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Tuesday, 21 October 1997
Page: 9357


Mr BEAZLEY —My question is again to the Minister for Family Services, and we will try again to get to the bottom of his answer. Minister, will you concede that every $1 additional income tested fee that is paid by a resident of a nursing home reduces the government subsidy for that person by $1?


Mr WARWICK SMITH —What are you talking about?

Opposition members interjecting


Mr WARWICK SMITH —Look, the fundamental issue is this: under the budget papers we spent $2.69 billion on residential care, and that increases up to $3.2 billion by the year 2001. There is an average annual growth rate in that figure of some three per cent. The money that is paid by an individual goes to the provider; the money that is paid under that residential aid arrangement—that is, the subsidy from the Commonwealth—is paid to the provider. That is quite straightforward. Why can't you understand that concept? What happens is, under the means test arrangements, those who have a capacity to pay subject to the means test are asked to pay more. That, as I just mentioned to you, substitutes some of the money that is being paid, because we come back to the fundamental problem—that is, the increasing number of people moving into the aged care area and into facilities. We have to make taxpayers' dollars go further and it has to be fairer than it has been. These are issues that I am sure you looked at as finance minister. That is the simple situation and it has been explained to you now on three occasions.