Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

I move:

That this House:

(1) recognises that the regulation of retirement villages in Australia is highly complex and varies significantly between states and territories;

(2) acknowledges that retirement village fees can include upfront incoming payments, ongoing service charges, and exit or deferred management fees, the latter of which may equate up to 25 to 40 per cent of the resident's ingoing contribution or resale price;

(3) further recognises that while these fees are of a quantum which may apply to a prospective resident when purchasing a property freehold, most retirement villages offer only loan/license agreements or leasehold or similar agreements, which do not provide comparable security of tenure nor other rights;

(4) expresses concern that:

(a) negotiating and understanding a lengthy and complex retirement village contract can be difficult for some prospective residents; and

(b) the fees charged place some residents in financial hardship when they depart, such that they may not be able to afford a higher level of care if needed subsequently;

(5) calls on the Government to recognise that many retirement village contracts represent a financial product, and therefore warrant federal oversight and regulation; and

(6) further calls on the Government to work with the states and territories on national reforms for the harmonisation of retirement village regulation regimes such that:

(a) improved consumer protections and increased transparency and consistency are provided for all Australians entering retirement villages; and

(b) consideration is given to:

(i) regulation of retirement village contracts as financial products by the Australian Securities and Investment Commission; and

(ii) improved consumer protections and regulation by the Australian Competition and Consumer Commission.

I call on the government to give Australians living in retirement villages greater financial and consumer protections, and to take the lead in ensuring consistency and transparency across state and territory legislative regimes. While retirement villages are largely regulated under state and territory laws, elder law specialists and senior advocates have called for national reform and a harmonisation in the past. Many Australians enjoy retirement village living and it suits their lifestyle well.

Unfortunately, I'm also approached by many others who are appalled at the excess fees applied to retirement village living. One couple from the south coast in my electorate say that, after perceived changes to their retirement village rules, they have been told they will receive only $259,000 of an estimated selling refund of their property—the property they're living in, the property they don't own—of $417,000. This represents a loss of around $160,000, largely for the privilege of leaving. Another gentleman advises that, after paying $187,000 for his unit, his mother will be charged over $121,000—around two-thirds of the original incoming amount paid—when she leaves. She has also been told she will potentially be charged fees for up to six months after leaving if the property has not been resold to another person. A couple from a retirement village in the Adelaide Hills are concerned that fellow former residents have paid exit fees of between $80,000 and $100,000. They're calling for legislative reform so these fees are required to be fair and reasonable.

For many, the total fees for upfront incoming payments, ongoing service charges and exit or debit deferred management fees are eye-watering. Exit fees alone can be anywhere between 25 per cent and 40 per cent of a person's ingoing contribution. Residents have very little insight into or control of how some retirement villages calculate their exit costs—including the complete refurbishment of the unit, which may be demanded even if a resident is only there for a year. Many residents don't have any control over how the unit is marketed or when it's going to be put to market. This is all done in-house by the retirement village owners, and often at far higher rates, with commission that a real estate agent would charge, leaving exiting residents feeling powerless and out-of-pocket. Once fees are deducted, remaining funds leave some residents ill-equipped to pay for high-care-level needs. This is particularly worrying for many of them who are then moving on to aged care.

How can we listen to our constituents' stories and not take action in this place? This needs fairness and transparency. We have an uneven playing field of regulations in each state and territory, and often a power imbalance with respect to negotiations between prospective residents and the owners and managers of the villages. I urge government to look at the nature of retirement village agreements. These contracts are lengthy and confusing. If an agreement looks like a financial product and behaves like a financial product, it should be regulated like one and should have the strong regulatory oversight role that the Australian Securities and Investments Commission does.

This call for action is supported by National Seniors Australia, who have been calling for nationally consistent and strengthened retirement village legislation for years due to growing complaints from older Australians. Ian Henschke, their chief advocate, tells me people are confused and frustrated by the complexity of contracts and lack of protection when they are entering a retirement village, and are dismayed by the delays and egregious charges they're charged when they exit. Nationally consistent retirement village legislation is needed, and it needs federal government leadership. The South Australian Retirement Villages Residents Association, which represents 7,000 residents just in South Australia, believes we need to have greater consumer protection and transparency, and a balance of rights between operators and residents.

Retirement villages, for many, are a safe and welcoming place to live. As I said earlier, if an agreement looks like a financial product and behaves like a financial product it should be regulated like one, and we need Commonwealth oversight with respect to the ASIC and the ACCC. We can't continue to allow people who are living in retirement villages to be rorted and to feel completely powerless when they are buying what is essentially often their last financial product in life.

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

Is the motion seconded?

Russell Broadbent (Monash, Liberal Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Louise Miller-Frost (Boothby, Australian Labor Party) Share this | Link to this | Hansard source

MILLER-FROST () (): I thank the member for Mayo for this private member's motion and recognise her concern with practices in the retirement village sector. I certainly share her concerns and recognise that with our ageing population—and, specifically, with the baby boomer cohort continuing to move into retirement age—retirement villages are going to be increasingly under pressure, and that the practices of the retirement villages will be affecting more and more of our community. In Boothby, we currently have around 38,000 people of retirement age, which is 21 per cent of the population, and, obviously, we expect that to increase over time.

As the member notes in her motion, retirement villages are currently regulated through various arrangements of the state and territory governments. The federal government does not regulate retirement homes. Under the Aged Care Act 1997, the federal aged-care regulator, the Aged Care Quality and Safety Commission, is only responsible for approved providers, being those aged-care facilities that receive Commonwealth subsidies. We do, however, recognise that many people living in retirement villages often access Commonwealth funded home-care packages and other supports, and this can be a very important part of enabling them to continue to live independently and safely for as long as possible.

To this end, the government is committed to implementing the aged-care royal commission recommendations. Within our first six months in office we addressed 37 royal commission recommendations, almost four times as many as the previous government managed and in about a third of the time. This has included introducing caps for home-care fees, to stop rorts; banning exit fees from home-care packages; and budget measures to introduce an aged-care complaints commissioner to give older people and their families a voice. We've also supported aged-care workers' fight for fairer wages at the Fair Work Commission, resulting in a 15 per cent pay rise for this dedicated workforce from 1 July this year. This much-needed pay rise for workers will be crucial in making sure that we have the workforce we need to continue to care for older Australians, both through home care and in residential aged-care homes.

With more than five million Australians either approaching or in retirement now, and with many of them having more financial resources than previous retirees, thanks to superannuation, it is important that retirees get good information and advice before entering into agreements with retirement villages, which can be very complex agreements. Many of these retirement villages are excellent and do the right thing, but, as with everything, there are those that leave a lot to be desired. As I understand it, there is a legal definition of what is or is not a financial product and therefore falls into the purview of ASIC and what they are able to regulate. Retirement village contracts do not meet the definition of financial products and there are likely to be legal barriers to this, given existing regulation by states and territories.

As retirement villages are the responsibility of state and territory governments, the Australian Securities and Investments Commission and the Australian Competition and Consumer Commission cannot have oversight of these entities. However, I have raised these matters with the Assistant Treasurer, who was very encouraging, and I would encourage the member for Mayo to do the same. The Assistant Treasurer reiterated that improved consumer protections and transparency are key priorities of the Albanese government, and we are actively working to protect consumers in all sections of our economy.

The Albanese Labor government cares deeply about the aged-care sector, including retirement villages. We care deeply about the older Australians who rely on it, and about their families and loved ones. Every Australian deserves a safe and comfortable retirement, and retirement villages play an important role in the options available to Australian retirees. This government is on a mission to clean up the mess left by the previous government and to deliver the foundations of a world-class system that delivers the care that older people in this country deserve. This government will not stop, and I will not stop, until we've achieved this. I thank the member for her motion.

Russell Broadbent (Monash, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Mayo for bringing this motion before the House. For all of us who have been serving in this place for a long time, there's not one of us who hasn't come across somebody who has had a difficulty with a retirement village or the stages that they're going through in their lives. I note that the member for Boothby just said there are some five million people moving into this category of the Australian community, and they've served this nation very, very well. They also provided for themselves well. In doing so, they go to another stage of life, another opportunity. I always see it as another opportunity, whether it be going into a retirement village or associated body like retirement villages—lifestyle villages. Some people are going into lifestyle villages when they're over 50 years of age, because they choose to do it, especially if they're single women. It gives them a community around them, it gives them activities to do and it gives them interaction with other people without having to go outside of their village. It gives them the protection and care that is surrounded in that process.

There are also, as has been stated today, financial arrangements entered into for people going into lifestyle villages—selling their own home or moving from a rental into a lifestyle village, for the financial benefit of that—and then perhaps others moving into retirement villages. We've all got them in our community. They are large. There are a lot of people who have chosen that lifestyle now. However, I had one experience the other day whereby a gentleman and his wife—and his wife was considerably unwell—moved into a lifestyle village but that lifestyle village was too loud for his wife. It would be normal for us but her particular needs were quietness and that lifestyle village couldn't provide it so he couldn't stay there. He had to go into an aged-care facility. The problem with going from one situation into another into another is the loss of funds that you have entered into. It was a product in one way. In one way it may not meet the state definition or the federal definition of a financial product but it actually is a financial product. You are entering into an agreement. And if you don't stay for very long, for whatever reason—be it morbidity or whatever the situation is—you're still responsible to pay what you agreed to pay when you left the village. Whether it be three weeks, six months, two years, five years it doesn't matter. So if you are only there for a brief time and you need to go to another one you're going to have to pay. There are consequences for that and they are financial consequences.

We were all trained in our secondary years—in accounting anyway—about caveat emptor: let the buyer beware. Why do they go to a particular retirement village? Because their friends recommend it. They say, 'It's wonderful and we are having a beautiful time here. We love what we're going et cetera.' So the input into what the financial arrangements might be might not be as rigorous as you would expect. I don't think many of them ring their solicitor, if they have a solicitor, and say, 'Would you look at this agreement I'm entering into and give me some recommendations that I should highlight here so I fully understand it?'

In another situation, I spoke to a man whose wife was going into an aged-care facility. He was wanting information from the provider that the provider clearly wasn't prepared to give, or wasn't able to give, or didn't want to give—I don't know. He was a highly articulate, highly intelligent older person and he was asking questions that he needed to know answers to before he signed up. He was getting accounts that he thought he shouldn't have been getting and what was I to do about it? As a local member you're not necessarily on top of every financial contract that somebody has entered into. You expect that's for the experts—for the solicitors and the accountants—not Russel Broadbent, MP for Monash. But we're quite prepared to go back to myGov. MyGov is interesting. I don't know how to explain that. It is sometimes not the exact place to go. Thank you, Deputy Speaker, for the opportunity to speak on this motion.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

FREELANDER () (): I thank the member for Mayo for moving this motion regarding retirement villages and the need for greater supports and oversight of this industry, an industry that was neglected for far too long under the previous government and one that was severely affected during the pandemic. I'm speaking on this motion not because a One Nation voter told me during the New South Wales election on Saturday that I belong in a retirement village but because this is very important.

Tony Pasin (Barker, Liberal Party, Shadow Assistant Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

That's a bit harsh. Not even I'd say that!

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

Very good—I thank the member for Barker. Retirement villages are springing up around my electorate very, very quickly. My electorate is a rapidly growing one. In areas where previously there were farms, we're now getting aged-care homes, retirement villages and new buildings. Very frequently, my office is being contacted by people from the retirement villages with a number of complaints. The retirement villages that I have seen and been into my electorate seem to me to be very, very good. But the legislation around their management, which is predominantly state legislation, is unclear, and questions often arise as to people's obligations; the obligations of the owners of the retirement villages; and things like maintenance costs, increases in levies, what happens when the accommodation is sold, for whatever reason, and what happens to the assets.

I think the Minister for Aged Care is doing a wonderful job addressing the negligent attitude of the previous government regarding retirement villages, particularly after COVID and the effects that have happened. It is important that the Commonwealth government has national oversight of this industry, as it will be a more harmonious coalition between aged-care residents and Commonwealth funded programs compared to the states and the different packages they offer and in terms of legislation.

I am proud to be part of a government that cares deeply about the aged-care sector and about the retirement living sector. Elderly people rely on proper management and proper legislation to make sure these homes are adequately oversighted and appropriately managed. We are an ageing population, and more people are going to require support as they enter into retirement living. Things like aged care et cetera are very important in providing services into the retirement living space.

This government has introduced budget measures to put in place a number of complaints processes in the aged-care sector, and the same could be done in the retirement living sector. With an ageing population, we're all living longer, and we're seeing that the retirement living sector is booming. However, I think legislation has been quite slow in coming to terms with the implications for the aged-care sector and also transitioning from retirement living into aged care. More must be done, and it is being done by the Albanese government, and I congratulate the minister. It is important that we know that our retirement living sector is adequately managed and that people feel that they are supported whilst they are in retirement living places. There's more to be done in terms of health care in retirement living, and design is very important. Again, this is important in Commonwealth legislation. We need to be looking at things like air quality, facilities for exercise, facilities for entertainment and support for people as they get older so that they can stay independent in their own homes for longer.

This is going to require quite significant review by government, and the Commonwealth government must get involved with this. We can't leave it to the states to continue managing the retirement living sector, as they had done with many of the aged-care facilities, and we saw what happened to residential aged care. So it's very important the same thing doesn't happen in retirement living spaces. Much more needs to be done. There needs to be more oversight. The government is aware of that and is putting in place measures to deal with all of those issues, and I'm sure that better outcomes will happen because of that.

I thank the Member for Mayo for moving this motion. I know she cares very deeply about this issue, and I thank her for her support.

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

There being no further speakers, the debate is adjourned and the resumption of the debate will be made an order of the day for the next sitting.