Judith Adams (WA, Liberal Party) Share this | Hansard source

It gives me pleasure to speak after Senator Siewert. She has given us some very good information. I would like to continue in that vein. I rise today to speak about the mess that Australia’s aged-care sector is in. To highlight that, I would like to inform you of the Aged and Community Services Australia conference which is being held in Perth this weekend. They have named it ‘Get up, stand-up!’. That is the theme of ACSA’s 2009 conference. The conference brochure says:

And who can doubt that it’s time for the aged and community care industry to stand up for their rights and the rights of the people they support? We’ve been knocked from the pillar of a workforce crisis and soaring inflation to the post of the totally inadequate funding regime in a time of global financial meltdown. No wonder the sparks are well and truly flying right now! But, does anybody know and does anybody care? Well, we care and we’re going to show the world what we’re made of!

This Conference is all about rallying, connecting, challenging and asserting—it’s about aged care pride. It’s themed throughout as a “stand up” event in every sense, where the delegates get involved and don’t just sit down and take it.

I wish that organisation well with their conference.

If the Rudd Labor government continues on its present course of poor management of aged care, the growing crisis in the sector will very soon reach breaking point. The government needs to remind itself of its responsibilities and act on them. Aged care is a direct Commonwealth government responsibility. Schools are a state government responsibility, so why is the Australian government spending money on primary schools, plastered with political advertising, and not aged-care facilities? It is because most people cast their vote in the local school hall and not at the local nursing home.

The extraordinary thing is that the care of senior Australians is being severely compromised by the bad spending decisions of the Rudd government. I would like to touch on that briefly. This past week we have seen the Rudd government try to justify its bad spending decisions and the massive amount of debt it is saddling future generations with. It has tried to distort the seriousness of the situation by saying that many of the major economies are doing the same. The Rudd government is also citing a number of organisations which have supported the spending spree. But how many of those organisations foresaw the financial meltdown? Almost none that I am aware of. There is one that the Rudd government has been as quiet as a mouse about, only one bank to warn of the impending financial meltdown, and that is the Bank for International Settlements—the Reserve Bank of reserve banks. That very same bank has also warned against the stimulus spending, saying it will lead to stagnation, inflation and higher interest.

The Rudd government is not listening to the one bank that foresaw the trouble ahead. But in not reining in its spending, the Rudd government is threatening the care options of millions of senior Australians. That is something that will come back and haunt every single Australian family. Aged care touches most Australian families. Many of our parents and grandparents will spend the final years of their lives in aged care. These people are as important to our community as their children and grandchildren, and the Commonwealth government has a duty to give our elderly citizens, who have helped build our nation to what it is today, the very best care in their final years. The government cannot absolve itself of this responsibility and turn its back.

Like most developed countries, our population is ageing as a result of sustained low fertility and increased life expectancy. Over the past two decades, the number of elderly people in Australia increased by 158 per cent compared with a total population growth of 29 per cent over the same period. The Department of Health and Ageing has indicated that within 40 years the number of people aged over 65 will almost triple, from 2.8 million today to around 7.2 million in 2047, or from around 13 per cent of the population today to over 25 per cent. This is a horrifying statistic.

People aged 85 years and over made up 1.5 per cent of Australia’s population in June 2004. This age group is projected to account for around six per cent to eight per cent of the population in 2051 and seven per cent to 10 per cent in 2101. The population aged 85 years and over is projected to experience the highest growth rates of all age groups. We need to be acting on infrastructure requirements in tandem with our ageing population because the problem is not going to go away.

The recent report for Alzheimers Australia by Access Economics projects that the number of Australians living with dementia by 2050 will have quadrupled from 245,400 at present to a staggering 1.13 million people. The first of the baby boomers will be turning 65 in 2010 and by 2020 it is estimated there will be 75,000 baby boomers with dementia. These are horrifying and very sobering statistics that highlight the need to be gearing up, not neglecting, our aged-care sector. Just as we prepared for our retiring Commonwealth superannuants with the Future Fund, so too do we need to prepare aged-care services for the increasing number of our elderly citizens. Treasury projections indicate that in 40 years time government spending needed for aged care will have more than doubled over current expenditure, and the aged-care budgets will be higher than the budgets for defence or education. These figures must be taken seriously by the current governments as we are rapidly falling behind the eight ball. The disgrace of the situation is that it is our older citizens who suffer directly as a consequence.

The infrastructure costs required to build and service new aged-care bed licences far outweigh the funds that are available. Senator Siewert, before me, described what those infrastructure areas were—that people nowadays would prefer to have a single-bed unit with their ensuite rather than share. This is just what the baby boomers will expect; they will not want to go into four-bed wards or two-bed wards with shared facilities. Unless this is immediately addressed there will continue to be no incentive for aged-care providers to expand their services. These providers are having great difficulty existing as they are now and, what is more, a substantial number are now going backwards in this industry that has become unsustainable in its present form. Approximately 45 per cent of residential aged-care facilities in Australia reported a loss over the past two years, and this is direct evidence of a currently unsustainable industry. The places which are being allocated are not being adequately funded. Not only do aged-care providers not have the capital to expand facilities to meet the number of bed licences issued but, in many of the instances where they do have some construction funds, they cannot get the additional finance required because banks are stipulating that there is no return—the business case is just not there.

The cost of constructing new accommodation far outweighs the funding that is being made available. Last October, the Bethanie Group in Western Australia handed back licences for 110 beds. Each bed would have cost approximately $180,000 to create plus $65,000 to run. However, the funding available was a one-off $109,000, and $41,000 per year to maintain. A recent report by Access Economics estimates that a capital cost of $42.32 per resident per day is needed to contribute to the construction and maintenance of new or expanded aged-care facilities. This is well above what the Department of Health and Ageing allows to be paid. The government allows only $23.88 for a pensioner or a concessional resident or $26.88 for a non-concessional resident per day to be paid towards accommodation or capital costs. This is an $18.44 shortfall below the $42.32 which is needed, according to Access Economics. At an aged-care facility in the federal seat of Hasluck in Western Australia, the funding they receive falls short of the capital needed to build the 24 new places allocated to them