Mr ALLAN MORRIS (8:51 PM) —At the very start let us get it very clear. I came into this parliament in March 1983, and we were advised within weeks that the previous Treasurer had been advised prior to the election of a deficit in prospect of, in today's equivalent, $25 billion. He did not deny that. In other words, the current Prime Minister (Mr Howard) had been told by Mr Stone from Treasury before the election in 1983 of the deficit in prospect on his budget of August 1982. Quite frankly, I get fed up with the kind of hypocrisy and cant coming from the government about the supposed deficit, which was not authenticated, which was not documented. Originally it was $6 billion, then $7 billion and $8 billion. Every month the number kept changing. Quite frankly, I find it just a little bit tiresome.

Despite that deficit, despite the double digit unemployment, despite the double digit inflation, despite the fact that in 1982, with John Howard as Treasurer, the manufacturing work force declined by eight per cent in one year alone—despite all that—we managed to lift pensions, we managed to extend benefits, and we managed to introduce hostels, which were barely in existence at the time. We managed to extend support for people who needed it. We could have done what those opposite have done, and are still doing, which is rip into the system, blame the victims—whether they be Asians, blacks, pensioners or people in nursing homes—blame somebody else, and become the pawns of Treasury and Finance.

So-called fiscal responsibility has been social irresponsibility. The debt that you are building up in this government is not about money; it is about social capital. It is a social debt. If you keep up this kind of line, you will pass on to generations ahead a burden they will not cope with. I suggest to anybody who is observing this debate on the Aged Care Amendment Bill 1998 that they go back and read the speeches of the same people on this original legislation—hear them justify and defend the ripping away of half a billion dollars from the aged care sector, because they did not mention that.

Tonight we have had the previous speaker, the member for Griffith (Mr McDougall), talking about the condition of nursing homes. You would think that this was about benefiting nursing homes. The fact is that this legislation is financial. It has nothing to do with nursing homes; it is about money. It is about finding a way to make up for the half a billion dollars the government has cut out of the budget for residential aged care. That is what it was about the first time around. That is what it is about right now. It did not work then, and it does not work now.

But, in the meantime, what are you doing? You are blaming the victim. You are shooting the messenger. On the one hand, the government says, `You ran a scare campaign.' Then we hear tonight, from speaker after speaker, how the government listens to the people. If it was only a scare campaign, why would you have listened? Let me tell you why you listened: it is because you have been deceitful all the way through. You have tried to pretend that what you are trying to do is improve nursing homes, when we know that is not the case.

Two of these amendments go to matters where I had constituent submissions which I wrote to ministers about. The first was the five-year cohabitation issue. A constituent of mine had been living with her father for two years. She had left her job and left Sydney to come back home to care for her father. She was a woman in her 50s, so the prospects of finding work again were remote. When he had moved to a nursing home, as he was required to do because she could no longer care for him, not only did she have the burden of the guilt from not being able to care for her father any longer but also, as the sole beneficiary, she was required by your legislation, which we are now amending, to sell the family house to pay the up-front fees. You brought it back to two years because of that particular case. Week after week, the minister in this place insisted we were making that up, yet the correspondence was in her office all the time.

The second case involved the retrospective application of the $10,000 per year gifting provisions, which went back five years. I had a case of that as well. The family was bereft. The mother was going to be devastated by those provisions. Week after week, the government denied, procrastinated, stonewalled, accused us of scaremongering, said it did not exist, did not answer the correspondence for ages, and eventually capitulated. If I had not done that, could I have been said to have been representing my constituents? Of course I couldn't. Yet week after week I have heard—and I am hearing it again tonight—that we were scaremongering. The hypocrisy in this debate is breathtaking.

Let us get the figures right again. The 1996 budget took out of the residential aged care system half a billion dollars over four years—$130 million a year. The legislation for up-front fees was brought into this place and went through the parliament to recover that money—not to give extra money to aged care; simply to recover that which had been taken out. Your so-called deficit policy was off the backs of the families of people who needed residential aged care, nursing home care. That is where it came from—half a billion dollars of it.

In the same way that you attacked the students, in the same way that you attacked the unemployed, in the same way you attacked a whole range of other people—people who wanted to sponsor a spouse, a brother, a sister, a niece, a nephew—you attacked this sector. At first, the nursing home sector thought you meant what you said. They said, `This is terrific. Up-front fees will be great. It will be very helpful.' They did not understand what you were really doing. When they did and they made that clear, the government then started to change its tune.

There are a couple of things that need to be understood as well. There is one other aspect of what the government has done which is not in the legislation; it is about breach of contract. I want to quote yet again an example I have quoted in this place more than once to date because it is important that those opposite and the community at large understand the depths to which this government has sunk—and I say `depths' with some thoughtfulness. Maroba nursing home in Edith Street, Waratah, is a nursing home and hostel. A couple of years ago, they received a grant for $400,000 to upgrade and to extend. The grant was to be paid over 10 years at $40,000 per year. Altogether, they spent $1 million on their facility. That money was spent before this government came to power.

From recollection, when the announcement came out in the 1996 budget, they had received only two payments of that $40,000 a year. In other words, they were still owed $320,000. They were advised by letter, from recollection, in late 1996 that they had a choice: they could take up-front fees, or they could take their grants—but they could not have both. This was from a government that is telling us it is about getting extra spending for nursing homes to repair damage, to upgrade facilities.

This group had spent $1 million already; it had counted on the $400,000 from the Commonwealth to help pay for that. Of course, up-front fees were about the future, about expansion and improvement—not about paying last year's bills, which is what we are talking about. The contract they entered into was with the Australian government, as far as they were concerned. It was not with the Labor Party or some other party, but with the government. The composition of the government may change but, as far as I am concerned, its contracts do not change. That decision by the minister to revoke that contract, to my mind, is one of the most blatant and disgraceful breaches of faith one can imagine.

That organisation—which is run by a church group, incidentally—now has to go out and try to raise the money. This is $320,000 that organisation has been dudded on. This is not some concoction; this is a sheer breach of contract. Mr Deputy Speaker, you may have noticed that some organisations are looking at taking legal action. I hope they do. I hope that we, in this chamber and in the other place, will move amendments to say to the government, `You've got to keep your contracts. You can't break a contract that was entered into in good faith; you've got to keep it.'

Let the government vote in favour of breaching its own contracts as a government. That is what it has done. It is what it is doing right now. And, at the same time, we get this cant from those opposite about how this is about lifting standards. It is about ripping $½ billion out of somebody else's pockets—and what for? To create a social debt.

Money is always payable. Social debts, once incurred, cannot be recovered. They live on in people's psyche and in people's spirit, in their bodies and collective memories, for years and even decades to come—the hurt we do each other now, with this kind of social engineering. And that is what it is: it is social engineering of the worst kind because it is deceitful, dishonest and hypocritical. Social debts that we incur cannot be repaid.

We will pass on to our children and our children's children an enormous number of assets. They will inherit roads, railway lines, ports, buildings—a whole range of things. But they will also inherit an amount of debt. Let me tell you: in my period in government, asset building vastly exceeded debt building—vastly exceeded it. We built a lot more assets in our society. For starters, just look at the national highway. Look at its current replacement cost compared with what it was when Labor was in government; look at what it would cost to put it in now.

The debts that we are passing on to our children, our grandchildren and future generations are accompanied by assets. As I have said, I have no embarrassment or shame—simply pride—that we improved the asset value much more than the debt value of what we are passing on. But what I cannot explain, what I cannot justify, is the pain we are passing on.

If we had not brought to the attention of the House and the government the kinds of problems that the legislation imposed, the woman of whom I spoke earlier would have been devastated and destroyed. I can tell you: the impact on that woman of what the government was doing was just unbelievable; she could not believe that any government would do that to her. Then there was the effect on the family of that mother's gifting—her giving her cash reserves to her grandchildren to help put deposits on houses; the govern ment was going to act as though she still had those cash reserves.

This woman does not get a pension. She is a full fee payer. She has no benefit at all. She was not performing any clever family trust trick—and that is what I find so appalling. Here we have good honest citizens, with, in so many cases, a house being all they have. I wonder who owns the houses of all those members in the government with family trusts; does the family trust own the house and, therefore, it is not affected? I am sure it probably does.

The way in which we see the government functioning, its members defending the use of artificial devices to protect assets for their children, and boasting about it—and then for us to see that government ripping into the assets of people who did not create that kind of artificiality is breathtaking in its hypocrisy. I suggest that people who speak in this debate go back and look at the speeches on the previous legislation to see how much has changed. Who and what are government members defending? They are defending the decision of Finance and Treasury to cut $½ billion. So no amount of talk about standards and all the rest will make up for that. It is about time that a few of them got a bit honest about it and actually came up-front and explained what they are doing.

The second fundamentally important thing that is going on in this debate is to do with the introduction by the government of the accreditation and assessment process that has taken place. I am sure that this has been mentioned in this place before: there has been correspondence from the nurses association, particularly up in the Hunter, regarding the way in which a single assessment instrument is being developed for nursing homes and hostels.

This is a complex issue, but it is fiendishly clever what the government is doing: the government is completely rewriting the actual schedules of assessment in a very clever way. The effect of it is to give a greater amount of money to people who are much more frail, particularly people suffering from Alzheimer's. That is understandable; we are aware that we have a problem there. But, rather than doing it by increasing expenditure, the government is shifting funds from the other recipients.

The compression and shifting of scales that is being undertaken in the resident classification scale or in the changes to it is going to mean two things—and, quite frankly, one cannot be sure what it will mean eventually because it is still such an experimental exercise. There are no pilots going on. This has not been tested in a pilot and proven through. This has been brought in with a bang. With this government, once again, we have the big bang theory. We are seeing it in the employment market. We used to be accused of being social engineers. These people are social engineers par excellence everywhere—not only with our aged, but with our frail and with our families.

I referred to a letter from the Hunter region aged care facility directors of nursing associations. Firstly, these people are all professional nurses and, secondly, are involved in directing aged care facilities. They have written a letter of some length and detail expressing an absolute abhorrence at what is happening. They are concerned about a significant reduction in direct care subsidies associated with the instrument. The compression of scales means that the payments per person of the different scales will be shifted. In regard to that one nursing home I mentioned earlier, if that scale were applied now to the current residents, they would be $100,000 a year worse off—bang, instantly. There goes $100,000 on their bottom line. This is a church group. They have already lost $320,000 in grant money. They are having trouble with the up-front fees question. They share the pain of the half a billion dollar cuts anyhow. With this instrument coming in, there is a $100,000 effect on current residents. If they were to have those residents come in now on this current scale, that is what the effect would be.

Mr Deputy Speaker Quick, you were not in the chair when the previous speaker, the honourable member for Griffith (Mr McDougall), made a point which I think is worth pointing out. He made the point that in the aged care facilities around Australia 65 per cent of people are on the full pension. I think when he made that point he thought he was saying something fairly important. Sixty-five per cent of people in nursing homes and hostels are on full benefits. In other words, their income falls below the asset and income test levels. What he did not say was that the government legislation provides for nursing homes to keep only 27 per cent of the beds for people who cannot afford these fees—27 per cent, less than half. On the one hand, he tells us 65 per cent are currently in there. What the government is saying is that in the future it will be 27 per cent.

What is clear in all of this is that the government do not understand how nursing homes and hostels work. They do not understand the cash flow and the capital outlays. They never have and they still do not. What the nursing homes will have to do is maximise their income by seeking and accepting people who can pay the highest possible fees. It is the only answer they have. They are forced to take 27 per cent of people who have no money. Therefore, they are forced to maximise the others. What will happen will be a very simple selection process. Those who can pay the most will get in the fastest. Those who cannot will not. It will be as simple as that. Between 27 per cent and 65 per cent, that 38 per cent gap, what do they do? They squat. We heard about them squatting—squatting in hospitals, squatting anywhere. There will be nowhere to go. Yet we hear that this is about improving standards. It is a disgrace. (Time expired)