Laurie Ferguson (Reid, Australian Labor Party, Shadow Minister for Consumer Affairs) Share this | Hansard source

The essential purpose of the Aged Care (Bond Security) Bill 2005 and cognate bills is to strengthen the prudential requirements and enhance the protections available to residents in aged care facilities who have paid accommodation bonds. These bonds are paid upon entry by non-concessional residents of low-care facilities, previously called hostels, and also by residents in high-care facilities, formerly called nursing homes, which have ‘extra service’ status, as well as by some residents in multipurpose service facilities. When residents exit an aged care facility, they or their family may be eligible for a refund of part of the accommodation bond paid previously. Under current arrangements, if a residential care facility provider becomes bankrupt or insolvent, residents are 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.

This was recommended by Professor Warren Hogan in his 2004 Review of pricing arrangements in residential aged care. In making the recommendation that prudential arrangements be established to ensure the protection of residents’ bonds, Professor Hogan noted that bonds do not qualify as preferential debts under the Corporations Act 2001. Currently, approximately $4.3 billion is held by residential aged care providers as bonds, with an average bond of $127,600. Sadly, this has been the only response the government has made to the Hogan report. We are still waiting for the government’s response to the long-term proposals that Hogan recommended. It has taken the government longer to respond to that report than it allowed Hogan himself to undertake the entire inquiry.

The Aged Care (Bond Security) Bill 2005 establishes a scheme to guarantee the repayment of aged care residents’ bond balances if the approved provider of a residential aged care service or a flexible care service becomes insolvent—a default event—and is unable to meet their financial obligation to repay residents’ bond balances. The Aged Care (Bond Security) Levy Bill 2005 will enable the Commonwealth to impose a levy on approved providers of aged care if it needs to recover its costs, including administrative costs, after repaying accommodation bonds to aged care residents whose approved providers become insolvent and default. A levy can be imposed on approved providers of aged care once a cost recoupment determination is made by the minister. Such a determination is made when the Commonwealth has not recouped money it has paid out in compensation to aged care residents entitled to bond refunds from a defaulting approved provider or when the Commonwealth wants to recover associated administrative costs. The bill does not actually impose a levy. Instead, the rate of any levy will be determined by regulation. The rate cannot exceed the cost recoupment determination amount in any particular case. While any levy imposed may apply different rates to different classes of approved provider, it cannot discriminate between providers on the basis of their location in a particular state or part of a state.

The Aged Care Amendment (2005 Measures No. 1) Bill 2005 contains a number of measures and includes the aims of ensuring that residents of flexible care services are afforded the same protections as residents in residential aged care services, putting in place a set of prudential standards, ensuring that interest is repaid to the estate of a resident for the period between the death of the resident and the repayment of the bond, changing the time frame for repayment of a bond to the estate of a deceased resident and, finally, reducing the time frame in which a bond must be refunded in the event of a resident leaving a facility or if the resident dies. This bill will enable the strengthening of existing prudential requirements related to accommodation bonds, especially in relation to liquidity, record keeping and disclosure. These new prudential requirements will be developed over time and will be subject to review.

While Labor will support these bills, we are concerned at the way in which the Howard government has chosen to manage—or mismanage—aged care. This is evidenced in the comments made by Professor Hogan that Australia’s aged care system is stuck in a Stalinist time warp. I can say from my own experience that Professor Hogan is not one for extreme language, yet he has publicly stated that the government’s system for administering nursing homes has its basis in Moscow’s planning offices of the 1920s. Professor Hogan has called for ‘a comprehensive revision of aged care legislation’. The Minister for Ageing must acknowledge Professor Hogan’s and the sector’s concerns and get on with the job of ensuring the sector’s future. The aged care industry and the community have been saying for years that the government’s quick fix policies are putting enormous financial pressure on the aged care system, yet the former minister has refused time and time again to acknowledge the problems in administration and accommodation.

The Howard government is failing to deliver the aged care services needed for our ageing population, with a shortage of over 9,000 aged care beds across the country. There are thousands of frail elderly who cannot find a nursing home bed because of the Howard government’s failure to ensure promised aged care beds are actually built. After 10 long years, the Howard government has not faced up to the aged care bed crisis in Australia. Every week we hear from families desperate to access an aged care bed for their loved one and the waiting lists, especially for high care, are getting longer and longer. When the Howard government came into office there was a target of 90 residential aged care beds for every 1,000 people aged 70 years and over. As at June 2005, there was a shortage of 9,275 aged care beds against this target—a target the government set. Instead of fixing the problem and meeting this target last year, the Howard government quietly lowered the target to 88 residential aged care beds for every 1,000 people. It lowered the target—I do not think that is a new solution to the problem. Even against its own reduced target, there is still a shortage of 5,500 aged care beds across the nation.

The Productivity Commission reported that, in 2005, 30 per cent of people requiring nursing home care had to wait more than three months to get a bed, which was up from 15 per cent in 2000—in other words, the problem had doubled. The national shortage of 9,275 aged care beds understates the severe shortages in some regions. The Productivity Commission’s recently released report Australia’s health workforce highlights the significant shortage of nurses and care workers in aged care. The report noted:

There have been longstanding concerns about the size, skill mix and availability of aged care workers—particularly in regard to nursing staff. A number of recent reports have reinforced these concerns. For example, the Senate Community Affairs Committee Inquiry into Nursing identified aged care as the area of nursing in greatest crisis, with the acute shortage of nurses having led to increased use of unregulated workers, to the detriment of quality of care.

The recently released unanimous report of the Senate Community Affairs References Committee Quality and equity in aged care also noted that delivery of quality care was under threat from the retreat of both registered nurses and enrolled nurses from the aged care sector. The Productivity Commission report comes on top of myriad other reports that highlight the workforce crisis in aged care, and the Minister for Ageing has yet to engage with the sector to come up with serious solutions.

The government must provide the community with confidence that their loved ones are being cared for by sufficient and appropriately qualified care staff who are happy to work in the aged care sector. In the 2002-03 budget, the Howard government increased residential aged care subsidies by $211 million over four years to assist employers of aged care workers to provide for increases in wages and improved workplace conditions. In 2002 the wages gap between nurses working in residential aged care and those working in the public sector was $84.48 per week nationally—a significant difference. In the 2004-05 budget, the Minister for Ageing announced an extra $877.8 million over four years through a conditional adjustment payment to improve the financial position of aged care providers and allow them to pay more competitive wages to staff. The wages gap in 2005 was $191.83 a week. The problem is that there was no mechanism to ensure that this funding of nearly $900 million was actually passed on in wages so that we can recruit and retain nurses and care workers in an area that is struggling to keep them. Most of this money has gone not to nursing staff but to the providers themselves.

If this government were really serious about the provision of quality care for older Australians, it would make a commitment to increase the number of undergraduate nursing places. There are plenty of people wanting to undertake nursing but patently insufficient places for them. Figures from the Australian Vice-Chancellors Committee showed that 2,716 eligible nursing applicants missed out on an undergraduate nursing place last year. That represents 20 per cent of those interested in getting into the sector.

With the release of yet another workforce report highlighting the significant shortages in aged care, it is now time for this government to take immediate action so that older people in Australia receive the care they deserve. And when we speak of immediate action we are not saying that the government’s current method of importing skilled staff and undermining the nursing education systems and the availability of nurses in Third World countries is a solution—that is precisely not the solution.

In 10 years the Howard government has failed the grade in aged care. There is a major lack of infrastructure and long-term workforce planning, and the government’s lack of investment in future needs and, most critically, its inability to collaborate with state and territory governments have led to this crisis. Every day sees thousands of frail elderly in acute hospital beds because there are no places for them in residential care. The states and territories bear the cost, people who need hospital treatments must wait and the elderly themselves do not get the type of care and environment they need and deserve. This is an issue Labor has consistently raised. It was one of the key drivers of Medicare Gold, which offered a real solution to the problem.

This issue of what is called ‘bed block’ is so central to the problems confronting our hospital system that it was addressed head-on in the Podger review. We understand that Andrew Podger’s solution was very similar to Medicare Gold, which presumably explains why his report has been condemned to the backblocks. However, as a consequence, the issue of bed block and the need for the Howard government to meet its responsibilities and provide more aged care beds to get the frail elderly out of hospital can no longer be ignored by the Prime Minister, the Minister for Health and Ageing and the Minister for Ageing—or even the Treasurer and the Minister for Finance and Administration. So it will be on the table to be addressed at the COAG meeting next week. We await the outcome of COAG’s deliberations, as do anxious families of those elderly patients around the country who have been unable to find suitable accommodation.

Labor will support sensible proposals which are fair and which seek to relieve the pressure on the aged care system through access, quality, affordability and sustainability. As such we will support this legislation. However, we believe that legislation of this impact should be properly examined and scrutinised, and so we will move in the Senate to have these bills referred to committee for consideration.

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