Mrs ELIZABETH GRACE (9:11 PM) —I am sorry that I have such a limited time to talk because I would like to spend most of the time showing the member for Newcastle (Mr Allan Morris) exactly where he is wrong in the things that he said. The last thing he was speaking about was the 27 per cent concessional patients and the gap of 38 per cent. I would like to point out to him that 27 per cent is the minimum, not a maximum. Anyone can take as many concessional patients as they like. The government has provided for a higher government subsidy for concessional patients in lieu of income that has been derived from the accommodation charge. Let us get that bit right first.

I turn to the second bit. Let us get the bit about cohabitation right. You were saying that because a lady in Newcastle had not lived with her father for five years she had problems because she had to sell her home. I would like to point out that under Labor there was no protection whatsoever for the family home. It was counted in the assets test under the hostel entry contribution, and there was no protection and there was no exemption. You have no right to stand up and accuse us of taking the family home. There was no protection there whatsoever for it.

I have good news for the elderly in Australia. This government has introduced a plan that will allow nursing home residents the option of renting their home and having that rental income exempt from the pension income test and from the calculation of daily fees. This policy has direct benefits to pensioners. It allows the pensioner to keep the family home, it gives the pensioner peace of mind knowing that some day they may be able to return to their home, it provides them with cash flow that does not affect their pension, and no-one will have to sell their family home to enter a nursing home. Even a staunch critic of the government, Francis Sullivan, from the Australian Catholic Health Care Association, agrees that no-one will have to sell their home to enter a nursing home. On 4 February 1998 he said on the World Today radio program:

The change in government policy means that people are not going to have to be selling their homes to go into a nursing home.

What about the tax on rental, I hear the critics ask. Yes, pensioners will pay tax on their rental income. However, as taxpayers they become eligible for a tax rebate of 20c in the dollar on their health care costs that exceed $1,250 a year. I also hear critics say, `But you will never reach $1,250 a year.' Yes, they will because as a result of a lot of hard work the tax man has been convinced that daily care fees for nursing homes should be considered as legitimate health care costs and are therefore tax deductible. This is great news for the elderly in my electorate of Lilley and for the rest of Australia.

Over the course of a year a resident's daily fees are approximately $7,700. Factor in the 20 per cent tax medical rebate, and a $1,290 deduction will be returned to the nursing home resident at the end of the financial year. It must be remembered that this $1,290 is just a base figure and does not take into account any other related health costs such as medicines or visits to the doctor.

I think everyone in the House would agree that a minimum tax rebate of $1,290, as well as a steady rental income, will go a long way to contributing towards a pensioner's accommodation charge of $4,380. This deduction under the medical expenses rebate is a significant relief for pensioners and their families. Allowing people to rent their homes without it affecting their pension entitlement is a good move on behalf of the government. It adds flexibility to the system and gives residents and their families a choice.

The good news does not stop there. I am in the process of lobbying the tax department to make a ruling on whether the annual accommodation charge of $4,380 can also be considered tax deductible. I am hopeful of a positive outcome and will keep the House informed. Part pensioners and self-funded retirees will also be able to claim this rebate, which effectively means that, if they rent their homes to contribute to their nursing home care, they will be paying minimal or no tax.

National Seniors Association Chief Executive, David Deans, in his press release on 11 March 1998, said that this rebate would soften the impact of nursing home charges and provide significant relief for self-funded retirees. Mr Deans used an example of self-funded retirees paying top-rate daily fees. The rebate would be $4,300 a year, which would almost cover the yearly accommodation charge in full. I urge honourable members to make sure this information is circulated to the seniors within their electorate.

This legislation puts in place the government's vision for our aged care system. It is a vision that includes a practical response to address Labor's legacy of inefficient and poorly maintained buildings, inadequate funding for dementia care, over-regulation, inflexibility, and the focus on paper work over the quality of care. The government's policy of creating a balance between public and private contribution will see over $850 million invested in the capital stock of nursing homes over the next four years—that is, $850 million without having to ask the taxpayers to pay more than the $30,000 per resident they are already paying.

The result from the national certification audit of nursing homes and hostels has shown that a disturbing number of nursing homes do not meet basic standards. This is a legacy of the 13 years of Labor neglect. This is the problem that Professor Gregory told the now Leader of the Opposition (Mr Beazley) about in 1994. This is the problem that Labor not only ignored but exacerbated by cutting nursing home capital funding.

Labor chose to ignore the findings of the 1994 Gregory report, which they commissioned, and, although these findings have been mentioned many times in this place, it bears repeating. The findings graphically sum up the crisis in nursing home care: 11 per cent of nursing homes did not meet fire standards; 15 per cent did not meet health regulations; 40 per cent of residents shared rooms with four or more beds; and 65 per cent of nursing homes did not meet required building codes.

Unfortunately, the system under Labor failed to stamp out poor conditions. The coalition will be working in partnership with industry and consumers to ensure that older people get the care and conditions they deserve. We are not blaming victims, as the member for Newcastle said; we are blaming Labor.

This bill also introduces strong protection for consumers and creates incentives for providers to invest in maintenance and improve building stock. It also ensures that older Australians have equitable access to aged care services that provide high quality standards of care and accommodation. No longer will they have to put up with substandard accommodation. Only good quality facilities will be able to charge an accommodation charge. If residents are required to pay an accommodation charge, every cent will be spent on improving the quality of nursing homes. None of it goes to the government.

There are also provisions in the act which require nursing home operators to meet stringent suitability requirements which enable the Commonwealth to take action against providers who, for example, have been convicted of serious crimes, such as abuse of residents or fraud. This sets a clear benchmark and allows for progressive improvement over time in response to future demands and expectations of an increasing proportion of older Australians. Elderly Australians and their families now have confidence that their chosen nursing home will offer long-term quality care.

Access to aged care will be based on need, not on ability to pay. Aged care assessment teams will continue to assess people on this basis. The coalition has safeguards in place that will protect people on low incomes, and every nursing home will be required to set aside a minimum of 27 per cent of beds for concessional patients. Another positive aspect of this bill is the reduction in the qualifying period for co-residents from five to two years. This protects spouses and dependent children who live in the family home.

The government has a strategy to combat the aged care problem inherited from Labor. The coalition strategy is built around people's needs. Dementia is a prime example. We have taken dementia funding seriously. We have made an election commitment of support for dementia care, including funding dementia-specific facilities, and we have delivered.

The new capital funding arrangements will provide an incentive income stream—$130 million over four years—to enable nursing homes to invest in improving building quality to better cater for the needs of residents with dementia. Building designs are an integral part of dementia care in providing a secure environment for those people who wander, assisting with orientation for those people who get disorientated, and enhancing accessibility to facilities.

I have personal experience with dementia patients. My mother was in care, as she was frail aged, and she was twice attacked by wandering dementia patients. Even though she was well cared for, the staff were unable to prevent this from happening. Therefore, I approve of this money that we are putting into dementia care to protect people like my mother.

We have a strategy which fixes today's problems and ensures quality care for the future. The coalition has acted where Labor failed. This bill will give people choice, improved facilities and access to quality care. They will not be inheriting a $10 billion debt. We will not accept a policy that has thousands of elderly frail Australians living in substandard buildings. We will not stand by and let the frail elderly Australians who need nursing care suffer in substandard accommodation. We will not slug the ordinary taxpayer of Australia to fund the guilt of the Labor Party. I commend this bill to the House.