Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

I rise to speak on the Aged Care Amendment (Red Tape Reduction in Places Management) Bill 2015. I will say at the outset that Labor will support this bill, and I note that this legislation has savings of $63.6 million.

We are in favour of reducing the red tape, as this legislation does, and we commend the government on it. But it has to be said that much of the reforms that have been made in relation to the aged-care sector stem from Labor's Living Longer Living Better reforms that we brought in after extensive consultation with the sector. Labor did the heavy lifting with our Living Longer Living Better reforms, which are consistent with red tape reduction.

This bill changes the process for transferring places between aged care providers from an approvals process to one where the transfer is seen as approved until it is vetoed. In addition, the bill will increase the time frame for providers to make provisional allocated places operational, from two to four years, while also limiting the number of extensions to this period. These amendments are sensible and we support them.

In detail, this bill will extend the provisional period from two to four years. This makes sense and is logical, given the development constraints that exist. This should provide some certainty for providers seeking to make substantial investments in new or refurbished facilities. But it limits the number of extensions that can be approved. This means providers are not holding onto provisional places indefinitely. Given the high demand for aged-care places, it is essential that we see places become operational as soon as possible. In addition, it makes sense to facilitate the transfer of allocated places between providers. There are occasions when providers make a financial decision that they can no longer support the place, and seek to transfer the allocation to another provider. Quite frankly, there is not a lot of change as a result of this legislation. Providers still need to inform the department about the transfer, they still need to meet the criteria so that the places remain in the same planning region, and so forth. But, at the moment, the department secretary has to indicate an approval or rejection of a transfer. This legislation will reduce the workload of the department secretary, as they will no longer need to give notice of approval, only of veto. So red tape reduction will definitely favour the secretary of the department. Labor supports these measures, as I said from the outset. But the real test here will rest in the government's ability to implement and regulate these changes.

The transfer of allocated places does not occur regularly. Holders of allocated places often on-sell the bed licences or provisionally-allocated places, and make some money doing so. We do not want to see providers applying for the allocation with a view to on-selling them. I am not suggesting this happens. I do not want aged-care providers to think that I am accusing them of rorting the system—I will leave that to the Minister for Aged Care. Take, for instance, the mid-year economic forecast, which robbed providers and aged-care residents of $472 million, after the government cut the funding for ACFI supplements. The Minister for Aged Care buried those cuts with cries of outrage at the incredible rorting of these supplements by the aged-care providers. I have seen reports from providers that compliance has improved over the last 12 months, and that at least 99 per cent of providers are doing the right thing. And, as I travel the country and visit these aged-care residents, I know from talking to those providers that there are excellent care opportunities for older Australians in this country.

So, rather than blame providers—who really have the best interests of their residents at heart—maybe the Minister for Aged Care should look at the increase in the cost of providing care. Maybe she should actually visit to some aged-care homes around this country. Maybe she should take a stronger interest in aged care. For example, if our goal is to keep people living in their own homes for longer—which I agree is most certainly the best option—then we certainly have higher needs when people finally do enter into residential care. These incur higher costs. So the longer we are able to keep people in their homes, the better it is for those individuals, the better it is for the community and—let us be frank—the better it is for the federal government's bottom line. But we have to accept that when people reach a stage where they can no longer be cared for in their own homes, and they go into residential care, their care is at the top end. During that phase of their lives, it is going to be the most costly care. So perhaps the Minister for Aged Care should be looking at this.

We know that over the next two to three decades the number of older people is going to increase dramatically. So, rather than cutting aged care funding, the government needs to be investing. And, when I say 'cutting'—the Turnbull Liberal government has cut around $1.8 billion from aged-care expenditure since they came into office. That is $1.8 billion in two years. I wonder if the Prime Minister considers that amount 'modest'.

When it comes to aged-care cuts, quite frankly there is no difference between Tony Abbott and Malcolm Turnbull. This is yet another example of the Prime Minister and the former Prime Minister saying one thing before an election and then doing something entirely different afterwards. $1.8 billion out of the aged-care budget in this country is unacceptable.

Labor does support this bill, as I have said, but there is so much more that needs to be done. So we will be watching this government. In particular, we will be watching the Minister for Aged Care to see whether or not she actually has a handle on this policy, whether she actually does care about older Australians, because quite frankly over the last two years this government has demonstrated without a shadow of a doubt that they do not have the same priorities in this policy area as we did in government. We did the heavy lifting with Living Longer, Living Better. We consulted with the sector. We had the sector joining with us, along with the union movement, to bring in the reforms of Living Longer, Living Better. Unfortunately, this government—even though they had the framework; they had the plan there; all they needed to do was roll it out—failed miserably because they have never had a Minister for Ageing. They have never seen it as a priority of this government to give due recognition to older Australians. Now we have a Minister for Aged Care. Aged care is obviously very important—I am very passionate about it—but it is only one aspect of ageing.

So, as I said, we will be supporting this legislation but we will be keeping an eye on this government to see how they roll out the regulations and whether they are monitored. We commend the bill to the Senate.

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

I rise to also make a contribution to the debate on the Aged Care Amendment (Red Tape Reduction in Places Management) Bill 2015. The allocation of beds and home care places, but particularly beds in residential aged care, has been a bone of contention in Australia for a significantly long period of time—in fact, for the whole of the 10 years I have been in this place and beyond this has been a burning issue.

In particular it has been an issue, I have to say, in my home state of Western Australia. As the boom took place in Western Australia and costs escalated, one of the things that happened was the allocation of places and beds through the round and them not being taken up for a significant period of time because people could not afford to build as housing prices and building costs increased in Western Australia. I would say it reached a crisis point at one stage.

Senator Polley chaired a landmark Senate inquiry into aged care and really focused on and highlighted the issues. I participated very strongly in that. That Senate inquiry focused and highlighted some of the major issues. At the top of the list was access and allocation facing what we knew were the increasing numbers of people that would need aged-care support—both home care and residential care—and also the changing nature of what people would want from an aged care system. This included better services, better supports and single occupancy rooms. For example, many of our facilities at that stage were still four-bed-type facilities. More and more people wanted to remain in their homes and to remain in their homes longer

There is a very long list of the changes that were needed. That is why we were very pleased to see the Living Longer, Living Better reforms, and the Greens participated very strongly in that discussion. In fact, I would like to think that we achieved some really good amendments in that legislation as well. But we all know that Living Longer, Living Better was only the start of the reforms that were needed in aged care, and that is quite obvious to anybody who is involved in this issue. If you read the Productivity Commission report, it is also obvious that we have only done part of that work. This is a work in progress. We all knew that at the time, and this goes to part of that work. There is a lot more work that needs to be done in this space, and I am looking forward to continuing to work on aged-care reform.

At the heart of this, we need to make sure that the consumer—that is, older Australians and their families—are at the centre of it. This is about supporting Australians as they age in place. But it is also about supporting them if they need to go into residential facilities; we need to make sure that we have quality there. We need to make sure that people have choice and that we put the consumer—older Australians and their families—at the centre of that decision making. That is why I am so pleased to see that CDC—consumer directed care—is being put in place and that we are making sure that that works really smoothly and achieves its aims of giving people control over their supports and care. I know that that is still a bit of a work in progress as it comes into operation, particularly this year but also over the next couple of years.

I do not actually see this so much as red-tape reduction—and I really think that the government has made a mistake in terms of classing this as red-tape reduction—I see it as part of the work in progress that is contributing to rolling out better aged care in this country. There is no doubt that we need to be doing that. Under our current framework the government allocates the subsidised aged-care places—be they home care or residential care. Where a provider has been allocated a place this typically carries over from year to year. Each year the minister also determines how to allocate new places in accordance with the planning framework. Aged-care places can be provisionally allocated but the provider does not receive that funding until they can become operationalised.

This bill makes two changes to the administration of how aged-care places are allocated. Instead of looking at this as red-tape reduction, we should be looking at the goal of making things easier and improving aged care, both for consumers—older Australians—and also for providers. To make a little note of warning here: we cannot just be making things easier for providers; it is essential that we are making this better for older Australians, for the delivery of care. Providers are very important and we need to make sure that their views are included—absolutely. But we need to make sure that the centre here is older Australians.

As I touched on at the beginning of my contribution, the issue around taking up beds and operationalising and building them has been quite problematic. Holding on to places and getting them online has been quite problematic. So I think it is better that these changes progress towards reforms that are needed. The first change is how places are transferred between aged-care providers. Currently, when an aged-care provider wants to transfer a place to another provider it must be approved by the secretary to take effect. The minister has said in the other place, and it is also in the documentation, that 80 per cent of the transfers are routinely approved. This bill amends that processes so that transfers are automatically approved unless they are vetoed by the secretary, and there are a number of minor changes associated with this. Probably the most significant is that providers will not be required to justify the reasons for the transfer. The protections around the same planning area and the ability of the secretary to vary that and to be involved are important protections, and we are satisfied that the bill does add those protections.

The second change relates to the time line for provisionally allocated places. This is, I think, particularly important so that providers are not hanging onto those places. Currently the legislation allows for provisionally allocated places, and this may occur when an aged-care facility is being built or expanded. Where a provisional place is allocated, the place must become operational within two years. However, providers can request extensions and frequently do. We understand from the minister's second reading speech that the median time for allocation is four years, with 80 per cent operational within six years. The new framework allows for provisional places to be allocated for four years rather than two, and the minister can provide two extensions but only has to approve a third or subsequent extension in exceptional circumstances.

I think the amendments here are good amendments. I probably would have liked to see it go a bit further, quite frankly, but I think this is a step in the right direction. We will be supporting it. We understand the government have consulted with industry and peak bodies on these reforms and that the reforms come out of work that was undertaken by the aged-care sector committee. I actually consulted as well, just to make sure, because I have some experience in this place of where the government say they have consulted and in fact they have not, or they have a different definition of 'consultation' to what I and the community would class as consultation. Having said that, this time I do believe them. They are reflecting the opinions, I think, of both the industry and, most importantly, consumers—so providers and the people that are going to be using these services. My understanding is that they do support these amendments, so I am quite pleased that they are backing these and I think, therefore, that we can support this bill and these amendments to the legislation, knowing that they have the various stakeholders' support.

So, on this basis, we will be supporting this bill. We do think this will make steps in terms of the longer term aged-care reform, and the changes are supported by stakeholders. In particular, they will bring benefits, most importantly, to consumers. I encourage the government to keep going with the process of aged-care reform, because we still have a long way to go in this country if we are going to be prepared and ready for older Australians as they age. People use the word 'tsunami'. I do not like to term it that way at all, but we know that our population are getting older and they also have large expectations. I am one of them, folks! We all have large expectations about the quality of life that we expect and what we expect from our aged-care system, and I think we need to see this as a small step in that longer term reform process. The Greens will be supporting this bill.

Dean Smith (WA, Liberal Party) Share this | Link to this | Hansard source

I am also pleased to join with my colleagues in this place in support of the Aged Care Amendment (Red Tape Reduction in Places Management) Bill 2015, which forms a key part of this government's commitment to deregulation across all policy areas. I think it is fair to reflect on the fact that over the last few years there has been a greater sense of bipartisan spirit in the development of Australia's aged-care policies. It was pleasing to hear Senator Polley's contribution today, where she commended the government for its commitment to red tape reduction in this particular area. I remember very clearly our commitment, when we were in opposition, to the then government's Living Longer Living Better package of proposals. When we reflect on the last decade, this area of public policy can too easily be prone to political point-scoring by political parties, but I think the reality is that this, more than many other areas that we have to deal with in this Senate, is an area that requires less politics and more good policy. I note Senator Siewert's contribution in regard to the heavy demand that we have in meeting people's expectations that they themselves, or indeed the people that they love and care for, will be given the appropriate care should they require aged-care services as they get older in our country.

This bill is fundamentally about letting aged-care service providers do what they need to do and do it well, actually delivering services that support ageing Australians instead of having to spend quite so much time coping with unnecessary and outmoded forms of regulation. We know that Australia has an ageing population—that is not disputed—and, by extension, that means we know aged care is a growing and increasingly important industry that will impact growing numbers of Australians in the years ahead. The legislation before us today is about allowing those working in aged care to focus on their core business—and that, of course, is service delivery—while still retaining appropriate safeguards to ensure that the services being delivered are of an appropriate standard.

This bill reduces red tape for aged-care providers in regard to the management of provisionally allocated residential aged-care places and the transfer of residential home-care and flexible-care places. The major measures in this bill represent the fulfilment of an election commitment made by this government to review the administration of aged-care places management. The legislation is consistent with achieving item 11 of the government's Red Tape Reduction Act Plan. That plan was co-developed by the government and the aged-care sector, and it was approved by the former Prime Minister Mr Abbott in 2014. At that time, the government committed to undertaking a review of aged-care places management. This included streamlining the transfer of residential home care and flexible care places and revising the service provider obligations associated with managing provisionally allocated residential aged-care places.

There are two distinct measures contained within this bill which are worth illuminating: firstly, the transfer of aged-care places measures; and, secondly, the amendments relating to provisionally allocated residential aged-care places. Both of these measures form a significant part of the government's plan to better align business realities with the legislative platform in the Aged Care Act, thus establishing a more efficient and effective model of administration for aged-care places.

This bill is also about making sure our regulatory system around aged care reflects contemporary economic reality and the changing priorities and preferences of aged-care consumers. In particular, it is an effort to take account of the growing popularity of home care packages. Home care packages are an attractive option for consumers and taxpayers alike. They do save the taxpayer money, but I would argue that more importantly they allow Australians to remain in their own homes for longer while still receiving the levels of care and support they need to continue leading a comfortable, dignified and independent lifestyle.

This is in no way intended to denigrate our nation's aged-care facilities, because they are exceptional in many cases. Many of us in this chamber would have visited many of them during our time. But I think it is fair to say that, given a choice between remaining in our own homes or moving to a full-time aged-care facility, the overwhelming majority of us would choose the former. That is just human nature; home is where the heart is, we are told. It stands to reason that in our later years most of us would wish to be in an environment that holds memories that are precious to us.

The problem with the system as it currently stands is that the process for approvals is not necessarily keeping pace with these changing demand patterns. This reform allows for proposed providers to transfer their licences to other aged-care providers who may want to operate facilities in the area instead of having to go through a laborious process for advising government and completing a mountain of paperwork to accompany that. There can now be greatly simplified notification processes as a result of these reforms.

I am sure many senators would join me in detailing their interactions with those who own and operate aged-care facilities across their home states. I certainly have because of course, as we know, aged care is a long-standing interest of mine and of many colleagues in this place. Of course, one of the major gripes of those who work in the sector is the resourcing that has had to be directed to dealing with the administrative aspects of their role. I have to say that this is a particularly significant issue when I meet with aged-care service providers across regional Western Australia. Running an aged-care service is a difficult enough challenge anywhere in our country, but I think even more so in regional Western Australia, which suffers from the added complications and frustrations of distance, isolation and low population density.

To be blunt, the already difficult task is not assisted by the appearance of sensationalist claims in the media, which unfortunately seem to be part and parcel of working in the sector at present. Chief among these seems to be an attitude that aged-care service providers should not be making a profit, and that somehow 'profit' is a dirty word. I think that notion needs to be disputed. It needs to be dispelled. It is actually possible to deliver high-quality aged-care services and make a profit, as many providers in Western Australia are doing. The two things are not mutually exclusive. Yes, it is true that profit in the aged-care sector is increasing. Data shows that average before-tax profit increased from $12.32 per resident per bed day in 2014 to $17.20 in 2015. A major reason for this was the government's decision to deregulate resident accommodation payments. This was a deliberate effort to open the market up to greater levels of competition, which is ultimately about greater choice and higher quality for consumers.

Profit is not actually bad for the aged-care sector. The thing that is most needed to drive greater choice and higher-quality services for aged-care patients around Australia is greater levels of investment. It stands to reason that business-savvy investors are going to be more inclined to invest their money in an aged-care sector that is indeed profitable. Only by attracting greater levels of investment will we be able to make sure that our aged-care system is able to meet increasing demand levels in the future. It also stands to reason, then, that a system that is more efficient is one that will be more profitable. That is why the government is pursing the deregulatory measures outlined in this legislation.

The new approach proposed in this bill to the transfer of aged-care places is to replace the application form with a simplified notice of transfer that is signed by the transferring parties. It eliminates the need for approved providers to seek approval to transfer their places to another provider. They will instead be able to simply notify the department of the transfer and wait for the transfer to be processed. The government retains the capacity to review the proposed transfer and where quality of care, prudential, financial or other significant concerns exist, has the right to issue a notice of veto to prevent the transfer from proceeding. In other words, careful overview of the quality of services being offered will still be maintained.

These reforms are a part of a package of changes that will remove 20 out of a total of 93 provisions which relate to the material that must be provided to or considered by the Department of Health when providers wish to transfer places. A further 17 of the 93 are being merged or simplified, and 10 of those 17 provisions will only apply where places are transferring to a new approved provider. This new approach is wholly consistent with the fundamental concepts of red tape reduction and meets the objectives of the Red Tape Reduction Action Plan by ensuring regulation within the aged-care sector meets our modern needs.

The second measure within the bill aligns the period of provisionally allocated residential aged-care places with the current business realities of approved providers of residential aged care. In reviewing current practice and assessing the case for a change in the policy setting towards a reduced administrative arrangement, advice from the aged-care sector was that the current legislative arrangements did not adequately support providers of aged care. A provisionally allocated place is a place that an approved provider has not and is not delivering care through. It is a place that an approved provider has been advised will be subsidised by the Australian government but is not currently operational and has not taken effect. Following successful receipt of a provisionally allocated place through the Aged Care Approvals Round, approved providers of residential aged care must then seek planning approval through local governments to construct their new aged-care service. Advice from the sector is that sometimes this process alone can add up to two years. The current provisionally allocated period of two years sometimes only permits planning approval to be received before applications for extensions commence. Departmental data indicates that the median time it takes approved providers to operationalise their places is approximately four years, and that 80 per cent are operational within six years.

It is reasonable to amend this provision to reflect how this component of the act is used by providers of aged care. Under the current approach, a rolling cycle of extensions and quarterly reporting is required to be undertaken. This is time consuming and includes unnecessary reporting of information that rarely changes. The new approach to managing provisionally allocated residential aged-care places extends the initial period from two years to four years and permits two 12-month extensions before care is required to become operational. After six years, an extension to the provisionally-allocated residential aged-care place will only be made in exceptional circumstances. If care does not start to be delivered, the aged-care place will lapse and be reallocated through the Aged Care Approvals Round to another provider that has the capacity to deliver the care.

Importantly, this model aligns the legislative platform for regulation with the current business realities of approved providers of residential aged care across Australian communities. It also reduces the red tape for the sector by preventing the unnecessary reporting burden on approved providers of residential aged care by 75 per cent. This new approach is an important change in the way that we consider aged care, as it shifts the focus back to care delivery.

This bill represents practical reform for aged-care providers. It delivers on the government's agenda on red tape reduction, it is going to make life easier for administrators on the ground and it will make it easier for people to invest in the aged-care industry, because they will be able to obtain bed licences when and where they need them without having to spend unreasonable amounts of time on form-filling, red tape and dealing with departments.

In supporting this legislation today, I extend my particular thanks to those who deal with the very real challenge of working in the aged-care sector each and every day. The work you do is an integral part of helping Australians live longer lives that are still dignified, comfortable and independent. As our population ages the importance of this work will only grow, and it is therefore crucial that our regulatory system helps to make that task easier. The bill is a practical way to do this.

Fiona Nash (NSW, National Party, Deputy Leader of the Nationals in the Senate) Share this | Link to this | Hansard source

I thank senators for their contributions.

This Aged Care Amendment (Red Tape Reduction in Places Management) Bill 2015 is an important component of the government's deregulation agenda. Australia has an ageing population, with the life expectancy of older people increasing. With this demographic comes the need for governance to support older people with their increasing care needs and to make the process of delivering care less burdensome administratively.

This bill makes the business of delivering aged care easier for service providers and removes unnecessary red tape so that the focus of care delivery can be at the forefront of a service provider's attention. This bill aligns with the action areas in the Red Tape Reduction Action Plan by reviewing current practice and assessing the case for enhanced policy settings, streamlining administrative requirements and ensuring fit-for-purpose regulation.

The amendments proposed in this bill remove the need for approved providers to seek approval to transfer their places to another provider. They simply notify the Department of Health of the transfer and wait for the transfer to be processed. The Department of Health will retain the ability to veto transfers where they are not appropriate, and must still consider the matters critical to ensuring that aged-care consumers are protected.

The amendments proposed in this bill also reduce the number of times that approved providers who have been provisionally allocated places must apply to extend the period of provisional allocation. The bill amends the act to give approved providers four years, with the possibility of two 12-month extensions and further extensions in exceptional circumstances.

Both measures are founded on three key concepts: (1)—most importantly—upholding quality aged-care service delivery and other consumer protections; (2) only seeking additional information from the aged-care sector that is necessary to provide an informed risk-managed perspective of the proposed transfer; and (3) reduced involvement in business transactions of approved providers of residential care.

This bill is a positive step forward in reducing red tape for aged-care providers. I thank senators for their contributions to the debate on this bill. These measures have been supported by those we consulted within the aged-care sector. I welcome your support for the bill, those in the chamber, in reducing red tape in the management of aged-care places.

Question agreed to.

Bill read a second time.