Michaelia Cash (WA, Liberal Party, Minister for Women) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows—

AGED CARE AMENDMENT (RED TAPE REDUCTION IN PLACES MANAGEMENT) BILL 2015

The Aged Care Amendment (Red Tape Reduction in Places Management) Bill is a key component of the Government's deregulation agenda. It makes the business of delivering aged care easier for service providers and removes unnecessary administrative process so that the focus of care delivery can be at the forefront of service provider's attention.

Australia has an ageing population with the life expectancy of older people increasing with advances in technology. With this demographic, comes the need for Governments to support older people with their increasing care needs and make the process of delivering aged care less administratively burdensome than it currently is. This Bill reduces red tape for aged care providers in regards to the management of provisionally allocated residential aged care places and the transfer of residential, home care and flexible care places.

It shifts the focus of the business of aged care back to its roots in care delivery while still enabling the Government to uphold consumer protections around quality of care, as well as appropriate management of financial and prudential risk on behalf of the consumer. This Bill is a positive step forward to reducing red tape for aged care providers.

The two measures in this Bill are part of the election commitment made by this Government to review the administration of aged care places management. They represent the achievement of item 11 of the Red Tape Reduction Action Plan. This plan was co-developed by the Government and the Aged Care Sector Committee, and it was approved by the former Prime Minister in 2014. In the plan, the Government committed to a review of aged care places management including the streamlining of the transfer of residential, home care and flexible care places and to revise the service provider obligations associated with managing provisionally allocated residential aged care places.

The commitment to reduce red tape for the aged care sector in these two areas was initially achieved by streamlining the information required to be provided in managing aged care places with new forms released earlier this year. These revised forms reduced the duplication of information sought by the Department in regulating aged care while still meeting legislative requirements. This initial reduction in red tape was the first step in this deregulation agenda of aged care places management however more can be done to support the aged care sector. This red tape reduction achievement has been built upon and it is the foundation of this Bill.

This Bill contains two distinct measures; the transfer of aged care places measure and the amendments relating to provisionally allocated residential aged care places. Both measures are the necessary next step in aligning business realities with the legislative platform in the Aged Care Act, and contribute to a more efficient and effective administration of aged care places.

The transfer of aged care places occurs where approved providers of residential aged care make a business decision, that they no longer have capacity to deliver care to older people who reside at their service and seek out another aged care business to continue this service delivery. At present, both transferee and transferor are required to submit an application form that is then considered by the Department of Health. In approximately 80% of cases, this application form is routinely approved by the Department. Historically, this requirement to submit a form has ensured that the new provider of the residential aged care commits to meeting their quality of care and other obligations.

The Aged Care Act however has a number of different regulatory tools to ensure that quality of care is delivered to a high standard, including strict accreditation requirements, compliance mechanisms and oversight by the Aged Care Complaints Scheme. The approval of this form, to transfer aged care places, is an unnecessary and administratively burdensome component of the Act that this Bill seeks to rectify.

In proposing a new model for the transfer of aged care places, three key concepts have been central to the new approach; firstly, only seeking additional information from the aged care sector that is necessary to provide an informed risk managed perspective of the proposed transfer, secondly, that where the transfer of aged care places is a business decision between two already approved providers of residential care, that there is limited involvement in that business transaction, and thirdly and most importantly, the government retains capacity to review and where necessary veto the transfer arrangement to ensure that a high standard and quality aged care service can be delivered and other consumer protections can be maintained.

The new approach 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 removes the need for approved providers to seek approval to transfer their places to another provider. They 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. If additional information is required in reviewing the proposed transfer, a Notice to Resolve can also be issued.

The proposed legislative reforms are a part of a package of changes that will remove 20 out of a total of 93 provisions (in both primary and subordinate legislation) that relate to the material that must be provided to or considered by the Department of Health when approved providers wish to transfer places. A further 17 of the 93 are being merged and/or simplified, and 10 of those 17 provisions will only apply where places are transferring to a new approved provider.

In developing this new approach, important aged care sector input and consultation has occurred with support provided by peak bodies and others consulted. The new approach to the transfer of aged care places was provided to the Aged Care Sector Committee in May this year with a selection of other providers also asked for input and feedback on the model. The response to this measure from the aged care sector was positive and reflective of the business transaction that this component of the Act regulates. This new approach aligns to 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 is fit for purpose.

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 take up to two years. The current provisionally allocated period of two years sometimes only permits planning approval to be received before applications for extension commence.

Departmental data indicates that the median time it takes approved providers to operationalise their places is approximately four years, and that 80% 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 reports 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 twelve 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 being delivered, the aged care place will lapse and be re-allocated through the Aged Care Approvals Round to another provider that has capacity to deliver the care.

This model aligns the legislative platform for regulation with the current business realities of approved providers of residential aged care. It also reduces the red tape for the sector by preventing the unnecessary reporting burden on approved providers of residential aged care by 75%.

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 indicates the Government's intention that provisionally allocated residential aged care places cannot be held by service providers indefinitely, but rather it provides more definitive timeframes for providers to start delivering care for older people who require it and where this cannot be achieved, allows those places to lapse and be returned for reallocation to a service provider that does have capacity to deliver additional care.

The Aged Care Amendment (Red Tape Reduction in Places Management) Bill demonstrates that the Government is taking the pressure off the aged care sector by aligning the legislative platform with current practice, pursuing the reduction in red tape agenda to reduce unnecessary reporting and shifting the focus back to the business of delivering care for older people. This Bill also implements models that protect the high standard and quality of care provided while enabling business transactions between approved providers of aged care.

Debate adjourned.