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

On 10 July 2020, I made a 52-page submission to the royal commission on aged care based on two key premises: ensuring older Australians have the care they need when they need it and wherever they need it and that people want to stay home for as long as they can. My submission specifically addressed the systemic problems identified in the interim report, offering solutions for now and for the future. The royal commissioners agree on a majority of the recommendations, especially two key points: the need for a thorough redesign of the system, with new, robust governance arrangements, and for a new aged-care levy to deal with the inadequacy of funding. Their findings that 'aged care has often been treated by the Australian government as a lower order priority' and that 'the Australian government has been the dominant funder of aged-care services, but it has not funded the system adequately' are correct. But they differ on the institutional form of the respective governance arrangements and how that levy is determined, and this divergence has implications for the changes each is advocating.

I'm very pleased they pick up on many of the suggestions that I made in my submission. Both commissioners were critical, as I was, of aged care not being in cabinet and they said that the name of the department should include 'aged care'. At least Scott Morrison has rectified this by naming Greg Hunt as Minister for Health and Aged Care. I suggested a full integration of the health and ageing systems under one Medicare umbrella. Australians understand the operation of the Medicare system, including co-contributions. Recommendations include an expansion of Medicare services available in aged care. Co-payments, which are a feature of Medicare, need to remain a live option for long-term sustainability of the system. Recommendations also include: a new aged-care act founded on a needs based system, with a universal entitlement to aged care when required; reconfiguring the system as one of entitlement of care to deliberately mirror Medicare entitlements; a rights based approach reflecting our international obligations; and a general non-delegable statutory duty on approved aged-care providers to ensure that the nursing and personal care they provide is safe and of high quality, so far as is reasonable.

I also suggested that accrediting aged-care facilities to provide more services would not only add to their viability but also effectively allow them to become aged-care hubs, or one-stop shops for all aged-care services. I'm especially pleased that the recommendation for the approval of providers for particular kinds of services, or general approval for all kinds of aged-care services attracting government funding, goes a long way to facilitating my suggested hub model. This, combined with changes to aged-care areas to reflect local area networks and the expansion of allied health services for aged care, will further facilitate those local providers who are already plugged into local networks. The push for smaller, lower-density, low-congregate living arrangements for people with dementia reflects my suggestions for care similar to that which we were able to acquire for my dad, who had dementia.

The recommendations also pick up my suggestions about the need for greater medical services in aged care, recognising the need to alleviate the critical intersection between health and aged care, including greater usage of technology, real-time reporting and the use of outreach services and aged-care-accredited medical practices. I was especially pleased to see that many of my suggestions regarding workforce issues, including staff ratios, addressing pay gaps, and better training and career progression—including abolishing the ACFI—were picked up. This will go a long way to addressing the paper war in aged care, and return staff to doing what they should be doing and what they prefer to be doing—that is, taking care of our older Australians.

My submission advocated for a five-year agreement, a partnership between the government and the sector, to tackle the necessary reform. It would be a consensus based process depoliticising the important process of reform, given that both sides of politics have shied away from reform for fear of criticism. A five-year agreement would straddle different governments. It would be akin to the pharmacy agreement approach. This is about the method of achieving reform, and I sincerely hope that the government will adopt this approach.

Tonight I would like to focus on the important issue of funding. Commissioner Pagone advocated an independent commission model, arguing that if you continue with the same failed system you will get the same results. He advocates for a hypothecated aged-care levy, a dedicated fund within consolidated revenue to be used only for aged care. Parliament would set the levy based on Productivity Commission advice and assessments of all aged-care costs over 30 years. In short, under the Pagone model, contribution to the aged-care system would be according to one's income, with the more financially fortunate paying a greater share.

Commissioner Briggs, with her strong public service background, advocates for a government leadership model with greater independence in certain areas like quality regulation and pricing. She believes it is better to reform existing institutions, the argument being that the Commonwealth is the primary funder of aged care, and, therefore, only it can run the system and ensure ministerial accountability and greater integration with the states and territories. She advocates a non-hypothecated earmarked levy, an aged-care improvement levy. Like the Medicare levy, it would be paid into consolidated revenue. However, with notionally earmarked funds the government is not legally obliged to spend them on the identified purpose. She suggests one per cent of taxable personal income. Whilst this would fund a substantial part of improvements to the system, the government would need to meet the shortfall.

The commissioners were critical of the 1997 act and the Department of Finance cabinet memorandum, which was:

… not primarily concerned with the quality of care or with ensuring that older people can access the care that they need, but identifies the 'billions' in savings that had been achieved to that time by 'capping service provision' and the 'risks' to the Government's budgetary position presented by the new arrangements which might, if not carefully managed, undo some of the longstanding fiscal constraints that were operating in aged care.

The commissioners were also critical of the decisions made by the government to apply an efficiency dividend to aged-care funding and to ration care, concluding that aged-care spending was 22.4 per cent lower than it would have been if the efficiency dividend had not been applied. On top of this, they estimated that the rationing of places has further reduced expenditure by the government on aged care by 25.7 per cent from what it would have been if demand had been met by an unrationed supply of places. The commissioners concluded that collective decisions by successive governments had cut more than $9.8 billion from the budget for aged care in 2018-19, the last prepared by Scott Morrison as Treasurer.

In the many reports in recent decades, the most important one was the 2011 Productivity Commission report, Caring for older Australians, upon which I based my blueprint. It was an important reference point for the royal commission. Funding is not about how much we spend but about how we spend it. The Productivity Commission said that it was important to unpack a combination for everyday living, health and personal care costs in designing future funding for aged care. The PC said that older Australians don't want to be passive recipients of services, dependent on funded providers, but preferred to be independent and able to choose where they live, which provider they use, the way in which services are delivered and whether to purchase additional services and/or a higher standard of accommodation. Australians own their own homes or rent, hence critical to any reform is the need to be up-front about the principle of personal responsibility for accommodation and personal needs. Just because you get old does not mean that suddenly the Australian taxpayer must pay for those personal expenses.

The PC said that Australians will have to pay more for the care of older Australians as our population ages. Finding the right balance between public funding and private funding is a sensitive and complex task, and we need to be up-front with the Australian public about this. In the end, the Productivity Commission concluded that a pay-as-you-go tax finance system, supplemented by higher co-contributions and a lifetime stop-loss mechanism was the best approach. Any reform must also be undertaken against the background of two circumstances: baby boomers are more financially able to contribute to care and, for them, choice is very important. Also, the dependency ratio is relevant—that is, the people of working age, 15 to 64 years, for every person aged 65 years and over. In 1978 it was seven and today it's 4.2, and by 2058 it will be down to 3.1. It's against this background that it's now time for the government to have the political fortitude to fix aged care. We owe it to all Australians.