Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Aged Care, Disabilities and Carers) Share this | Link to this | Hansard source

The first two bills that we are debating here this evening, the Aged Care (Bond Security) Bill 2005 and the Aged Care (Bond Security) Levy Bill 2005 are designed to protect accommodation bonds held by residential aged care providers in case of a provider becoming insolvent. The third bill in this suite, the Aged Care Amendment (2005 Measures No. 1) Bill 2005, is designed to ensure that residents of flexible care services are afforded the same protections as residents in residential aged care services. It puts in place a set of prudential standards and is designed to ensure that interest is repaid to the estate of a resident for a period between the death of a resident and the repayment of the bond. It is also designed to change the time frame of repayment of a bond to the estate of a deceased resident. Finally, it is designed to reduce the time frame in which a bond must be refunded in the event of a resident leaving a facility or if a resident dies.

The essential purpose that these three bills provide is to strengthen the prudential requirements and enhance the protections available to residents in aged care who have paid accommodation bonds. These bonds are paid, as many of us know, upon entry by non-concessional residents of low-care residential aged care facilities, by residents in high-care facilities which have extra service status and by some residents in multipurpose services. When residents leave an aged care facility, they, their family or the estate may be eligible for a refund of part of the accommodation bond that has been paid. Under current arrangements, if a residential care facility provider became bankrupt or insolvent, the resident is not guaranteed that they will get their relevant accommodation bond amount refunded. These bills are designed to ensure that residents will in all cases be refunded the amount of accommodation bond that they are owed.

The introduction of these arrangements was recommended by Professor Hogan in his 2004 review of pricing arrangements in residential aged care. There is general industry acceptance of the proposals as an appropriate way to protect residents’ funds. Professor Warren Hogan recommended that measures be introduced to protect the increasing pool of accommodation bonds that exist. Currently, approximately $4.3 billion is held by residential aged care providers as bonds, with an average bond being $127,600. Unfortunately—and I am very glad the minister is here, because he might be able to answer this in his contribution to the debate—we are still waiting for the government’s long-term response to the Hogan review. The summary report of the review of pricing arrangements in residential aged care was received by the government in March 2004. It has now taken this government longer to respond to the report than it took Professor Hogan to undertake the research and write the report for his original work.

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

That is outrageous!

Jan McLucas (Queensland, Australian Labor Party, Shadow Minister for Aged Care, Disabilities and Carers) Share this | Link to this | Hansard source

That is right, Senator, it is outrageous. This legislation was referred to a legislation inquiry. As I said earlier, the sector is, by and large, quite comfortable with the proposal to protect bonds but was unsure of the potential liability that the industry may carry. We had a one-day hearing, and the question of potential liability was canvassed. The department reported that they had commissioned PricewaterhouseCoopers to analyse the financial risk profile of the residential aged care industry. Based on that analysis, the department indicated—and I paraphrase from the report—that the order of 0.2 per cent of the value of the industry’s accommodation bonds holding would be the potential liability. They also estimated on the very conservative assumptions that the size of the levy on the industry would only exceed 0.8 per cent of bond holdings once every 20 years. That provided an indication—certainly not a comfort, but an indication—to the sector of what they were potentially facing.

Another thing happened during the inquiry which I thought was a little concerning. Both the chair of the inquiry, Senator Humphries, and I were questioning the department on the question of who carries the liability if a provider becomes insolvent. We were somewhat concerned at the response from the witness from the department, who said on a number of occasions—and, again, I paraphrase—that any newcomer into the industry from the period of a point of insolvency to the day that the levy is struck would not have to pay the levy. She made it very clear that for any entity which changed hands in that period the purchaser would not have to pay the levy. I am not a lawyer; Senator Humphries is. Both of us thought that this was something that was anomalous. This concerns me mainly because we then got some supplementary information from the Department of Health and Ageing which, in my view, directly contradicted that advice. It is on the basis of that supplementary information from the department that I can undertake that Labor will support this legislation. If we had a circumstance in which a major provider were to go bankrupt and was not to able pay the accommodation bonds owed to people who are in the facilities, there would be a very unusual and very different driver in the aged care sector in Australia. You can imagine that people would be selling entities hand over fist simply to get out of the levy having to be paid. With that caveat and on the basis of the evidence that was subsequently provided to our committee that any entity which changes hands between the point of the insolvency—that is, 10 days prior to the insolvency—to the date the levy is struck, any entity which stays in the industry irrespective of changing hands will be liable to carry that levy. It is on that basis that I support this legislation. I thank witnesses who provided us with submissions in the short time frame. I thank those who were able to come to give evidence to the committee and the secretariat for the report. In particular, I thank Professor Hogan for his comments, given that his report was the genesis of this legislation.

In the 2005 budget, $1.3 million was allocated as consultation on the Hogan recommendations. It concerns me that here we are at nearly the end of March and we have still to see what has happened to that money and what the consultations have been. When are we going to see the final report on the Hogan recommendations that this government has been promising the industry for well on a year. When it comes to yet other recommendations made to the federal government, we are still waiting for the government’s response to the Senate inquiry report that came down 10 months ago called Quality and equity in aged care. I remind the minister that this was a unanimous report. This report was agreed to by Liberal Party senators. I think it is a fairly significant report in the committee’s history. It is 10 months now since that report has come down. We have Professor Hogan’s report. We also have the Senate inquiry report.

In the current climate, there are a number of pertinent recommendations to do with aged care in the Senate Community Affairs References Committee report. There are 51 in all but I just want to go to four of them. Recommendation 12 in the report identifies that each residential aged care facility needs to have one annual random or targeted spot check. Recommendation 16 calls for a review of the complaints resolution scheme so that it will be more responsive to residents’ needs. Recommendation 17 calls for an examination of the feasibility of whistleblower legislation so that those who report atrocities such as those that we have heard of in recent weeks are protected. Recommendation 18 calls for an investigation into the extent of intimidation of and retribution towards residents and their families. Two of those recommendations are also recommendations of the report of the ministerial aged care advisory committee, which met last week.

The Senate committee’s recommendations, Minister, have been sitting on your desk for 10 months and we are still waiting to see what the government is going to do. It has taken the events of the last few weeks to get the government to say it is going to do something about spot checks and a review of the complaints resolution scheme, but unfortunately the government has not been prepared to say what it is going to do about the 49 other recommendations that the committee made.

Further, I am concerned that the Minister for Ageing still has not clarified if there in fact has been an increase in sexual abuse or elder abuse more generally of residents in aged care facilities. In my view, it is time for an independent, arms-length inquiry that can ascertain the nature and prevalence of abuse that is occurring in residential aged care facilities. Until the community understands the scope of what we are dealing with, our ability to find an appropriate response will be limited. The only way to do that is to establish a short, efficient, tightly targeted inquiry. It would only take a matter of months, I think, but it is an inquiry that is absolutely required. In fact I asked the minister that question on 2 March this year: whether there were any other aged care facilities in Australia that had been or were being investigated for sexual abuse allegations. Unfortunately the minister did not answer the question. He did not take the opportunity to make it clear what the answer to that question was.

As I said, two of the four recommendations of the advisory committee were in fact recommendations from the Senate Community Affairs References Committee inquiry. I welcome the general support from employees and employers for the undertaking of police checks prior to employment. I also welcome the indication that employees will undertake training in relation to knowledge and awareness of abuse of the elderly and how to deal with complaints. However, I thought that the minister should have been forthcoming with more of an action plan about how that was going to occur.

The minister also missed the opportunity, in my view, to make any recommendations about staffing levels in aged care facilities. During our inquiry into aged care last year, I was concerned by the number of witnesses who came to the inquiry who talked about being on duty by themselves overnight. That is a very unfortunate circumstance, not only for the residents at those facilities but for the aged care workers themselves. They have no protection against false accusations—and, if unfortunately that person is not the right sort of person we should have in aged care, we are putting those residents at extreme risk.

The only response to date has been for the minister to call together an existing aged care committee, a committee which contains people with considerable expertise in aged care—no-one can deny that; they are all qualified and very eminent people—but which does not include advocates of residents in aged care. People who are experiencing this, people who are dealing with residents who have been through untoward, unpleasant, unsatisfying events, especially with the complaints resolution scheme, should have had representatives at that meeting. The other group of people that should have been there are those people with experience and expertise in elder abuse. There are a number of very eminent Australians, especially in the research sector, who I think could have provided some—

Debate interrupted.