Santo Santoro (Queensland, Liberal Party, Minister for Ageing) Share this | Hansard source

I hear what Senator McLucas says. She is aware, through you, Mr Acting Deputy President, that commercial-in-confidence situations apply to the process. To the maximum possible extent that the process can be transparent, of course this government is committed to that principle.

Around the country, people have told me that they would like support to live in their own homes for as long as practically possible, and the government has listened and responded. We have increased funding to home and community care services—up 103 per cent since 1995-96—and community aged care packages, which are up more than 1,012 per cent since 1995-96, as well as introducing the extended aged care at home packages, equivalent to residential nursing home care, to deliver high care to older Australians in their own homes.

As members opposite have alluded to, on 14 March 2006 I convened a meeting of the Aged Care Advisory Committee, which included representatives from across the industry. As I said, I will speak a lot more about the political points that Senator McLucas and others have raised when we debate their amendment in the committee stage. Basically, the legislation that we are debating focuses on the three principles that guide my activities and those of the government in terms of the provision of aged care. Those three principles are choice, quality and financial sustainability.

Choice means three things: focusing on individual needs and providing the care when and where it is needed; giving residents’ families, friends and carers a greater voice in the system; and adopting a flexible approach to meeting personal needs—in other words, to continue the transition away from a system in which the government pays providers for the kinds of services that they want to provide to one in which the government pays providers for the kinds of services that individual service users want.

The bills before parliament reflect this principle. By establishing a cast-iron guarantee that every resident that pays an accommodation bond will have the bond returned to them in the event that their provider becomes bankrupt or insolvent, the government is clearly focusing on the needs of the resident. The timely repayment of what may be a person’s life savings without question or unnecessary delay will remove worry from residents and their families. Without this new government guarantee, a resident would continue to rank as an unsecured creditor to an insolvent or bankrupt provider. People may have to wait months or even years to have their bond balance repaid and still not be sure of recovering all of the money owed to them.

The new system set out in the bills also gives residents and their families a greater voice in the system. New prudential standards to be established under the measures bill will give residents and their representatives access to up-to-date information relevant to the financial standing of the home in which the resident lives. Access to information empowers residents and their families to ask questions and make informed choices. I am proud that these new measures will enable residents to make better judgments about the financial viability of the provider.

Quality of care is the second of the three principles that I just mentioned. Quality is an essential aspect of aged care provision. In my view, the high road to improved quality is the road of competition and innovation, with regulation playing a very important supporting role. One of my predecessors, the Hon. Bronwyn Bishop MP, was passionate about improving the quality of care given to residents in aged care services. Mrs Bishop, as minister for aged care, oversaw the improvements to the responsiveness of the aged care accreditation agency and expanded the complaints resolution scheme.

The new regulatory arrangements set out in these three bills will further improve quality by assisting homes to manage their financial affairs and their ability to provide care into the future. We have worked very closely with industry to ensure the nature and degree of regulation is reasonable. I would like to acknowledge the residential aged care industry groups for their cooperation and assistance in the development of this legislation. In particular, Greg Mundy from Aged and Community Services Australia, Rod Young from the Aged Care Association of Australia and Mr Richard Gray from Catholic Health Australia have worked closely with government to ensure that this legislation meets the needs of both residents and industry.

Returning to the three principles for aged care, the third principle—financial sustainability—is closely linked to the principle of quality. The residential care system in Australia must be affordable to taxpayers, to service users and to providers. This requires a focus on productivity and efficiency so that the cost of providing world-class and innovative care to our elderly can be met. As Minister for Ageing, the Hon. Kevin Andrews MP understood this implicitly and instigated a number of strategic reviews of the system. I commend Minister Andrews particularly for his foresight in initiating the paperwork review, which has so well informed our current work on developing a more streamlined and efficient funding model.

I just want to particularly mention my predecessors Julie Bishop, Bronwyn Bishop and Kevin Andrews, because they did so much pioneering work in this area for which these days I have the privilege of enjoying ministerial responsibility. I heard those ministers invariably criticised in contributions by senators opposite, but they did much work to bring the aged care system of this country into the 21st century, which it certainly was not in when the Labor Party relinquished office in 1996.

The new prudential regulations to be made under the measures bill before the Senate also support the objective of financial sustainability by minimising the cost of industry and by focusing on improving the efficiency and viability of industry. I am acutely aware that the ongoing delivery of quality care is dependent on a financial, robust and vibrant industry. While the care and welfare of residents is paramount in every provider’s mind, each provider must also be conscious of the importance of running their business in a financially sustainable way. Good accounting practices, strong governance, risk assessment and management processes, and clear and up-to-date records and systems should be the backbone of any soundly run business. This point was strongly made by Professor Hogan in his excellent report Review of pricing arrangements in residential aged care, which has contributed significantly to the policy underpinning this new legislation for government thinking on longer term aged care reform. I am grateful to Professor Hogan for his significant contribution.