Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Tuesday, 22 June 1999
Page: 7040

Mr ALBANESE (8:43 PM) —This bill, the Aged Care Amendment (Omnibus) Bill 1999 , will make a number of amendments to the Aged Care Act 1997 in order to address a number of problems that have arisen under that act since its promulgation. Labor will be voting against this bill in the House. As the bill was only tabled in the House on 10 June, we have had little time to consult interest groups over the impact of this bill. Further, while Labor accepts that the bill goes some way towards addressing problems that have arisen under the Aged Care Act, a number of issues remain unclear. As a result, we will be responding to the bill in detail in the Senate.

While Labor supports many of the measures in the bill, it is important to note that they address many of the problems we have been raising with the government for some time. In particular, we support the provisions that will ensure that those who were residents of nursing homes prior to October 1997 will be refunded any accommodation charges they have been required to pay. These charges were levied despite the assurances of the Prime Minister that residents of nursing homes would not be subject to the charge. The government gave a commitment to stop this practice only after pressure from Labor and after these residents had been paying the charges for almost 18 months.

The Minister for Aged Care knows full well that it is because of the pressure from the member for Chisholm, the member for McMillan and other members in this House that the government has been forced, dragged kicking and screaming, into taking some appropriate action—18 months too late, Minister. It was in the government's best interests to bury the issue of nursing homes in the lead-up to the federal election. The government's duty of care to the community was overridden by its sense of self- preservation. It is ironic that after such delays the government has attempted to rush this legislation through without allowing for the proper scrutiny of parliament. But that is consistent with the attitude of the government benches. The government, whenever it is confronted by a controversial issue, delays, prevaricates and hides. The minister is now, on a bill of which she has charge, walking out of the chamber because she does not want to hear what is happening in aged care in Australia.

I can understand why the government is eager to avoid scrutiny of this bill, as it symbolises the government's mismanagement of the aged care sector since coming into office in 1996. The bill provides a list of the failings of the Aged Care Act. If you want to know what the government has done wrong, just have a look at the bill. Go through the provisions. The provisions outline one by one the mistakes made and the attempt—a sorry attempt—by this government to fix some of the problems, once again only after pressure from the Labor Party on these issues.

Unfortunately for aged care residents and providers, the government has compounded those problems, born of haste, through its subsequent inaction. I will come back to those problems a bit later, but first it is worth examining the process that has led up to this bill. The government announced its aged care reforms in the 1996-97 budget, without extensive consultation with the aged care sector, and proceeded to implement many of those measures in October 1997 through the Aged Care Act. Remember that at the time Minister Judi Moylan—she now sits up the back—was the minister responsible. Again, it must be emphasised that this was all done without the benefit of any real input from the sector.

We should not forget that in the 1996-97 budget, along with these changes, the government announced $500 million worth of cuts to the sector. On the one hand, they came in here and said, `We're about reform,' but the real agenda was half a billion dollars of cuts to the aged care sector. This figure clearly demonstrates the government's motive for its so-called reform of the sector and it explains its undue haste to implement its changes. But of course it was not about reform; it was about the government's ideology of public sector slash and burn. Instead of safeguarding the interests of people who require nursing home care, the government seized the opportunity to save money and at the same time open up the nursing home industry to the forces of the free market. The government argued that this would be in the best interests of elderly Australians, but we all know that just a few people—friends of the government; the consultants and former members of the government—were the real beneficiaries of these aged care reforms; people such as the former member for Lowe who has had a very hard time of late. He was doing quite well as a consultant to the Moran Health Care Group at the time that these reforms were coming in. At best, the government failed to recognise, at worst it refused to admit, that if you adopt a free market model then you must accept that profit rather than accessibility, affordability and quality of aged care becomes the goal.

At the same time the coalition suffered its first casualty in the Aged Care portfolio: the then minister suffered a demotion for her rather pathetic efforts to disguise the half a billion dollar budget cut as aged care reforms. Unfortunately for the new incumbent, the then member for Bass, Warwick Smith, was appointed the new minister.

Mr Zahra —Where is he today?

Mr ALBANESE —He arrived just as the government started paying the price for its rush to reform the aged care sector and its lack of consultation with the sector. The member for McMillan may well ask where the former member for Bass is today. Perhaps he is a consultant, along with a number of other former Liberal Party representatives such as John Hewson, Bob Woods and all those failed Liberal party politicians who have ended up as consultants in this area. But it has got to be said that, within a month of the Aged Care Act coming into force, the Prime Minister appeared—not in this parliament; he did not come into this parliament to announce a change—on A Current Affair to announce yet another change in policy, abandoning the proposed accommodation bonds in the face of widespread concern. Soon after taking up his post, the minister had to front an angry audience on the Midday Show to try to explain how cutting half a billion dollars from the aged care sector would not lead to a reduction in the quality of care delivered to older Australians. He was about as popular as was the current Minister for Aged Care, the member for Mackellar, when she went to a meeting as the grand leader, the future leader, of the Liberal Party. The poor member for Bass had to go along and defend the half a billion dollar cut on the Midday Show . Who can forget how angry older Australians were at that time about these changes.

But of course it did not stop there. On 5 March 1998 the government tabled the Aged Care Amendment Bill 1998. The bill currently before the House mirrors many sections of that earlier bill. Both list a number of problems that have arisen in the aged care sector because of the Aged Care Act. So, within three to four months of the Aged Care Act coming into effect, the government had already discovered a large number of problems in the system—problems that were a direct result of the government's rush to make changes in the aged care sector.

I want to outline to the House some of these problems. The first relates to residents being charged for places by providers before they arrive at a facility and even before they have accepted a place. Under the Aged Care Act, it is possible for providers to charge people fees `before the person has formally agreed to take up a place'. That would seem to be a significant problem. Think about the parallels. In what other form of service provision do you have to pay a fee before you agree to accept that service? And yet it is in the legislation. It would seem to be a significant problem with the legislation. It did indeed need to be remedied.

Secondly, the department is unable to revoke provider status where the provider has committed serious breaches of the act including fraud. Under the act, the department has to shut down an entire facility, which would require the immediate relocation of all residents. Where there are not sufficient alternative places available, the department has no choice but to allow the provider to continue to operate. There are some providers that are currently in this position.

Thirdly, the act does not recognise residents in aged care that are financially responsible for children who were not actually living with them, nor does it recognise grandchildren who lived in the same house as `close relatives' of the resident. People in these situations, who are currently disadvantaged, have been forced to rely upon the discretionary hardship provisions under the act—surely an unacceptable situation.

Fourthly, where a person entering a facility has a mental impairment and has not yet had a financial administrator appointed, it is impossible to sign the required entry agreements within the seven days stipulated. This leaves people in this situation in a precarious position, with the potential that providers might refuse them entry.

Fifthly, because the government repealed the previous legislation and the Aged Care Act does not provide for sanctions under those previous acts, the department cannot impose sanctions where a provider committed breaches prior to 1 October 1997. Through sloppy, bad, regressive legislation, the government has in effect granted an unintended amnesty to those providers who had committed breaches under the previous acts.

These problems in the system have placed great strain on families already in crisis. When a person requires nursing home care, it is not something that can be put off while the families involved sort out the finer details and shop around for the most suitable accommodation. People do not choose to go into nursing homes. It is not a lifestyle choice. It is not an option—it is a medical necessity, and it usually needs to be organised in a hurry. So Labor believes that it is the government's responsibility not only to provide the funding necessary for high quality, accessible and affordable nursing home care but also to ensure the process is straightforward. Labor is concerned that this bill does not go far enough in ensuring that the process involved in arranging a nursing home bed meets the essential criteria of quality care, accessibility and affordability.

The bill before the House also formalises the accommodation charge in the act. We have a number of concerns about the accommodation charge and its effectiveness in funding the capital requirements of the aged care sector. Despite the government's assurances, many older Australians have had to sell their homes in order to pay the charge. Remember in the last parliament we had ministers saying, `It hasn't happened.' We had to come in here and give practical examples before the government would concede what was going on in the community. Given the often traumatic circumstances in which a person enters a nursing home, the last thing they need to worry about is having to sell their home at short notice in order to pay the charge.

Meanwhile, providers have come to us complaining that the accommodation charge does not deliver the up-front capital they need to meet the certification standards that they must all meet by January 2001. We also have concerns that, under the bill, providers will not be required to actually spend the money raised through the charge on capital improvements. The whole logic of the government's position and rhetoric on this issue was all about capital upgrades. Surely then the legislation should ensure as a minimum that the government's own objectives are met, but that has not occurred. While the bill includes a rule to that effect, the department has informed us that it will do nothing to ensure that providers abide by that requirement.

The bill contains a number of other technical amendments that address other problems under the Aged Care Act. Having identified these significant problems and drafted legislation to address them, the government then made a blatantly political decision to minimise its exposure on aged care. The bill did not get beyond the government's second reading speech in the Senate on 26 March 1998. It was running up to the next election and was obviously eager to limit the damage from its failed aged care policies. Knowing that there were a number of serious problems in the system caused by these hasty reforms, the government chose to drop the bill that would address those problems. It put politics before good policy. Here is a government that was content to put its own short-term political interests ahead of the interests of the 135,000 aged care residents in Australia.

Then, as 1 July 1998 approached, we saw another problem emerge. The sector was concerned about the impact of another of the government's key so-called reforms—the coalescence of nursing home subsidies which was due to take effect from that date. The government has proposed an arrangement whereby the different nursing home subsidies paid across the states and territories would be brought together to a single national rate. Accountants and perhaps some economic rationalists on the other side support the mathematical neatness of the proposal, but it ignores the fact that the cost of providing aged care differs across the states—which is the reason the subsidy paid to providers differs.

It would be like arguing that housing costs for non-aged care people do not differ across the states, across regions and across cities. A major cost in providing care is the cost of labour. The government knows well that wage rates do vary across the states. Even more significant is the huge differences in real estate prices between the states in urban and rural areas. To argue that the cost of setting up and operating a nursing home in the eastern suburbs of Sydney would be the same as for a nursing home in Dubbo is just a nonsense. As a result, this arrangement is clearly flawed.

With the 1998 election looming, the minister tried to sweep the sector's concerns under the carpet by announcing a Productivity Commission inquiry into coalescence. In the words of the minister, this would be a `comprehensive' and `independent' review of the government's proposed move to uniform nursing home subsidies. The government set a reporting date of 13 January 1999 for the inquiry. The minister also sent a letter to the industry—just prior to the election—which gave commitments that yet more problems with the system would be fixed by the coalition if re-elected. It is an interesting tactic: you promise, if re-elected, to fix the problems that you have caused.

The government recognised that they had created a complete mess of the system, but they said, `Give us another go, and we will try to fix it up.' They almost acknowledged how wrong they had got it. Despite these desperate attempts by minister No. 2—Warwick Smith, the member for Bass—he became the second coalition casualty of the government's aged care reforms. He lost his seat. The new, improved member for Bass, Michelle O'Byrne, made sure that all of the people in the electorate of Bass knew what a mess Warwick Smith had made on this issue. It is one of the prime reasons why Michelle sits in this House today and why she will be here for some time to come.

We then moved on to the third coalition Minister for Aged Care. So we had Moylan gone, sitting up the back. We had Warwick Smith, gone completely. Who did they pick? Who would you want to bring in but the member for Mackellar? You can imagine it: the member for Mackellar, once touted as the future leader, the great right wing hope of the Liberal Party, being told that she had the poisoned chalice of aged care. Two colleagues had already sacrificed their careers to this government's half a billion dollar cuts to aged care and the hasty reforms they used to justify those cuts. The member for Mackellar must be desperate to avoid their fate.

We now know how desperate she is, because for the last nine months she has done as little as possible, obviously on the assumption that if she decreases her profile—this is a person who once was just running in front of every camera in the country, but now she is the invisible minister—she will minimise the opportunities for making mistakes. The head in the sand technique may work for ostriches but not for government ministers.

Unfortunately for the aged care sector, this policy of inaction could not have come at a worse time. Having suffered because of the government's rush to bring in changes, the sector now cannot get the minister to make the decisions needed to resolve the many problems those so-called reforms caused. Good government is about taking time to develop sound policy, with the involvement of all stakeholders, while moving decisively to resolve urgent problems. This government rushes into change without thinking and then refuses to fix up the problems that result.

The minister's desperate policy of inaction is no more obvious than in her dealing with the Productivity Commission's report into coalescence. The inquiry duly reported to government on the appointed date, 13 January 1999. That left the government six months to respond to the report's recommendations before 1 July 1999 when the next stage in coalescence is due to take effect. Weeks went past. Months came and went, but no announcement was made. The report was not even tabled. The sector started demanding a response. It needed certainty of funding, and coalescence went to the heart of the funding arrangements that would apply for the next seven years.

On 31 March 1999, 11 weeks after the Productivity Commission's report was handed to the minister, it was finally made public. An interesting date, 31 March 1999—after the New South Wales state election. There are seats with a high aged population, such as the state electorate of Tweed—the member for Richmond's electorate. I was very happy to visit it during the state election campaign to see my friend Neville Newell, who now visits me in Sydney when he is in parliament in Macquarie Street as the member for Tweed. So it is no wonder they delayed releasing that report.

Let us look at what that report found. It found that the government's proposal for coalescence, a key plank of its aged care reforms, was `deficient in several important respects' and should not proceed. It found that under the government's policy the quality of care provided to residents would become the balancing item in the funding arrangements for nursing homes—in other words, the quality of care delivered to residents in some states would fall as a direct result of the policy. This was the report card on the government's policy after a `comprehensive' and `independent' review. Yet there was still no response from the minister, apart from a misleading media release that claimed that the report supported the government's policy. That media release also stated:

The report raises a number of issues that the government will consult on, and make a decision about, in coming months.

The sector was consulted about coalescence for six months by the Productivity Commission and is generally satisfied with the report's recommendations. It does not want or need more consultation on this issue.

Almost a year after the government admitted that its policy of coalescence needed to be examined, and almost six months after the government received the report that does not endorse this policy, we are still waiting. To date, the minister has not responded to the Productivity Commission's report. I would have thought this debate tonight was an opportunity for her to do so; but no, she left the chamber because she was not interested in debating these issues.

If the minister has been doing as little as possible, why do we suddenly see a new amendment bill before this House? The reason the bill is before the House today is that Labor pushed the government to meet its commitments to those residents who were in nursing homes before 1 October 1997. In response to questions from Labor in the Senate, the government undertook that where these residents had paid the accommodation charge they would be fully refunded and would be no longer required to pay the charge. It is only because legislation was required to fulfil that undertaking that we now see sections of the previous amendment bill reintroduced, over 12 months after the government was aware of the significant problems that those provisions seek to address. It must have been with some reluctance that the minister agreed to introduce this bill into the House.

Unfortunately, the government has not taken advantage of the delay in reintroducing this amendment bill to ensure that many of the other technical problems under the act are addressed. I want to outline these for the House tonight. Firstly, self-funded retirees are potentially in the position of not being required to pay the accommodation charge, but they are not eligible for the concessional resident supplement. This means providers stand to lose $12 a day if they accommodate such a person. Given the minister's exhortations to the sector to act commercially, self-funded retirees may be denied care because of this loophole. Secondly, and similarly, where a person in a rural or remote region has a house that is worth less than $23,000, they too may not be liable for the accommodation charge, but they are ineligible for the concessional resident supplement—they miss out.

The government has not used the time since March 1998 to thoroughly review the impact of its legislation and to ensure that all the problems that have flowed from its hasty changes are addressed. The parliament needs to be confident that this bill addresses all the problems in the aged care sector, not just the ones that the government identified over 12 months ago.

As I signalled at the start of this speech, Labor will be opposing this bill because of the lack of time provided to consider its implications and scope. The aged care sector deserves proper parliamentary scrutiny of any legislation that will apply to it. Given the fact that we now have members in the chamber such as the member for Chisholm and the member for McMillan, that scrutiny is happening. But we need leadership from the government rather than being forced to respond to backbench members representing their constituents. Given the government's lengthy delay in implementing these measures, its sudden desire to rush them through with a week's notice simply cannot be justified.

We support many of the measures in this bill. Many of them do seek to address problems with the Aged Care Act that we have raised with the government time and time again—now with three separate ministers for aged care in this government. Labor will be responding to the measures in detail in the Senate and we are willing to cooperate in ensuring that the measures are implemented as soon as possible.