Concetta Fierravanti-Wells (NSW, Liberal Party, Shadow Minister for Ageing) Share this | Link to this | Hansard source

The Aged Care Amendment Bill 2011 introduces a number of amendments to the Aged Care Act and is part of the government's health and hospitals agenda—I will not say 'reform' because we have not seen too many changes in the system. The bill will apparently strengthen consumer protection for accommodation bonds paid to aged-care services and improve arrangements for the handling of complaints about Commonwealth funded aged-care services. It is little wonder that this legislation is required because it is very clear from the statistics on ageing today that this sector is very much in crisis.

The Department of Health and Ageing no longer releases the general purpose financial reports of providers. If it did, the situation would be probably a bit starker. It is very clear that 40 per cent of aged-care providers are operating in the red. In its 2011-12 budget submission, the Aged Care Industry Council stated:

A snapshot of the industry at the start of 2011 does not depict a sustainable system: only 40% of residential aged care services are operating in the black—

In fact, they were talking about residential aged-care services operating in the black, so it is even worse for residential aged-care providers—

… hours of service are decreasing; hours of care provided under community aged care packages have fallen; and many providers are not building new residential care beds. The situation is worse in rural and regional areas where providers face generally higher costs with less ability to manage their income streams.

Given that the aged-care sector is in crisis and in need of reform, the financial viability of the sector is very much an issue. Providers going into liquidation have increased, although these have remained under the radar due to their facilities being absorbed by larger entities. While it is difficult to quantify the regulatory impact due to the lack of available data, the proposed changes provide a regulatory framework that is commensurate to the risk associated with the strong growth in accommodation bond holdings, which are currently over $10 billion. It will increase the incentive for bonds to be used in a prudent and sustainable way to meet the policy objectives by allowing providers to charge bonds. Any costs related to the charges required of approved providers to ensure that bonds are only used for permitted purposes are minimised through removing current restrictions on the use of income derived from bonds, retention amounts and accommodation charges, and giving providers complete flexibility over how such income is used. Given the concerns and the operating costs that providers are facing today, this will be welcomed.

The proposed transition period of two years allows approved providers time to comply with the new arrangements to ensure, as far as possible, that the financial interests of care recipients are protected and to keep the regulatory burden as low as possible. Having said that, it is very clear that the regulatory burden in aged care is very high. As I travel around to aged-care facilities in Australia, the first thing that I am hit with in just about every facility I visit is the regulatory burden that this government has placed on the sector. Despite the many reviews and despite the advice that this government has been provided with about the regulatory burden in aged care, very little appears to have been done. Indeed, one provider in Tasmania said to me that he had provided submissions to no fewer than 17 inquiries into ageing and this government had really done very little.

Kevin Rudd promised in 2007 that he was going to ease the transition from hospital to aged care. In 2007 he criticised the then coalition government by saying that the government was not providing enough aged-care beds and that people had become bed blockers in acute hospital care. Of course, the term 'bed blockers' is Kevin Rudd's and is not a very complimentary term to refer to our older Australians. When the government first came to power it promised a new direction for frail and older Australians by making the transition from hospital to aged care a priority area. That is why it took $276 million out of the budget last year in order to keep people in long-stay hospitals. It raided the residential aged-care moneys for high care in order to prop up failed state and territory hospital systems and keep older Australians in hospitals.

Senator Polley interjecting—

Senator Polley over there is criticising us, but let us take you back to the report when you were chair, back in April 2009, when you yourself were critical of the Department of Health and Ageing. Indeed, you acknowledged that aged care was at a crisis point, and at that point there had been no response from government. So what did the government do? There was only one pronouncement by Julia Gillard before the last federal election about ageing and that was in a speech she gave at the Nursing Federation. She said that aged care was going to be a second-term priority. Well, we are still waiting. So despite the myriad reports, reviews and inquiries into aged care, what did this government do? They shuffled aged care off the front page and back to the Productivity Commission for yet another review. The industry has responded with over 500 submissions. Of course, the Department of Health and Ageing could not get its submission in on time, which meant that the draft report of the Productivity Commission was delayed. The draft was released and now we are waiting for the Productivity Commission to release its report—but then, of course, we will have to wait for this government to respond to that. Given its track record, I am not going to hold my breath, and nor is the industry holding its breath.

This is an industry that needs reform now. Older Australians need help now. They do not need to keep waiting for years and years, as this government is wont to do. Bed licences are being handed back. Senator Siewert has repeatedly commented on the Western Australian situation, and I am sure that she will repeat that in particular. The outlook is bleak in terms of the growing capacity of aged care in Australia. Senior Australians are increasingly finding that they are unable to access the services and care they need when they want them and where they want them. This continues, of course, to place pressure on the public hospital system and on Australian families who want to assist their loved ones into aged care. As Catholic Health Australia have said, every night in Australia there are 3,000 older Australians in our public hospital systems who ought to be better cared for in aged care. It is quite interesting that the AMA figures show the number of hospital beds that are badly needed in the public hospital systems is around 3,000—little wonder, because older Australians are not able to access the aged care they want and therefore there are difficulties. The reality is that as a society we are living longer, we have more complex health conditions and there are changing disease patterns. This is resulting in increasing and changing aged-care needs and with the shift in size and composition of households this is having an effect on our aged-care situation.

Let us look at the two budgets. In both, there has been very little for aged care. In the current budget, apart from Bob Katter scoring some funding for aged-care accommodation facilities—which is apparently some new model the Department of Health and Ageing was not able to give us full details about—we did not see very much there. Of course, the Ambassador for Ageing, Noeline Brown, a three-time candidate for the Labor Party, has been looked after: there was money for her in the budget to continue her work. Actually, there was money taken out of the system, because the government considers that when you shift from high-care residential places in aged-care facilities over to community services that saves money, so there was saving of $211 million over five years in the budget that is not going to aged care over the forward estimates.

As I said, there has been a complete litany of broken promises in aged care. The litany of failures in this area include the delays in the ACAR rounds. The Bringing the Nurses Back into the Workforce Program has failed. We have workforce shortages. We have training places and zero interest loans, but I have travelled all around the place and I have come across three people who have contemplated applying for the zero interest loans but have said it was all too hard and they did not do so. Then we had COAG mark 1 and mark 2—the grand COAG health changes. And where was aged care? Certainly it did not appear in Kevin Rudd's first COAG grand plan to fix the hospitals. Then we thought, 'Well, let's just see what happens in the second one.' Those who participated in the Finance and Public Administration Committee inquiry—and I think Senator Polley was present there—would remember well the scathing criticism of this government over its lack of attention to aged care and mental health.

Senator Polley interjecting—

Obviously, Senator Polley, your memory is deteriorating because you cannot remember the scathing comments that were made by witness after witness after witness at those inquiries who criticised the government heavily for its lack of attention to aged care and to mental health. So what have we seen in COAG mark 2? Aged care and mental health have been shunted off for another three years in the mark 2 agreement. There it is, shuffled off into the never-never because it is all too hard.

Senator Polley interjecting—

Senator Polley, I would refer you to the Financial Review editorial that described Justine Elliot as one of the most incompetent ministers in the previous government. Of course, she was demoted—and it is little wonder that she was demoted, because she really did not do much in this sector. Now we have Minister Butler, and the sector is still waiting. Obviously Labor senators are not talking to the same people I am talking to, because people are waiting with bated breath to see what this government does.

One need only look at the administrative burden that providers are faced with on a daily basis. When I talk to nurses in aged-care facilities, they tell me that they spend 35 per cent of their time filling out paperwork and providing reports to this government—and they seem to provide the same information over and over again. Once it is for the funding tool, then it is for some other purpose and then they provide their general purpose reports. Every day, instead of being able to care for our older Australians, aged-care providers are being swamped with paperwork on a daily basis. Therefore, I move the opposition's second reading amendment:

At the end of the motion, add "but the Senate:

(a) objects to the growing burden of regulation being placed on small businesses, not-for-profit organisations and industry by this Government;

(b) notes that the Government has broken its election promise to repeal one regulation for every new regulation; and

(c) calls on the Government to immediately adopt practical measures to reduce the regulatory burden on business and the economy".

This amendment focuses on the growing burden of regulation being placed on small businesses, not-for-profit organisations and industry by this government. It notes that this government has broken its election promise to repeal one regulation for every new regulation and calls on the government to immediately adopt practical measures to reduce the regulatory burden on business and on the economy.

The aged-care sector is a very, very good example of the growing regulatory burden. Indeed, this is one area where the government has well and truly broken its election promises. Every day the aged-care sector tells me that it is increasingly faced with an extremely heavy regulatory burden with respect to the day-to-day work that it does. The sector has been calling for reform, and it is very clear from the over 500 submissions that were provided to the Productivity Commission just how much this sector has been burdened. Those submissions are on the public record, and I would invite the government to make sure that it reads every single one of them.

The reality is that, if we do not reform this sector and we do not lift some of the regulation and the heavy regulatory burden, our older Australians will not be provided with the services that they desperately need in their old age and those services will not be available in the places where we want those services to be available. Faced with the situation where a loved one sustains an injury and is no longer able to live in their own home and look after themselves, their families desperately have to scurry through a very, very complicated system. I hear it every day. I hear it even amongst colleagues who, notwithstanding being involved in public and political life, have had to go through this process themselves.

I call on this government to heed the calls of a sector that is desperately in crisis and desperately in need of reform now. As I travel to aged-care facilities in suburban metropolitan areas and most especially in regional and rural areas, I see how they are really doing it tough, and I fear for many of those small aged-care facilities in regional and rural Australia. I was in North Queensland last week talking to providers in that area. They are heavily burdened. If this government does not take much-needed action, we are going to find that more and more providers are going to go out of business and more and more older Australians will not be able to receive the much-needed care that they will need.

Every day we talk about an ageing Australian population, but this government does not seem to understand. For every person over 65, there are now about six Australians working, but that is going to go down to three. Therefore we need to take action and we need to take action now; otherwise tomorrow older Australians will not be able to access and receive the much-needed care that we want to give them and that they will need.

Rachel Siewert (WA, Australian Greens) Share this | Link to this | Hansard source

I wish to outline our support for the measures proposed in the Aged Care Amendment Bill 2011 and then talk about some of the situations facing the provision of aged care in this country, and particularly in my home state of Western Australia. As Senator Fierravanti-Wells pointed out, Western Australia is ahead of the curve of the problems that are facing the provision of aged care and I agree with Senator Fierravanti-Wells: it does need urgent action.

With respect to the amendment that is currently before us, my understanding is that there has been consultation with the sector and with consumers, that the sector is relatively comfortable with the changes being made and that the government has taken on board their comments. The phase-in period is appreciated and the concerns of the sector have largely been met. With respect to the bonds and the improvements and changes to the complaints system, I understand that the concerns of the sector have largely been taken on board. There are a few remaining concerns, but I think that we should see how this new system works and then make any refinements if those are necessary. Of course, this needs to be seen as the beginning of what should be very significant aged-care reform, because there is absolutely no doubt that aged care does need urgent reform in this country. That was evident to anybody who took part in the Senate Finance and Public Administration Legislation Committee inquiry that Senator Polley chaired. It was unanimous across the chamber—the government, the opposition and myself, in terms of representing the Greens. All of us expressed our concern about some of the issues that were raised with us during the Senate inquiry. It was disappointing that the government did not act sooner to start dealing with these issues and making the reference to the Productivity Commission. However, we are pleased that the referral was eventually made. The Productivity Commission draft report has come out and comments have been made on that. That Productivity Commission draft report was fairly well received in the main. Of course, there were a lot of comments, but it has been fairly well received.

Urgent reform is clearly highlighted by the issues that are being seen in Western Australia. They are also reflected around Australia, but, as I said, we are at the head of the curve on these issues. For a number of ACARs we have seen WA not taking up the number of beds that were released. The sector has not taken up the number of beds that were applied. Consistently, around half of those beds are taken up. In the last ACAR, the government made a sensible decision, and that was to transfer some of the bed licences across to community care. I have a couple of comments to make about that. The failure of the providers to take up the bed licences in the last ACAR is strongly reflective of the state of the sector in Western Australia, and that is that they cannot afford to take up those beds under the current funding model. In other words, at the moment they cannot build and provide the facilities into the longer term because they know that they will not be viable.

It has taken the government a long time to take on board what the providers have been saying for years: 'We are not going to be viable and we cannot continue to provide these services.' There is the level of funding that has been provided to build facilities, particularly in Western Australia, where construction costs have been going through the roof. I will get to the workforce in a minute. Those costs have been going through the roof and they simply cannot afford to build the facilities, and funding levels for care—particularly high care—are falling below what enables these providers to be viable.

In terms of transferring through to community care, that was a good emergency response, but we cannot continue to have these emergency responses. There is only so much care that can be provided by community care. It is not only that; we are also seeing that the funding levels for community care are not sustainable at the moment and those services will not be viable into the future. In the case of Western Australia, there is a difference between HACC services and community care packages. There are differences with what is available and funding. Some people want to remain on HACC provided services in Western Australia because they feel they get better service and support than they do from the community care packages. That is another area that needs to be looked at.

In WA—and this is going to happen in the rest of the sector—viability and funding is not what is needed to make these services sustainable. It is hard to get people into the workforce, firstly because of funding and low wages—and I will come to the need to fix that in a minute—and, secondly, because of the forthcoming mining boom in Western Australia. If you have a choice between working on low wages in aged care or making a massive wage in the mines, guess what you will choose to do? You will choose to leave that sector to work in the mines. Not only are we losing experienced workers in aged care to higher paid employment, like mining, but we are also not attracting new workers. Of course, you have the issues around poor wages and the pay equity case that needs to be resolved. Government needs to incorporate the need for increased wages into the funding rounds.

As I said, the government is waiting for the final report of the Productivity Commission—I can understand that—but the message from us is very clear: the government will need to act with a sense of extreme urgency once that Productivity Commission report is released, because this sector is in crisis. You can talk to anybody in the sector. I do not just talk to Western Australian providers; I talk to Australian providers, and I know that what is happening in Western Australia is starting to be reflected in other states. We are ahead of the curve. I always say that WA is special, but in this instance, because of the special circumstances that are operating in Western Australia, we are the canary in the mine that highlights what is coming down the track for the rest of Australia. These issues need to be dealt with urgently.

We know that our population is ageing, so we know there will be increased pressure on our aged-care services and health services. We also know that the demographic of those who are ageing expects different things from the aged-care services and the way they are supported in their old age. We know that people stay at home longer and are shifting into high care later. We know that the services people will need in high care will be different to the way it is now. We also know that the current balance between low care and high care is at a kilter. That is affecting the finances of some providers. We also know that some people do not want to stay home; they actually want to make an orderly transition into high care, but not everyone does. Overwhelmingly, I have been told that people want to stay in their home longer. Therefore, we need to look at how we provide community care into the long term. These are issues that the government urgently needs to respond to. We will be looking for a very timely response by the government to the final Productivity Commission report. I presume that the government has already been preparing very carefully its response to the final report. It has no excuse. I doubt there will be that many surprises in the final report by the Productivity Commission. It knows the direction that the Productivity Commission is going in. I would have thought that it is not beyond the wit of the government to respond in a timely manner to the final report. It then needs to set out actual plans for urgent action, because if it was not for the fact this issue had been sent off to the Productivity Commission there would be a lot more people banging on the government's door right now saying, 'We need change.' The government must not hold off responding to this report. We are most definitely expecting a quick response from the government to the recommendations in next year's budget and we are also expecting to see the long-term planning for how it is going to deal with this crisis. The government has a short time frame in which to respond before we see more and more aged-care providers go out the back door because they will simply not be viable.

I put on the record that the Greens will be supporting this bill but urge the government to quickly and urgently respond. By urgently, I mean they have had time to respond so they cannot use the excuse of, 'We do not want to urgently respond because we need time.' The government have had time. They knew this crisis was coming. They finally acknowledged it. They have had their heads in the sand for a long time. Now we need to see them respond in a timely, comprehensive manner with an action plan about where to from here so that we can fix this crisis before it goes even further, before we lose the expertise from the sector and lose those providers that are providing excellent services in trying circumstances to people ageing in Australia. We need to not only fix the current situation but put in place a framework for how we are going to improve the provision of aged care in this country and how we can build a quality system into the future where we support all Australians as they age.

Helen Polley (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in support of the Aged Care Amendment Bill 2011. I thank Senator Siewert for her contribution. I was almost in total agreement with Senator Siewert until she said that we had our heads in the sand. I remind people that when we came to government in 2007 aged care was already in crisis and was facing difficulties. I think it is important that we put on record that the Senate Finance and Public Administration Legislation Committee, which I chaired, handed down a very good report. We were very clear in our remarks relating to the Department of Health and Ageing, we were very clear that we were concerned and we were also very clear with them that we were not happy in how they had responded to that inquiry.

It is a bit rich, although it is typical, of the Liberal opposition leadership to try and rewrite history every time they come into this chamber. It is disappointing, because I know Senator Fierravanti-Wells does have a genuine interest in aged care. I am concerned that she is trying to paint the picture that all of a sudden during that inquiry in 2009 the industry was blaming the Rudd government. That is misleading and untruthful. The industry said at every hearing that they did not lay the blame for the issues that were confronting the aged-care industry at the foot of the Rudd government. They acknowledged that we needed to do something, of course, but let us not forget it was the Howard Liberal government that was in power for 11½ years. Quite frankly, Senator Gary Humphries has told me on a number of occasions that the issue of bonds relating to aged care was too difficult—he was pleased to be in opposition not having to deal with it. Let us be truthful with the Australian people that there are huge issues affecting this industry, especially if you are talking about trying to attract people to work in this industry. This sector is extremely important and we as a government take that responsibility very seriously.

I take very seriously what Senator Siewert said about the government having to act urgently when the Productivity Commission hands down its report, as I said, but you cannot expect to quickly turn around a sector that was run down for 11½ years by the previous government. When we are critical of the former minister, let us be quite truthful about how many ministers there were over that 11½ years. There were five or six ministers. Let us not forget about the kerosene baths; let us not forget about the facilities and how run down they were.

I also place on the record—having just recently been to Scotland to talk to people about dementia and aged care—that Australia has pretty good record. I acknowledge that those people who work in the sector do a wonderful job. The sector in my home state of Tasmania, which is predominantly run by not-for-profit organisations, does have some serious issues, particularly when it comes to infrastructure, which have to be addressed. I think it is very misleading and pretty typical of those opposite to try to blame this government. We will address the concerns and we will be ensuring that we do everything we can, I have no doubt. I have to commend the current Minister for Mental Health and Ageing for his action.

While I do not want to dwell on the Standard and Poor's study Global Aging 2010: An Irreversible Truth, a couple of observations recorded in that study are worth noting. Age related spending on health, pensions and aged care is estimated to rise to 14.4 per cent of GDP by 2050. Without further reforms to address these mounting spending pressures, net general government debt could increase to 71 per cent of GDP over that period. The study goes on to forecast that government debt associated with age related spending could reach 300 per cent of GDP in 40 years in advanced economies if fresh measures are not introduced to address the issue. While this does not particularly apply to Australia it suggests the dimensions of the challenges that the world faces. However, I am reassured by the fact that the Gillard Labor government is the government of Australia and the future of aged care is being very seriously managed. On current projections there will be 3.6 million Australians in need of aged care by 2050—not that all of them will be of a certain age but that 3.6 million people will be in need of some sort of care. Aged care needs to be considered within the entire spectrum of care—from high-intensity care to simple advice to enable people to remain at home, from residential care to the support at home packages that will be needed by older Australians. I think we need to be more innovative in the way we provide these home care packages. Personally, I think they need to have more mobility. We certainly need to do a lot more in this area to make it simpler for families to negotiate their way through assessing what their older family members need and what is available to them.

This bill is just one of a series of reforms that will enable Australia to manage the special needs of aged care into the future. While this bill specifically relates to two aspects of residential care management, the Gillard government is committed to preparing Australia to manage the total impact of future aged-care needs. The Productivity Commission, when asked to review future aged-care needs, was required to consider the following three principles in preparing its report:    every older Australian has earned the right to be able to access quality care and support that is appropriate to their needs when they need it; older Australians deserve greater choice and control over their care arrangements than the system currently provides; and funding arrangements for aged care need to be sustainable and fair, both for older Australians and for the broader community. The Productivity Commission is developing detailed options for redesigning Australia's aged-care system and the government will consider these options in full when the final report is delivered later this month.

Meanwhile, just last Saturday the Minister for Mental Health and Ageing, Mark Butler, announced another 12,000 new aged-care places throughout Australia worth over $400 million—part of the 2011 aged-care approvals round. The 12,000 extra places will be rolled out this year, building on the 234,000 aged-care beds and community care places already operational. Increasing the number of aged-care places is essential to meeting the challenges of our ageing population—and I mentioned earlier the number of places that will be needed by 2050.

The aged-care approvals round is the major funding round in the aged-care industry each year and sees new Australian government funded aged-care places allocated to service providers through a competitive process. Places are offered to the providers who best demonstrate that they can meet the growing needs of the ageing population in their local region—that is, applications are independently assessed against criteria including financial strength, capacity to provide care and past experience in delivering care. These residential, community and flexible aged-care places are worth more than $400 million a year. There is also up to $150 million in zero-real-interest loans and more than $58.5 million in capital grants to build or upgrade residential aged-care facilities. This year's round demonstrates that the government is continuing to invest in developing and improving the aged-care experience for the nation's oldest Australians. Since 2007 the Labor government has increased funding to aged care by over 34 per cent.

The Aged Care Amendment Bill 2011 delivers on reforms by amending the Aged Care Act 1997 to: limit the permitted uses for accommodation bonds, such that providers of aged care may use accommodation bonds for capital works, investment in financial products, loans for these purposes and refunding accommodation bonds; introduce new criminal offences where misuse of accommodation bonds has been identified and the approved provider has failed financially, owing accommodation bond refunds; introduce new information-gathering powers to enable the Secretary of the Department of Health and Ageing to better monitor approved providers that may be experiencing financial difficulties or using accommodation bonds for non-permitted uses; and remove restrictions on the use of income derived from accommodation bonds, retention amounts and accommodation charges. This will provide aged-care providers with greater flexibility in managing their cash-flows and assist to offset the restrictions proposed in relation to the lump-sum element of accommodation bonds.

New complaints principles—incorporated in the aged-care principles—will improve the process of handling aged-care complaints and increase the focus on achieving outcomes for care recipients, their families and other representatives. The Department of Health and Ageing will adopt a range of approaches to assist in resolving complaints cooperatively with care recipients and providers of aged care—approaches that will include, for example, conciliation, mediation and investigation.

Funding of $21.8 million over four years was provided in the 2010-11 budget for a range of enhanced prudential measures, of which the proposed changes to accommodation bonds is one. Funding of $50.6 million over four years was also provided in the 2010-11 budget for improvements to the aged-care complaints system. Since the introduction of the act in 1997 there has been strong growth in the value of accommodation bonds—from around $500 million to more than $10.6 billion. As at 30 June 2010, approved providers held more than $10.6 billion in bonds on behalf of more than 63,000 aged-care residents. There are 1,150 approved providers and about 970 of them currently hold accommodation bonds. The average total bond holding by an individual approved provider is $11.2 million and the average accommodation bond is $167,000. This constitutes a significant part of each resident's life savings, which becomes a problem for people, particularly in my home state, because of the value of residential properties.

Existing legislation has a lack of clarity on the permitted use of accommodation bonds. This lack of clarity about the prescribed use of the principal of an accommodation bond has resulted in bonds being used for a wide variety of purposes, including some uses that may increase the risk of default on refunds of the accommodation bond. For example, using accommodation bond funds to meet operational expenses could arguably be considered a permitted use under the current arrangements, as this relates to providing aged care.

There is also evidence that approved providers are making loans to related and other entities using accommodation funds and there is uncertainty around whether these funds are consistently being used for an aged-care purpose. There is evidence of approved providers using accommodation bonds to make loans to related parties for non-aged-care purposes and using bonds to meet operational expenses, which triggered the creation of the Accommodation Bond Guarantee Scheme. This scheme was introduced in 2006 to increase protection for residential accommodation bonds and is triggered if an approved provider becomes insolvent and defaults on its accommodation bond refund obligations. In these circumstances, the government repays the amount owing to residents in full and has the capacity to impose a levy on the sector to recover any losses under the guarantee scheme. Since 2006, the guarantee scheme has been activated on five occasions and around 150 accommodation bonds have been refunded, at a cost of approximately $24.5 million to the Commonwealth.

In all the cases involving the guarantee scheme there was evidence that the failed approved providers had made significant loans to related parties, a number of which appear to be involved in non-aged-care activities. The impetus for strengthening regulation has also been reinforced by an audit conducted by the Australian National Audit Office. In its 2009 report Protection of residential aged care accommodation bonds, the ANAO recommended that the department enhance its regulatory approach.

I turn now to the inability to request certain information and inadequate penalties for noncompliance. In cases where accommodation bonds have been misused, the most significant action the department can currently take is to revoke approved provider status and/or allocated places. Also, there is currently no capacity for the department to take action against key personnel of approved providers.

Restrictions on the use of income derived from bonds, retention amounts and accommodation charges have been more significant than those related to the bonds themselves. The tight restrictions on the use of income related to bonds does not reflect the comparative risk, creates an unnecessary administrative burden and could impact on an organisation's cashflow, resulting in a risk that the bond itself may be drawn upon to manage day-to-day operations.

This legislation will address current legislative inadequacies while keeping the regulatory burden as low as possible; ensure, as far as possible, that the financial interests of residents are protected; maintain effective regulatory safeguards for accommodation bonds; provide a regulated source of capital funding for investment in aged-care infrastructure; provide a regulatory framework that is commensurate to the risk associated with the exponential growth of accommodation bond holdings, currently over $10 billion; and promote public confidence in the aged-care system.

The option of doing nothing to protect people receiving aged care is not an option. Retention of the status quo would continue to expose the government to the risks of underwriting the sector through the guarantee scheme. As I said earlier, this has already cost the Commonwealth $24.5 million since commencement of that scheme in 2006.

I would reiterate how important it is for all of us to work in the best interest of the aged-care sector. We need, along with the sector itself, to be proactive in attracting more people to work in the sector, which is a very important one. I have a very strong and passionate interest in this area and I make no secret of it. I want to make sure we get it fixed because I am getting old rather quickly—I want to make sure that things are in place before I have to call on the services.

I am somebody who has tried to navigate this, on behalf of my family, in looking for accommodation for my mother, who is in a facility receiving high-dependency and palliative care. The people who work in that industry are passionate and caring individuals and without them the industry would not be as strong as it is currently. Yes, we do need to work together to improve it, but I do not think it does anything for the sector, and certainly does nothing at all for the wider community, when those opposite constantly try to rewrite history by making themselves out to be the great saviours of the aged-care industry. They have been doing it for the last three or four years. We have to work together to improve this sector. We have to acknowledge the things that were not working in the past and we have to be innovative and prepared to work with the sector to find the best outcomes. This will ensure that we continue to lead the world in providing the care that every Australian has the right to expect.

Nick Sherry (Tasmania, Australian Labor Party, Minister Assisting the Minister for Tourism) Share this | Link to this | Hansard source

I welcome the opportunity to sum-up debate on the Aged Care Amendment Bill 2011. The bill seeks to amend the Aged Care Act 1997 to increase protection for accommodation bonds and strengthen complaints management in aged care as part of the government's commitment to providing better health and better care for older Australians through the national health reform agenda.

Since the introduction of the Aged Care Act in 1997 there has been strong growth in the value of accommodation bonds held by the aged-care sector. As at 30 June 2010, approved providers held more than $10.6 billion in bonds. The effect of this bill is to clarify the original intent of the accommodation bonds system, which was to provide a crucial capital funding stream for the aged-care sector. It will provide greater transparency about the use of these funds and strengthen the accountability of approved providers by proposing the introduction of offence provisions for the significant misuse of bonds. The bill also removes regulatory restrictions on the use of income derived from the bond principal retention amounts and accommodation charges.

The bill will enable the investigation principles to be replaced with new complaints principles, which will describe an improved complaints scheme for aged care with a stronger focus on resolution of complaints. This will provide consumers with a more flexible scheme with a range of options available for assisting to resolve a complaint, including early resolution, conciliation and mediation.

I thank senators for their contributions to the debate on the bill and their interest in aged care. In particular, this debate has highlighted the importance of achieving a balance between effective regulation to protect the elderly and the reduction of the regulatory burden on the aged-care sector.

The government does not agree to the second reading amendment proposed by the opposition. The amendment does not address the effect of this bill, which is simply to clarify the original intention of the accommodation bonds system and strengthen protection for consumers. The bill actually removes the regulation around the way that aged-care providers can use the income they derive from bond principal retention amounts and accommodation charges. It also removes a range of redundant provisions, including two pieces of redundant legislation. So, overall, the bill improves the protection of our most vulnerable and reduces the regulatory burden on providers.

In the broad, in my responsibilities as Minister Assisting on Deregulation I provide oversight of what is known as the Council of Australian Governments' seamless economy reform project—some 27 deregulatory policy proposals that are currently being enacted. To date, of these 27 deregulatory priority reforms, 13 are well advanced and close to completion or completed. Obviously this is important for small business more broadly. The opposition amendment goes to the impact of regulation on business, and small business in particular.

But there has been more done in reducing regulation in the seamless national economy projects in the last three years than in the previous 12, and I will cite a couple of practical examples. Australian Consumer Law, which commenced on 1 January 2011, replaced 20 separate acts across Australia and provided new protections for consumers. It is estimated by the Productivity Commission that it will provide a net gain to the community of between $1.5 billion and $4.5 billion a year, including significant economic cost reductions for business.

I will give you another example. Standard business reporting, which commenced on 1 July 2010, allows business to quickly and efficiently prepare and lodge business information electronically to a range of Commonwealth and state and territory agencies. Once fully operational in 2014, it is estimated to save $800 million per annum. I could go on and on. There are a significant number of projects.

As I say, more has been done in the last three years than in the previous 12. Yet we continue to get this nonsense from the coalition. Their latest—there are not many of them—grand promise is to cut small business red tape by 50 per cent in the first term of a Mr Abbott led government. I seem to have heard that promise somewhere before. I have been in this place for 21 years, and I seem to remember this claim being made back in 1996, prior to the election of the former Howard government—they would cut red tape by 50 per cent. That was a very simple claim to make, but what happened in reality? The GST and superannuation choice; I could go on and on about the increase in regulatory red tape imposed on business by the former Howard government. They are at it again; they promise they are going to cut it by 50 per cent. Where is the detail? If we look at their form, the previous Howard government lamentably failed in cutting red tape.

We got the runs on the board in that area. I can cite factual cases of our reductions in red tape over the last three years—factual cases of economic gain to business and the economy by reductions in red tape. So the second reading amendment moved by Senator Fierravanti-Wells, with due respect to the senator, is just utter nonsense. It is the usual trivial garbage that we get from the opposition. They have finally come up with a policy: they will cut red tape by 50 per cent. Well, look at their record. Where is the detail? Where is the costing on the policy? They have broken out from their usual negative approach of opposing everything the government does and actually come up with a scintilla—a positive policy for once. Unfortunately, their history, their form, shows it means nothing for business. So this absurd second reading amendment moved by the opposition to this legislation should be rejected for what it is.

Question put:

That the amendment (Senator Fierravanti-Wells's) be agreed to.

The Senate divided. [11:25]

(The President: Senator Hogg)

Question negatived.

Original question agreed to.

Bill read a second time.