Dean Smith (WA, Liberal Party) Share this | Hansard source

I am also pleased to join with my colleagues in this place in support of the Aged Care Amendment (Red Tape Reduction in Places Management) Bill 2015, which forms a key part of this government's commitment to deregulation across all policy areas. I think it is fair to reflect on the fact that over the last few years there has been a greater sense of bipartisan spirit in the development of Australia's aged-care policies. It was pleasing to hear Senator Polley's contribution today, where she commended the government for its commitment to red tape reduction in this particular area. I remember very clearly our commitment, when we were in opposition, to the then government's Living Longer Living Better package of proposals. When we reflect on the last decade, this area of public policy can too easily be prone to political point-scoring by political parties, but I think the reality is that this, more than many other areas that we have to deal with in this Senate, is an area that requires less politics and more good policy. I note Senator Siewert's contribution in regard to the heavy demand that we have in meeting people's expectations that they themselves, or indeed the people that they love and care for, will be given the appropriate care should they require aged-care services as they get older in our country.

This bill is fundamentally about letting aged-care service providers do what they need to do and do it well, actually delivering services that support ageing Australians instead of having to spend quite so much time coping with unnecessary and outmoded forms of regulation. We know that Australia has an ageing population—that is not disputed—and, by extension, that means we know aged care is a growing and increasingly important industry that will impact growing numbers of Australians in the years ahead. The legislation before us today is about allowing those working in aged care to focus on their core business—and that, of course, is service delivery—while still retaining appropriate safeguards to ensure that the services being delivered are of an appropriate standard.

This bill reduces red tape for aged-care providers in regard to the management of provisionally allocated residential aged-care places and the transfer of residential home-care and flexible-care places. The major measures in this bill represent the fulfilment of an election commitment made by this government to review the administration of aged-care places management. The legislation is consistent with achieving item 11 of the government's Red Tape Reduction Act Plan. That plan was co-developed by the government and the aged-care sector, and it was approved by the former Prime Minister Mr Abbott in 2014. At that time, the government committed to undertaking a review of aged-care places management. This included streamlining the transfer of residential home care and flexible care places and revising the service provider obligations associated with managing provisionally allocated residential aged-care places.

There are two distinct measures contained within this bill which are worth illuminating: firstly, the transfer of aged-care places measures; and, secondly, the amendments relating to provisionally allocated residential aged-care places. Both of these measures form a significant part of the government's plan to better align business realities with the legislative platform in the Aged Care Act, thus establishing a more efficient and effective model of administration for aged-care places.

This bill is also about making sure our regulatory system around aged care reflects contemporary economic reality and the changing priorities and preferences of aged-care consumers. In particular, it is an effort to take account of the growing popularity of home care packages. Home care packages are an attractive option for consumers and taxpayers alike. They do save the taxpayer money, but I would argue that more importantly they allow Australians to remain in their own homes for longer while still receiving the levels of care and support they need to continue leading a comfortable, dignified and independent lifestyle.

This is in no way intended to denigrate our nation's aged-care facilities, because they are exceptional in many cases. Many of us in this chamber would have visited many of them during our time. But I think it is fair to say that, given a choice between remaining in our own homes or moving to a full-time aged-care facility, the overwhelming majority of us would choose the former. That is just human nature; home is where the heart is, we are told. It stands to reason that in our later years most of us would wish to be in an environment that holds memories that are precious to us.

The problem with the system as it currently stands is that the process for approvals is not necessarily keeping pace with these changing demand patterns. This reform allows for proposed providers to transfer their licences to other aged-care providers who may want to operate facilities in the area instead of having to go through a laborious process for advising government and completing a mountain of paperwork to accompany that. There can now be greatly simplified notification processes as a result of these reforms.

I am sure many senators would join me in detailing their interactions with those who own and operate aged-care facilities across their home states. I certainly have because of course, as we know, aged care is a long-standing interest of mine and of many colleagues in this place. Of course, one of the major gripes of those who work in the sector is the resourcing that has had to be directed to dealing with the administrative aspects of their role. I have to say that this is a particularly significant issue when I meet with aged-care service providers across regional Western Australia. Running an aged-care service is a difficult enough challenge anywhere in our country, but I think even more so in regional Western Australia, which suffers from the added complications and frustrations of distance, isolation and low population density.

To be blunt, the already difficult task is not assisted by the appearance of sensationalist claims in the media, which unfortunately seem to be part and parcel of working in the sector at present. Chief among these seems to be an attitude that aged-care service providers should not be making a profit, and that somehow 'profit' is a dirty word. I think that notion needs to be disputed. It needs to be dispelled. It is actually possible to deliver high-quality aged-care services and make a profit, as many providers in Western Australia are doing. The two things are not mutually exclusive. Yes, it is true that profit in the aged-care sector is increasing. Data shows that average before-tax profit increased from $12.32 per resident per bed day in 2014 to $17.20 in 2015. A major reason for this was the government's decision to deregulate resident accommodation payments. This was a deliberate effort to open the market up to greater levels of competition, which is ultimately about greater choice and higher quality for consumers.

Profit is not actually bad for the aged-care sector. The thing that is most needed to drive greater choice and higher-quality services for aged-care patients around Australia is greater levels of investment. It stands to reason that business-savvy investors are going to be more inclined to invest their money in an aged-care sector that is indeed profitable. Only by attracting greater levels of investment will we be able to make sure that our aged-care system is able to meet increasing demand levels in the future. It also stands to reason, then, that a system that is more efficient is one that will be more profitable. That is why the government is pursing the deregulatory measures outlined in this legislation.

The new approach proposed in this bill to the transfer of aged-care places is to replace the application form with a simplified notice of transfer that is signed by the transferring parties. It eliminates the need for approved providers to seek approval to transfer their places to another provider. They will instead be able to simply notify the department of the transfer and wait for the transfer to be processed. The government retains the capacity to review the proposed transfer and where quality of care, prudential, financial or other significant concerns exist, has the right to issue a notice of veto to prevent the transfer from proceeding. In other words, careful overview of the quality of services being offered will still be maintained.

These reforms are a part of a package of changes that will remove 20 out of a total of 93 provisions which relate to the material that must be provided to or considered by the Department of Health when providers wish to transfer places. A further 17 of the 93 are being merged or simplified, and 10 of those 17 provisions will only apply where places are transferring to a new approved provider. This new approach is wholly consistent with the fundamental concepts of red tape reduction and meets the objectives of the Red Tape Reduction Action Plan by ensuring regulation within the aged-care sector meets our modern needs.

The second measure within the bill aligns the period of provisionally allocated residential aged-care places with the current business realities of approved providers of residential aged care. In reviewing current practice and assessing the case for a change in the policy setting towards a reduced administrative arrangement, advice from the aged-care sector was that the current legislative arrangements did not adequately support providers of aged care. A provisionally allocated place is a place that an approved provider has not and is not delivering care through. It is a place that an approved provider has been advised will be subsidised by the Australian government but is not currently operational and has not taken effect. Following successful receipt of a provisionally allocated place through the Aged Care Approvals Round, approved providers of residential aged care must then seek planning approval through local governments to construct their new aged-care service. Advice from the sector is that sometimes this process alone can add up to two years. The current provisionally allocated period of two years sometimes only permits planning approval to be received before applications for extensions commence. Departmental data indicates that the median time it takes approved providers to operationalise their places is approximately four years, and that 80 per cent are operational within six years.

It is reasonable to amend this provision to reflect how this component of the act is used by providers of aged care. Under the current approach, a rolling cycle of extensions and quarterly reporting is required to be undertaken. This is time consuming and includes unnecessary reporting of information that rarely changes. The new approach to managing provisionally allocated residential aged-care places extends the initial period from two years to four years and permits two 12-month extensions before care is required to become operational. After six years, an extension to the provisionally-allocated residential aged-care place will only be made in exceptional circumstances. If care does not start to be delivered, the aged-care place will lapse and be reallocated through the Aged Care Approvals Round to another provider that has the capacity to deliver the care.

Importantly, this model aligns the legislative platform for regulation with the current business realities of approved providers of residential aged care across Australian communities. It also reduces the red tape for the sector by preventing the unnecessary reporting burden on approved providers of residential aged care by 75 per cent. This new approach is an important change in the way that we consider aged care, as it shifts the focus back to care delivery.

This bill represents practical reform for aged-care providers. It delivers on the government's agenda on red tape reduction, it is going to make life easier for administrators on the ground and it will make it easier for people to invest in the aged-care industry, because they will be able to obtain bed licences when and where they need them without having to spend unreasonable amounts of time on form-filling, red tape and dealing with departments.

In supporting this legislation today, I extend my particular thanks to those who deal with the very real challenge of working in the aged-care sector each and every day. The work you do is an integral part of helping Australians live longer lives that are still dignified, comfortable and independent. As our population ages the importance of this work will only grow, and it is therefore crucial that our regulatory system helps to make that task easier. The bill is a practical way to do this.