The Acting Deputy President:

In accordance with the usual practice and with the concurrence of the Senate, the government responses will be incorporated in Hansard.

The document read as follows—

Senate Economics Legislation Committee

Inquiry into Tax Laws Amendment (Public Benefit Test) Bill 2010

Government Response

Recommendation 1: The Committee recommends that the incoming government should follow the emerging international best practice and work with the Council of Australian Governments to amend legislation governing not-far-profit entities to include a definition and test of ‘public benefit’.

Recommendation 3: The Committee recommends that the incoming government work through COAG to establish a single independent national commission for not-for-profit organisations. The incoming government should establish a working group, or use the COAG Business Regulation and Competition Working Group. The working group should consult extensively with the sector in a timely manner to address issues arising from the establishment of a commission which applies a public benefit test. The Australian model should draw on the Charity Commissions in the United Kingdom and New Zealand.

Recommendation 4: The Committee recommends that the working group consider the functions and role of an Australian commission which should include, but not be limited to, the following:

• promote public trust and confidence in the charitable sector;
• encourage and promote the effective use of charitable resources;
• develop and maintain a register of all not-for-profit organisations in Australia using a unique identifying number (for ‘example an ABN) as the identifier;
• develop and maintain an accessible, searchable public interface;
• undertake either an annual descriptive analysis of the organisations that it regulates or provide the required information annually to the ABS for collation and analysis;
• educate and assist charities in relation to matters of good governance and management;
• facilitate, consider and process applications for registration as charitable entities;
• process annual returns submitted by charitable entities;
• supply information and documents in appropriate circumstances for the purposes of the Tax Acts;
• monitor charitable entities and their activities to ensure that registered entities continue to be qualified;
• inquire into charitable entities and persons engaging in serious wrongdoing in connection with a charitable entity;
• monitor and promote compliance with legislation;
• consider, report and make recommendations in relation to any matter relating to charities; and
• stimulate and promote research into any matter relating to charities.

The Government committed to strengthening the not-for-profit sector in its 2010 election campaign including a scoping study for a national regulator for the sector to be completed in early 2011.

The Government will consider the recommendations of the Senate Economic Legislation Committee as part of the scoping study for a national regulator that Treasury has been tasked to undertake.

• A test of public benefit would be considered as part of any proposal to codify the key principles of the common law definition of charity.

Recommendation 2: The Committee recommends that the Attorney-General’s Department provide a report to the Committee on the operation of Miviludes and other law enforcement agencies overseas tasked with monitoring and controlling the unacceptable and/or illegal activities of cult-like organisations who use psychological pressure and breaches of general and industrial law to maintain control over individuals. The report should advise on the effectiveness of Miviludes and other similar organisations, given issues that need to be addressed to develop an international best practice approach for dealing with cult-like behaviour.

The Government does not support this recommendation.

The Government recognises the financial, psychological and emotional impact that the activities of cult-like organisations can have on individuals and their families and considers that religious observance should not be regarded as a shield behind which breaches of the law can be hidden. However, it is doubtful that the Commonwealth has legislative authority under the Constitution to establish an agency with similar functions to the French Mission interministerielle de vigilance et de lutte contre les derives sectaires (“Miviludes”).

Miviludes’ primary tasks include:

• observing and analysing the movement of religious and other groups which are perceived as constituting a threat to public order or that violate French law;
• producing and archiving documentation and discussion papers on groups considered “sects”;
• providing information and training relating to potential threats to public order to the media, the French government and individuals; and
• helping victims of “sectarian deviances” to receive financial aid.

Australia is home to a diversity of faiths, united by tolerance, mutual respect and a commitment to democratic traditions. All Australians are free to choose their religion and are able to express and practise their religion and their beliefs, without intimidation and without interference. The Government considers that it is not the Government’s role to interfere with the religious beliefs or practices of individuals, unless they are in breach of Australian laws.

States and territories are generally responsible for criminal laws and enforcement action directed against criminal activity including conduct resulting in physical, emotional or psychological harm perpetrated by members of religious organisations. Law enforcement agencies and Directors of Public Prosecutions are appropriately equipped to deal with allegations of wrongdoing or criminal activity.

State and territory laws also provide for restitution and compensation for victims in certain circumstances, including through victims of crime compensation schemes. Access to such schemes varies depending on specific criteria in the relevant state or territory.

On 8 March 2006, the United Nations Special Rapporteur on Freedom of Religion or Belief released “Mission to France,” addendum two to her report, “Civil and Political Rights, Including the Question of Religious Intolerance” (E/CN.4/2006/5/Add.4). The report concerned France’s policies in the late 1990s, during the terms of Miviludes’ two predecessors. The Special Rapporteur’s findings included a statement that the policies “undermined the right to freedom of religion or belief and raised serious concerns about religious intolerance.” The Special Rapporteur indicated an intention to continue to closely monitor Miviludes to ensure its actions remained consistent with the right to freedom of religion and to “avoid past mistakes”.

The Government does not propose to provide any further report on the operation of Miviludes and other law enforcement agencies overseas who monitor and/or control “cult-like” activities.

AUSTRALIAN GOVERNMENT RESPONSE TO SENATE STANDING COMMITTEE ON FINANCE AND PUBLIC ADMINISTRATION REPORT

RESIDENTIAL AND COMMUNITY AGED CARE IN AUSTRALIA

OCTOBER 2010

Australian Government Response: Senate Finance and Public Administration Committee Report: Residential and Community Aged Care in Australia

INTRODUCTION

The Australian Government welcomes the report of the Senate Standing Committee on Finance and Public Administration on Residential and Community Aged Care in Australia. The Government is committed to the long-term viability of Australia’s aged care sector and the protection of the nation’s frail and elderly. Through the Council of Australian Governments it has reformed roles and responsibilities within the federation to take full policy and funding responsibility for aged care. This will allow the Government to build a national aged care system to provide better support for older Australians. The reforms will also support the integration of the aged care system with Local Hospital Networks through the Government’s National Health and Hospitals Network.

Over the next four years, increased funding from the Australian Government will bring direct financial support for aged and community care providers who care for older Australians to a record level of $47.8 billion, including $10.8 billion in 2010-11.

The Australian Government will invest more than $900 million over the next four years to deliver:

• a national aged care system
• more highly qualified aged care workers;
• more aged care places;
• more health care services; and
• greater protections for older Australians receiving care.

This investment builds on:

the Australian Government’s commitment to maintain the Conditional Adjustment

Payment in the forward estimates – worth $2.3 billion over the next four years;

the $15 million provided in the last budget to increase the viability supplement for rural and remote residential aged care providers; and

the $728 million flowing to aged care providers as a result of the Australian Government’s pension reforms.

The Australian Government has also asked the Productivity Commission to conduct the most comprehensive inquiry into aged care for decades. The Commission is due to report by the end of April 2011. The recommendations of the Commission and the recommendations of the Henry Review of taxation, together with the recommendations contained in the Senate’s report, will provide vital input into future policy deliberations.

The Prime Minister has made it clear that further reform of the aged care sector will be a second term priority for the Gillard Government.

RESPONSE TO RECOMMENDATIONS

The Committee made 31 recommendations. The Australian Government response to specific recommendations is provided below.

Recommendation 1

The committee recommends the establishment of a national aged care forum, reporting directly to the Minister for Health and Ageing and coordinated by the Department of Health and Ageing, to consider, on an on-going basis, current and future challenges to the aged care sector.

Response

The Australian Government supports Recommendation 1 of the Committee.

The Australian Government established the Ageing Consultative Committee in June 2008 to provide the Minister for Ageing with relevant advice, on an on-going basis, on current and future challenges to the aged care sector. The Committee’s membership includes for-profit and not-for-profit care providers, consumer groups, and professional and union bodies.

Recommendation 2

The committee recommends that the national aged care forum establish a taskforce (or equivalent body) representative of all involved aged care stakeholders including clients to action and where possible implement determinations of the national forum.

Response

The Australian Government supports in principle Recommendation 2 of the Committee.

The Australian Government’s Ageing Consultative Committee already has the capacity to establish working groups as needed to address issues that may arise. Recent working groups have developed a Charter of Rights and Responsibilities for Care Recipients in Community Care and a detailed proposal for the phased implementation of consumer directed care into community aged care programs. A Quality in Community Care Reference Group has been established to provide advice on issues related to quality assurance in community care and input, as requested, on specific aspects of the development of enhanced quality assurance mechanisms.

The Australian Government has also established an Aged Care Workforce Committee to assist the Department of Health and Ageing in formulating advice to the Minister on

key areas relating to the aged care workforce.

Recommendation 3

The committee recommends that the Department of Health and Ageing, in cooperation with the suggested taskforce and in partnership with all involved stakeholders including clients, undertake an all-encompassing review of the Aged Care Act 1997 and related regulations. The review should:

equally examine the provision of residential and community aged care services in Australia with consideration of both current and future challenges in the provision of aged care services;

provide future projections to enable both short and longer-term sectoral planning.

Response

The Australian Government supports in principle Recommendation 3 of the Committee.

The Australian Government has commissioned the Productivity Commission to conduct a public inquiry into Australia’s aged care needs over the coming decades. In undertaking the inquiry, the Commission will develop options for further structural reform of the aged care system so it can meet the challenges facing it in coming decades. In particular, the Commission will:

• examine the social, clinical and institutional aspects of aged care in Australia, building on the substantial base of existing reviews into this sector;
• address the interests of special needs groups;
• develop regulatory and funding options for residential and community aged care (including the Home and Community Care program);
• examine the future workforce requirements of the aged care sector;
• recommend a path for transitioning from the current regulatory arrangements to a
• new system that ensures continuity of care and allows the sector time to adjust;
• examine whether the regulation of retirement specific living options should be aligned more closely with the rest of the aged care sector; and
• assess the fiscal implications of any change in aged care roles and responsibilities.

The Commission is due to report by the end of April 2011.

Recommendation 4

The committee recommends that the Department of Health and Ageing in association with the suggested taskforce and in consultation with all aged care stakeholders including clients undertake analysis to establish benchmark of care costs.

Response

The Australian Government does not support Recommendation 4 of the Committee.

A similar recommendation was made by the Productivity Commission in its 1988 Inquiry into Nursing Homes Subsidies. The Australian Government at that time did not accept the Commission’s proposal as the most appropriate way to assess the adequacy of Government subsidies and resident contributions in meeting average costs.

The Australian Government considers that the sustainability of the industry as a whole is best measured by:

• macroeconomic indicators of viability of the industry such as the level of building activity in the industry, the level of interest expressed by providers in entering or expanding their involvement in the industry, and the prices paid for ‘licences’ to operate in the industry; and
• detailed economic simulations of high care and low care homes to see what factors influence the viability of individual homes.

This view was confirmed by Professor Len Gray in his independent Two Year Review of Aged Care Reforms, which was completed in 2001, who indicated that such a benchmarking process would be very complex and expensive to undertake. The Australian Government’s preferred approach is also in line with that adopted by Professor Hogan in his independent Review of Pricing Arrangements in Residential Aged Care, which was completed in 2004.

Recommendation 5

The committee recommends that the Department of Health and Ageing recommence publication of Audited General Purpose Financial Reports as soon practicable and continue to publish such reports annually as a matter of course.

Response

The Australian Government supports Recommendation 5 of the Committee.

The Department of Health and Ageing has published the deidentified data sets it has derived from the Audited General Purpose Financial Reports of approved providers of residential aged care for 2006-07 and 2007-08. It will publish the deidentified data set for the 2008-09 Audited General Purpose Financial Reports as soon as it is available.

In addition, through the National Health and Hospitals Network—Aged care—increasing business efficiency measure in the 2010-11 Budget, the Australian Government will provide $7.0 million over the next four years (including $0.3 million in capital) to improve the business efficiency of aged care providers by establishing a new provider benchmarking system. The new benchmarking system will allow aged care providers to compare their operational and service performance with other providers, and identify areas where they can improve their performance. This information will also be available to consumers to inform their choice of an aged care service provider.

Eligible aged care providers will also have access to financial advisory services to improve their operational efficiency. This will include financial advice on strategic planning, business analysis, operational reviews and human resources management.

Recommendation 6

The committee recommends that the Department of Health and Ageing review the Audited General Purpose Financial Reports with an aim to identifying any necessary reporting changes to ensure that the information available provides a clear and comparative understanding of provider performance.

Response

The Australian Government supports in principle Recommendation 6 of the Committee.

To satisfy the financial reporting eligibility requirement for the Conditional Adjustment Payment, a residential aged care provider must prepare a financial report that:

• is a general purpose financial report within the meaning of Statement of Accounting Concepts SAC 2 ‘Objective of General Purpose Financial Reporting’;
• is in accordance with the accounting standards;
• gives a true and fair view of the financial position and performance of the entity for the financial year;
• has been audited by a registered company auditor (within the meaning of the Corporations Act 2001), or a person approved by the Department of Health and Ageing.

The Australian Government considers that General Purpose Financial Reports are the most appropriate statements for aged care providers to prepare, because, as the Australian Accounting Standards Board (AASB) says, ‘general purpose financial reporting focuses on providing information to meet the common information needs of users who are unable to command the preparation of reports tailored to their particular information needs. These users must rely on the information communicated to them by the reporting entity.’ (AASB, Statement of Accounting Concepts 2, paragraph 7)

In addition, through the National Health and Hospitals Network—Aged care—increasing business efficiency measure in the 2010-11 Budget, the Australian Government will provide $7.0 million over the next four years (including $0.3 million in capital) to improve the business efficiency of aged care providers by establishing a new provider benchmarking system. The new benchmarking system will allow aged care providers to compare their operational and service performance with other providers, and identify areas where they can improve their performance. This information will also be available to consumers to inform their choice of an aged care service provider.

Eligible aged care providers will also have access to financial advisory services to improve their operational efficiency. This will include financial advice on strategic planning, business analysis, operational reviews and human resources management.

Recommendation 7

The committee recommends the establishment of a nationally consistent methodological approach to data gathering and research on the financial status of the residential and community aged care sector. Towards this goal, the committee recommends the establishment of a roundtable of key stakeholders engaged in such research and facilitated by the Department of Health and Ageing to discuss and agree upon common indicators and definitions to enable comparative analysis.

Response

The Australian Government supports in principle Recommendation 7 of the Committee.

The Australian Government is currently considering these issues at a whole-ofgovernment level. An overall review of reporting requirements and a commitment to reducing red tape for non-profit organisations has been made by Business Regulation and Competition Working Group of the Council of Australian Governments. This initiative will review: the operating structures for non-profit organizations and supporting legislation; fundraising licensing requirements and supporting legislation; governance and financial reporting; and the role of regulators.

In addition, in its response to the Report of the Senate Standing Committee on Economics’ inquiry into disclosure regimes for charities and not-for profit organisations, the Australian Government indicated that it was considering policy reforms in response to the review by the Treasury of financial reporting by unlisted companies under the Corporations Act 2001. The response also indicated that the Government would develop a Commonwealth grants policy framework, including arrangements to minimise unnecessary red tape for grant recipients. This framework came into effect 1 July 2009 and is referred to as the Commonwealth Grant Guidelines.

The Australian Government has already moved towards consistent financial reporting in the residential aged care sector through the requirement that aged care providers produce General Purpose Financial Statement in accordance with all Australian accounting standards, and audited by a Registered Company Auditor, in order to be eligible for the Conditional Adjustment Payment.

In addition, through the National Health and Hospitals Network—Aged care—increasing business efficiency measure in the 2010-11 Budget, the Australian Government will provide $7.0 million over the next four years (including $0.3 million in capital) to improve the business efficiency of aged care providers by establishing a new provider benchmarking system. The new benchmarking system will allow aged care providers to compare their operational and service performance with other providers, and identify areas where they can improve their performance. This information will also be available to consumers to inform their choice of an aged care service provider.

Eligible aged care providers will also have access to financial advisory services to improve their operational efficiency. This will include financial advice on strategic planning, business analysis, operational reviews and human resources management.

Recommendation 8

The committee recommends that the Department of Health and Ageing in association with the suggested taskforce (or equivalent body) and in collaboration with the Australian Institute of Health and Welfare review and address deficiencies in information in the aged care sector.

Response

The Australian Government supports Recommendation 8 of the Committee.

The Department of Health and Ageing will continue to work with the Australian Institute of Health and Welfare to ensure the availability of reliable statistical information on the aged care sector.

Recommendation 9

The committee recommends that the Department of Health and Ageing undertake a ‘stress test’ of the aged care sector in order to measure the sector’s financial wellbeing.

Response

The Australian Government supports in principle Recommendation 9 of the Committee.

The Australian Government continually assesses that the sustainability of the industry by monitoring:

• macroeconomic indicators of viability of the industry such as the level of building activity in the industry, the level of interest expressed by providers in entering or expanding their involvement in the industry, and the prices paid for ‘licences’ to operate in the industry; and
• detailed economic simulations of high care and low care homes to see what factors influence the viability of individual homes.

Recommendation 10

The committee recommends that the Department of Health and Ageing, in association with the suggested taskforce, undertake a review:

• to identify the costs and resources required to meet new regulation, accreditation and compliance measures with a view to rationalising the administrative processes as required; and
• to identify more cost effective means of meeting the requirements of the compliance framework.

Response

The Australian Government supports in principle Recommendation 10 of the Committee.

The Australian Government considers the costs of compliance when making regulation and the costs of regulation introduced in recent years has been assessed as minor.

The Australian Government currently has a number of processes underway that will examine key aspects of aged care regulation and these will provide opportunities to consider the scope to streamline regulation and reduce administrative and compliance burdens. These include the Productivity Commission’s Caring for Older Australians Inquiry and the review of aged care accreditation standards and processes.

The Australian Government is also currently working to implement recommendations made by the Productivity Commission in its review of regulatory burdens in social and economic infrastructure services.

The development of a nationally unified aged care system will also provide the Australian Government with a platform to streamline provider administrative and compliance processes.

Recommendation 11

The committee recommends that the Department of Health and Ageing implement measures, including additional funding, to assist smaller providers to meet the requirements of the compliance framework.

Response

The Australian Government supports in principle Recommendation 11 of the Committee.

A viability supplement is paid to eligible residential aged care providers, including smaller providers, in regional, rural and remote areas to assist with the additional costs of providing care in these areas. In the 2009-10 Budget, the Australian Government provided an additional $14.8 million for this supplement, over two years, to increase the average level of the viability supplement for eligible aged care homes by 40 per cent. In the 2010-11 Budget, the Australian Government provided an additional $10.1 million for this supplement, over four years, to increase the average level of the viability supplement for eligible providers of community care packages by 40 per cent.

The Australian Government also subsidises the costs of accreditation for small aged care homes.

Recommendation 12

The committee recommends that the issue of professional nursing and other aged care staffing requirements be considered in the overarching review of the aged care sector.

Response

The Australian Government supports in principle Recommendation 12 of the Committee.

The Australian Government has commissioned the Productivity Commission to conduct a public inquiry into Australia’s aged care needs over the coming decades. In undertaking the inquiry, the Commission will develop options for further structural reform of the aged care system so it can meet the challenges facing it in coming decades. In particular, the Commission will examine the future workforce requirements of the aged care sector. The Commission is due to report by the end of April 2011.

The Australian Government has also established an Aged Care Workforce Committee to assist the Department of Health and Ageing in formulating advice to the Minister on how best to meet Australian Government policy objectives in key areas relating to the aged care workforce.

The Australian Government will commit more than $310 million over the next four years to support the aged care workforce and to support aged care workers while they undertake education and training.

New measures in the 2010-11 Budget worth $103 million over four years will enable The Australian Government to:

• Support and encourage aged care workers to upskill by introducing an Aged Care Education and Training Incentive Payments scheme, which will provide payments of up to $5,000 to support up to 50,000 aged care workers over the next four years while they undertake training and further education ($59.9 million).
• Provide an additional 600 fully funded enrolled nurse training places and 300 undergraduate nursing scholarships ($21 million).
• Build on its reforms that recognise the important role of nurse practitioners, through an $18.7 million investment to establish different models of practice to utilise nurse practitioners in aged care ($18.7 million).
• Work to document a national scope of practice and competency framework for personal carer workers and assistants in nursing ($3.7 million).

The Australian Government will also shift the focus of its existing workforce programs ($211.2 million) to improve clinical care. This will include:

• Introducing Teaching Nursing Homes to strengthen the links between the aged care sector, research and training institutions and support the sector’s engagement with Local Hospital Networks.
• For the first time, providing financial incentives for aged care providers to make available up to 400 nursing graduate placements to ensure new graduates benefit from experienced clinical support and mentoring.
• Up to 640 clinical training placements to enable improved clinical training and supervision in the sector.
• 40 aged care nurse practitioner scholarships to build on the Australian Government’s MB S and PBS reforms for nurse pr