Peter Dutton (Dickson, Liberal Party, Shadow Minister for Health and Ageing) Share this | Link to this | Hansard source

I conclude my remarks on the Aged Care Amendment Bill 2011. It is true that all we have gotten from Labor's so-called reforms in health has been overblown promises, overblown spending and new layers of bureaucracy, one after the next. Let us hope the legislation before us to make changes in the aged-care sector is more successful. There is provision for a review to be conducted in 2014-15. Aged care needs supportive policy. Currently it is overregulated, underfunded and facing huge challenges. I note that the explanatory memorandum for this bill states that it is difficult to quantify the regulatory impact of these amendments. This remains an ongoing concern for the coalition. This is a government that imposes additional regulatory burden on industry at every turn. The aged-care sector has almost been regulated to death. For those reasons I move:

That all words after "That" be omitted with a view to substituting the following words: "whilst not declining to give the bill a second reading, the House:

(1) notes:

(a) objection to the growing burden of regulation being placed on the aged care sector by this Government and its impact on the ability of providers to make available affordable aged care places; and

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

(2) calls on the Government to immediately adopt the Coalition’s commitment to reduce Commonwealth regulation by at least $1 billion per year."

Bruce Scott (Maranoa, National Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Malcolm Turnbull (Wentworth, Liberal Party, Shadow Minister for Communications and Broadband) Share this | Link to this | Hansard source

I second the amendment.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Aged Care Amendment Bill 2011. I take issue with what the member for Dickson was saying about what we are doing on aged care because we are strengthening protections for accommodation bonds paid by care recipients to providers of residential and flexible aged-care services. We are taking steps in a massive way to support the aged-care sector. The aged-care sector has never received such a large sum of money in any budget than it has in this budget. We are providing assistance to the aged-care sector in a big way. We are supporting a review on aged-care services in this country. The Productivity Commission handed down its draft report on 21 January this year and we are seeing significant interest in that and from the aged-care sector.

We are making sure that we have a sustainable sector. We are making sure that we have opportunity for people in their senior years to get the best quality care, that people have choice and that people have decency and support from good qualified nurses, nurse aides, doctors and care workers in that sector. We are also very committed to making sure that the workers in that sector have decent and affordable wages and conditions.

The member for Dickson was very critical of our performance on aged care. He quoted the Grant Thornton analysis of aged care. It is interesting because back in 2006-07 Grant Thornton examined what went on under the Howard coalition government. The member for Dickson pointed this out, failing to tell those who might be listening that the coalition government was in power at that time. Grant Thornton prepared a financial analysis based on data obtained from financial information from the Department of Health and Ageing. Grant Thornton found that 40 per cent of all providers of aged care reported a loss in residential aged care. Net profit per bed fell by 30 per cent from 2005 to 2006—those opposite were in government at that time—and the annual average net profit per bed was around $1,700, a return of less than 2.5 per cent.

So let us not come up with this furphy that somehow there was some sort of aged-care nirvana during the time they were in government. In fact, the aged-care portfolio was a bit like the Northern Ireland of politics in the UK because Prime Minister Howard took the view that he would put people like the current member for Sturt in the portfolio—people he did not really like. We saw plenty of people over there who are not really too au fait with the portfolio. We saw a revolving door of about seven different ministers across about 11 years. The aged-care sector was up in arms about this.

I can recall meeting with the Aged Care Alliance in Queensland before the 2007 election when they were just absolutely livid with the performance of the coalition government. A number of backbenchers opposite were clearly of the view—they knocked on the door of the then member for Bennelong, the then Prime Minister John Howard—that more support should be provided. This was a constant refrain in the Courier Mail and the media back home in Queensland. So let us not perpetuate and perpetrate a myth about the commitment to aged care from the coalition. I look forward to what the Productivity Commission has to say when it releases its report at the end of June this year because the draft report was creative and innovative. I see the member for Ryan across the chamber. She and I both spoke at an aged-care breakfast in Brisbane about this topic some months ago where, as she would know, people from the aged-care sector were looking forward to the liberty and to a more sustainable, flexible and financially viable sector. We welcome the Productivity Commission's draft report. I have to confess I actually have read that report, all 507 pages. The Productivity Commission has made it clear that we need to make reforms in this area. The Prime Minister and the Minister for Mental Health and Ageing have made it clear that this item is very high on the second term agenda of the government.

The legislation that is before the House today will make a number of important reforms that I think go towards transitioning aged care to the point where we look at, act upon and take seriously the suggestions of the Productivity Commission and its recommendations. The bill will make amendments which limit the permitted uses for accommodation bonds taken after 1 October 2011, such that providers of aged care may still use bonds for capital improvements to aged-care services and prudent financial investments but may not use bonds for operational purposes. The bill provides a two-year transition period to allow time for the sector to adjust to the new arrangements. Bonds are of course paid in low care and not in high care, which is a more hospital-like environment for people who are suffering from severe illness and disability.

The average person who goes into a high-care facility is about 84 years of age. We have about 170,000 people in residential aged-care facilities across the country, but a million Australians interact with the aged-care sector and we are putting about $50 billion into that sector across the forward estimates. A million people often get home and community care. On the Extended Aged Care at Home Dementia packages: I have been arguing for some time, in my electorate for a start, that there should be more aged-care packages. I am pleased to see that recently my representation has been successful with further packages for Blue Care in the upper part of the Brisbane Valley around Lowood. I warmly welcome the representation from Peter Conaghan in relation to that. Peter has been a terrific advocate as the Service Manager, Community, at Blue Care in Lowood.

These amendments will also remove restrictions on the use of income derived from bonds, retention amounts and accommodation charges. This will give an unrestricted source of income to aged-care providers. I spent 14 years on the board of Queensland Baptist Care and acted as a lawyer for many aged-care providers. In fact, when I spoke at the event that the member for Ryan also attended, I saw in the audience quite a number of the clients I represented when I was in private practice as a lawyer.

The aged-care sector is crying out for reform. The amendments in this legislation are transitional, but they make clear the sources of income. It is always difficult to invest in capital infrastructure to build the best kind of facility and to have that ready source of income. So I welcome the ACFI funding that we have put in during the last few years, which has given further assistance to those in aged care and made a ready source of money available to assist people.

The challenges in this sector are so great. By 2050 we will have 2.7 Australians working for every person over the age of 65. That is what the third intergenerational report says. The increase in costs in aged care will be three times what the increase will be in health funding. That is the challenge we face. About five Australians now work for every person over the age of 65 years. The intergenerational report indicates the rate of growth is enormous. About seven in 10 women and about five in 10 men reach 65 years of age and they are going to need some form of help for their domestic needs, some form of help with showering, shopping, mowing, ironing and those kinds of routine household chores.

The legislation we are debating today is about caring for the disadvantaged and the vulnerable. It is about honouring the contributions that they have made to our welfare and our wellbeing in this country. We believe that every Australian deserves the right to access good quality care. We believe it is appropriate and the measure of a decent society is how we treat our senior citizens. In my electorate of Blair we have made a significant contribution to our senior citizens. Of the $9 million used to redevelop the Cabanda aged-care facility in Rosewood, a community run aged-care facility, $1.5 million was federal government money. We have put in $5 million as an interest-free loan for the Milford Grange project in Ipswich run by RSL Care. Our transitional funding through low-interest loans has made a big difference. Older people will benefit from another 113 new aged-care places in Blair costing more than $6 million a year. This includes an allocation of 30 new residential aged-care beds. We are making a huge contribution. On 8 December, the Minister for Mental Health and Ageing announced that 12,272 new aged-care places worth more than $450 million a year will be allocated across the country. That is a huge number of people who will interact with the aged-care sector. The aged-care sector has been crying out for reform for a long, long time. It is not as if those opposite did not know about the need to reform the aged-care system, which the Productivity Commission has described as complex and difficult for people who interact with it to negotiate and navigate. They knew very well about the challenges in aged care because former Prime Minister John Howard instructed Professor Warren Hogan to undertake the Hogan review back in 2004. Professor Hogan urged radical change in the aged-care sector, but for three years the government sat on his report and did virtually nothing.

In 1997 the government made some significant change, which we acknowledge, but subsequently they refused to take up the mantle of change. They refused to be reformers. Their idea of aged care was to manage it as best they could, in a political way. They did not really commit themselves to the change they needed to make.

The Productivity Commission's draft report Caring for older Australians has really made it clear that the Howard coalition government utterly failed with respect to aged care. It has made clear that there is great disparity in wages and conditions for aged-care sector staff; that the system is difficult for people to work out; that we need a different model, a different method, for funding the aged-care sector; and that we need a gateway agency to allow people to navigate the system, with different methods of assessment, different methods of sanction and different methods of accreditation. There is a lot to be done—the legislation here is really transitional—before that happens.

We think that making changes to the aged-care sector will improve the lot and lifestyle of our senior citizens. We think a more flexible range of care and support services will make a difference. We want to make sure there are safety and quality standards across the sector. We want to make sure that the regulatory commissions and bodies involved in it are transparent, accountable and open. We want to make sure that there is a simplified gateway that is easily understood so that assessments of care and information can be given to consumers and customers. We want to make sure that where there are gaps in service delivery we can fix them.

The legislation here is part of that process as we transition to major reform. This is a priority of a reformist Labor government. The fact that we have to do it is testimony to the failure of those opposite who, for 11½ years, fudged and fumbled aged care because they did not have the wisdom or wit to do the reform that needed to be undertaken.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

Aged care in Australia is a topic that confronts and challenges us all. I spoke in my maiden speech about the importance of social connectedness and active ageing. To put the potential impact of an ageing population into perspective, it is worth noting the statistics. By 2050, one in two voters will be aged over 50 and by 2055, 78,000 Australians will be aged over 100. We need to acknowledge not only the cost but also the potential benefits of age. Australians aged over 55 contribute an estimated $74.5 billion per annum through voluntary, unpaid and caring work. We must not dismiss their enormous contribution and potential. That is our challenge.

The government is not meeting this challenge. We are here today debating yet another amendment—another stop-gap measure; a bandaid solution—that still does not resolve the bigger issue. The government came to the 2007 election claiming 'new directions for frail and older Australians' and claimed that it would make the transition from hospital to aged care a priority. Yet the reality is: another Labor priority policy area; another Labor government failure.

After delivering so little for this sector during its first term, this Labor government refused to commit to any substantial reform during last year's election campaign, leaving aged care to be swept under the rug once again. This government has failed to make the tough decisions needed in the aged-care sector, yet again dodging the key issues and then passing the buck to the Productivity Commission inquiry. The findings of this inquiry will not be released until after the 2011-12 budget, providing the government with yet another excuse to delay any real action in this vital area.

This amendment bill aims to strengthen consumer protection for accommodation bonds paid to aged-care facilities as well as to improve the arrangements for the handling of complaints about Commonwealth funded aged-care services. Given the recent experience of one of my constituents, I agree with the government that at the very least there are major issues within this area that need to be addressed. Ms Linda Fitzgibbon recently contacted my office to share her experience when dealing with an aged-care facility. Ms Fitzgibbon placed her two elderly parents into care last year, paying an upfront accommodation bond of $300,000 for each parent—$600,000 in total up-front just for the bond—in addition to the fees she would be paying for their care.

As Ms Fitzgibbon points out, she was lucky to have been able to afford this outlay up-front, as the interest charged on paying this bond off over time was, at that point, over seven per cent per annum. Sadly, she has lost both her parents over the course of the past year, her mother in September and her father in March. During this grieving and stressful time she also faced, due to circumstances beyond her control, a delay in her parents' wills going to probate.

As you would appreciate, this was a very distressing time for Ms Fitzgibbon. That stress was compounded by the fact that, due to the delay in the will going to probate, the aged-care facility would not release her parents' accommodation bond. Unfairly, neither was that bond earning interest at the same rate that the constituent would have been charged had she not paid that bond up-front. That rate has now increased to 8.94 per cent. With this in mind, I do find the proposals to strengthen consumer protection for accommodation bonds and improve arrangements for the handling of complaints to be warranted, and we on this side will continue to support sensible policy measures. It will help to curb aged-care facilities investing these accommodation bonds—substantial amounts of money—in high risk investments, reducing the possibility of the bond being lost. The proposals will also, hopefully, encourage aged-care providers to upgrade their facilities for residents, which I am sure residents and their families would appreciate.

But the question we must ask is: why is this happening within the aged-care industry? It is happening because the sector does not receive enough support from the government. As the Productivity Commission report stated, the aged-care industry is close to crisis, with 40 per cent of aged-care providers operating in the red as at June 2010. Yet the population of over 85-year-olds, the main users of aged care in Australia, is set to swell from 400,000 in 2007 to 1.6 million by 2047. Increasingly, seniors are struggling to access the care that they want, they need and they deserve, with 2,000 aged-care beds and 786 bed licences lost since 2007 alone. The government clearly have not faced the reality of our ageing population and they do not appreciate the dedicated and committed individuals working in aged-care facilities. Aged-care nurses on average earn 20 to 30 per cent less than their acute-care colleagues.

Whilst the amendments we discuss today are both needed, they are not enough. This government's entire treatment of the sector is simply inadequate. Those in the industry have already raised the alarm that the system is difficult to navigate, confusing and underfunded. The whole industry is already overregulated, yet here we are today discussing stopgap regulation but not real reform. Back in 2007 the government promised to cut one regulation for every one it introduced—one in, one out. So the obvious question is: what is being cut today? The answer to that is: nothing. It is yet another broken promise of this Labor government. In fact it has introduced 220 new regulations for each one it has repealed. Indeed, rather than reducing regulation, the only cut this government has made is a cut to funding for the sector. The assistive technology in community care initiative was cut and, as a result, there is restricted access to vital technology which could assist older Australians in their homes. We have also seen cuts to hearing services through the introduction of a threshold, and funding cuts to preventative measures that assisted our older Australians to keep fit and healthy, increasing the financial burden on the government purse and, sadly, reducing support for our senior citizens. On top of that the Labor government applied one of their most simplistic and lazy 'saving' measures: freezing indexation payable to aged-care providers in the 2009-10 budget, thereby cutting approximately $910 million over four years. The government continues to fail our aged-care sector and therefore fails our seniors, in turn fails their families and then fails our young Australians—for it is our young Australians who will bear the responsibility and the cost in the future for rectifying this neglect.

The amendments today are a bandaid step, but we need genuine reform if we are to support aged care in Australia. It must be done responsibly and it must be done soon. Aged care is in crisis, and the financial viability and associated issues are of vital importance. As Mike Woods of the Productivity Commission said:

… the system is expected to provide care to over 3.6 million older Australians by 2050. It is inevitable that government expenditure will rise. The challenge is to reform the system, while keeping that expenditure within sustainable limits.

The more we fail now, the greater the problems for future generations. The more costs and pressures we place now on the aged-care industry, and by extension the health system, the greater the burden we place on future generations. Failing in aged care affects so many facets of our economy and has far-reaching consequences which this government refuses to face. To quote Abraham J. Heschel:

A test of a people is how it behaves towards the old. It is easy to love children. Even tyrants and dictators make a point of being fond of children. But the affection and care for the old, the incurable, the helpless are the true gold mines of a culture.

Mr Deputy Speaker, let us begin to apply this philosophy to our aged-care sector.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I rise to support the Aged Care Amendment Bill 2011 and I commend the minister on bringing this matter to the parliament. A compassionate and responsible aged-care sector is, quite frankly, the hallmark of a modern society. When we look at the costs associated with maintaining that sector I know they sometimes appear horrendous, but one of the things that strikes me these days is that we have seen huge changes, particularly with respect to the standards of accommodation and lifestyle which are associated with aged-care facilities. One of the reasons for that is not just that it is what society expects for its aged community; it is what we expect for our parents. If you personalise that point, it is what we are looking forward to for the care of our mums and dads—and I suppose we might possibly inherit that degree of care from our kids as well—and it shows that there is a reason why we constantly review, upgrade and look forward to progress being made in this sector. We pride ourselves on advancing our own standards of living and lifestyle, and clearly in taking care of our aged these things are no less important. That is the hallmark of a modern society and a modern community, which we are all very happy to support. That is the reality of the position. In my electorate I have—as, no doubt, every member has—a number of aged-care facilities. I take the opportunity to visit them regularly. I would like to mention two that I have been to very recently. One is the Cardinal Stepinac Village and the other is the Indo-Chinese Elderly Hostel. They are fantastic organisations. These organisations cater for a significant ethnic population in my electorate. I have mentioned many times that my electorate is the most multicultural electorate in the country. The work that those two organisations do—Cardinal Stepinac Village with respect to the Croatian community and the Indo-Chinese Elderly Hostel with respect to the Indochinese population—is extraordinary. A lot of the residents have limited English. That has not always been the case. Regrettably, as people grow old and with the onset of dementia, a lot of people return to their original tongue. Hence, these two facilities cater very significantly to the ethnic aspects of the elderly in my electorate.

I would like to refer to Harry Tang and his team. Harry is the President of the Indo-Chinese Elderly Hostel and Veronica Hon is the CEO. They do a wonderful job. As a consequence, the government rewarded them only recently with approval for another 32 aged-care beds as part of the second round approval process. That is significant in my area, particularly around Bonnyrigg where they are located. When I was at Cardinal Stepinac Village the chief executive officer, Matt Smolcic, presented me with a cheque for $40,000 to top up the Premier's Disaster Relief Appeal in Queensland. I thought that what the Croatian community did was pretty good—that they still thought about others.

Getting back to the bill—I know I have digressed—these amendments will strengthen consumer protection around accommodation bonds and will make the processing of complaints easier and probably more flexible as that applies in this sector. In particular, it will amend the Aged Care Act to address the current legislative inadequacies around accommodation bonds in aged-care facilities. It will go a long way to clearing up the confusion and uncertainty—certainly in the minds of some of the industry operators but, more particularly, in the minds of residents and families of residents—about what these bonds can and cannot be used for.

Bear in mind that these bonds are a form of interest-free loans to operators. They are certainly worth a significant amount of money and it is only right that we protect the consumer—often that is the family of the aged-care recipient—make sure that their investment is protected and that the money is used for proper processes. As I understand it, when the bonds were introduced in 1997, they were designed to apply to infrastructure—the bricks and mortar associated with accommodation. However, since then, without prescription provided by the legislation, there has been the opportunity for some operators to use the money, which has effectively been held in trust for recipients, to do other things. This bill is designed to bring it back to what these bonds were originally intended to do. The bill gives greater clarity in that respect. It will ensure that what the bonds in the aged-care sector are for—the money is held in trust—and what the bonds can be used for by the operator is clearly understood. The amendment, which will take effect on 1 October 2011, will make it clear to all operators, residents and, in particular, the families of residents that the bonds are to be used strictly for capital improvement and not, under any circumstances, used for other operational purposes.

The two-year transition period will give the aged-care providers the opportunity to prepare for the changes. In addition, the compliance and enforcement regime will change under these provisions. That will be enhanced around these bonds. It will introduce new offences where misuse of funds has been identified. It will also provide for new and better information-gathering powers for the department to follow up on when there are complaints or allegations of misuse of accommodation bonds.

The second aspect of the bill removes restrictions on the use of income derived from accommodation bonds, which technically gives aged-care providers an unrestricted source of income. The amendments to the Aged Care Act will strengthen and improve the compliance scheme in the aged-care area. It will replace the investigation principles with a new complaints based principle. That will broaden the department's scope for dealing with and following up on concerns.

At present the department is limited to only being able to investigate complaints and establishing whether a breach of the act has occurred. If that is proven to be the case, it would go down the prosecution route and adversarial aspects in terms of compliance with the act. This amendment will make the scheme more flexible. It will introduce the aspect where the department can employ a wide range of mechanisms to assist in resolving complaints, not waiting until there has been an established breach of an act. Those mechanisms include early resolution, conciliation and mediation to work in collaboration with residents, families of residents—the complainants in this case—and the operators of an aged-care facility. At the end of the day, it is not in our interests or the department's interests to establish a prosecutorial regime. We want to show leadership in the standards and the services that are being administered by aged-care providers, and we want their obligations to be understood not only by the providers but also by the residents and the families of the aged. This will lend greater flexibility in trying to resolve issues so that people can undertake their work—that is, to look after the aged.

These recommendations came out of an independent report commissioned by the then Minister for Ageing, Justine Elliot, into how the industry responded to concerns. I acknowledge the former minister's good work and I wish her well in her new portfolio. For what it is worth, I think she applied herself diligently in the ageing portfolio with a view to making a difference for the people in aged care.

The last element of the bill will make some minor operational changes to remove the redundant provisions of the Aged Care Act. These amendments were developed through extensive consultation with a wide range of stakeholders, including aged-care providers, residents and their families, and aged-care advocacy groups. These amendments will get the balance right. That is not to say that once we pass this bill everything will come to a stop, because this is an ongoing reform of aged care. Changes will obviously occur from time to time, but we are trying to make sure that the administration of our aged-care residents reflects the contemporary standards that one would expect in a society such as ours.

We intend to protect residents and their families from unscrupulous operators. There are profits to be made in this area, there is no question about that. It is not simply an altruistic industry. We want to make sure that people do not cut corners that prejudice the lifestyle of residents. As a consequence, continued monitoring of this industry will be needed and that is why a further review will take place two years after these changes are implemented.

As I said, we are setting about to protect the community from unscrupulous operators, but that is not meant to cast aspersions on all of the good operators out there who are the vast majority. However, where operators and their senior staff abuse the rights of others we need to be able to give a level of assurance to the aged and those who effectively fund the accommodation bonds. This government will do all we can to support Australians who are being cared for in aged-care facilities and to support the industry so that they can provide the highest possible standard of care to our aged. As such, the government will continuously monitor the effectiveness of these changes. As I have said, once they have been implemented there will be a subsequent review that will take place in 2014 or 2015.

The elderly certainly have the potential to continue playing a very significant role within our community and that is why we need greater flexibility in aged care. One of the things that drives the development of the aged-care industry is what we expect for our own parents. I support these amendments because they will introduce changes that are needed, but they do need to be continually reviewed. The best thing we could do to provide a greater degree of assurance for those in aged care is establish mechanisms that can quickly and appropriately address complaints instead of simply looking for breaches to prosecute in the courts. I think these amendments will take us a long way down that track. I think it shows that we are committed to making sure that the processes work not only on paper but also in ways that fundamentally deliver good results for the aged-care sector and, more importantly, for those who are cared for in the aged-care sector. I commend the bill to the House.

Don Randall (Canning, Liberal Party, Shadow Parliamentary Secretary for Local Government) Share this | Link to this | Hansard source

I am very pleased to speak on the Aged Care Amendment Bill 2011. As previous speakers have mentioned, this bill introduces a number of amendments to the Aged Care Act 1997 which are part of the reform agenda to strengthen consumer protection for accommodation bonds paid to aged-care services and to improve the arrangements for handling complaints about Commonwealth funded aged-care facilities. If this bill is passed it is proposed that the reforms regarding accommodation bonds for approved providers will take effect after 1 October 2011 and the new complaints mechanisms will take effect on 1 September 2011. I am sure that my colleagues have already mentioned that there will be a transition period, so I will not just repeat what everyone else has said about these matters.

There was a need for reform because things have happened with accommodation bonds. The original policy was that they were to be used for capital funding for investment in the building of stock; however, the principal amount of the accommodation bond was not clearly articulated in the legislation. In other words, the act needed clarification and that is what this bill does. It makes it clear that bonds must not be used for purposes other than those related to providing aged care to recipients. The bill also provides that, where a bond is charged, the approved provider is entitled to income derived from that bond and the principal can be deducted from it for specific purposes. The bonds were generally invested in deposit-taking institutions, such as banks et cetera, but they did venture into other areas, such as credit unions, syndicates and other sorts of trusts. There has been a very wide use of bonds and there has been a lack of consistent interpretation regarding permitted uses of bonds. There have been a number of anomalies which have been identified by the Department of Health and Ageing. These included using accommodation bonds to make loans to related parties, related entities and individuals, and failing to meet existing prudential standards relating to bonds.

Grant Thornton, in his Aged care performance survey in November 2007, found that 40 per cent of all providers were operating in the red. Without going through all the issues, that is why we are here today. Let us get on to some of the real issues in relation to why there is a crisis in aged-care funding. I suspect that you, Mr Deputy Speaker Scott, would be the only one who has been in this House long enough to know that in 1997 there was a massive argument in this House about the charging of bonds and it essentially brought down the minister of the day, the member for Pearce. She was attacked roundly by the member for Jagajaga for trying to charge accommodation bonds where it related to the family home.

I will not revisit that whole experience, other than to say that we supported sensible arrangements to charge bonds because no government can afford the growing aged-care industry capital spending that is required. There needs to be a blend of funds from government, the investment sector and individuals. As we know, at that time, many people entering aged-care facilities had a home and they could have used the value of that home to help provide capital for accommodation by providing a bond to the aged-care facility. But that proposal was not supported, and people like Francis Sullivan from the Catholic association helped the Labor Party opposition at that time savage us over this issue.

There are still massive underspends in what is required for aged-care accommodation. I see on the opposite side of the House the former minister for aged care. I am sure as she travels around this country she would hear—as all members hear in their electorates—that they are desperate for funds in this area. At the moment, there is not only a crisis but also a massive underspend because these facilities cannot create a business case. I have met with my aged-care providers, and earlier this year the member for Hasluck and I met a delegation of aged-care providers at Amaroo Village in Perth. We met with David Fenwick—who is very vocal on these issues—Trudi Hodges, from Dale Cottages, and a number of other providers. They said that we had to do something about supporting their parlous situation and they wanted us raise this issue in the parliament—and this debate gives me the opportunity today.

What is happening in Western Australia—and it is happening right across Australia—is that they are handing back the allocation of funds for beds and they are handing back licences because they cannot make a business case. Charitable organisations, churches, community based aged care et cetera cannot make a business case at the moment. As a result, they are experiencing real problems trying to expand or even do with what they have now.

I feel very, very chastened because during the election campaign I visited one of my aged-care facilities, the Graceford Hostel, an independent living facility in Byford in my electorate, and they pleaded with me: 'Mr Randall, can you do something about helping us?' While showing us through the home, they said, 'We are in a desperate situation here for a whole number of reasons: we are swamped by regulation, we are swamped by the massive amount of compliance and we can't get aged-care nurses.' They are not very well paid. I think they are 30 per cent under the average nursing payment ratio, particularly agency nurses. They cannot get qualified nurses or even nurses who want to work in the sector. As you know, Western Australia has a shortage of labour in a whole range of areas, and this is exacerbated in the aged-care area. This home had no ability to get capital funding to expand the services even though they had a massive waiting list.

All of these aged-care facilities are asking me, 'Can you help us?' One of the things that they came up with at the forum that I attended with the member for Hasluck was: 'If there is all of this money being offered for beds—and 2,000 in Western Australia alone have been handed back—obviously there is a massive underspend in that area because they are not taking them up.' They said—and I am sure that the member for Hasluck will corroborate this—'If there is this massive underspend and the money is not getting out the door, why can't you cobble it together and put out more per bed to make a business case out of it, because at the moment the amount per bed just will not make a business case for any organisation that wants to invest in age care?'

What is the end result to this? In 2007, Kevin Rudd said that he would end this logjam in hospitals, where aged people were being parked up in hospitals. He was going to do something about it, but it never happened. It did not happen through the Rudd years and it certainly has not happened through Prime Minister Gillard's years. There is a logjam and people, particularly in rural and regional areas, are getting parked in hospitals rather than going into aged-care facilities. The residents at Quambie Park in my electorate are so frustrated that Ken Landwehr, the CEO, sent me a petition from them. It said:

Let Canberra know about the needs of older Australians—their right to quality care and support now and in the future.

This is how desperate they are.

Pam Corker and Quambie Park have actually opened a further expansion of their dementia facilities. But they did this largely through legacies left to them by former residents and the community. The strange thing about it is that the legacy left to them by one of their former residents made it more difficult for them to get ongoing and recurrent funding. They were told, 'You have too much money.' The system is just not flexible enough. Since the Labor Party has taken over, compliance has, if anything, increased and made it harder for people to get on and do the actual job of nursing. In addition to compliance, as I said, you cannot make a business case out of the funding available.

The tsunami is coming and this government is not prepared for it. In 2007, there were 400,000 people over 85—1.7 per cent of the population. There will be 1.6 million people in this age group by 2047—that is the size of the aged-care exercise that is heading our way. In addition to that, the growing incidence of dementia means that specialist facilities have to be built—in other words, more capital funding. In 2009, 245,000 people were deemed to have dementia. By 2030, it is predicted that there will be 591,000 and the prediction for 2050 is a staggering 1.13 million. And yet this is an underfunded area. It is not a priority of the Gillard government; aged care is not a priority area for the Labor Party at all. In fact their failure to act is indictable.

We have an ageing population. In 2007, there were six working people to support every person aged 67 and over; by 2047, there will be only 3.2 people for each aged person. So where is the plan for the future? Where is the investment for the future in this sector? That is what aged-care providers in my electorate are asking me to raise here. At their meeting with the member for Hasluck and me, they even asked: 'Can you get someone to have the courage to look at the housing situation again? Obviously any way of freeing up capital for aged-care facilities, nursing homes et cetera would be a blessing for us, because we cannot make a go of it.' As I said, rather than expanding their services, many of them now are reducing their services or even selling them. Who is buying them? It is the large aged-care providers in Australia. There are economies of size, but you do not get the same level of care from these large providers as is provided by the hands-on community aged-care facilities found in many suburbs and rural and regional areas. Ageing in place? That is ideal and it should happen. Without economies of scale, however, it is harder.

I say in the House today to the government: investment in this area has not so far been a priority of yours. While we were in government under John Howard, we made it a priority and we certainly made sure that there was accreditation and that standards were lifted. We are asking you, on behalf of the aged and frail of Australia, to finally get off your hands and do something about getting funding into this sector. (Time expired)

Deborah O'Neill (Robertson, Australian Labor Party) Share this | Link to this | Hansard source

I am delighted to speak on the Aged Care Amendment Bill 2011. This bill once again demonstrates the government's commitment to ensuring that older Australians receive the best possible care available. This bill again demonstrates that protections are in place to ensure that money paid by those entering assisted living is being returned in capital investment. These amendments will also strengthen the arrangements for managing complaints concerning facilities providing subsidised care by creating more flexibility in the resolution process.

This is not new. The Gillard government has taken a number of steps to improve aged care for older Australians and to ensure the aged-care system is both sustainable and responsive to care needs. The Gillard government will give $55.4 billion for aged care over the next four years. This year's budget will support continued investment in the aged-care industry to meet the increasing demand for services.

(Quorum formed) When entering a care facility, residents are often required to pay a bond, much like any other individual entering into an accommodation arrangement. The value of these bonds has increased to more than $10.6 billion. Currently we can see an increase in value of more than 20 per cent every year. These bonds are, in essence, an unsecured loan paid by care recipients to the approved provider. Given the significant and increasing amount of bonds, it is appropriate that care recipients can be assured that their funds are being used for the intended purposes and that there is transparency of, and accountability for, that use.

While the intent of the legislation was always that the bond would be used for capital funding, a lack of clarity in the language—being that bond money should be used for expenses related to 'providing' aged care to care recipients—has allowed some service providers to fund a wide variety of other purposes. The danger is that certain expenditure of bonds, especially those which fund day-to-day operational costs, makes having bond money on hand for repaying recipients on leaving the care facility extremely difficult. This does introduce unnecessary concern and it is resulting in a higher chance of default on these important payments.

This legislation ensures that we clearly articulate what these bonds can and cannot be used for. The legislation is not about making life more difficult for providers by taking away a potential source of income; rather, this legislation is about ensuring that what is a significant part of each resident's life savings—and we are talking about a sum of about $167,000 per individual on average—is used to provide the necessary capital improvements that are just a part of maintaining a home.

Similarly, the amendments in this bill will enshrine that these bonds can be invested in term deposit accounts and act as interest-bearing investments. While some providers have done this in the past, it was never expressly known as a possibility, as previously it did not meet the requirement that it was spent on providing care to recipients. My electorate of Robertson, and the Central Coast as a whole community, is an aged and ageing community. We do have a large cluster of young people at the other end but aged care is definitely part of the landscape of the Central Coast.

In our care facilities we have a high population of retirees who downsize from the long-held family homes in the region and use a proportion of the profit from the sale of their home to fund their accommodation bond. Often making this move into a new facility—a change at the later stages of life—can be very daunting. Whatever we can do as a government to give more certainty to those individuals will ensure that people have confidence in the sector. It is important that people have confidence. It is important they know that the facility and the management are doing the right thing and that when it is time for their bonds to be returned, the money will be available.

These amendments are for the care of recipients. These amendments are aimed at improving the quality of aged care for the care recipient through increased investment in capital works. These amendments will increase the reliability of refunding of bonds and add more transparency and more certainty to ensure that bonds are not squandered but reinvested. This certainty will, in turn, provide longer term benefits to the providers themselves. The removal of restrictions on the use of income derived from bonds will provide aged-care providers with a legitimate cash flow and will reduce the current regulatory burden.

The introduction of criminal offences, which this amendment bill provides, is a reflection of the moral importance that we as a government put on ensuring that money which is essentially 'loaned' to providers is spent properly. It is our intention to protect the rights and the interests of care recipients, who are often in a vulnerable situation. There was considerable support for the introduction of criminal penalties, and we are very aware of this from the submissions to the inquiry. Submissions urged the department to carefully structure any penalties to ensure that key personnel could not unintentionally be caught up under any new offences. The legislation was also structured to ensure that the new offences did not dissuade people from taking up roles within aged care and that offences would only apply to those individuals in the worst cases where an individual has deliberately acted in a way that has caused a provider to misuse bonds.

These changes in the legislation have received wide consultation. The government has spoken to consumer groups, peak bodies, providers of aged care and the financial services sector. A total of 33 submissions were received: six from peak industry bodies, 23 from approved providers, one from a consumer group and three from other interested organisations. It is important to note that the aged-care sector supports these changes. It is also important to note that we are not responding in panic; rather, it is a much-needed and carefully considered response to the reality that exists in our communities.

The bill provides much more clarity in the language, This will ensure that providers know precisely what they can and cannot do, and that has to be a massive improvement for aged-care recipients who are participating in transactions. The consultation period yielded a great sense of a need for this change. Providers and consumer groups all recognised the issues that currently existed within the unclear language and they all agreed that action had to be taken to review what options were available. The government was open and responsive to these needs and, with wide contribution from all those participants in the formation of the legislation, we know that we have brought the best legislation before the House.

We also do not propose to blind side the industry with these changes. We understand that there will be some immediate compliance costs with the changes, as providers make the necessary changes to their financial affairs. The government is proposing that the changes take effect from 1 October 2011 for all bonds received on or after that date. Bonds received before that date can continue to be used in accordance with the existing rules or may be used in accordance with the new rules. This ensures that the changes do not have any retrospective impact but also gives approved providers the flexibility to choose to treat all bonds in the same way.

A two-year transition period is also proposed, whereby approved providers may use bonds for existing purposes associated with aged care. This will provide the department with the data necessary to determine if further adjustments to this proposal should be made to assist the cashflow management of approved providers and will provide industry with a reasonable transition period to become familiar with these important new arrangements.

This legislation is effective in clarifying our aged-care bond system. It is absolutely effective in providing a more positive outlook for service providers and care recipients. It is a practical reform that is not based on some ideological rhetoric; rather, it is based on a genuine consideration of the needs of the system and those who use it and on the way in which accommodation bonds could and should be used. I commend the bill to the House.

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

I rise to speak to the Aged Care Amendment Bill 2011. The bill introduces a number of amendments that aim to strengthen consumer protection for accommodation bonds paid to aged-care service providers and aims to provide an increased focus on consumer complaint resolution and on the achievement of outcomes for complaints rather than just investigation.

The coalition will not be opposing this bill, which takes steps to protect some of the most vulnerable members of our community. However, there is so much more that needs to be done, encompassed within a framework of reform of the aged-care sector—reform that should see a vibrant aged-care sector that provides for the holistic needs of older Australians and a sector that is valued for the work that it does.

The ageing of Australia's population is undoubtedly one of the nation's biggest social challenges. Over the last two decades, the median age of the population has increased by 4.8 years, whilst over the same period the number of children aged between 0 and 14 decreased by three per cent. The first cohort of baby boomers will leave the workforce this year, but the number of young people joining it will decline. In 2007 there were seven people working to support every person over the age of 67. By 2047, this figure is expected to almost halve to 3.2 people supporting every Australian over the age of 67. Australians are expected to live longer, further increasing the pressure on the aged-care sector. More and more people are expected to live well into their 80s. By 2047, there is expected to be an increase from 1.7 per cent to 5.6 per cent of over-85-year-olds requiring the services of our aged-care sector.

There is evidence that the aged-care sector is already struggling to provide the excellent levels of care that we want for our older Australians, who have contributed so much to our community. This Labor government has delayed any meaningful reform of the sector by commissioning report after report, whose conclusions only point in one direction: a crisis in the sector. Forty per cent of aged-care facilities are operating in the red. There are a record number of provider liquidations and undersubscription to aged-care places.

In the context of the current legislation at issue, accommodation bonds payable were originally intended for capital funding. The legislation as it stands provides for the use of accommodation bonds paid for by someone going into care for the purpose of providing aged care for recipients. However, there are ambiguities around what this actually means, so accommodation bonds have been used for a wide variety of purposes, including meeting operational costs. There is no clarity around the ability of service providers to invest the money in, for example, long-term bank accounts or, alternatively, to use the money to provide loans. There is currently no data that reveals the true extent of the problem. However, anecdotal evidence from discussions with service providers indicates that bonds are being utilised for operational purposes.

At the moment there are restrictions on how an approved aged-care provider can use income derived from an accommodation bond. However, the restrictions that currently apply do not reflect the comparative risk and create a situation whereby the administrative burden of the regulations may impact on cashflow, thereby increasing the possibility that bonds may be used for operational expenses. The financial viability of the aged-care sector is a major issue, an issue that will only gain greater prominence in Australia. In its 2011-12 budget submission, the Aged Care Industry Council stated that a snapshot of the industry at the start of 2011 indicates a sector that is unsustainable. Hours of service are decreasing, hours of care provided under Community Aged Care Packages are decreasing, new residential care beds are not being built, many services are not operating at a profit and liquidations have increased.

At a time when Australia is likely to see increasing demand for aged care, the sector is struggling. In 2008-09, 2,000 beds were cut in the aged-care approvals round, and industry is rejecting government funded beds. The last two aged-care rounds were undersubscribed, as opposed to the situation under the coalition government, where aged-care places were prized. Providers are handing back licences, and beds are being left empty, with older Australians having to wait longer for a bed and travel greater distances. This is particularly the case in rural Australia.

In my electorate, this is an issue for the community. I have had to deal with several cases of older constituents waiting for months in hospital beds because there is no other place for them to go. This is not representative of a system that recognises the holistic needs of individuals. If people from Bribie Island in my electorate are in hospital in Brisbane, their partners have to commute for up to three hours a day to visit them. This has the obvious effect of causing social dislocation and isolation. It also has the effect of placing extra pressure on an already overcrowded public hospital system. This situation is causing distress and anxiety in my community.

This legislation is designed to increase regulations on the amount of accommodation bond principal; however, it will reduce the regulations on income derived from the bond, retention amounts and accommodation charges. The regulation would then better reflect the risk associated with the principal. This would permit improved oversight of the bond, which is effectively an interest-free loan made by a resident, and other sources of income derived from the approved provider. Permitted uses for the accommodation bond would be limited to the original policy intent of providing funding for increased investment in capital works, in certain products and to pay debt related to the provision of aged care. From talking to local aged-care providers, it would seem that it is the provision of capital-intensive mortar and bricks that provides the greatest financial hurdle for the sector. The Department of Health and Ageing will have increased information-gathering powers to ensure that service providers that might be at risk are able to repay accommodation bonds.

Because the sector is struggling and aged-care providers have had to go into liquidation, the Accommodation Bond Guarantee Scheme has been utilised to the tune of $24.5 million, meaning around 150 accommodation bonds. This legislation proposes that there be new penalties introduced for approved providers that use bonds for non-permitted purposes that might trigger the guarantee scheme. While this is a step forward in safeguarding the contributions of older Australians and making the sector more financially viable, there is more that needs to be done.

Unfortunately, as in many other areas of government policy, the Labor government's record is littered with broken promises. For example, the attraction and retention of nurses in the aged-care sector is becoming increasingly difficult. However, despite promises of a fix, Labor recruitment policies have failed. The Bringing Nurses Back into the Workforce Program was abolished, with the program delivering only 139 nurses out of a promised 1,000 by February 2010. In 2009-10, only 8,200 out of 13,100 training places for aged-care workers had been delivered. Of the 2,000 transition places promised, only 698 had become operational by April 2010.

The bill is also designed to improve complaints handling by changing the focus to resolution of complaints rather than just their investigation. It is intended that the handling of aged-care complaints will be improved, with an increased focus on the achievement of outcomes for care recipients, their families and other representatives. A range of approaches such as mediation, conciliation and investigation will be employed by the Department of Health and Ageing to resolve complaints cooperatively with care recipients and providers of care. This should go some way to reassuring care recipients and their families that issues relating to their care will be dealt with rather than just investigated, and as such the coalition welcomes the change.

The coalition is committed to providing the highest possible standards of aged care. We believe that this is one way of giving back to those who have contributed so much to this country in the past and continue to contribute in a number of ways. My electorate is full of senior people who continue to make a full and meaningful contribution to the community. Some of them have the time and are able to volunteer in various ways that provide invaluable support for the community. However, there are those that are more vulnerable and require different levels of care. These people and their families should expect and receive the very highest possible standards of care. Whilst this bill is a step in the right direction, the whole aged-care sector is in need of serious attention, not just tinkering around the edges.

The Labor government has failed the aged-care sector and with it many of our most vulnerable senior Australians. The coalition, on the other hand, remains committed to the provision of $935 million over a four-year period in order to provide for the increasing challenges the aged-care sector will face as there is increasing demand for its services from an ageing population. Central to the coalition policy is the development of an aged-care provider agreement with the aged-care sector that will be designed to reduce red tape and paperwork so that medical professionals can actually get on with the job of providing care rather than jumping through bureaucratic hoops. The agreement would provide more certainty for older Australians and those involved in their care.

For a start within this coalition policy the agreement would see the provision of $50 million over four years for professional aged-care programs and services. There would be payments of $30,000 for 3,000 aged-care places as part of the implementation of the aged-care bed incentive program. Importantly, the coalition would work cooperatively with the aged-care sector in order to identify areas of greatest need in order to establish a framework for the allocation of the places. As with many other areas in health, the coalition believes that it is the people on the ground and in the communities, not bureaucrats in Canberra, who are best placed to know and make decisions about what is needed. Importantly for my community, the coalition has promised to establish a convalescent care program, with funding of $300 million over four years to assist up to 20,000 Australians waiting in hospital to return home. As I mentioned before, this is an issue that has been raised with me on many occasions by the senior members of my community who are waiting for months to return home and are impeded from doing so because there is no-one able to care for them. The convalescent care program would provide up to 21 days in a residential aged-care facility, relieving pressure on our hospitals and adding to aged-care providers' funds. Uncertainty is plaguing the aged-care sector and the coalition's plans for an aged-care provider agreement would provide much-needed certainty for aged-care providers with the added benefit of increasing security of employment in the aged care workforce.

Labor has neglected the needs of older Australians and the aged-care sector is in urgent need of reform to meet the coming challenges of Australia's ageing population. Older Australians have every right to feel they are going to be well cared for in their twilight years and the coalition is committed to meeting care needs now and into the future. This legislation is a step forward; however, broader reform of the aged-care sector is needed. The coalition's sustainable plan would see the needs of our seniors met and would provide a framework for the real reform the sector so urgently needs in constructive partnership with them.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

I took great interest in listening to the member for Longman read his speech to this parliament. There were a number of items in his speech that I think really need to be dealt with. His speech demonstrated to me that he was unaware of what happened in the Howard government era. He was unaware of the lack of spot checks, the people in aged-care facilities being given kerosene baths and the total lack of receptiveness of the Howard government to the needs of older Australians. He talked about the aged-care sector struggling. It was struggling as it was under enormous pressure at the time of the Howard government. As for reviews, we had the Hogan review. What happened following the Hogan review, a review which the Deputy Leader of the Opposition was so proud of at the time?

And what of operating in the red, as he suggested? Well, I know that in the Howard government era aged-care facilities were really struggling. Time and time again the facilities people came and talked to me about the need for compensation, workers compensation, electricity, water and wages—all the issues that the Howard government ignored. As for 'unsustainable', he talked about people waiting for aged-care beds. In the Howard government era one out of every 10 beds in the Shortland electorate only existed on paper—phantom beds! I think it is beholden upon me to remind the House of the Standing Committee on Health and Ageing report about the blame game that was brought down in the parliament in, I think, 2007. As a member of the committee, I spoke to a number of people who were involved in aged care and the one thing that was pointed out to me by those people was the number of people waiting for aged-care beds who were languishing in hospital because the Howard government refused to act.

Here we have before us today legislation, in the form of the Aged Care Amendment Bill 2011, that is bringing about real change, legislation that strengthens protection for accommodation bonds paid by care recipients to providers of residential and flexible aged-care services—something that is good for the aged-care facilities and good for those people that make those facilities their home. I am really pleased to say that the minister at the table was previously the Minister for Ageing who was responsible for the reviews that have been bringing about the changes that we are seeing now. If it were not for her efforts, we would not have this really proactive good legislation before us today. Legislation limits the permitted use for accommodation bonds taken after 1 October 2011, so that providers of aged care can still use these bonds for capital improvements to aged-care services. That is really important for those facilities. I talk to the aged-care facilities people in my electorate on a regular basis, just as I talk to the people that live in those aged-care facilities and those people that may need those facilities in the future.

Shortland is one of the oldest electorates in the country—it is the 11th oldest electorate—and this is an issue that is very dear to my heart and I need to know that the aged-care facilities we have, and also the care that those people who choose to live in them will receive, will be outstanding. This change to the use of the bonds is really important. The fact that bonds cannot be used for operational purposes is a very important change. The introduction of the new criminal offences where there has been a significant misuse of bonds is about the government facing up to and dealing with the problem, not burying its head in the sand and hoping it will go away and not acting and so ignoring the needs of older people and the needs of the aged-care industry. This is a government that actually deals with the problem and does not mouth platitudes or make statements that just sound good. We act, we do and we address the problem. The legislation is introducing 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 bonds for non-permitted uses. This will allow the department to help these aged-care providers. It is about making sure that there is continuity of aged care and making sure that older Australians have security about where they live. There is also a move to remove restrictions on the use of income derived from bonds, retention amounts and accommodation charges. This gives aged-care providers an unrestricted source of income, offsetting the proposed restrictions on the bonds. That is a really good news story. It is about making the aged-care providers more viable and, by doing that, making aged care safer and more secure for those older Australians who will require aged care over a period of time.

I referred earlier to the Parliamentary Secretary for Trade, who is at the table. On 12 April 2010, when she was the Minister for Ageing, she announced that the government would increase protection for aged-care residents' savings. She made that announcement as part of the announcement entitled 'More support for older Australians in the National Health and Hospitals Network'. She has always been committed to the needs of older Australians, and I know she also represents an electorate in this House that has an older population.

This legislation has been subjected to extensive consultation with the industry, community, government and stakeholders on the options for enhancing prudential regulation of accommodation bonds to identify the best means by which to ensure as far as possible that the financial interests of the residents are protected; to maintain effective regulatory safeguards for accommodation bonds; to provide a regulated source of capital funding for investment in aged-care infrastructure; to provide a regulatory framework that is commensurate to the risk associated with the exponential growth of accommodation bond holding; and to promote public confidence in the aged-care system. I emphasise that that last point, promoting public confidence, is very important.

Unlike the previous government, this government believes in consultation. We believe in talking to the people who will be operating the aged-care facilities. We believe in talking to those people who will be using the aged-care facilities. We also believe in talking to those people who will be regulating the facilities. This is a far cry from the type of consultation that took place in the last parliament, where there was cover-up after cover-up after cover-up, no spot checks—and now spot checks are regular occurrences—in aged-care facilities and a culture that enabled elderly people to be given kerosene baths.

As a result of this consultation process it is proposed that there will be changes to the act to strengthen the accommodation bond. This will address the lack of clarity in the act, which I think is really important, and introduce new criminal offences where misuses of bonds are identified. Once again, that is a really important change to the legislation. It is dealing with a problem that exists. It is proposed that the changes will take place from 1 October this year. There will be a two-year transition period to allow the sector to become more familiar with the new requirements, and I think that that is very important.

The other major change in this legislation involves the proposed amendments to the complaints scheme. It is proposed to amend the act to enable investigation principles which currently describe the investigation process in relation to complaints to be replaced with a complaints principle. This means that concerns relating to the delivery of residential, community and flexible aged care subsidised by the government can be investigated. They will be investigated. There is going to be a strong focus on resolution of complaints rather than investigations of complaints.

Investigating a complaint is all very well. Like me, all members of this parliament would have been visited by a constituent who had a problem with an aged-care facility. You would ring the aged-care complaints line. They would investigate it. And still that person who came to see you, more times than not, would be unsatisfied with the result. It was about investigation; it was about looking at it. It was not about dealing with the issue. It was not about resolving the issue.

These changes will allow those issues to be resolved rather than an investigation taking place that will deliver no outcome whatsoever to the person who has lodged a complaint. I think the fact that this legislation brings about a change that focuses on resolution rather than investigation is a very proactive and good change. The bill shifts the focus of the system from investigation to a more flexible scheme where the department can employ a range of mechanisms to assist to resolve a complaint, including early resolution, conciliation, mediation and encouraging the departments to resolve the issue themselves.

The changes that are outlined in this bill are essential. They come out of the government reviewing the system, looking at it and then, after consulting widely with the community and the sector, putting in place changes to the 1997 act that was introduced by the Howard government. Changes have caused quite a few problems within the community. We only have to look back to the time when the member for Mackellar was the Minister for Aged Care to see the kinds of problems that can be caused if governments do not consult widely with the community. The community and the aged-care sector need to have input into the direction of legislation, because good legislation is not imposed on a sector or on the community; good legislation is developed in consultation with all parties. I congratulate the minister for developing legislation that builds on the work of the previous minister and brings about legislation that is workable, that takes account of the interests of all parties and that will benefit those vulnerable frail aged people in the electorates of each and every member of this parliament. I commend the legislation to the House.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I rise tonight to raise various points concerning the Aged Care Amendment Bill 2011. The first point I would like to address is that of regulation, which we are once again seeing. The merits of that regulation are yet to be tested and it is yet to be seen whether they will be worthwhile. But we are seeing regulation occurring without the government honouring its commitment of 'one regulation in-one regulation out'. This is a sector that is continually suffering from the stifling impacts of regulation, so we need to address that.

We also need to look at where the aged-care sector stands at the moment. The Rudd government came into power promising all sorts of things for this sector, but it delivered next to nothing. We then need to compare that with how the coalition would go about addressing the problems and issues confronting the aged-care sector. We have a proven track record on this. Ever since we introduced the Intergenerational Report and forecast what was going to occur with the ageing of our population we have had a policy that has fitted neatly with that budget summation as to where spending on aged care is going to go as Australia's population continues to age. I would then like to look at some of the impacts the aged-care sector is facing in my seat of Wannon and make some reference to Sea View House and a way forward on that issue at the moment.

This bill introduces a number of amendments as part of the governments health and hospital reform agenda. It plans to, and hopefully will, strengthen consumer protection for accommodation bonds paid to aged-care services. It also plans to improve arrangements for the handling of complaints about Commonwealth funded aged-care services. The government released an issues paper in October 2010 and, following submissions, undertook a series of industry and consumer stakeholder meetings. A consultation paper was released in February 2011 followed by industry, consumer and regulatory stakeholders in February and March 2011.

As part of the government's health and hospital reform agenda, it is committed to strengthening consumer protection for accommodation bonds and this is what this legislation seeks to do. If the bill is passed the reforms regarding accommodation bonds will take effect on and after 1 October 2011 and the new complaints principles will take effect on 1 September 2011. However, there will be a two-year transition period, until the end of September 2013, for the changes to the permitted use of accommodation bonds, which will allow the sector to become familiar with the new requirements. A post-implementation review will be conducted in 2014-15.

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; 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.

This does not portray a sector that is heading in the right direction. This does not portray a sector that is ready to meet the ageing of Australia's population. This does not portray a sector that is going to deliver, especially for older Australians in regional and rural areas. What it does portray is a sector that is in urgent need of reform. It also portrays a sector that needs a government that will listen to it and address its problems, and this does not seem to be occurring. As a matter of fact, if there is a constant theme that I am hearing in my community and I am witnessing when I come into this place every day the parliament sits, it is that this government does not seem to want to listen to the Australian people. It has its own agenda and it seems hell-bent on forcing that agenda on the Australian people.

The difficult part about this bill is that we do not really have a clear understanding of the regulatory impact. Also, given that we are introducing more regulation, what regulation are we taking out of the aged-care sector to help it meet the incredible demands it is going to be facing in the coming years?

The coalition understands that the very best care, whether in the community or residential, should be balanced. We need a clearly articulated policy that balances the community care and the residential care. We put forward at the last election a clear policy that first admitted the reality that the ageing of the population is an enormous social challenge facing Australia. We have a rapidly ageing population, and we are seeing that played out more in regional and rural areas. Australians are living longer and, as a result, are facing more complex health conditions. Disease patterns are changing as a result of Australians living longer. We are also seeing a shift in the size and composition of households, which means that there is not the family support there once was to help Australians as they age.

What does this mean? It means that our budget cannot sustain Australia's demographic changes. The declining workforce will generate insufficient tax revenue to meet the health and aged-care demands of our ageing population. On this point, we have to look at where the Australian budget is at the moment. The budget just handed down has a deficit of $47 billion—a budget deficit the size of the whole of the Victorian budget. We do not have a government that is getting our budgetary position in place to deal with the ageing of our population. We have a government that has forgotten about the Intergenerational report and how it set out clearly what we need to do as a country to make sure we are ready to meet the ageing of our population.

We have a budget deficit forecast for next year of $21 billion. All this has led already to a net debt position of $106 billion, with repayments of $135 million per day. Imagine what that money could do if it were put into productive use in our aged-care sector. Sadly, though, we will see this money being used to repay debt and not to deal with these enormous challenges we are facing today in the aged-care sector.

In 2007 Kevin Rudd and the Labor government promised the world for this sector. They pointed out that there were issues about providing enough aged-care beds and people becoming 'blockers' of acute care hospital beds. Kevin Rudd announced that we were going to get a new direction. He promised the world. What has he delivered? As I quoted before from that damning indictment in the prebudget submission, we did not get that at all. The Aged Care Industry Council has stated that the snapshot of the industry at the start of 2011 does not depict a sustainable system—and we must work towards a sustainable system.

A key to producing a sustainable system will be making sure there is appropriate funding and also making sure we do not stifle this sector with regulation. Sadly, it is a habit of this government to try to fix every problem with regulation. Maybe it should step back and listen to some very wise advice, which is that trying to fix every problem with regulation often just creates more problems.

In visiting aged-care facilities across Wannon—in Ararat, Stawell, Casterton, Hamilton, Portland, Warrnambool and Mortlake, just to name a few—I see communities dealing with constant issues, especially workforce issues. This is not made easier by governments promising to deliver—for instance, promising to deliver new nurses, especially in regional and rural areas—and not delivering on those promises. These centres are dealing more and more with constraints on accessing the labour they need. Not only that but they then have to deal with extra regulation that requires them to have professionals with certain qualifications and does not allow them flexibility as to where they get those professionals and how often they can use them.

One of the key things for regional and rural communities is to ensure that as people age in their communities they can stay in those communities. One of the key components of the coalition's policy approach before the last election was to ensure that there was flexibility in the system to enable people to age gracefully in the communities in which they grew up. Sadly, we are not seeing that from this government. What we are seeing from this government are regulations that continually make this more and more difficult—regulations that seem to support large facilities in urban areas and do not have the flexibility to enable the smaller aged-care facilities to operate.

Finally, I will point to a very simple example. Sea View House in Portland is a 56-bed supported residential service that has had the rug pulled from underneath it by Portland District Health. At the moment it is trying to deal with the question of what will become of it. The community has rallied and is keen to buy Sea View House so that it can continue to provide services. I would like to take this opportunity to say how much I support what the community is trying to do to save Sea View House. Glenda Carswell, the spokeswoman from the community group which has been set up, the Sea View House Support Group, has been doing an excellent job to make sure that the facility can continue to provide its services to the people in residence there. They have provided bonds to make sure that they are in a situation where they can live the last parts of their lives in a very comfortable way and in an environment which they have freely chosen. The support group are doing a terrific job and I hope that they will be able to get a purchaser for that facility so that it can continue to provide its services. I thank the House for the opportunity to speak on this bill.

Ken Wyatt (Hasluck, Liberal Party) Share this | Link to this | Hansard source

The Aged Care Amendment Bill 2011 introduces a number of amendments, which form part of the government's health and hospitals reform agenda. This bill plans to improve arrangements for complaints handling of Commonwealth funded aged-care services and to strengthen consumer protection for accommodation bonds paid to aged-care services. The history of this bill is an interesting one and for once demonstrates that those on the other side sometimes consult and listen to key stakeholders. Especially on an issue as important as aged care, we would expect the government to undertake consultations. The issues paper on enhanced prudential regulation of accommodation bonds, released in October 2010, resulted in a consultation paper released in February this year, which was followed by a number of industry, consumer and regulatory stakeholders meetings with the government to work through the issues raised.

In Aboriginal and Torres Strait Islander society elders are consulted because of their knowledge, wisdom and life experiences. Their guidance helps to shape our future and teaches us humility, compassion and understanding. Ageism is not a factor; nor is age. Members of this House need to fully appreciate that if we apply the same approach in our wider society then we are more likely to provide the level of aged-care services and facilities that reflect aged people's needs, including staying in their own home. It is that generation that built and continued to build this great country of ours and the lifestyle we enjoy; therefore, we should take care of them.

The current regulation around the use of accommodation bonds is not consistent throughout the industry. The Department of Health and Ageing has identified, through monitoring and compliance activity and financial reports from a range of providers, that the lack of consistency of interpretation as to the permitted uses of bonds has led to many providers misusing them. The Aged Care Act provides that if an accommodation bond is charged to the care recipient by the aged-care provider then the provider must not use the bond for a purpose that is not related to 'providing aged care to care recipients.' It also stipulates that where a bond is charged then the provider is entitled to the income derived from the bond and may also deduct retention amounts from the bond principal. However, there are restrictions on how these amounts can be used. As mentioned before, the Department of Health and Ageing has found that a number of providers are using bonds to make loans to related parties and meet operational costs, making loans to related entities and to individuals with variable practice in documenting the loans, repayment arrangements and interest charges, and failing to meet the existing prudential standards relating to bonds. Since the prudential requirements were introduced in 2006, over 15 per cent of the aged-care industry has been found to be noncompliant.

Our aged-care system is a mess under this government. According to a Grant Thornton aged-care performance survey in 2007, over 40 per cent of all providers were operating in the red. I find that fascinating in this day and age. The Aged Care Industry Council stated in its 2011-2012 budget submission:

… only 40% of residential aged care services are operating in the black; 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.

This is important, because in my own electorate I have a large demographic, but part of that demographic are retirees and ageing Australians who will remain in their homes for a period until such time as they are unable to continue in independent residential living and move into a facility that will provide the levels of support that they require. In some instances those who need more intensive care move from my electorate into two other regions of the metropolitan area because the aged-care facilities that are established in our electorate do not have the capacity to meet the numbers.

This industry needs urgent help. No-one knows this better than Mr David Fenwick, in my electorate of Hasluck, who I work extremely closely with on the issues that impact on the industry. Mr Fenwick is the Chief Executive Officer of Amaroo Village in Gosnells. Amaroo provides independent living units, 92 high-level care places and 81 low-care places. Amaroo is an outstanding example of how the industry is making it work. They struggle to meet operating costs but recognise that there is a need in the area and continue to work towards the best outcomes possible for the residents.

Back in January, my colleague the member for Canning and I were presented with petitions from aged-care providers in our electorates of Canning and Hasluck. The aim of the petitions was to 'let Canberra know about the needs of Older Australians—their right to quality care and support they deserve now and in the future'. Their voices deserve to be heard. The pity is that the petitions did not meet the rigour of the requirements for petitions to be tabled in the House. Nevertheless the message was quite strong.

The management and care team at Amaroo are passionate about their work and they deserve to be supported by governments. This is consistent in all of the aged-care facilities that I have visited in Hasluck. Instead, the government has broken its election promise to repeal one regulation for every new regulation. Red tape and bureaucracy is holding the industry back. The burden of growing regulation is a disgrace. The coalition is committed to reducing Commonwealth regulation by at least $1 billion per year. Unlike those on the other side, we want to see industry encouraged to innovate, grow and provide the best possible services to those who need them the most.

We need to be supporting the aged-care industry now because we remember that, one day, we will all most likely need to access the services provided by the aged-care industry. When we grow old and need support, the aged-care industry, and the carers and providers, who are extremely passionate, will be looking after us. Unfortunately, only when that day comes for those opposite will they realise that they should have been much more supporting of the aged-care industry than they are now. The aged-care industry is becoming financially unviable and the number of providers going into liquidation has increased. However, many are being absorbed by larger facilities, thus not giving an accurate representation of the state of the industry.

The changes proposed by this bill strike a balance between explicit regulatory requirements and a risk based approach. It is difficult to accurately quantify the regulatory impact of these proposed changes due to the lack of available data. The changes include the provision of a regulatory framework that is equal to the risk associated with the strong growth of accommodation bond holdings and the increasing of incentives for bonds to be used in a prudent and sustainable way to meet the policy objective of allowing providers to charge bonds. Further, any costs to providers due to changes to ensure that bonds are only used for permitted purposes will be minimised by 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. There will be a transition period of two years, which will allow approved providers time to comply with the new arrangements. The changes also ensure that the financial interests of care recipients are protected.

These proposed changes will take effect in relation to accommodation bonds taken by approved providers on or after 1 October 2011 and the new complaints principles will take effect on 1 September 2011. A two-year transition period will conclude at the end of September 2013 to allow the changes to permitted uses of accommodation bonds to take effect and to allow the sector to become familiar with the new requirements. A post-implementation review will take place in 2014 or 2015. This review will be extremely important to the industry and I certainly look forward to seeing the outcome and what the challenges are.

Another key element of this bill is the management and resolution of complaints about aged-care services. The bill proposes that the investigation principles be replaced with new complaints principles. This will provide greater flexibility for complainants and will result in a range of options being available to assist in resolving a complaint, including early resolution, conciliation and mediation. I support this measure as people accessing the industry deserve to be looked after.

In my electorate of Hasluck, there are 22 approved aged-care providers providing a total of 321 community care places, 313 residential high-care places and 610 residential low-care places. I have been privileged to visit a number of these providers and they provide outstanding service to those in Hasluck who need it. I will always fight for the needs of the aged-care sector because it is an important part of the Hasluck community. We all know someone who is accessing aged-care services and, as such, we all have a duty to stand up and argue to improve the quality of the industry. This is a passion of mine. As I stated in my first speech to the House:

Elders within Aboriginal and Torres Strait Islander societies are revered and respected, and hold a special place—they do not go away but remain as wisdom-givers and guides in our future. The same concept has to be applied to all seniors and retirees, and the support they require should be accorded to them.

In the short time I have represented the electorate of Hasluck I have enjoyed the privilege of meeting people within residential care and, equally, those who have made the decision to remain living at home. The level of support provided in the home has been welcomed; what is disappointing, though, is that where there are increasing numbers there is not the financial capital to build the infrastructure required to provide the number of beds that are needed. I hope that in the future the Productivity Commission report and the work that we do on this side will help contribute to solutions that will make a difference across this nation for our elders, who will need the services and opportunities that are provided, both socially and from the point of view of accommodation at secure facilities that provide them with a bed and the comfort of support.

I revere our seniors. I believe that they provide opportunities for us to learn of the past, to take their knowledge and use it for the future and to understand our history in this nation. When I was teaching, the school had a relationship with an aged-care home and I saw many children enjoy the relationship with older people. Those who did not have grandparents enjoyed the relationship with seniors in those villages. They liked the fact that they were talking to people who had lived through a history, where they had seen the transition from horse-and-cart days to the types of vehicles and technology that we have in this day and age. I just hope that this government gives due attention to the needs of our elderly and to aged-care services.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

The aged-care system in Australia is rapidly approaching crisis point. The number of people over 65 is set to double over the next 20 years and the industry is desperate for additional funding particularly for capital works. There are a number of indicators that should alarm all policy-makers in this House in the provision of residential care in particular, and I would like to talk about some of these.

Last year the federal government allocated 1,564 additional residential aged-care places to Western Australia. However, only 314 of the beds were taken up—just 20 per cent. In the preceding year, of the 1,208 beds on offer, only 507 or 42 per cent were taken up in WA. What is worse, over the last three years 786 aged-care bed licences, the licence that provides the funding for aged-care beds, were handed back to the government and 283 of them were from Western Australia. We are now some 2,400 beds short of our aged-care requirements in WA. The situation is going to get worse.

This is happening at a time when the group referred to as the 'baby boomers', those born between 1946 and 1964, start to enter retirement. They are looking at retirement and at aged-care solutions. I would suggest that several members in this House right at this moment may be part of that group and may feel as though they are being made responsible for a lot of the world's problems. Some of us do, however, represent a significant increase in the ageing population, which makes the debate on how we care for our ageing community perhaps even more urgent for some members here.

In my electorate of Forrest there are around 19,000 residents over the age of 65 and that number will increase rapidly. We have 30 aged-care facilities; however, the number of facilities and their capacity has to expand as the age demographic within my electorate increases. I note that 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; 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.

This is exactly the case in my electorate, and I would expect it is also the case in other rural and regional electorates. It is extremely difficult for aged-care providers to invest in new facilities. The financial viability of the sector is critical to the ongoing provision of appropriate aged care in this nation.

As well as the viability issue, as we engage in the debate about aged care, there are several other questions. One of them is: what is the most appropriate form of care? Historically senior members of our community were cared for by their families in the homes. While in some circumstances this may have resulted in some forms of neglect, in most cases it did not. In many countries in the world it is still the primary form of aged care. Some constituents of mine with a strong history in the aged-care sector visited Italy in recent years and did some research on the aged-care industry there. It was extremely limited, of course, because most of the aged care in Italy centred on care in the home, by the family, with the support as needed. We have some similarities. They have a baby boomer population entering retirement, as does most of the developed world. There are increasing numbers of families who can no longer care for their ageing relatives at home although Italy, as you would imagine, starts from a much lower base on this.

Most Australians want to live in their own homes as long as they possibly can. When people cannot do so, they will most certainly enter residential care but, because it will be later in life, they will be in a much more frail state with far more serious health issues, as the member for Mackellar frequently advises us. They will potentially need high care, which brings me to the bill before the House. Accommodation bonds are an acknowledgement that the individual does have some responsibility to contribute to their own aged care. The bill tightens the rules for the use of bond money. Greater certainty in the area is required, but it is another tinkering around the edges of aged-care provision. This is an industry that is overwhelmed with compliance already, yet the government is adding to that burden, and more and more resources within these facilities are being directed to compliance and less into patient care where it is so badly needed. Again, the government has broken its promise to repeal one piece of legislation and regulation for every other piece that it passes. As I said, the industry is swamped with complex, overlapping and costly regulations.

The government must also consider the specific and individual needs of smaller, community based aged-care providers such as Tuia Lodge in Donnybrook in my electorate, which is a 26-bed facility employing 30 very caring staff members. Lui Tuia has been the driving force, as the member for Mackellar knows. It has been Lui's leadership and endless volunteering, the commitment from the local community and constant community fundraising that has provided the people of Donnybrook with a great quality, caring aged-care facility. In this small community not only does Tuia Lodge provide aged care but it is one of the major employers in the town. I am told that, in general, aged care employs more people than retail. Facilities like Tuia Lodge need to be able to expand to meet the growing demands of Donnybrook. There will be an explosion in the need for high-care provision within three years in this area, but they need the capital funding to expand and, of course, it has to be a profitable outcome to proceed and be sustainable. Tuia Lodge needs all the help and consideration of its specific needs from this government not only to continue to provide quality services but to continue to expand to meet the needs of the community.

Another issue confronting rural and regional communities is the fact that parents with disabled children of a mature age have no aged-care accommodation facilities that provide for their specific needs. The task ahead, the future of aged care will take bold vision and strength of resolve that not only is not in this legislation but is also lacking from this government.

An aged-care provider in the town of Collie in my electorate, Southern Cross Care, has a 64-bed residence which currently has a waiting list of 22 people. One poor lady has recently had to leave the town she has lived in for 66 years and move 50 kilometres to Bunbury. There was no other option for the lady and, of course, it is particularly difficult for her family.

I did want to briefly touch on palliative care, Mr Deputy Speaker, but I see that my time has run out. I believe there are other matters in this House that are about to be dealt with, so I will conclude my remarks.