Helen Polley (Tasmania, Australian Labor Party, Shadow Parliamentary Secretary for Aged Care) Share this | Link to this | Hansard source

On several occasions this year and last year I spoke about the challenges that the aged-care sector faces as the baby boomer generation heads towards retirement. It goes without saying that we should never consider an ageing population to be a problem. In fact, the very incidence of an ageing population demonstrates how far first-world nations like Australia have come in terms of health outcomes that are extending our lives. We should all be thankful for that. But, of course, an ageing population does present challenges as well as opportunities, and we need to carefully consider how we are going to prepare ourselves.

As many people in this chamber are well aware, the pressures on the aged-care system, including on residential facilities, are enormous and are growing by the day. One option to confront these challenges is simply to cut away at aged-care expenditure and hope that these small changes will pacify those agitating for real change and direction. This is essentially what the Abbott government has opted to do in its first budget. First on the chopping block was the Andrew Fisher Applied Policy Institute for Ageing, which is a body charged with placing Australia at the forefront of policy development on the opportunities and challenges of an ageing population. There was also the cessation of the aged care payroll tax supplement and changes to the indexation of pensions. Both changes spelt disaster for aged-care providers, which I will explore in a moment, but that was not all. There was also the decision to cut the rate of real growth in the home support and respite program, and confirmation that the government intended to reprioritise the workforce supplement. As a result of this last change, there is absolutely no guarantee that workers in the aged-care sector will see an improvement in their pay and conditions.

The key point to note from examining these changes in close detail is that there is no real leadership or vision from this government on aged-care or ageing policy. The Treasurer's budget moved some figures about, made some undoubtedly harmful cuts, and presented itself as a government quite willing to create sovereign risk to investment in the sector. These changes generally slipped under the radar of the mainstream media as attention was focused elsewhere. This is simply a reality when it comes to journalistic coverage of aged care in this country.

Those with a real interest in this sector agree—and I repeat—there was quite simply no leadership or vision from this government. It is almost as if those opposite are uninterested in aged-care policy and the outcomes that will impact older people. There was no plan beyond cuts, no scope for future reforms, nothing to indicate that this government takes the welfare of older Australians seriously. This was made abundantly clear during the recent Senate estimates hearings when the responsible minister, Senator Fifield, refused to even vaguely defend the government's budgetary changes. He was given numerous opportunities to spell out how his government would address the challenges facing the sector and baulked at every opportunity. The most notable example occurred when he was asked about the significant challenges facing the aged-care workforce and what his government's plans were. His response was glib and uninspiring. He said:

The main workforce pressure facing the workforce is bodies, and creating many, many more.

That was it. That was his answer to how the government would solve the pressures faced by a sector under enormous burden to provide care and support for older Australians.

Half of the aged-care workforce will retire in the next 10 years from this sector. It is a sector that suffers from a high turnover of staff, low pay and poor conditions. It is a sector that we will increasingly rely upon as our baby boomer generation ages and as more and more people require care at home or in a residential facility. This is the situation we face and the minister's answer was to say that we need more bodies. Well thanks, 'Captain Obvious', but how exactly do you plan to boost the aged-care workforce and attract new staff? Or, in language that you may prefer, how are you going to locate more bodies? What is the plan?

Labor's vision was to improve the pay and conditions of those in the aged-care workforce. That is why we dedicated $1.2 billion dollars to a workforce supplement, which was going to deliver pay rises for some 350,000 aged-care workers. It was a pay rise to people who earn very little as it is—nurses who are paid less than those in hospitals and people who are dedicated to caring for the elderly. Instead, in this budget we found out that this supplement would be reprioritised and simply handed to providers to spend as they wish. Now, of course, the response from the coalition is that this money will naturally flow to aged-care workers via the providers. But, if you look closely at this short-sighted and deceitful budget, you will find out that that is not the case. Why? Because for-profit providers are reeling from the cessation of the aged care payroll tax supplement, which is a supplement that they have relied on for decades. These providers have noted that this cut will significantly affect their bottom line and restrict their capacity to use the extra subsidised funds to boost the pay and conditions of workers. So, really, the reprioritisation of the workforce supplement was just a tricky way of moving money around.

The government has performed a neat magic trick here. It has redirected the workforce supplement funds to providers via an extra subsidy, but this will not make up for the hit that for-profit providers will take with the scrapping of the payroll supplement. It is basically a case of robbing Peter to pay Paul. The government clearly thinks that aged-care providers and the aged-care workforce will be too busy to notice. This is a real kick in the teeth for people who work extremely hard in trying conditions, with very little pay, to care for our older people at the most vulnerable point in their lives.

This is a heartless government and one completely unconcerned about what the future of aged care looks like in this country. Do not believe what they are saying publicly about the budget. Workers will not really benefit, and once again I emphasise that they have no long-term plan for addressing challenges that the sector faces in attracting staff. The scrapping of the payroll tax supplement occurred with no consultation and will have an enormous impact. Even the Commission of Audit warned that, if the supplement was scrapped:

… it is likely that these costs would be passed on to new residents.

That is right, it is the older Australians that will have to make up for the shortfall. The document also said:

The aged care sector is generally not characterised by high profits and some providers may struggle to continue without this subsidy.

And that is right; it is a real threat. In the long term this cut may prove disastrous and, indeed, more costly for future governments. This is because a lack of proper funding or shortfalls in revenue may lead to residential facilities closing, which could potentially propel thousands of older Australians into the public system. The cost of providing a hospital bed is more than six times that of the highest residential care funding, yet that is something that this government is seemingly willing to risk.

Another reason this change is so short-sighted and self-defeating is that it deters investment into the aged-care sector. When the announcement was made that the payroll tax supplement would be scrapped, a large company, Japara Healthcare, went into a trading halt whilst it considered this drastic cut. The fact that this company decided to take these steps in examining potential damage to its earnings outlook demonstrates how damaging the cessation of the supplement is for the sector as a whole. It comes at a time when the residential aged-care sector would need to build close to 80,000 additional aged-care places over the next decade. This involves an estimated investment of around $25 billion over the next decade, and we have a government intent on creating sovereign risk.

The cessation of this supplement does not just eat away at the tight profit margins that many for-profit providers survive on. It does something else that this government is apparently concerned about: it creates more red tape. It is true that the providers can seek an exemption from paying payroll tax, but to do so they will have to apply to each state and territory, one by one. Minister Fifield should take responsibility for this, but his response during the estimates hearings was simply to say, and again I quote directly:

The states and territories are responsible for their own tax base. Payroll is a state and territory tax base; they are responsible for determining the application of the taxes.

So much for a government that is going to cut red tape. According to him it is as simple as that. The government was responsible for suddenly pulling the rug out from under the profit providers and introducing this change with precisely zero warning or consultation. It is little wonder that they did not consult, because they would have known what the answer would be. This is, as I would describe it, a dereliction of their duty. They have not thought through the implications of this. It is as simple as that.

Let's take another example: the decision to achieve savings by changes to how pensions and equivalent payments are indexed. It really is no surprise that the government was silent on how this would impact on aged-care revenue, which is worked out at 85 per cent of the age pension. Therefore, this change will not only hit the hip pockets of pensioners, which is bad enough, but it will also have a dramatic impact on the revenue of residential providers who, as I mentioned a moment ago, already operate on extremely tight profit margins. Sure, the government achieves an initial saving, but in the long term the very viability of the sector is harmed.

I cannot stress enough the point that nothing in the budget will, in the long term, really solve the underlying challenges we face in providing proper care and support for our ageing population. Cuts and sneaky tactics to 'reprioritise' money may in the short term provide some cover, but that is not what leadership is about. If we rely on cuts, we quite simply will not be able to properly manage the challenges that this sector faces.

As the Grattan Institute pointed out in their report Game-changers: economic reform priorities for Australia, we already have one of the most efficient health systems in the OECD. The costs of caring for an ageing population are so great that no level of cost-cutting, no matter how severe, will really address the problem. Instead, this government needs to consider new innovations and comprehensive plans for how we are going to provide for an ageing population.

For a start they can consider something that Labor is 100 per cent committed to: new technologies to improve the lives of older Australians and save billions in unnecessary health expenditure. There is the potential of telehealth. On numerous occasions in this chamber I have highlighted the benefits that would bring to Australia generally, but in particular to older Australians. Telehealth allows medical professionals to monitor and consult people in their homes, where they can live comfortably rather than being in a residential facility or hospital bed. But, as I have said previously, to fully realise the potential of telehealth, we need all of our older Australians to have access to reliable, medical-grade internet connections. We need them to be connected to 21st century fibre-to-the-home broadband, and Labor's National Broadband Network model would deliver such a connection to 93 per cent of our premises. The technology to support telehealth is available right now and is moving ahead in leaps and bounds. High-definition, internet-ready 4K televisions and monitors are already on the market and they are going to require more and more bandwidth.

Telehealth consultations will not function properly if medical professionals have access to 21st century broadband but older Australians at home are relying on only 19th century copper wire. There will be insufficient service at the recipient's end in terms of the bandwidth going out of the home. We must see Labor's NBN model for what it really is: a massive infrastructure achievement that will enable older Australians to access medical-grade broadband connections.

Older Australians deserve better. They deserve a government that is willing to prepare for the future, to invest in aged care, to encourage development in the sector and to boost the pay and conditions of workers. Right now, older Australians have been let down by a budget that was derived out of spite and heartless consideration for the people that they are attacking in this budget—those who are less able to look after themselves: pensioners, families and older Australians. We deserve better. Those on the other side of the chamber should hang their heads in shame for having no vision and no plan for the future care of older Australians.