Mr LEE(7.01 p.m.) —I rise to speak in support of the amendments which have been foreshadowed by the honourable member for Jagajaga (Ms Macklin) as the Labor Party has serious reservations and grave concerns about the impact of this particular piece of legislation. First of all, to understand what this legislation is all about, you have to understand when it was announced and what it is really intended to do. It was announced on budget night last year. It is all about cutting back federal spending on aged care by half a billion dollars because the forward estimates produced in last year's budget show that in the first four years the budget will save $577 million as a result of the changes announced in this particular package of legislation and in one other change announced in last year's budget which also reduces federal spending on aged care.

So it is driven not by some intention to upgrade the standard or quality of our nursing homes, as every government speaker has claimed in the debate; it is about trying to cut back federal expenditure on providing quality aged care for elderly Australians. I will explain that in some detail later in my speech. The government says that it is about trying to cut back government spending. So why isn't the government quite open and honest about its intentions? I think there would perhaps be greater acceptance in the wider community if the government was open and up-front about admitting what is really driving these reforms. It is not about improving the quality of nursing homes; it is about saving Mr Howard a few dollars so that we can package up some nice election promise come the next election.

When you realise that the failed savings rebate—which gives the directors of BHP $450 and the Treasurer (Mr Costello) $450 in this year's budget—would more than pay for the cutbacks that will be implemented by this legislation, and, if redirected into aged care, would obviate the need for all of this, then that makes it quite clear that the government's priorities are quite misdirected.

These measures introduce two major changes. The first is the imposition of the up-front entry fee or the up-front accommodation bond, as the government calls it. The imposition of this uncapped, new, up-front entry fee is going to mean that wealthy people who can afford to pay very large up-front fees are going to have access to the best nursing homes beds. It is going to mean that those people who are less well off and are not able to provide that accommodation bond, that up-front entry fee, are going to be relegated to the back of the queue. They will be the elderly Australians who are left with the poorest level of care in the poorest quality nursing homes.

The second measure that is implemented with this legislation is the imposition of additional daily fees for nursing home residents. The imposition of this new fee means that residents will be paying an extra 25c in the dollar for every dollar over the pension-free area. This might sound reasonable to some of the hard-hearted accountants on the government benches. We even had the honourable member for Dickson (Mr Tony Smith) proudly boast that full rate pensioners would not pay this additional impost on their pension. Thank God full rate pensioners do not pay, battling as they do on that very modest sum of money that they receive from the government for the years of working and paying taxes for all of their lives.

If an aged pensioner or a service pensioner earns $1 more than $50 a week, then this government says that they are going to impose an additional tax on those people. It will not be imposed on high income earners, it will be imposed on people who are earning $51 a week, which is a very modest sum of money these days when it has to meet the cost of part of their medication, their upkeep and their clothing. Fifty one dollars a week is a pitiful level at which to bring in this new, additional 25c in the dollar rate. That is in addition to some other ways that the government seeks to whack elderly Australians.

I have done a bit of work on the imposts that are placed on a pensioner in that position, where a part pensioner earns a little bit of money above the free rate. They not only get hit with income tax; they get hit with the Medicare levy, they get hit with withdrawal of that pensioner rebate and, as a result of this change, they are going to be hit with the 50c in the dollar reduction in their pension because of the social security means test and this new 25c in the dollar means test as applied to cover the cost of their daily nursing home fees. The all-up cost of this is that the effective marginal tax rate, the effective withdrawal rate—the equivalent of the effective tax rate for these part pensioners—is going to be up in the range of 78c to 91c in the dollar.

We certainly suspect the Mr Packer does not pay 91c in the dollar. I suspect Rupert Murdoch does not even pay 78c in the dollar. So how could we expect part pensioners on very modest sums of money to be paying effective rates of tax of between 78c and 91c in the dollar? That is what the government will deliver as a result of the imposition of this new 25c in the dollar means test on the daily nursing home benefit. It is outrageous that the government is seeking to impose these new imposts on people who are on very modest sums of money.

The other point I would like to make is that there is a bit of a split in the government. Usually they stick to one particular line—I will concede that—but there are two groups within the government speakers on this legislation.

One group claims that no-one will have to sell their home. The other group is typified by the honourable member for Hindmarsh (Mrs Gallus), and I made some notes from her contribution earlier today. She said, `What is so terrible about selling your home? If I move, I sell mine. What is so terrible about having to sell your home to move into a nursing home?' That is what the honourable member for Hindmarsh said. I do not know if that is the view shared by other Liberal members who are in the chamber at the moment, but I think that sums up the feelings of a group of government members who are speaking in this debate.

It is okay for the honourable member for Hindmarsh to say that. If she sells her home, she can negotiate the purchase of a new home, unit or property. But how do you think people seeking entry to a nursing home—often people who have been in hospital or have had a stroke; often people whose families are under enormous pressure at this time in their lives—would cope? I think it is quite unfair for the member for Hindmarsh to equate her circumstances with that of the family of a person who is trying to decide whether he or she should reside in a nursing home. In the words from the mouth of the honourable member for Hindmarsh, there is nothing so terrible about someone being required to sell their home.

The government says, `It's optional. It is not compulsory. This is just market forces. It's up to each person considering being admitted to a nursing home to reach agreement with the owner of the nursing home.' The problem the government faces is that it does not understand what the Corporations Law is going to do. We have some very competent officials in the advisers' box tonight, I am sure. They take very copious notes, and I would ask them to pass our concerns about this on to the minister so she can answer this question—a question we have raised in this House before—in her summing up to this second reading debate.

Under the Corporations Law, if there is a for-profit nursing home being run by a private entrepreneur—especially one that might be listed on the stock exchange—the directors and the management of that company have to do all they can to maximise the returns to the shareholders. That is their obligation by law. If that for-profit nursing home has one spare bed and it has to choose between a person who can afford to pay $200,000 for the up- front fee, a person who can only afford to pay $88,000 for the up-front fee and a person who is disadvantaged and cannot afford to pay any up-front fee, the Corporations Law says the nursing home has to give the bed to the person who can afford $200,000, otherwise the directors of the company breach their fiduciary duty to their shareholders.

Let us just put the $200,000 to one side. Let us say there is a nursing home on the Central Coast that has decided they will charge everyone—whatever their means, however rich they are—$88,000 as their up-front fee. If a person is disadvantaged, the government will say, `Don't worry. We'll put in a bit of extra money per day.' That was fine until we found out last week that the generous sum of money the government is going to offer is only $3 a day. There is no way that $3 a day can make up to a for-profit nursing home the amount they can earn from having an $88,000 bond in a bank account somewhere earning interest.

The question I put to the minister is this: does she deny that the Corporations Law will require a nursing home proprietor in those circumstances to deny the disadvantaged person that bed? We have asked the minister that before, but this time we hope to get an answer. Because of the Corporations Law, the introduction of market forces with nursing home accommodation will mean that a lot of low income Australians, elderly Australians, will be very severely hurt by these changes.

Government members delight in referring to Professor Gregory's review of nursing home accommodation. They then go on to claim that Professor Gregory's findings on the capital needs of the nursing home sector justify the imposition of this market forces approach. The problem for the government is that, in chapter 5 of Professor Gregory's report, he particularly went out of his way to discourage the Australian parliament from heading down this approach of market forces. I would like to quote from what Professor Gregory said in chapter 5:

The circumstances under which clients seek access to nursing homes are considerably different from hostel clients.

. . . . . . . . .

Approximately 60% of nursing home admissions are from hospitals. This is one indicator of the fact that nursing home entry is often urgent, motivated overwhelmingly by the need for nursing care.

The sheer size of entry contributions and the impact on a client's life of having to agree to sell assets to receive care would be a considerable barrier to entry.

He then goes on to describe it as a measure which seems too harsh.

It is completely misleading for members of the Liberal and National parties to claim that in some way Professor Gregory endorses the introduction of up-front fees. He does not. It is certainly wrong for Liberal and National Party members to say that in some way Professor Gregory supports or justifies the imposition of this new 25c in the dollar means test on part-pensioners who earn only $51 a week. Someone of Professor Gregory's background and concerns would never argue that low income Australians should be targeted in that way.

When the honourable member for Hindmarsh referred to the concerns that have been expressed by many of those involved in the charitable sector of aged care, she dismissed these people as `fellow travellers'. We presume she was not referring to them as being fellow travellers of the Communist Party—the old expression of the 1950s. We presume she meant they were fellow travellers of the Labor Party because they had had the temerity to criticise the government's decision and to express concerns about the impact the government's decision was going to have on low income Australians.

It is pretty hard to believe that an organisation such as Community Services Australia, the national body for community services in the Uniting Church, is in some way aligned to any side of politics, when it says that the government subsidy of $3 a day is:

. . . an insult to our elderly and a slap in the face for charitable service providers.

It is pretty hard to challenge the view of the Australian Nursing Homes and Extended Care Association who said, on 27 May, that this will inevitably result in a two-tiered aged care system. They said:

The problem arises because of the Government's completely inadequate supplementary funding for concessional residents.

We have the Australian Catholic Health Care Association who said that they cannot support funding changes because:

. . . under the proposed changes the government will provide a capital regeneration subsidy of $5 a day per bed for financially disadvantaged people while the payment of an accommodation bond will generate an average of $19 per bed per day for non-financially disadvantaged Australians.

If the government is picking up the measly subsidy, then it is clear that you are much worse off.

Mr Jull interjecting—

Mr LEE —The minister at the table is grumbling away there but I am sure he would not describe this group as being in any way associated with our side of politics. On 11 May the Alzheimers Association of Australia, the Australian Catholic Health Care Association again, the Australian Pensioners and Superannuants Federation, the Baptist Community Care, Churches of Christ, Community Services of Australia and the Salvation Army aged care services issued a joint paper expressing their concerns about the impact of the aged care legislation on Australians with low incomes. All of these are being dismissed by government members as fellow travellers when these are organisations and individuals that have put enormous resources and an enormous amount of their own time into trying to look after elderly Australians and trying to make sure that disadvantaged elderly Australians in particular are not left behind as a result of the changes that this government is seeking to implement.

My other concerns in many ways have developed after I had a number of discussions with a person who lives within the electorate of Robertson. This gentleman's name is Mr Neville Boyce and he appeared before the Senate committee. Anyone who lives on the Central Coast knows that Neville Boyce is the former Chief Executive of the Central Coast Area Health Service. He very bravely attacked Labor and Liberal ministers for health over many years of distinguished service looking after the area health service. I would like to read a few quotes from Mr Boyce's submission to the Senate committee. On page 1 he says:

Having read the Aged Care Bill 1997 I would have believed, if the act had not come from the government, that these pages were written by the nursing home industry as they are so skewed to benefit the provider.

He goes on to say:

The proposed changes will cause great distress to the elderly and their families. How can the present government, without a mandate, introduce means testing and a capital contribution at the end of one's life span when entry into the public hospital system is almost free to the richest people of the country?

Mr Boyce goes on to make the point that on the Central Coast we are very fortunate to have high quality nursing home beds available to people.

The danger that Mr Boyce has raised is that, if you allow the market forces approach, disadvantaged elderly residents of the Central Coast will be priced out of the market. Of course, it does not take long to drive from the electorate of Bradfield to the Central Coast and we can imagine that, before long, residents of the northern suburbs of Sydney will be able to pay very large sums of money for access to the beds of the nursing homes on the Central Coast.

This a concern which has been raised by Mr Boyce in his submission to the Senate and it is a concern that I think should cause the member for Robertson (Mr Lloyd) to seriously rethink his strong support for this particular legislation. If that does not cause the member for Robertson to rethink his position I would encourage him to attend another meeting of the Self-funded Retirees Association at the Gosford Central Coast branch who, I know, have grave reservations about the impacts of these changes on elderly Australians on the Central Coast.

The crucial point is that the Labor Party's position is that we think nursing home care should be available equally to all Australians on the basis of clinical need rather than on the basis of their financial circumstances. It should really be considered the same as hospital care. If people need to be admitted to a hospital they are admitted. If people need to be admitted to a nursing home they do not do it by choice; they do it because of medical need and because they are assessed by the aged care assessment teams as having certain clinical conditions that require them to have that 24-hour nursing home care.

The final point I wish to make is that we expect that, unless something unusual happens in the Senate, this government legislation will pass in the not too distant future. The opposition will do all it can to try to persuade a majority in the Senate not to approve the legislation because we think it is unfair and it is going to hurt elderly Australians. But if, at the end of the day, we are wrong then we give every Liberal and National Party member of this House an assurance that elderly Australians in your electorates will hold you accountable in future days.