Judith Adams (WA, Liberal Party) Share this | Hansard source

I do not know; I have not heard anything from the local member on this particular facility. This provider would need to raise an additional $162,000 per year to service a capital loan. The same residential aged-care provider currently has 118 bed-ready prospective residents’ names on their waiting list. These names are of frail, aged persons in a public hospital, in care awaiting placement facilities and in the community of the south-east metropolitan region of Perth. Most of these people require a high-care place. With construction costs in the vicinity of $250,000 per place, there is no way this aged-care provider can afford to build, as the capital funding comes nowhere near this mark for the 24 places that have been allocated. This example demonstrates why aged-care providers are not applying for new bed licenses, as they are unable to justify the expense of creating them.

The Minister for Health and Ageing will carry on about how many bed places are being made available, but what she fails to tell you is the number of these places which are not being taken up. Of the 1,208 places made available in Western Australia this year, just 536 places—less than half—have been sought. Of those 536, only 519 places have been allocated. This is just 43 per cent of the bed places offered in WA in the 2008 round. This can be regarded as nothing but an indication that there is a crisis in the aged-care sector, and the Rudd government continues in failing to address the serious shortfall of bed license applications in WA. We heard earlier from Senator Polley, and I can recall an adjournment speech in which she spoke on aged-care issues in Tasmania. Obviously it is happening in her state in exactly the same way. I wonder what she is doing to get the Rudd government to improve the situation.

Based on this hard evidence on the ground that I have described, it is breathtaking that the minister has indicated there will be 4,299 beds on offer to WA in the next two rounds. With the industry rapidly going backwards in WA, it is anyone’s guess who will be applying for all these beds. If these 4,299 places were all allocated, providers in WA would need to build more than 40 new facilities at a cost of $800 million. If the minister thinks that Western Australian providers have that sort of capital, she is away with the fairies. Even if they were able to borrow and service these loans, where will they find and how will they pay for the 4,000 staff needed to run these new facilities?

Since December 2007, approximately 786 allocated bed licenses have been handed back to the Department of Health and Ageing, with 283 of those from WA. The 283 places allocated to WA providers were handed back because the providers could not afford to build them. More places are expected to be surrendered in 2010. Most disturbingly, there is evidence that some providers have begun emptying beds because they cannot afford to operate all of them under current funding levels.

In short, aged care is now an unsustainable industry. There is not enough money to run operations at the level that they should be run at and there is not enough money to build new facilities. Without adequate funding, aged-care providers are not able to pay sufficient rates to attract and retain the skilled staff that are required. The pay rates between the acute- and aged-care sectors has a direct bearing on this. Wages in aged care are on average 20 per cent less than in acute care, and the large amount of paperwork also acts as a disincentive. So, once again, red tape is tying up our frontline services.

Operationally, there is another shortfall of approximately $22 per resident per day in funding received from the government or the resident below what is required to look after a person in aged care. Fees are not indexed to reflect the true CPI, which leaves providers with great difficulty in meeting the costs of wages, food and utilities. They are all increasing costs that exceed income. As a result of the non-viability of the sector, staffing numbers in aged-care facilities are now being cut, and this is having a direct impact on the care that our elderly citizens receive.

The crisis in aged care is not restricted to our cities. It intensifies in our rural and regional areas. Not only is there the difficulty with fewer numbers of aged-care beds in regional areas; there is also the unhappiness and often the trauma for people when they are forced to move away from their lifetime homes and families, friends and communities in order to receive the care they need. Regional and remote communities are unable to obtain the residential aged-care places they require, because no-one can afford to build in these areas where the risks are far too high for providers to contemplate a 60-bed aged-care facility.

The simple fact is that the government is doing nothing to address the capital and operational funding crisis in aged care. Every day that passes without new facilities being built is causing problems to snowball that we will have to face in the future. The government needs to address the capital funding issue immediately to enable providers to build the necessary aged-care places, particularly in high care, where there is no provision for accommodation bonds.

By failing to adequately fund each place that has been allocated, there will continue to be fewer and fewer new residential aged-care places coming on stream. This is going to severely impact the frail aged people who will be looking for a place in three to four years time. Simply allocating more community care packages will not solve this problem—in fact, it partly helps to exacerbate it. At some point, many people will need to make the switch from their family home to an aged-care facility and the rooms will not be there waiting for them. What do we do then? The demand for residential places will continue to grow simply because there is an increasing number of frail aged people and they will need this facility in the later stages of their life. Most of these people will desire to stay in their own homes for as long as they can, but many will need to be admitted to an aged-care facility, particularly if they need 24-hour nursing care, to receive the level of care that cannot be given at home. As we have heard, high-care places are becoming very scarce—low care is when people are being treated at home—and this is certainly becoming a very difficult problem.

The Rudd government must immediately address all of these problems that I have spoken of and commence the required structural reform of the sector. The minister must cease her confrontational approach and start supporting and working with the industry to ensure that the care needs of senior Australians are met. The minister could commence by responding to the recommendations in the Senate Standing Committee on Community Affairs report on residential and community aged care in Australia. As a member of that committee, I am very disappointed that we have not had any response to those recommendations.

All older people in our community should have access to affordable, high-quality aged-care services. The Rudd government should leave the politically motivated resourcing of primary school halls to the state governments and focus its attention on meeting its responsibility of looking after our ageing citizens in a compassionate, proper and adequate way.