manuel Lang, who said:

Bundaberg is a prime example of where there's very, very limited aged care places.

But what we've found since we've launched Palm Lake Care is that it not only serves as a benefit to our residents, it also services a much broader benefit to the wider community.

Palm Lake Resort manager Ann Finn was also on site. I congratulate her on being so successful to achieve this.

The ratio for operational residential care places in the Wide Bay region is 66.2 for every 1,000 people aged 70 or over. That is compared to the Queensland ratio of 81.4. For operational home care places that ratio is 26 compared to 27.8. So the operational residential care places are 17 per cent under the state average. This situation is simply not acceptable. I will be seeking a meeting with my state and local government counterparts to see if together—and I emphasise 'together'—we can attract further investment to the region to get these beds built and services provided.

There are lots of things governments can do to encourage providers to expand or establish services in Wide Bay and my electorate of Hinkler. Providing land, reducing red tape and expediting development approval processes are just a few. Providing 630 beds and delivering 100 home care places across the region would not only reduce the waiting list for people who deserve to live out their remaining days with dignity but also stimulate the construction industry and the local economy more broadly. It would create jobs and training opportunities in nursing, allied health, pharmacy, administration and retail.

Economists often talk about the impact our aging population will have on productivity, but few talk about the opportunities it will create. According to demographer Bernard Salt, between 2006 and 2011 the fastest growing job was aged and disability carer. Given the oldest baby boomer is still only 66, he calls aged care the 'space to be in'. I am with Bernard. The glass is half full. Hinkler has an older than average population and is a renowned retirement hub. While there will be some challenges, I look forward to seeing what opportunities it brings in the next 10 years.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

It has been said earlier by the member for Blair, in his fine contribution to this debate on the Aged Care and Other Legislation Amendment Bill 2014, that the motto for Labor in government when it came to aged care was 'Living longer, living better.' That motto encapsulated the various policies and the spending priorities of Labor when it came to aged care. If we were to collect all of the policies and initiatives of the Abbott coalition government under one banner in its one year in office, the true and accurate slogan—which should be emblazoned across that banner—would be 'Working longer and you are on your own.' If you look at the lamentable facts about the Abbott government's contribution to the aged-care sector after one lonely year in government, it is a very sorry record indeed.

What have they done? They have cut pension benefits, to start with. They have changed the method of indexation. We know, through independent research, despite the protestations of the Prime Minister, that this initiative alone is going to see the average pensioner worse off over the next 10 years by around $80 a week. They have cut benefits for people who are residing in aged-care facilities—and I will have something more to say about that in a moment. They have cut benefits for people who care for people in aged care. If that was not enough, they have cut the agency which plans for workforce issues when it comes to health and the aged-care workforce in this country. It is an absolutely atrocious record after one short year in government. We can only begin to contemplate the horrors that beset the sector if this is allowed to run for another two years.

We do face some challenges in the sector; there is absolutely no doubt about it. We know, as every speaker in this debate has identified, that we have an ageing population. That is actually a sign of success. It is a sign of the success of our healthcare policies and of Australia as a country that we have one of the greatest life expectancies of any country in the OECD. Australians born today can expect to live nearly 25 years longer than those who were born at the beginning of the last century. Close to 15 per cent of Australia's population is now over the age of 65. That is expected to be about 24 per cent by mid-century. We know that we have some significant issues that we have to deal with when you put all of these demographic facts together.

Seized of the issue, Labor in government did what any responsible government would do: we went to the experts in the area and commissioned some research. The starting point for any analysis of aged care and aged-care policy has to be the excellent report of the Productivity Commission Caring for older Australians, which was commissioned by the Labor government and tabled, including in this House, in June 2011. I take the trouble of going to some specific parts of the Caring for older Australians report, because they are very pertinent to the legislation before the House today. I am particularly reminded of some of the observations that are made at page xxvii of the overview of that report where the Productivity Commission observes that:

The aged care workforce will need to expand considerably at a time of 'age induced' tightening of the overall labour market, an expected relative decline in family support and informal carers, and strong demand for workers from other parts of the health and disability systems.

What the Productivity Commission is putting up in lights is that we have an issue here. We have an ageing population. We have a tightening of the labour market. We have a demand for carers and professional staff within the sector and tight competition within the sector, particularly because of demand from other parts of the aged-care and healthcare workforce in health and disability. They go on to say later in the report:

As the number of older Australians rises and the demand for aged care services increases, there will be a commensurate increase in demand for a well-trained aged care workforce. The Commission anticipates that the aged care workforce will need to more than quadruple by 2050, at a time when the overall employment to population ratio will be declining.

They then give some pretty clear instructions for what a responsible government needs to do, working hand in hand with the industry, to ensure that we meet these challenges. They say this:

Improved employment terms and conditions are the foundation for building a larger supply of workers in the aged care sector.

It is worth repeating:

Improved employment terms and conditions are the foundation for building a larger supply of workers in the aged care sector. The most notable shortcoming is the low wage rates for personal carers and the long standing disparity between the wages paid to nurses employed in the aged care sector compared to those employed in comparable settings, such as the public health system. The fiscal impact of increases in wage rates would be felt equally on the current system or the reformed system as proposed by the Commission.

But wage increases alone will not be enough to set the industry on a sustainable path. A coordinated approach to improving the attractiveness of the aged care sector is necessary …

And the commission goes on to make a range of other observations. It is a very clear instruction to a responsible government about what is needed to meet the impending challenge of aged care in this country. They could not be clearer:

Improved employment terms and conditions are the foundation for building a larger supply of workers in the aged care sector.

Seized of this information, you would think that a responsible government would act. But I have to say, Mr Deputy Speaker, that you would be hard pressed if you went back over the last 110-odd years since Federation to find a bigger collection of members on that side of the House who are committed to the rare arts of the ostrich in sticking one's head in a bucket of sand when confronted by a problematic situation than what we find in the 44th Parliament. That is exactly what those opposite are doing.

Collectively, they are putting their heads in a bucket of sand and denying the obvious steps that need to be taken to deal with the impending problems that we face in the aged care sector. One of their first acts when given the opportunity to confront this issue was to axe the $1.2 billion aged care workforce supplement. What is the history of this supplement? Quite simply, it was one of the many measures put in place by the Labor government in response to the Caring for older Australians report. We focused our attention on the recommendations of the Productivity Commission, knowing that addressing employment terms and conditions was the foundation of improving the workforce and therefore services in the aged care sector. We put this in place, amongst other measures, as part of our Living Longer. Living Better reforms.

When confronted with this proposition, and scrabbling around for an argument to justify their egregious attacks—their mindless cutting of this important workforce initiative—what are we met with? Their opposition comes in two lines: firstly, there is a risk that people who are union members might benefit from better wages and conditions in the aged care sector. So if somebody who might be a union member is facing the prospect that they may benefit from this, it must be bad! Nothing blinds like bigotry, and speaker after speaker have stood in this place and tried to justify these egregious cuts on the basis that somehow providing a benefit to somebody who may or may not be a union member somehow equates to compulsory union membership in the aged care sector. Never has a more ridiculous notion been put before this House to justify these egregious cuts. They do not know their own legislation; they simply do not know their own legislation.

The second proposition I have heard put in justification really does not fall very easily from the mouths of these Liberal members of parliament. I heard it from the member for Lyons and I heard it from the member for Ryan. They say, 'Well, we are not taking money out of the sector; we are merely giving it to the aged care sector so that they can distribute the additional money as they see fit.' I have to say that this does not fall very well from the mouths of coalition MPs who, in the very same budget, removed the education bonus because in the mind of the Treasurer and other members of the government there is the risk that people may not be spending that money for educational purposes. That is to say, that they could not guarantee that that money was going to be spent for educational purposes. These are the people who say we should just hand the money to the sector without strings attached. That is their justification. Well, if the sector were able to meet the needs of the labour market and if wages were sufficient to attract people into the industry and retain people in the industry then the Productivity Commission in its 2011 report would not have made the observations that it did and we would not be facing the labour market crisis in aged care that we are today.

So it is a nonsense argument. They know it is a nonsense argument. It is a product of their blind bigotry, that a benefit provided to a sector which may or may not benefit somebody who is a union member must automatically disqualify it as somehow illegitimate. It just goes to show that there is nothing which is cohesive, nothing which is based on evidence and nothing which is fair about the changes that are being proposed as part of the Liberal government's approach to the aged care sector.

We are talking about aged care, and the shadow minister has proposed a second reading amendment to the motion before the House. I want to take the opportunity to address an issue which is contained in that amendment, because the parliament needs to know about it and the Australian people need to know about it. It goes to the dementia and severe behaviour supplement. It was a supplement introduced by the former Labor government in August 2013 and it provided $16.15 per day as a supplement to approved aged care providers in recognition of the additional costs of caring for people with severe symptoms of dementia.

We all know the statistics; we all know the fact that dementia is one of Australia's fastest-growing diseases and that there are currently somewhere in the vicinity of 330,000 Australians living with the disease, that by mid-century there will be close to a million people living with the disease and that he aged care sector and families throughout the country are struggling with the caring needs of people living with dementia. So, against that backdrop you have to ask yourself, 'If you are committed to improving the caring needs of older Australians and meeting the dementia challenge, why would one of your first acts be to remove this payment?' When put together with the other cuts we see in this budget, what is quite clear is that whereas Labor's approach to this was to ensure that as a nation we are living better and living longer, the coalition's motto is 'work for longer and when you are getting older, you are on your own.'

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

I stand here today and will be relatively brief on this bill, the Aged Care and Other Legislation Amendment Bill 2014, because there are other members on our side who would also like to discuss this important change to how the aged-care sector will be able to manage itself. I will start by saying that we on this side understand the importance of aged care to regional and rural communities in particular. The idea that you can grow up in a community, spend your life in a community and then spend those last years in that community is incredibly important to this side of the House. We have all seen, and still see today, the contribution that the not-for-profit sector makes to small rural and regional communities when it comes to providing aged-care facilities. Many of those facilities are still run by volunteers from the community. Many of those facilities have been built on the basis of voluntary contribution by those communities, and it is incredibly important that those facilities can continue to operate in our regional and rural communities.

This bill will help in that regard. Obviously it makes consequential amendments to the Aged Care Act 1997, but it does so in one particularly significant way. It repurposes the workforce supplement. This was a coalition election commitment, because we did not want our aged-care facilities run under a central command system. The previous speaker, the member for Throsby, referred to there being nothing as blinding as bigotry. I could not quite work out what he was referring to when it comes to this bill, but I say to the member for Throsby: nothing blinds like self-interest. The sad thing is that in the dying days of the Gillard government all we saw from that government was it trying to do everything it could to support the only people who were really remaining loyal to it: the union bosses. Sadly, this was another initiative that had nothing to do with helping aged-care facilities on the ground. I spoke to numerous aged-care facilities around this time, and they did not like the idea of Canberra centrally controlling what they should or should not be doing with their budgets. As a matter of fact, they saw it as a complete throwback to some old Soviet-style system. So I would say, with due respect, to the member for Throsby that I think it was self-interest on their side that was dictating this policy.

These are important amendments. But so, too, are other initiatives that the government is making towards the aged-care sector. We see a 2.4 per cent increase in care funding for eligible aged-care programs from 1 July 2014. Importantly, we see a $54million funding boost for aged care providers in regional, rural and remote areas from 1 July 2014 through a 20 per cent increase to the viability supplement. Also, the government is undertaking a stocktake of workforce initiatives to inform an aged-care workforce development strategy as well as future education and training priorities. This review will also consider where activity can benefit the aged-care and disability-service systems—very good methodical, common-sense ways to try to assist the aged care sector.

Obviously the sector is facing challenges at this time. We are seeing people staying in their homes longer, and, when they are using aged-care facilities, the time they spend in those aged-care facilities is shorter. This is placing increased pressure on these facilities. The government is determined to work through these issues with the sector, but it will do it in such a way that it will not be saying, 'Here from Canberra we know best and we will dictate how every dollar in ever instance is going to have to be spent.' We are going to use the completely opposite approach: we want to free up and give more flexibility to each aged-care provider so that they have the flexibility to look after their own long-term interests. So, I commend these amendments to the House, and I commend the government's policies and approaches to the aged-care sector.

Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

On indulgence, I would like to begin by acknowledging Merewether Public School, who are joining us in the gallery today. They had a lot of very sensible questions that they put to me earlier on, and it is a delight to have them here seeing debate in progress.

I rise today to support the amendments by the member for Blair to the two bills that are currently before the House: the Aged Care and Other Legislation Amendment Bill 2014 and the Health and Other Services (Compensation) Care Changes (Amendment) Bill 2014. The amendments by the member for Blair clearly outline the failure of this government to adequately support the aged-care sector. In particular, the amendments note that the government has failed to provide alternative assistance in meeting the demands of the aged-care workforce—an issue I will return to later. The government has also failed to ensure that repurpose funds be utilised for workforce pay, conditions and development; to consult with or inform the aged-care sector of budget cuts, including the axing of $653 million in aged-care payroll tax supplement; to consult with or inform the aged-care sector of the axing of the Dementia and Severe Behaviours Supplement until after the 2014 budget—one of the cruellest cuts this government has wreaked on the aged-care sector. Finally, those amendments also note the government's failure to oversee the management of aged-care funding as evidenced by the oversubscription of the Dementia and Severe Behaviours Supplement and the undersubscription of the Dementia and Cognition Supplement and the Veterans' Supplement.

While Labor are not outrightly opposing these bills, we do not support the unfair nature of the cuts and the dismissive treatment of aged care by this government since coming to office. A central part of Labor's Living Longer Living Better package was the introduction of the $1.2 billion Aged Care Workforce Supplement to improve workers' pays and conditions, to enhance their training, and to better structure career pathways for those working in the sector. The sector, of course, has a high turnover of staff, low pay and poor conditions, and the supplement was aimed at addressing a growing need to broadly improve employment for workers today and to ensure that the sector is still seen as a viable career option, because demand for staff will greatly increase in the future.

I would take issue with the previous speaker—and, indeed, with most of the members opposite who have made a contribution to this debate—who declared that Labor's concern in this area as an act of self-interest, or the old fallback position which members opposite often arrive at, to attack unions or those who dare to stand up to give voice to those who are vulnerable in a workplace, who are on low pay, who are battling constantly with the increased casualisation of the workforce and the vulnerability of working shifts. So, it is a shame to hear that argument being progressed in this chamber. It would be a strong message for this government and for the opposition to deliver bipartisan concern for the health and wellbeing of the aged-care workforce and sector.

Clearly, the demand for more staff in the aged-care sector is going to be extremely significant. The Productivity Commission's report, Caring for older Australians, has predicted that we will need three times the aged-care workforce than we currently have by 2050. The $1.2 billion workforce supplement was going to deliver pay rises for some 350,000 aged-care workers who are, as I said, some of the lowest paid workers in Australia. Labor is concerned with the redirection of the workforce supplement funds. While the extension of the funding is, indeed, welcome, the funds will now be given directly to providers with no guarantees or conditions that it will support workers through pay increases, improved conditions or professional and career development. Preparing our aged-care system for the future requires vigilance, political will and real investment, all of which this government is sadly lacking. While Labor support the continued rollout of our Living Longer Living Better reforms, we will continue to hold the government to account to help ensure that older Australians get the strong and sustainable aged-care system they deserve.

This Prime Minister and Treasurer's first budget has been widely criticised for very good reason. Some five months on and it is still the stinking carcass around the government's neck, and the way it unfairly targets low- to middle-income earners is especially worrying. One of the many surprises it delivered was a blow to the for-profit aged-care providers. The aged-care sector is hardly known for massive profits with the Aged Care Financing Authority reporting that the average net profit, before-tax margin across the sector is just 5.6 per cent. The sector has been left reeling from the ending of the Aged Care Payroll Tax Supplement from 1 January next year, which is a $653 million hit over four years. It is the flow-on effect and the cumulative impact, which cuts like this will have, that hit our families and our communities hardest. In this case, effective providers will need to recoup this impost by increasing accommodation charges, and it will erode the capacity for the sector to increase staffing levels, pay and conditions for, as I said, some of the lowest paid workers in the country.

The cut was a sudden blow for the sector at a time when it must continue to grow. A number of large providers had planned significant investment over the coming years, but are now being forced to rethink their plans based on the cessation of the supplement. The Minister for Social Services cut this funding with no consultation and with no prior warning. The so-called 'open for business' government continues to spring surprises on business sectors that need to grow. Instead these businesses are now forced to slam on the brakes due to the shock policy announcement and massive funding cuts. The Abbott government clearly has not considered how the demand for some 75,000 additional aged-care places that will be required over the next decade will be met. In contrast Labor did the heavy lifting in aged-care when in government. Our Living Longer Living Better reforms provided fairness and equity for older Australians while ensuring longer term sustainability for the sector. These reforms were undertaken with extensive sector and community consultation, collaboration and cooperation—indeed, as it should be. It is a strategy that, regretfully, this government refuses to engage in. Labor joins with the aged-care sector in expressing disappointment at the disregard given to aged care in the budget and the lack of prior consultation with the sector.

Perhaps the cruellest of all cuts to the aged-care sector has been the axing of the Dementia and Severe Behaviours Supplement. According to the Australian Institute of Health and Welfare, last year, it was estimated that 322,000 Australians have dementia and, based on projections of population ageing and growth, the number of people with dementia will reach almost 400,000 by 2020 and around 900,000 by 2050. One in 10 Australians aged over 65 have dementia, three in 10 over age 85 have dementia, and 50 per cent of permanent residents in Australian government funded aged-care facilities have a diagnosis of dementia.

Dementia is a growing issue in our country, in particular in my community in Newcastle. The New South Wales branch of Alzheimer's Australia estimates that the Newcastle and Hunter region have some of the highest dementia prevalence rates in the state, and prevalence rates in the region are forecast to increase by up to 438 per cent by 2050. Aged care providers in my electorate are very concerned about the prospect of a service shortage as the population grows and ages. They already have massive waiting lists and demand will grow exponentially in the next 30 years. Its impact on those living with dementia, their families and their carers and workers in the sector cannot be ignored.

Labor introduced the Dementia and Severe Behaviours Supplement on 1 August 2013 as part of the Living Longer Living Better measures to tackle dementia. The supplement provided additional financial assistance to approved facilities in recognition of the additional costs of caring for people with dementia and severe behaviours associated with a diagnosis of a relevant medical condition. Approved providers could claim an additional $16.15 per day, indexed annually, in respect of an eligible care recipient.

On 26 June this year, the Assistant Minister for Social Services announced that the supplement was being cut in one month's time. In spite of his assurances that he had consulted with the industry, providers were kept in the dark and were shocked and horrified at the decision to cut the supplement. To date, there has been just one roundtable discussion about the issue but there have been no solutions, alternatives or investigations. All of this is from a supposedly no-surprises, no-excuses government.

As I mentioned earlier, as our population ages and dementia affects more and more Australians, we need to do more, not less, to address dementia and support those affected by it. The previous Labor government did that heavy lifting to make aged care sustainable and fairer, with wide community and sector support. In contrast, the Abbott government's legacy will be the dumping of the Dementia and Severe Behaviours Supplement; the slashing of more than $650 million from the aged care payroll tax supplement; cuts to pensions, which will affect aged care sector revenue streams; the demolition of the $1.1 billion aged care work supplement; and the abolition of Health Workforce Australia. Older Australians in residential aged care, and those who will need care in the future, deserve better.

Australia's population is growing but it is still ageing. More of us are living longer. For the first time in our nation's history there are now more people turning pension age each year than there are turning working age. Our aged care system has struggled to keep pace with the needs and expectations of our ageing population. As our population continues to age the pressure on our system will continue to increase. That is why federal Labor invested $3.7 billion in a new aged care system fit for the future.

In the single biggest investment in aged care in a generation, Living Longer Living Better is a ten-year strategy for reform of our age care system, designed to provide older Australians with the aged care they want and need, no matter where they live and not matter what their financial means are. It is a strategy that helps to lift the quality of care for those in aged care facilities and allows more people to get care in their own homes. It is about current and future generations of older Australians.

Federal Labor remains committed to building a new age care system built on the principles of respect, dignity and choice that will have capacity to provide quality, affordable, accessible and appropriate care to a rapidly growing population of older Australians over the coming decades. Senior Australians and, indeed, all Australians deserve nothing less. It is time the Abbott Liberal government stood up to the task ahead. The aged care sector knows well there is no time to lose.

Nickolas Varvaris (Barton, Liberal Party) Share this | Link to this | Hansard source

I wish to thank the House for the opportunity to speak on this bill today. These two bills together form an important piece of legislation that the coalition is implementing to assist with Australia's changing demographics. There are three important aspects of these bills.

Firstly, important amendments to the Aged Care Act 1997 reflect the coalition's 2014 budget measure of the aged care workforce supplement under which residential care, home care and flexible care providers in the aged care category receive an increase in basic subsidy. This increase is the coalition's investment and commitment to ensuring our aged care workforce is looked after through increasing the pool of aged care funding. This was contained in the coalition's budget released earlier this year.

Secondly, the bill amends the Healthcare Identifiers Act 2010, to support the implementation of the aged care gateway, an online information portal to store changes in aged care, maintain crucial aged care client records and sustain the integrity of Commonwealth systems.

Thirdly, the two bills together amend the Health and Other Services (Compensation) Act 1995 and Health and Other Services (Compensation) Care Charges Act 1995 to overcome existing impediments to recovery of past care costs for home care provided to a care recipient who received or receives a compensation payment such as workers compensation. The latter aim to remove inequity between home care and residential care, as well as overcome likely delay in entering residential care until compensation payments are settled, thereby minimising financial loss to the Commonwealth.

Through a 10-year aged care reform package the Australian government continues to build an aged care system that will offer choice and flexibility for older people living in community and residential care. Indeed, our population is living longer due to increased health awareness and better health care. This does not make our ageing population impervious to ailments, and whilst they may not suffer serious illness, they may be less able to be maintained in their households, which means assistance is necessary.

We are fortunate that our aged care system is world class and our senior citizens are given provisions to choose a level and type of care most suited to their needs. Indeed, our current government spends more than $14 billion a year on aged care, and this is projected to increase to about $17.5 billion by the end of 2017. Reforms over this 10-year span are being implemented progressively and will give consumers more choice, easier access and better care. It serves to build a better and more sustainable aged-care system.

Equally important, our aged-care health providers are given funding to continue to do the important work that they do and look after current and future generations of the ageing population. I am pleased to announce that this government is committed to have increased funding of 2.4 per cent of their basic subsidy from 1 July this year. The government will provide $1.5 billion into the general pool of aged-care funding. The Australian government pays for the bulk of aged care in Australia, but, as with all aged-care services, end users may be asked by their service provider to contribute to the cost of their care.

In Barton alone, there are 30 residential care providers, ranging from low care to high care. Some are religiously focused, some are tailored to certain ethnic backgrounds and others appeal to the general population. These customised services demonstrate the various requirements of our ageing population and suit people's preferences and circumstances. As with all consumers in society, the ability for people to choose the level of autonomy afforded in the decision-making process, and transition to the next phase of their lives in dignity, is pivotal in ensuring we truly look after subsequent generations of Australians.

True autonomy is a valued component in Australian life. As discussed earlier, the move towards an integrated online information portal, in our digital age, also reflects autonomy. Transitioning from a previously paperwork driven culture to one that is efficient to manage allows participants and end users control in record management. All this, combined with redirecting the $1.5 billion being directed into the general pool of aged-care funding, is important reform to help providers run their businesses more efficiently and effectively and address the needs of their users.

Today's two bills together form an important piece of legislation the coalition is implementing to assist with Australia's changing demographics. I trust that both sides of parliament support the three important areas this legislation represents. As I mentioned before, our amendments will mean that providers in the aged-care category will receive an important increase in basic subsidy to ensure our aged-care workers can continue to do the fantastic work they currently do. I also mentioned that the crucial $1.5 billion in funding distributed over the next three years will be allocated into the general pool of aged-care funding so that providers can work effectively to ensure the needs of our ageing population are met.

The coalition's 10-year reform plan for aged care will also oversee changes to how information is collected, collated and managed for participants and end users. The introduction of My Aged Care, an online information portal, will ensure important changes to patient information records are maintained and sustained in an efficient manner within our systems.

As Australia sets to face enormous changes in our demographics over the next few decades, we must ensure our social policies aimed at the ageing population work fluidly to address the complex needs of those affected. For Australians, whose values are centred on freedom of choice and social autonomy, our services must equally reflect these values so that our population can age with dignity in the next important stage of their lives. I commend the legislation to the House.

Amanda Rishworth (Kingston, Australian Labor Party, Shadow Parliamentary Secretary for Health) Share this | Link to this | Hansard source

I rise today to support the amendment moved by the member for Blair to the second reading of the Aged Care and Other Legislation Amendment Bill 2014 and the Health and Other Services (Compensation) Care Charges (Amendment) Bill 2014. While the amendment legislation before the House is supported by the Labor Party, the second reading amendment moved by the member for Blair highlights some of the key issues that need to be included.

It was interesting to hear the previous speaker talk about the coalition's 10-year plan for aged care. It was actually Labor that brought in, after significant consultation, the biggest aged-care reform we had seen in a significant time, and that was the Living Longer Living Better aged-care reforms. They were critically important reforms which expanded aged care and the availability of aged care, not just in residential facilities but also at-home packages, the ability to get support in the home, to ensure that people could age in place. The previous minister, the member for Port Adelaide, worked very hard in delivering that important reform and certainly needs to be commended.

While Labor will support this package of bills, I have to say that, although the coalition continues to support some elements of the Living Longer Living Better package, there are critical elements that have not been supported. While part of this legislation does inject funds that Labor committed into the area of aged care, one of the key parts of our Living Longer Living Better package was the workforce supplement. That was $1.2 billion to improve the pay and conditions, and enhance the training and career structures, of those working in aged care.

Anyone who has visited an aged-care facility in their electorate and talked to the staff would know that it is a very low-paid job for enormous caring responsibilities. I take my hat off to aged-care workers, who work so hard, with so much compassion. When I talk with them, they say they do not do it for the money. They say that they could go and work in a bar or somewhere else and get better money, but they do it because they love it. They do it because they believe in what they are doing. That really needs to be recognised. That is why the workforce supplement was brought in under the Living Longer Living Better package. This was designed to deliver pay rises to some 350,000 aged-care workers. It was a partnership between the sector and the government to improve the wages of so many of our very poorly paid workers who do a great job.

While the government has committed—and we certainly welcome the commitment—to continuing to put money into the aged-care sector, and we note that there is $1.1 billion going in as part of this, we note that this money will go directly to providers and there is not a guarantee that it will be used to improve the wages and conditions of the workers. That is why the amendment before the House really talks about ensuring that these funds are invested in our workforce. We have already seen that, because of the hard work, often injury and other things associated with it, there is a huge turnover in this industry. Even though people say they would like to continue working in it, they just cannot either physically do it or make ends meet. So I really hope this money is redirected into the workforce, and that is why the amendment calls for that.

The amendment also in part 3 says ' to consult with or inform the aged care sector of Budget cuts including the axing of the $653 million Aged Care Payroll Tax Supplement'. This is an incredibly important part. In June this year the government abandoned both the aged-care payroll tax and the dementia and severe behaviour supplement. These two supplements were incredibly important for the aged-care sector. They were so important in ensuring that the financial assistance was given, recognising that providing aged care is a tough environment. It is difficult to ensure that you can deliver high-quality service, which is why the aged-care payroll tax supplement was so important in recognising that they are not in a competitive market where they can just let the market rip. They are providing a critically important social service. But the dementia and severe behaviours supplement was also critically important in assisting aged-care facilities with caring for our most vulnerable. Because of this cut of the dementia and severe behaviour supplement, aged-care providers will no longer collect the $16.15 per day for each eligible care recipient.

It sounds like a very small amount, doesn't it? But it goes a long way with assisting with the ongoing care and support of Australia's most vulnerable citizens, and that is those who suffer from dementia. This cut has seen nursing homes re-evaluate their capacity to hire specialist staff, to plan for new facilities and to support new resources. Of course this was never mentioned before the election; this was foisted on the aged-care sector as a surprise without any consultation—probably not a very good surprise but a surprise to the sector nonetheless. I know that thousands of people have signed Labor's petition to bring this supplement back, to not punish. We talk about this budget and how it punishes the most vulnerable, and in so many ways it does. When it comes to those suffering from dementia and the care that they need, you cannot get much more vulnerable than that. Thousands and thousands of Australians have seen just how mean-spirited this cut is and have called for this to be reversed, have signed Labor's petition to reverse this mean-spirited decision.

I have also mentioned the cut of $653 million from the aged-care payroll tax supplement from 1 January 2015, and in my electorate I held a seniors forum in which a number of aged-care providers came. They are very concerned about what this means for them. They are very concerned about how this will affect their ability to provide good-quality services. This cut will force aged-care providers either to wear increasing costs or to recoup this impost by increasing accommodation charges or putting off or cancelling increased staff levels. We already know, as I mentioned previously, that staff in aged care do a fabulous job, so putting more pressure on them by having lower staff levels or increased accommodation costs for those who can least afford it is once again punishing some of the most vulnerable in our community.

In closing, while Labor does support the continuing funding of the workforce supplement, we also remain deeply concerned about the lack of transparency as to where this funding will go, what impact it will have on aged-care workers and whether it will actually make it to those aged-care workers who so desperately need to be recognised and paid appropriately. We also, of course, oppose wholeheartedly the mean-spirited cuts to aged care that have been put in this mean budget.

And this is a mean budget. It is an incredibly mean budget that hits our most vulnerable. Whether it is through the cuts to the severe dementia supplement or the aged-care payroll tax, the outcome will be putting more pressure on aged-care providers who are already working very hard in quite tough operating environments—extra pressure that will then lead to those residents not getting as high a quality of service. I know that those aged-care providers out there want to do their best, but they need support from government. We really are urging the government to stop cutting and start actually listening to the sector, start visiting aged-care facilities, start talking to those living in aged-care facilities, see how these cuts will significantly hurt older Australians and the aged-care providers who are doing their best to support the older Australians in our communities.

I commend the amendment of the member for Blair to the House and urge the House to support his amendment.

David Coleman (Banks, Liberal Party) Share this | Link to this | Hansard source

It is good to have an opportunity to speak on this legislation. I am pleased that there is bipartisan support for it. We have a number of speakers who are interested in speaking on this matter, so I will keep my remarks brief, but I did want to comment in particular on two aspects of aged-care policy and the very important differences between the government and those opposite.

One is in relation to a matter we have heard a little bit about today, which is the dementia and severe behaviours supplement. Of course, we are all supportive of initiatives that seek to reduce the impact of dementia and increase care for people with dementia in our community, but you can only take those caring initiatives if you are able to manage them in a sensible way. It is important to have the compassion and to have the heart that motivates you to help people in need. But it is also very important to have the presence of mind—the common sense, frankly—and basic administrative capacity to actually deliver things. The previous government got this horribly, horribly wrong.

The dementia supplement, the previous government said, would cost less than $12 million a year and they thought that about one per cent of people would be eligible to apply. What actually happened was dramatically different. It was not one per cent of people who were granted the funding; it was actually 15 per cent. It was 15 times more. As a consequence, what was meant to be an expenditure of less than $12 million was headed to $110 million, almost a tenfold increase. If you want to deliver compassionate services, you need to have the common sense to actually budget for them, plan for them, do the hard work, do the detailed work that enables you to deliver in a sensible way. The previous government did not do that.

Remarkably, what those opposite say is: 'Just continue on. Even though it was 10 times more expensive, just continue on.' That would cost $800 million over the forward estimates period, over the next five years—completely unsustainable. It would be like budgeting $30,000 to spend on the family car, you get to the dealership, it is $300,000, and you say, ' We'll buy it anyway. We'll just borrow the other $270,000.' That is not common sense. We must be compassionate in our dealings in the aged care sector—and this government certainly is; it is maintaining levels of funding—but you have to be sensible about how you do it. This opposition was absolutely appalling in its mismanagement in this area.

Then we have the aged care workforce supplement. This was industrial tactics by stealth—not so much stealth, because it was pretty obvious. If you actually looked at the rules under which people could obtain this aged care workforce supplement, if you had more than 50 employees, you could only get access to the supplement if you had an enterprise agreement. And if you had an existing enterprise agreement, it had to be updated to comply with various rules under these provisions. Now, of course, in practice, that means you have to do a deal with the union. That was the only manner in which you could obtain this supplement if you had more than 50 employers, which, of course, most larger aged care facilities do. That industrial activity by stealth is just not appropriate in this sector. As Catholic Health Australia Chief Executive Martin Laverty said:

Using a government contract to force an industrial outcome was not in the best interests of those who would miss out on pay rises where their workforce did not have an enterprise bargaining agreement in place.

If the goal was to help the aged care sector, why would you tie it to an industrial outcome? It doesn't make any sense. It betrays the real motivation of those opposite in this area. We will, of course, reallocate that funding to the aged care sector. We will maintain the level of funding—indeed, we will provide additional increases of over two per cent in various areas of aged care—but we will not do so in a fashion which demands any particular industrial outcome from any aged care provider.

This is important legislation. Some of the technical matters here we agree on. Some of these broader matters of management, we certainly disagree on, because we have a very different approach. These are good amendments, this is good legislation and I commend it to the House.

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

I think the government's convictions about aged care and its commitment to delivering quality aged care can be shown by the length of the speeches presented from the people on the other side of this parliament.

The former government legislated major reforms to aged care with its Living Longer Living Better legislation in the last parliament. It was legislation that changed the face of aged care in Australia. It was the biggest revamp of aged care in over 20 years. It was legislation that put the person at the centre of aged care. The numbers needing aged care will increase into the future, so it is really important that aged care be person centred.

Mr Laming interjecting—

I can hear noise from the government backbenches, where they are saying they don't agree that aged care should be person centred. They don't believe that aged care should be about the needs of the person. When Labor was in government we were committed to ensuring that aged care was about the person—aged care was person centred; that preferably it would be delivered to the person in the home but, when older people needed to access aged care in an aged care facility, that aged care facility would be able to look after them in the appropriate way, would be appropriately funded and would have the appropriate workforce—a well qualified, well-resourced, well-paid workforce. Listening to the contribution from the member on the other side of this House it is something that government members are not committed to. They do not acknowledge the fact that workers in aged care deserve to receive a reasonable recompense for their work. The legislation that we introduced when in government was about ensuring that those workers did receive adequate remuneration for their work. Each and every day in this House we see this government moving to attack the conditions and the pay of workers.

Aged care is a very special industry. It is an industry that looks after some of the most vulnerable people in our society and we need to make sure those people have the training, the qualifications and the skills that they need to work in the industry. We need to make sure that once they do have those skills and training they will remain in that industry. Workers in the aged care industry were receiving significantly less than other workers in similar occupations in different parts of the healthcare sector. As I mentioned, these workers are looking after the most vulnerable people in our community—frail, aged people who have made enormous contributions to our nation. They have made Australia the country it is today, and the least we can do as a country is ensure that those older Australians are properly looked after in their later years.

The legislation before us today amends the Aged Care Act 1997 to reflect a measure to reprioritise the aged care workforce supplement introduced under Labor's Living Longer Living Better supplement. It was a $1.2 billion supplement going into the general pool of aged care funds, and it was a coalition election commitment. The supplement was abolished through a legislative instrument in September 2013. This legislation also makes amendments to the Healthcare Identifiers Act 2010 to support the implementation of stage 2 of the Aged Care Gateway, something that was established under the Labor government's Living Longer Living Better legislation, and minor clarifications and technical amendments to aged care related legislation. Reprioritising the aged care workforce supplement fund into the general pool of aged care equates to an investment in Australia's aged care workforce. The aged care supplement was effectively implemented through two legislative instruments, which addressed the funding arrangement.

The one issue I have to emphasise over and over again is that we need to properly remunerate workers within the aged care sector. We need to make sure we do not walk away from that. We need to make sure that any changes really do not lead to a further whittling away of the wages of those workers and leading to more workers leaving the aged care sector when it is a growing sector. It is a sector that we will be depending on more in the future as we have an ageing population, as has been mentioned already this morning. At this particular time we have more people each year receiving the pension than are entering the workforce. That shows we have an ageing population in Australia; that shows we need to make sure that we have the right sort of care provided for people as they get older. Across the industry there is a consensus that workforce issues are a priority. Unless the government truly tries to address that, rather than looking at ways it can save money, looking at ways it can lead to lower wages being paid to workers in the aged care sector, then we will have a workforce crisis.

It is, as I said, imperative that pay and conditions are maintained. The Productivity Commission report Caring for older Australians predicted that we would need three times the aged care workforce that we have now. There tends to be a very high turnover in the aged care workforce. It features some of the lowest paid workers, as I have already mentioned, so it is important that we get this right. On this side of the parliament we are committed to supporting the continued rollout of the Living Longer Living Better reforms. I hope the government does not move away from them.

I want to quickly touch on the aged care payroll tax supplement that was abolished in this year's budget. That was very important to providers of aged care. I was talking to one aged care provider this morning. That aged care provider—it is a smaller provider—told me that it means $10,000 a month to them, so for bigger providers it will mean even more to them because they will lose greater amounts. So $10,000 a month equates to $120,000 a year, which can really impact on the quality and the care that will be available for people because those aged care providers will have fewer resources available to them.

The aged care sector is not an industry. People working in the aged care sector do not make a massive profit. Most of the people involved, most of the organisations involved in aged care—be they not-for-profit, public or private—are dedicated to ensuring that older people are cared for properly and the cessation of the payroll tax will, in essence, be a cut in funding to the aged care sector.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

That's not true and you know it!

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

Members on the other side make a lot of noise, but the facts speak for themselves. This government is about cutting and making things harder for anyone that looks to government for support. We have seen that time and time again in the House this week, with this mean-spirited government constantly making cuts across the board—affecting pensioners, families and students. Before the election they promised one thing; now they are in government they are delivering something else. They promised to be a government of no surprises and no excuses. That was the kind of government they said they would be; instead they have been a government that said one thing before the election and says another thing after the election—a government of broken promises. At the head of those broken promises is the Prime Minister of this country, Prime Minister Abbott, who does not blink as he comes in here and avoids answering questions or telling the truth to Australians about why he is breaking his promises.

One of the worst things this government has done is remove the dementia and severe behaviours supplement. In relation to that, it is really important that we look at what is happening in the area of dementia. In the last parliament I delivered a report from the Health and Ageing Committee that looked at dementia. Dementia is one of the biggest health issues facing Australia today. We have to make sure that adequate resources are going into providing care and services for people who are living with dementia. It has been called a national crisis and it is looming as a health disaster. There is not enough money going into research in this area, and currently there are 330,000 Australians living with dementia. Each week, more than 1,700 people are being diagnosed with dementia. The figure is set to rise to 7,000 a week, or a total of one million people, by 2050. These numbers are huge. It is a tragedy for our society and for the families of these people, and it is a tragedy that this government has removed the dementia supplement which was put in place to ensure that aged-care facilities had the proper resources to care for people living with dementia.

I would like to refer to some comments that have been made in this area. One is in relation to research. Only $22 million was spent on dementia research in 2012-13, in comparison to the $162.4 million that was spent on cancer research. Cancer research is very important but these figures show that this government is not prepared to invest in ensuring that people living with dementia are properly cared for. I would like to quote the CEO of Aged and Community Services Australia. He says the dementia supplement is a 'very necessary supplement' and that losing it will have an enormous impact.

This government is selling older Australians out. This government said one thing before the election and does another thing after. Its approach to aged care—ripping, as it has, all the money out of aged care—puts the most vulnerable people in our society at risk. Instead of supporting older people, who have given so much to our country, it is walking away from them.

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Apologies to all in Australia who are listening in to the debate today for the last 15 minutes of debate; that is 15 minutes many of us will never get back. If we were to distil what happened in the last quarter of an hour, most of us would agree that we could pretty much sum up the debate right now and just have a vote.

I want to repudiate a couple of inaccuracies that snuck through in that 15 minutes for those of you who did not fall asleep. The first is that this payment of $1.1 billion—which was effectively used as a union recruitment tool in aged care—will be in full and 100 per cent repurposed into the aged-care funding pool. The indexation of 2.4 per cent that accrues in the aged-care sector is recognised to have occurred early this year. This repurposing of the payment we are debating today is over and above indexation. It is a very clear message to Australians out there in aged-care facilities that the money is fully available to providers now, and they will not be told how to spend it.

It must be very difficult being a member of the Labor Party when uttering the phrase 'pay and conditions, pay and conditions' continues to get you preselected, but takes you no closer to the heart of the economics of running an aged-care facility. It is only one lever, and you cannot keep pressing the pay and conditions lever and ignore everything else—partly because that might be your ideological choice and partly because the economics of aged care is a little bit too complex. It is much easier, in that context, to pay a workforce supplement to try to push up wages and not worry about the ancillary effects that flow from that.

In reality, for those of us who run a small, medium-sized or big business, or a hospital, an aged-care facility or anything in between, we know there are numerous inputs that control the quality of what we create. That is, of course, the service. Looking after our seniors is not just about who pays what salary; it is actually about the technology we deliver to ensure that work is of the highest quality. It is about the training we impart so that those who work in our services are as effective as possible. Lastly, it is about the managerial decisions that ensure that over the long term the service is viable.

Wages are just one input. It is the Labor Party input that occupies every preselection debate and that they come and stand in this chamber to talk about, but we know it is way more complex than that. When we pay for good people and we get the best people that we can within the market, we then have a broader concern about the quality of the service that is delivered and the use of technology, and of course those labour to capital ratios. And that is a far broader debate that aged-care facilities are thinking about. What they know is that they get all of that money and more, they get the indexation and they have more flexibly about how that money is spent.

We know that in regional and rural areas occupancy may not always be at the same high levels and, potentially, there can be fluctuations in service requirements—and if you cannot get services in that town or to get them you have to pay more then, in many cases, viability really can be quite threatening in those situations. Fifty-four million dollars of viability payments is a very important contribution to make sure that Australian seniors can retire and have aged-care facilities in the towns where they have grown up, where they have worked and where they have given their lives. That is very important. I also note many seniors from regional areas, in a very dispersed population like Brisbane's, increasingly come down to outer metropolitan areas to find aged-care places. That puts an enormous stress on our services to respond to those demands.

Thirdly, in this series of minor, technical and consequential amendments, there is an arrangement to ensure that costs can be recovered from people who have care at home, as they can be with residential care. That makes complete sense, and it is only fair to treat people who have at-home care in the same way as those who have residential care.

Lastly, and with some credit to the previous government for embarking on the My Aged Care website and the services that have been provided, there is the acknowledgement that it will be stepping up in the middle of next year and that individuals will be able to develop their own personal aged-care profiles. That makes complete sense and is consistent with the move, that we are having in both health and hospital provision, increasingly to not only collect data but also make sure that that data is available, because if you cannot mine the data and use it then the great threat is that that data, having been so expensive, is not at all utilised. I know that there is significant work now occurring in the US—led by GE, no less—to effectively form control towers around the management of health and hospital data. At the moment, we have a highly reactive hospital and aged-care system. We set our staffing ratios weeks in advance; we wait, often unable to predict patient flows and arrivals; and we have the 5 o'clock referral from aged-care facilities to hospitals when staff there are not confident that they can look after complex and high-needs patients over a weekend when staffing levels and experience are sometimes lower. We need to plan for that in advance. We need a highly intelligent system that could pull together multiple forms of information in health and aged care. I think that forming these profiles in the My Aged Care website is one way of doing that.

Keep in mind that a hospital and an aged-care facility are very complex environments. You have your staff flow, patient flow, use of consumables, and staff time in individual tasks. At the moment we have a very slowly responsive system that cannot actually respond when required to changes in that system, leading to blockages—obstruction within the system—and, ultimately, poor functionality. So whether it is in outpatients or whether it is an individual patient record, or whether it is in aged care with our own profile, we are determined to help Australians through that sometimes very traumatic time of finding a suitable aged-care place. It is something that the coalition government is committed to.

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

The question now is that the amendment be agreed to.

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

The Aged Care and Other Legislation Amendment Bill 2014 makes consequential, technical and other minor amendments to various measures in aged care. Aged care in the Lyne electorate is a very important sector of the economy and delivers care to thousands of nursing home residents. That is why this legislation is so important. In fact, one of the growth engines of the Lyne economy is the aged-care sector. Health and aged care are by far the greatest employers in the Lyne electorate, and changes to the legislation to make it a more robust and better functioning part of the healthcare and aged-care system are going to be very beneficial.

There are three main consequences of this legislation. The first is the repurposing of the Aged Care Workforce Supplement. The amount of money involved in this supplement will be retained within the aged-care and the My Aged Care space, and it will be used much more efficiently by the aged-care providers. The initial rollout of this supplement was used to entice people into union membership, and it really did not sit well with the industry or the recipients of care. It also represented a misuse of Commonwealth funds, in my opinion, and this redirection into the aged-care space at the discretion of the providers seems eminently reasonable.

In my home town of Wauchope we have a huge aged-care facility, and I am sure they will be very pleased to hear of these changes. Similarly, in the town of Gloucester there is an aged-care facility which is really quite ageing and ill-designed for the purpose for which it is used. I have been fighting to get some help to get a new aged-care provider into the town of Gloucester. We are hoping that Manning Valley Care, which runs extremely professional nursing homes on the mid-North Coast, will move into that space, and we look forward to that coming to fruition. Similarly, in the town of Taree we have several large aged-care facilities, and I am sure they will appreciate being able to apply this aged-care supplement in a way that benefits the residents and the delivery of care, rather than being an incentive for a worker to join a union.

The My Aged Care stage 2 rollout is also going to be facilitated by this. It allows the system of enrolment and information to be centralised. The first stage of it was very helpful for people entering their parents or relatives into the aged-care system. This will help complete that process. It is a very user-friendly system, at least in the first stage, and we are looking forward to the second stage being rolled out. The third thing about the way the system works that is most important is that it equates the way the system works for aged care in the home-care setting as opposed to the residential setting. That discrepancy was very inefficient and unequal. Also, the recovery of past care costs is very important. If someone is in aged care as a result of misadventure or an accident, there is often compensation reached but that legal process can take months and years. (Time expired)

Debate interrupted.

Bruce Scott (Maranoa, Deputy-Speaker) Share this | Link to this | Hansard source

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour. The honourable member will have leave to continue his remarks.