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Tuesday, 25 November 2008
Page: 11391


Mr JOHNSON (7:17 PM) —I am pleased to speak on the Aged Care Amendment (2008 Measures No. 2) Bill 2008 on behalf of the people of Ryan, whom I represent here in the federal parliament. It is a great pleasure to speak on an important bill that goes to some very important issues. Any bill to do with aged care is a bill that affects, indirectly if not directly, every single Australian. Whether we like it or not, one indisputable fact is that we are all ageing, and national governments need to have, front and centre, policies in relation to aged care. It is acknowledged that we have an ageing population and we must focus on how to deal with this so that, in their later years, all Australians have a life of dignity and respect.

This bill is largely without contention, although there are a couple of reservations that the opposition has, and I might touch on one of those in the time I have. The legislation provides the regulatory framework for Commonwealth government funding for aged-care providers and provides protection for aged-care recipients. The principal objectives of the bill are to address current legislative inadequacies and to maintain effective regulatory safeguards to ensure high-quality care for frail older Australians; to promote public confidence in the aged-care regime; to provide a regulatory framework that is appropriate in an evolving corporate environment; and to ensure, as far as is practicable, that the financial interests of care recipients are protected.

Since the Aged Care Act 1997 came into effect, the industry has matured significantly, and it is probably fair to say that, some 10 years after that act came into force, it really is a very different type of industry. The setting in 2008 has evolved into multisite, multistate, multiservice operations where there are many complex financial and legal arrangements in place. But the last decade has seen a significant increase in the level of investment in the sector from large corporate entities, and the regulatory framework and contemporary business practices must mean that legislation needs to keep up with these changes. It is always difficult, in the legislative context, to keep up to date with changing and evolving technology, but we must try to do so. It is always difficult, in the legislative context, to keep up with changing business trends and innovative business practices, but it is the role of legislators and executives to keep our eye on the ball.

As I touched on in my opening remarks, I am pleased to speak on this bill because, when I was elected to the federal parliament in 2001, a central part of my maiden speech was on our ageing population. I would like to revisit that, because it is of interest to the people of Ryan that their federal member spoke on this issue in his first speech to the parliament, on 13 February 2002. In relation to public policy issues that I flagged I had an interest in, I said of aged care and the ageing of our population—because the two are intimately related—in my maiden speech:

The first public policy issue I wish it to be known I have a genuine interest in tackling concerns the ageing of our population. This issue is indisputably one of the most critical public policy issues facing our nation at the beginning of the 21st century. As Australia is not alone in this challenge—with most of the industrialised countries of Europe, as well as Japan in our region, confronting this issue—we must seize every advantage that goes with being the first to address the challenge.

The two main reasons for Australia’s ageing population essentially lie in the consistent decline in our fertility rates, combined with the increasing life expectancy of the baby boomer generation. When today’s baby boomers were children, they outnumbered the generation of people over 65 years by four to one. In the next two decades, for the first time, older Australians will outnumber the children of Australia. The first of the baby boomers reached 55 in 2001. It is calculated that by 2030, people over 50 will comprise 40 per cent of our population. Moreover, a quarter of the Australian population will be 65 years of age or over. By comparison, today the number of Australians aged 65 years or over is some 12 per cent of the population.

I end this section of my maiden speech with the following:

With forward projections showing that there will be more Australians over the age of 65 than at any time previously, the challenges confronting our country in a range of policy areas will be unprecedented.

This bill goes to some of those policy challenges and tries to tackle them. Whether it does so effectively, time will tell; whether we have to revisit this piece of legislation, time will tell. I hope it is a good bill and that it does its job. I think it is a reasonably good bill. The opposition has some reservations, but I am pleased that the government is focusing on this area, because, as I said back in my maiden speech, this is an area of immense importance to the country. The people of Australia are counting on their members of parliament, their executives and their legislatures to come up with good policy, with good funding models and with good regulatory regimes to protect our older Australians.

I refer the House to a very good and interesting article in Urban Connection on the profile of Australians. It referred the reader to ABS stats and talked of the population of our country growing from 20 million to more than 25 million between 2006 and 2031. It made this observation:

Those aged 55-plus represented 4.87 million people, or 24% of the population in 2006. By 2031 the number of over-55s will be 8.26 million, or a staggering 33% of the population …

I know that constituents of mine interested in policy in this area will be interested in the table in this Urban Connection journal, because it gives a very good breakdown of the demographics of the country, both contemporarily and projected as well. This is very relevant to this bill because this bill talks about legislation that will protect Australians in the future who will be in aged-care facilities. In 2001, the age bracket 55 to 64 was 10 per cent of the population. By 2031, that will rise to some 13 per cent or 3.189 million. If we go to the 65 to 75 bracket, currently that makes up seven per cent of the population or 1.338 million, whereas in 2031 11 per cent of the population will be in that bracket, or 2.856 million. The table breaks it down further into different age brackets. The total population in 2001 was 19.184 million and in 2031 it will be 25-plus million. They are very revealing and significant figures and policy makers should take them into account when they craft legislation.

I will now make reference to some of the provisions of the bill. The compliance factor is one that is of a little bit of concern to me. We must remember that primarily those facilities have as their very primary task the physical care of those in their jurisdiction or responsibility, so we have to be careful to get the balance right. We cannot have carers tied up in compliance so that they are not able to take the time to give quality care to their residents. There may well be additional financial burdens on approved providers in complying with the new and amended obligations under the act. At a time when many operators are in fact exiting this industry, the sector could be in a little bit of difficulty, so we have to be careful that the impossibly tight margins that they might be operating under are not made worse in the longer term. These obligations imposed by the bill may affect investor confidence in the aged care industry, so we have to keep an eye on that. This may have an impact on the number of bed licences available overall across the country. No doubt, many electorates will experience bed shortages. I draw the attention of local members who have an interest in this policy area to be aware of that.

Section 22 talks about losses. I want to touch on this, because this is quite important. Under a new financial instrument, the aged-care funding instrument, which commenced in March, assessments of older Australians entering aged care facilities do not often marry up with their actual care needs. What we find is that a reassessment needs to be undertaken and there are month-long delays before this takes place. During this time, a facility providing a high level of care only receives a low-care subsidy. If the resident is reassessed as being high care, the higher level of subsidy is not backdated to when the resident entered the facility. Facilities could potentially lose money and become less viable as organisations and bodies that take care of Australians in need of such care. We have to be careful with this provision and keep a spotlight on it. We do not want to have a situation where there is a negative financial impact on providers. We must note that if they are under significant economic constraint, we do not want the overall negative financial impact to mean that they close their doors. The last thing that this country needs in the context of an ageing population is to have facilities close their doors unnecessarily.

I might also note that I am under the impression that during this consultation process between the government and the industry the industry was led to believe that this inequity that I touched on about the gap between the care need and the care given was going to be addressed in the legislation—in other words, the funding was going to be made retrospective to reflect the care provided. But this clearly has not come to fruition.

Section 65 is significant, because it talks about the increased power to impose sanctions. The bill provides for a widening of the power of the federal department to impose sanctions on behalf of future aged-care residents, with the imposition of sanctions to act as a deterrent to future non-compliance. Let me say again that compliance with legal obligations is fundamental. But we have to go back to the starting point, and the starting point is getting regulatory requirements balanced. We have to make sure that compliance requirements are not counterproductive to what we are trying to do in the parliament or to the legislation’s purpose and spirit. There are considerable powers to impose sanctions and to revoke licences in the bill. It is not a trivial element of this bill. I hope that providers do not find themselves in the position where a licence revocation becomes an issue. The uncertainty and complexity in the bill is something that I want to put on the record. I go back to the central purpose and spirit of what we are trying to do, and that is to provide a legislative regime that at its heart protects recipients of care.

As someone who was in the Howard government for two terms of its 11½ years in government, I have no hesitation in saying that I believe that the Howard government left an excellent aged-care system in place. The former Howard government placed significant emphasis on wide-ranging reforms to deliver a higher quality and more affordable and accessible aged-care system that met the needs and preferences of older Australians. The Howard government’s reforms, as I touched on earlier, began in 1997, when the new aged care act came into force.

One of the elements of that act was the introduction of a national quality assurance framework for residential aged care that combined accreditation, certification and the aged-care complaints investigation scheme. These measures, I believe, have given the community a greater confidence in the quality of care and services and the standards of accommodation, as well as fundamentally protecting the rights of older Australians. The coalition does place significant importance on older Australians having quality care. We must do that in the years ahead. The government, no doubt, has goodwill in this area and has a genuine desire to do so as well. It is a question of balancing funds and priorities, which is the greatest challenge of government.

In my concluding remarks, I want to talk about the demographics a little bit more, because they are fundamental. We are an ageing population. I suspect that the majority of Australians do not turn their mind to such a significant public policy statement, but I also suspect that, if one were to have a conversation with them, most Australians would be very concerned about how their national government and indeed the opposition confront this policy challenge and ask what sorts of policies and ideas that we have. It will, whether directly or indirectly, impact on all of us, whether we become residents or we have loved ones in residential care. This must be central to how we govern, because it has enormous implications, not only in the social space but also in the economic space.

I will end my remarks on a couple of points that will be of interest to Ryan constituents who might read my presentation. There will be some 2.8 million people aged 65-plus. They will be 13 per cent of the population. There will be some two million people aged 70-plus, which is some 9.3 per cent of the population. By 2047, there will be seven million people aged 65 years and over, which will be a quarter of our population. In 2007, there were five people of working age to one person aged 65-plus. But in 2047, there will be some 2.4 people of working age supporting each person aged 65 years or over. During the 20th century, life expectancy rose by 30 years in developed countries. Let me make the interesting observation that the number of people over 100 years of age will increase from 2,860 people today to 78,000 Australians by 2055. That is an interesting and revealing figure.

Over the next 40 years—the next four decades—the number of Australians aged over 85 will increase some fourfold. These figures from our demographic profile clearly demonstrate that the ageing of our population is unquestionably one of the biggest social and economic policy challenges confronting our nation and our government, whether it is a Labor Party government or a federal coalition government. Both sides of the parliament must have aged-care policy right up there, because it cuts across every sphere of our national profile. I am pleased to speak on this bill, as I was to touch on this public policy issue way back in 2002, when I was a new member of the parliament of Australia.