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Wednesday, 25 March 1998
Page: 1501


Mrs CROSIO (11:29 AM) —If at the Academy Awards last night there had been an award for the best minister in delivery of understatement, I believe the Minister for Family Services (Mr Warwick Smith) would be in the House today with a gold statuette. Let me refer to some of the statements he made in regard to the government's aged care reforms, delivered in his second reading speech on this Aged Care Amendment Bill 1998 on 5 March:

However, as with any reform of major significance, it has become apparent that there are some issues that require finetuning and others that relate to the administration of the act that need addressing.

And how about the other one when he stated in that second reading speech:

These changes are the result of the government listening to and responding quickly to address these issues. We have acted in a timely and sensitive way to keep the benefits of the aged care reforms flowing to consumers now and into the future.

To say that this Howard government's Aged Care Act needs finetuning is like saying the Titanic needs a bit of drying out. For all the minister's flowery words and sentiment and his astonishing gift for understatement, the Aged Care Amendment Bill 1998 represents the culmination of almost two years of ham-fisted incompetence on behalf of this government. It stands as a beacon to its abject failure to understand the needs and the concerns of one of the most important sectors in our society—and that is the elderly. It represents ministerial failure of the highest order—failure that has already seen one minister shuffled sideways and out of harm's way for her troubles. It represents arrogance and an unwillingness to listen to the voices of ordinary Australians—voices raised in objection to a series of measures which they view as attacking some of the very principles that underpin our nation and, most certainly, our system of health care in this country.

This bill represents self-deception and self-deceit, a point-blank refusal of government members to either admit to or face up to what was palpably obvious to everybody else—that its aged care reforms would force elderly Australians into selling their house in order to get a nursing home bed. Yet with this piece of legislation—the Aged Care Amendment Bill 1998—the self-delusion continues. We have a government intent on shying away from the central issue that people will still have to sell their homes in order to pay the accommodation charge that this bill introduces.

This bill marks the culmination of 14 separate changes to the way the Howard government has put together its aged care reforms since it first announced them. The nursing home sector, the elderly in Australia and their relatives and their loved ones have waited almost two years for the government to get these reforms right. Where they expected sensitive deliberation and forethought they have now received confusion, uncertainty and anxiety.

If the Howard government had truly been listening to the issues `raised by some older Australians', to use the minister's words, we should then expect this bill to actually get it right. That it does not speaks volumes about how the minister defines the word `listening'. The Howard government, for all its public humiliation on this issue, for all the brickbats it has received from the elderly of Australia, from the church and community organisations and from the nursing home sector, has still managed to get it wrong with this bill. It is still intent on introducing a reform that will affect the elderly in the same way as its original reforms—the bottom line being that it will still force people to sell their homes to get a nursing home bed.

Let us take a look at the centrepiece of the fall-back position of the Prime Minister (Mr Howard), his `warm and cuddly' alternative to the ill-fated accommodation bond—the accommodation charge. With this legislation, nursing home residents now have to pay $4,380 a year—or $12 per day—if they have assets of over $44,000. Those with assets of between $22,500 and $44,399 today pay extra fees on a scale from $1.37 to $9.50 per day. The payment arrangements may have changed from the government's original plans but one thing remains the same: the family home is still part of the assets test for these new accommodation charges. Over 70 per cent of aged pensioners have only one asset—the family home—and the last time I looked most homes, even one-bedroom flats and units, sold for more than $44,000. That being the case, as a result of this legislation most pensioners will face the highest level of fee upon entering a nursing home, and for many the only way they will be able to pay that is to sell their house. The Prime Minister made it clear after appearing on the Ray Martin show in November last year that his government was going back to the drawing board on these reforms. He said the family home was now safe. But, until the family home is taken out of the assets test, it is not safe; it is under threat.

This bill is less of a backdown in more ways than one. Elderly Australians entering a nursing home actually end up now paying more under this legislation than they would have previously. Under the bond scheme, a nursing home was allowed to retain only $2,600 per year for five years—a maximum of $13,000. With the annual fee, residents will find that after five years they have paid $21,900. And, if a nursing home resident chooses to rent their house to pay for their care, they will pay much more. For example, if the house earns $200 per week in rental, a resident will end up paying almost $15,000 after taking the daily fee, the new annual fee and the taxes on the rent into account. This is on top of the additional daily fee that came into effect earlier this month—the Howard government's nursing home tax. The extra daily fee is 25c of every dollar of private income over $50 per week. The maximum extra daily fee a nursing home operator can charge is $36.90 a day or over $250 a week. This revenue, despite the minister's attempts to claim otherwise and despite his attempts to mislead the House on this issue, does not go back to the nursing homes to be used for maintenance or to improve services for residents. This revenue goes straight back into the government's own coffers.

The minister stood in this House in question time on 9 March and claimed:

The money raised by daily fees goes to nursing homes; it does not go to the government. It goes to upgrading nursing homes . . .

His words. This is despite the across-the-board understanding of the nursing home industry and of aged care peak bodies that the money was destined for the Treasury. In a joint press release issued by some of the largest providers of nursing home care in Australia—the Australian Catholic Health Care Association, Anglicare Australia, Baptist Care Australia and the Uniting Community Services Australia Peak Body—it was stated in direct contrast to the minister's assertions:

In actual fact, the extra daily fees do not contribute any extra money to the upkeep of the homes, the care of the residents or the future development of the services.

So, one may ask, where does the money go? Whose word do we trust: the minister or those organisations representing the four major Christian churches in this country? I do not think you have to be an overly religious person to know the answer to that one.

It is not hard to see why neither the nursing home industry nor elderly Australians are yet to express their full confidence in the government's new `redesigned' aged care reforms. Despite this government's assertions that this bill will put into place, once and for all, a fair and reasonable set of reforms, even the most cursory of inspections reveals that serious problems remain, problems that threaten the survival of the nursing home industry as we know it and that will affect the standard of care offered to our elderly.

Debating this bill, it is worth remembering that the Prime Minister's so-called backdown on accommodation bonds, his retreat to the position we now find the government taking, has not occurred because of a sense of altruism on his part. It has not occurred because the Prime Minister can't stand to see the elderly of Australia suffer the anxiety and concern that his changes have brought to them; it has occurred solely because the Prime Minister was confronted by the political realities of the situation he had brought upon himself and his government. The political reality was that he was being caned in the opinion polls over of this issue, especially by the over-55s—and so he should be—and, as such, was entering dangerous waters in the year long run-up to the next election. We must remember that a year ago the Prime Minister was wholly supportive of the draconian measures his government originally introduced for nursing homes. He said, just 12 months ago, in March 1997:

Our approach in this area is fair and balanced.


Mr Martin Ferguson —He didn't!


Mrs CROSIO —He did, in March 1997. It was only when confronted by the polls, confronted by the political reality of what sort of damage his reforms were doing to his government, that the Prime Minister agreed to a number of changes. On October 15 last year he said, in regard to the aged care reforms:

We are not going to alter the arrangements in the short-term.

And yet 12 days later he was talking to journalists about the minor changes he con sidered necessary to save his government's skin. He said:

I think they represent the right amount of fine tuning and I wouldn't see any other changes as being necessary.

The Prime Minister was adamant that there were to be no more changes to the act, that is, until he realised the minor changes he had put in place had not stemmed the bleeding of support away from the government in the opinion polls on this issue. The Prime Minister saw no option other than to scrap the accommodation bonds in November last year.

Aided and abetted by the two ministers who have handled the portfolio responsibilities for these reforms, and supported by his vast back bench, the Prime Minister for more than a year has refused to admit that people will have to sell their homes to get a nursing home bed. Now, he was pronouncing that the family home was, in his words, safe. Safe from what?

If, as the Prime Minister has assured Australians, the family home was not under threat in the 12 months prior to this backdown, what was he doing now saying it was safe? Why should anyone believe him when he says it is safe now? The Howard government has had almost two years to sit down with the groups representing the interests of older Australians and the representatives of our nursing home industry and come up with a set of reforms mutually beneficial to all sides of this debate. It has had an opportunity, with the backlash its changes provoked and with the Prime Minister promising a rethink on the issue, to come back to this parliament with a raft of reforms that not only would give the nursing home industry the support it needed but also offer reassurance to older Australians. It has certainly missed that opportunity with this bill.

This bill, while marking the culmination of almost two years of stuff-ups and bureaucratic bungling, also stands for more of the same insensitivity from the Howard government. As late as yesterday, a number of groups came together to issue a press release—and I hope it was issued to every government member and I hope, if the Prime Minister hasn't read it, somebody will bring it to his attention—on the welfare sector's call for urgent action on aged care. That sector comprise Uniting Community Services Australia, the Australian Catholic Health Care Association, the Australian Pensioners and Superannuants Federation and the Salvation Army. They stated:

The Federal Government must have a specific capital funding program. Capital funding is critical to the maintenance of high quality aged care.

They went on to a number of issues. They believe:

Institutional poverty will become a reality for full pensioner residents in hostels because of the loss of $11 a fortnight of disposable income.

They have also brought up the point that it is impossible to remove hundreds of millions of dollars from the aged care system without a drop in the level of care which ageing Australians are now entitled to. We are saying to the government it has no choice but to spend more—or the system will decline—the aged care system we know in our society will fail.

The government displays more of the same readiness to inject concern and anxiety among the elderly in this bill today, more of the same politics that chooses commercial interests over those of the community—one set of interests at the expense of all others—rather than forging an equitable balance between the two. From looking at the contents of this bill, I can see that the Howard government has not learned its lesson. Perhaps it is a lesson that can be learned only at the ballot box, and I know the over-55s will be marching with their feet. I certainly do not commend this bill; I condemn this bill for the way it's going to affect the society that should have care from the legislators at this stage of their life.