Thursday, 20 June 2013
Community Affairs Legislation Committee; Report
That the Senate take note of the report.
I rise to take note of the Community Affairs Legislation Committee report into the provisions of the Aged Care (Living Longer Living Better) Bill 2013 and four other aged-care bills. I take this opportunity because it is very clear that next week any opportunity to speak on these bills will be severely curtailed. I was afforded five minutes earlier today, and I thought I would take another 10 minutes this afternoon because next week, as is clear from some information that has become available this afternoon, we are likely to have less than 45 minutes on these five very, very complicated bills. And at this point in time we still have not seen in their final form the 18 pieces of delegated legislation that are part of that package of bills.
I will make some comments in relation to this report. The coalition referred these bills to committee inquiry even though the bills were still in the lower house. We were keen to make sure that they did get proper scrutiny and therefore facilitated their examination by the Senate. The reporting date was initially set for 17 June. However, by a majority vote of the committee, this was brought forward to 31 May. From a coalition perspective, we were very concerned because the reduced time did not afford us much consideration of the legislation, particularly the delegated legislation that I have mentioned. The anticipated reporting date did not mean that the bills were considered any earlier in the Senate, and indeed they could not have been listed in the Senate before this Tuesday. I reiterate that, from the coalition's perspective, we have been ready to deal with these bills and we certainly were ready on Tuesday. It has been as a consequence of the government's mismanagement and giving priority to other matters that now we are going to be left with barely 45 minutes of debate on this.
Submissions received by the committee were very critical of the government primarily over the key issues of workforce, financing, bonds and information access. The inquiry heard evidence that some smaller facilities would be worse off financially and some forced to amalgamate to survive or, worse, even close down. Key criticisms in the inquiry focused on the $1.6 billion cut for ACFI from the forward estimates. The minister justified these ACFI changes with assertions that providers had been guilty of alleged rorting, but this spurious allegation was trashed at the estimates hearing in February 2013 when it was revealed that there had been no provider prosecutions in the last five years.
Another key point is that only 40 per cent of residential aged-care providers are currently operating in the black and many providers referred to the negative impact of the ACFI cuts in their submissions, citing reductions ranging from thousands of dollars to millions of dollars. On another front, submissions were critical of the Aged Care Funding Authority which was established last year, another bureaucracy. Indeed, this whole package of bills has added much more bureaucracy and more regulation to what is now one of the most, if not the most, heavily regulated sectors in Australia.
The government then sought to introduce a brand new regime in relation to the whole bond system, allegedly to stop providers ripping off the system with huge bonds. What do we know about these alleged huge bonds? There was the Prime Minister with Minister Butler on 20 April last year tarring all providers with the same brush by leaving the impression that they were charging so-called super bonds of more than $2 million. The Senate inquiry received evidence that totally refuted this nonsense from the government. Presently there are just over 21,000 accommodation bonds in Australia with only 124 of these between $750,000 and $1 million. Despite the minister's expansive allegations last year, there are only 33 bonds in excess of $1 million. We understand that in the whole of Australia there is only one bond of $2 million, paid by somebody in Western Australia who resides in the top floor of a lovely aged-care facility in Perth. Once again, why let facts get in the way of a good story? So much for the rorting.
The issue which has caused the greatest angst in this process has been the workforce supplement. It all started on 5 March this year when gaffe prone Minister Butler not only insulted the people of Western Sydney but also insulted the aged-care sector by announcing wage increases that the whole sector knows will never materialise. It was a hastily put together announcement designed just for the Prime Minister's last-ditch five-day sleepover in Western Sydney. But peak provider bodies boycotted the workforce supplement announcement with the minister forced to make his announcement in front of a church in southern Sydney because he could not find an aged-care facility willing to host his initiative. The front page of the Australian that day revealed that the supplement, which is the so-called flagship of the government's package, was nothing more than a backdoor scheme to increase union membership. So, despite the protestations of the minister, there is no doubt that the cuts in ACFI are linked to the workforce supplement. The icing on this sad and sorry cake is that the minister admitted that he did not know how many of the nation's 352,000 aged-care workers would benefit from the supplement that is now being put up. Isn't that just so inspiring from this minister? But we do know from the Senate inquiry that many providers cannot afford to access the funding and therefore many staff will not get wage rises.
My point to the government is that if you really had the interests of aged-care workers at heart you would have used existing mechanisms to pay to providers funds for increases in wages, not force providers to have to enter into enterprise bargaining agreements with so many strings attached. We know from the Senate inquiry that providers will not be able to afford the cost of the EBAs and the on-costs associated with that and therefore providers will not be able to pay their workers more. But this did not stop the minister from making false and misleading statements such as this one, which I found on page 47 in the winter edition of The Retiree. There is a picture with the Labor logo in the corner. It says that from July $1.2 billion will flow into the pay packets of 350,000 aged-care workers across Australia thanks to federal Labor. Well, that is a blatant lie. You know what? It was actually authorised by none other than Mark Butler with the address which is presumably the electorate office of Minister Butler. What a blatant lie the minister is perpetrating. He knows very well that there are going to be very few—
I raise a point of order, Acting Deputy President. Constantly stating that the minister is lying is inappropriate. If Senator Fierravanti-Wells wishes to make a point, she can make it without making that direct point, as she well knows.
It is very clear that that is not going to happen because it was made very clear to us at the inquiry that providers are not going to be able to afford these pay rises. Of the 352,000 aged-care workers, about 130,000 are not covered by an EBA. That is a lot of potential new union members—mostly vulnerable, low-paid aged-care workers. These are the ones the disgraced former HSU official Craig Thomson described in his maiden speech as people who are 'committed and motivated and who strongly believe in the importance of the work they do'. These are the ones who would be forced back into the very union which betrayed them.
Time will not permit me to cover everything tonight. Hopefully I will get an opportunity next week to trawl through some of the major problems with these bills. Those problems are outlined in the dissenting report of coalition senators and include issues such as the payments, the workforce supplement and a whole range of other matters.
I was not intending to speak on the report of the Senate Community Affairs Legislation Committee into the Living Longer Living Better package of bills—although it is a very good report—but I felt that I needed to make a couple of points. Senator Fierravanti-Wells was arguing that the community affairs committee's process had somehow curtailed debate. In fact, we had several days of very effective evidence. The committee took evidence for as many days as we do for many of our inquiries.
If you look at the report, you will see the number of submissions we received, the detailed evidence we received in our public hearings and the extent of the consideration of that evidence. It is a large report and that is because there are many issues involved in the changes in aged care being put before parliament. Senator Fierravanti-Wells is quite right—it is a very complex area.
The issue of delegated legislation has again been raised. We do have all the delegated legislation which impacts on the changes to take place from 1 July. The implementation period for this series of changes in the aged-care acts extends across three years. Yes, it is true that we do not have the delegated legislation for things which will happen next year. In a perfect world, I would like to have all that before us. That is a point I have made many times in this place and I have been fortunate enough to be on the Senate Standing Committee on Community Affairs since the second week I came into this place.
On every inquiry into significant legislation which has come before this committee—both under previous governments and this one—there has been an issue about getting the core legislation and all the delegated legislation in front of the committee, and then in front of the parliament, before the core legislation is considered. I think it is worthwhile to continue making that point. But to imply that this is the only time it has happened under our government is just untrue. I will not go into any further discussion about what 'untrue' might mean, but it is untrue.
When we consider this legislation next week, we will have before us the core legislation and the delegated legislation which will come into effect, should the core legislation pass, from 1 July. That is in front of us now. We raised the issue of delegated legislation with the department both when they came before the committee as well as in a number of discussions we had as we pulled the committee report together.
We have said that all the delegated legislation will be disallowable. These instruments will therefore all come into this place for consideration. If people have a problem with them, there will be time to debate those issues then. That process occurs in the Senate regularly.
Senator Fierravanti-Wells interjecting—
As Senator Fierravanti-Wells is saying, we do not have all the delegated legislation in front of us, but the instruments we do not yet have in front of us it will come through this place in the future. That process is in place.
The report covers a range of views put forward on a range of issues. The consultation process on this batch of legislation has been going on for over two years. This final stage was the point when our committee had the chance to look at the draft legislation. We consulted with people from the providers, people from the consumer network and people from the various worker groups involved. If you read the Hansard transcripts of the committee's hearings, you will see that it is quite clear that Senator Fierravanti-Wells has a particular issue, as do some of the witnesses, with the workforce supplement. That is an area of disagreement.
But some things are clear. No-one is being forced to join a union by this legislation—no legislation could do that of course. All that is being said is that enterprise bargains involving the appropriate unions should be a mechanism to look at wage rises, wage security and entitlements for workers in the industry. It was generally agreed that there were significant workforce issues in this industry. That has been a major complaint over a number of years.
The model which the minister has put forward—indeed, the minister has put this forward—is the workforce supplement. To access the workforce supplement, you need to have an enterprise bargain which involves the union. But you do not have to access this funding. There is no compulsion to access the funding. In fact, if you are a smaller facility—and we did hear about the particular issues facing smaller facilities—you are not required to go through this process at all.
So it is not as black and white as has been presented. I urge people who are interested in aged care in our country—and I think that should be all of us—to have a look at the issues which were raised with our committee, the information which came before the committee and, in particular, the clarification points which were included specifically to respond to the workforce supplement issues.
It is clear how this supplement will operate. It is not compulsory. No-one has to use it and we understand that some providers will not use it. That is their choice as it is their choice now. If they choose to access the extra funding, they will need to meet the criteria. This model is intended to ensure that the extra funding which will flow from this legislation will, in fact, go into wages. I think there are a number of people who are sitting around this chamber who know that one of the key complaints over many years has been that, when money is provided to the industry, it does not necessarily flow through to the workers in the industry. That has been a major gap in the way we secure trained professional people in aged care.
We do not have time to talk about all the issues of aged care in a short period. I thank Senator Fierravanti-Wells for taking up the opportunity to discuss this matter, because it was not something I had thought of. I do want to make a couple of points about the state of the industry. It is truly sad that there is a view in the wider community that the aged-care system is under deep stress and that it is not responding effectively to the needs of people who are seeking aged care now, let alone the numbers that we know are going to be flowing into aged care over the next few years. We all know the demographic position in our country—we are an ageing community. We are ageing as we sit in the Senate tonight. Not only do we have the need for greater services as we grow older; the community itself has greater demands. There is an expectation that people in our community will receive effective services no matter what region they live in and no matter what their incomes are.
Changing the culture around both the people who are providing aged-care services in our country and the people who are seeking them has been a huge exercise. I want to congratulate the industry for the way it has been prepared to be involved in these significant changes. One thing that people have agreed on is that there needs to be change. I did not hear one skerrick of evidence from the time we started this process that said we did not need change. Certainly there were different views about what would be the best way to go forward, but there was agreement that the current system was not working. We have an absolute need in this parliament to consider the changes that have to take place. We can look at changes for the future but anyone who pretends that these current changes came from nowhere, that they have been forced on people who did not know about them and that there has not been an opportunity to be involved in the process, has simply deliberately chosen not to be involved.
There will be major change in this industry—there has to be. The way into the future is going to have a new balance, with people across the community being expected to put more into the funding of their own aged care. That is a huge step forward. We have to make sure that there is an effective system that carefully scrutinises the changes and that gives people the security that they will be able to have their own needs serviced and they will not be sacrificed in the process. That is our job—we need to be part of the process.
The Living Longer Living Better package of five bills is yet another indication of how this government cannot use process to fight its way out of a paper bag. Most of this legislation will not come into force until July 2014, so why the great rush to put it through now? It is all very well for there to be conversations suggesting that debate, research and inquiry into this area have gone on forever, but almost none of the recommendations in the Productivity Commission's report have been picked up by the government and other things have been added in a completely cherry-picking way.
The government is undertaking this extraordinary workforce supplement effort. As far as I can see, it is simply about unionising anyone in the aged-care workforce who currently is not a member of the union. Aged-care providers would have to have EBAs and negotiate with a union. This would mean that the one-third of the aged-care sector that is currently not unionised would become unionised. It looks like a backdoor way of unionising the entire workforce in aged care. We also have this sleight of hand going on with the pay involved in this supplement. There is $1.2 billion over four years for the workforce compact, but no-one has mentioned that this has come out of a $1.6 billion cut in funding to the sector. The $1.6 billion has been moved out of funding and the $1.2 billion has been put into a workforce compact, and the government pretends it has somehow improved the industry.
The coalition very much shares the views of everyone in the aged-care sector that people working in the sector are not sufficiently well paid, nor is their training sufficiently concentrated on, but this is not the way to go about fixing those problems. The other bizarre part of this arrangement is that the government expects that aged-care providers will meet the on-costs associated with the increases in staff pay. This means that they will pay for the increases in holiday costs, superannuation and so on. We have evidence suggesting that in many industries it is almost a dollar-for-dollar cost, so that if pays go up by $50 a week then the total costs to an employer will go up by $100 a week.
Much as we support the need for pay increases within the aged-care sector, this is absolutely not the way to go about providing them. The coalition certainly wants to see reform in the aged-care sector but we do not think it should simply be reform that comes down from on high, as this does. It has been suggested that, when the workforce compact was announced in March this year by Minister Butler, some of the peak industry bodies and leading providers were not invited, and some even boycotted the event because they were so concerned that they were going to end up with more red tape, less funding going directly to assisting patients, and unions interfering in the way that every aged-care facility in Australia functions. When we look at the groups involved in the aged-care industry, we have three unions: the Australian Nursing Federation, United Voice—which of course was Minister Mark Butler's former union base—and the HSU, of which, I think, this place is tired of hearing—
Senator Fierravanti-Wells interjecting—
Senator Fierravanti-Wells suggests that perhaps we should mention some of the corruption which went on, particularly in the New South Wales branch of the HSU through Mr Craig Thomson and which appeared to spill into Victoria. These are not unions that we need in this sector. The sector has functioned well. As we all know, the award is low, but unionising the remaining workforce will make no difference in that area. All it will do is increase the costs in the area and that will mean there is less funding to assist people who live in aged-care facilities and people who receive services.
There are a couple of improvements in this bill in terms of the additional home care packages. But there is no need for this legislation to be rushed through at the rate it currently is. The bill will provide funding of $880 million over five years, but it does not start for some time. So there is no need for the rush that is going on with respect to this legislation.
The coalition want to reform the sector, as I said earlier, but we want to actually talk with the sector about how that reform happens, not have a situation where the sector is just simply told from on high what will happen, how it will happen and without any sort of real consultation about the outcomes. It was quite obvious during the inquiry we had that a number of service providers simply had no idea what the effect of some of this legislation would be on the way that their businesses and their services would work.
We can have a Labor government saying that it is iniquitous that an aged-care service provider might make a profit or have a surplus but, unfortunately, without that they will not improve their services or improve the conditions in which people live. So we have to work this out with others. The coalition is intending to have an aged-care providers agreement framework. That will be the first time ever that aged-care providers have actually been asked about how this industry should be structured. There are many things in this industry that you would do differently if you were starting tomorrow. But a workforce compact that takes some money out of funding and puts it into a bucket to assist unions to develop enterprise bargaining agreements with aged-care homes is not the way to go about it.
None of the outstanding viability issues that affect aged-care providers are addressed in this legislation. I am sure a number of people here will remember the Grant Thornton report into the funding of homes, which led to the alleged improvement with the Aged Care Funding Instrument, ACFI, but which did not achieve what it was supposed to achieve. Most aged-care homes are probably making a surplus or a profit for the year of three per cent. No business in Australia will prosper and stay in business if they are making a three per cent return on money. When that happened, the bank rates were probably about eight or nine per cent. But, even now, with a three per cent return on your money for the investments that you must make, to have resources in this heavily regulated area and to have the sorts of resources that meet the requirements, you need a far better return than three per cent to achieve that.
As I said earlier, one of our great concerns is that these bills only cherry pick some of the Productivity Commission's recommendations. They add even more regulation to what is a highly regulated sector and, whilst they contribute very slightly to reform, the procedures are over the top, heavy-handed and inept. With this government's package, things in the aged-care sector will only get worse.