Senator FORSHAW (3:08 PM) —I move:

(a) notes that for years the Government has ignored the pleas of the aged care industry, the community and the Australian Labor Party about its neglect of residential aged care, neglect that has caused difficulties in access and industry viability as well as concerns about the quality of care; and

(b) registers its concern that the Government has resorted to a short-term political fix which seeks to put off until after the election the Government's true intentions on a range of issues, including whether:

(i) accommodation bonds will apply consistently for both high level care and low level care;

(ii) an accommodation bond will apply to residents who are classified as medium care residents under the new resident classification scale;

(iii) there will be a further increase in the maximum daily accommo-dation charge for non-concessional residents from $16.25 to $19, a nearly 40 per cent increase from the current charge;

(iv) the requirement that at least 40 per cent of residents are concessional before a provider is entitled to a concessional supplement is retained into the future;

(v) bonds will be available to providers for the duration of a resident's period of stay if it is greater than the current 5 years;

(vi) an aged care voucher system will be introduced; and

(vii) an auction or tender system will be introduced for the allocation of aged care places”.

The Aged Care Amendment Bill 2004 amends the Aged Care Act 1997, and it is that act that provides the framework for Australia's residential aged care system. I well recall the lengthy debates on that legislation back in 1996-97, when I represented the opposition as the legislation took its tortuous path through the Senate. I recall warning at the time that a number of the changes to the legislation that the government proposed would create significant problems in aged care in the years to come. Unfortunately, that has come to pass. I will come back to that in a moment.

The Aged Care Amendment Bill 2004 proposes two changes to the legislation. Firstly, the amendments to the act will make changes to the aged care assessment process. Secondly, the bill proposes to remove the current five-year limit on accommodation charges for residents who enter high-care facilities after 1 July this year. Essentially they are minor changes in the grand scheme of issues that require consideration in respect of aged care in this country. They are changes that the opposition does not oppose. The two specific measures in this bill reflect recommendations of the Review of pricing arrangements in residential aged care, otherwise known as the Hogan review. The review of pricing arrangements in residential aged care was done under the chairmanship of Professor Warren Hogan. That very extensive report with a large number of recommendations was finally released to the public at the same time the budget was handed down. At the same time, the government released its response to the various recommendations in Professor Hogan's report. The review process took many months and involved consultations with various interested groups and organisations as well as providers in the aged care sector and the community. I will have more to say about the aged care review undertaken by Professor Hogan later.

The bill proposes to simplify the Aged Care Assessment Team process. Currently, to determine the level of care required by potential residents of an aged care facility, those in need are classified into one of eight different categories of the Residential Classification Scale—the lower the category, the higher the level of care required and so on. The funding that a facility is appropriated depends on the Residential Classification Scale rating for each resident in the facility. So, the higher the RCS classification of the residents, the more funding is provided to the facility from taxpayers' funds.

Currently, when a resident in a facility that is classified as low care is reclassified as a high-care resident, an assessment must be undertaken by an ACAT team. This legislation will remove the requirement for that assessment to be made at that point in time. As I said, we do not oppose this particular change in the bill. We see advantages in this respect, and indeed it is consistent with the recommendations and findings of the Hogan review. We do note, as has been noted in the Bills Digestprepared by the Parliamentary Library and indeed acknowledged by the government, that there is some fiscal risk to the taxpayer. The Bills Digest notes that abolition of this requirement for assessment may result in a situation where:

We note that the government contends that the risk can be managed through additional resources for the residential classification review program. This will be something that needs to be monitored over time.

This bill will make changes to arrangements for accommodation charges payable by residents. Residents in facilities currently pay daily care fees and accommodation payments to assist with capital costs. Of course some residents are not required to pay an accommodation charge if they meet certain criteria. The charge that other residents pay depends upon their assets. There are a variety of arrangements that occur in respect of contributions made by residents in residential aged care facilities.

The second change that this bill proposes is to abolish the current five-year limit for those accommodation charges. Currently those patients paying an accommodation daily charge pay that charge for a five-year period whilst they are resident in the facility. The bill proposes that new residents, those entering into high-level care from 1 July this year, pay the accommodation charge for the entire duration of their period in the facility. That means that from 1 July a new resident in that facility will pay the daily charge and will continue to pay it beyond the five-year period. The impact of that, of course, is felt by the resident specifically after the five-year period. Nevertheless, it is a change that will have some impact.

As the Bills Digest itself notes, the amendments to the accommodation charges, both this one in this bill and others that are not covered by this bill, will have an adverse financial impact on certain elderly people who enter high-care residential facilities on or after 1 July this year. As I have said, we are not opposed to the measure. We believe it is a reasonable change. However, we have two concerns which, despite requests to the government, have not been allayed. They are concerns that relate to the broader issue of accommodation charges and other payments made by residents.

Firstly, the government refuses to give an undertaking, despite many requests and questions to the minister in the parliament, that it will not similarly move to remove the current five-year limit on deductions from accommodation bonds in low-care facilities. For those residents in low-care facilities who pay accommodation bonds, a deduction can be made from that bond money for a period up to five years. Those funds are then used, or intended to be used, by the facility for capital infrastructure works.

We are concerned that removing the five-year limit on the accommodation charge that applies to those residents sends a signal that the similar five-year limit on the drawdown on accommodation bonds for residents in low-care facilities may also be removed. We have asked the government to give an assurance that that will not happen. The minister refuses to give that assurance. There is, therefore, a very real fear out there in the community that this will happen and, particularly, that it could happen after an election is held. So I challenge the minister again to give an assurance that that will not happen.

The second related issue, though not part of this bill, is the actual increase in the charge that will apply from 1 July this year. The government has already decided to increase the maximum accommodation charge payable by new residents in high-level care from next month. The maximum amount of that charge payable will increase from the current daily rate of $13.91 to the new daily rate of $16.25. This specific change is not covered by this bill, but it is a related concern. It is a concern because the Hogan review recommended that the maximum rate of the concessional resident supplement—which, coincidently, is the same amount as the accommodation charge—be increased to $19 per day. The government has, in its response, increased, as I have said, the accommodation charge paid by the resident to $16.25 and similarly the supplement to $16.25. Therefore the real concern is that, after the election, we may see a further increase in the charge to that recommended figure for the supplement of $19 per day. If that were to occur, that would be an increase of almost 40 per cent on the accommodation charge. We have asked the government to rule out any such increase. The minister, again, refuses to give that assurance. What we are continually told by the government, and what is also in their written response to the Hogan review, is that they are consulting on this and other issues with the industry.

That leads me to make some comments about the Hogan review, because it is the fundamental basis of examining the future of aged care in this country. It was a $7 million taxpayer funded review into pricing and other arrangements in aged care. We know from questions asked at estimates that the broad views and recommendations of the Hogan review had been arrived at by late last year, which was when it was anticipated the report would be released. It was not released at that time; it was only released in May this year, coincidentally with the budget. But everybody in the industry knew what was in it because Professor Hogan's recommendations and views on what was being contemplated and what the government was examining were leaked, were out there in the community.

There has been ample time for the government to consider Professor Hogan's review and recommendations. But what we found when we received the government's response at the same time as we received the review was that, whilst the government has picked up on a number of those recommendations in its budget package, it has left many of the critical issues unanswered. It has refused to say what it will do in respect of many of those key recommendations. For instance, it refuses to put on the record its response to whether or not an accommodation bond will apply to residents who are classed as medium-care residents under the new resident classification scale. What is proposed is that the current division of eight levels into low care and high care will be redesigned into three levels of care: low, medium and high. Currently, accommodation bonds can apply to residents in low-care facilities; they cannot apply to residents in high-care facilities. The government tried that on back in 1996, but it had to back away from that proposal because outrage—

Senator Patterson —Because your shadow minister misled the public. Jenny Macklin was outrageous—

Senator FORSHAW —The minister interjects. The minister should go back and check the record. The legislation went through this parliament, but the government ultimately refused to implement it because of the outcry from people in the community.

Senator Patterson —I don't often get angry, but I was outraged about Ms Macklin.

Senator FORSHAW —The minister says she is outraged. She should have been outraged at the thousands of residents and their families in this country who objected to that proposal. That is what happened. But what we want to know from this government now is: under this proposed three-tier classification structure, will the government rule out imposing accommodation bonds on medium-level care? Will it rule out imposing accommodation bonds on high care in the future? But the minister, despite being asked on a number of occasions in question time, refuses to give that assurance. As I said, we want to know whether the accommodation charge will be further increased after the election. These are recommendations that are in the government's own funded review by Professor Hogan, and all the government can say on these critical issues is, `We are undertaking further consultation with the industry.' The government have had months and months to consult with the industry. They know the industry's views on these issues, we know the industry's views on these issues; but the government, because there is an election in the wind, refuses to come clean and tell people what they intend to do. We have put our position on the record with respect to the issue of an accommodation bond. We are opposed to accommodation bonds being implemented in high-level care facilities and in the new medium-level care facilities, and we will continue to put that position.

I will turn very quickly to the two amendments that I have circulated. Our second reading amendment outlines in detail the failures of this government when it comes to its stewardship of aged care since it came to office in 1996. It promised great things through the 1996-97 debates on the new Aged Care Act, but what we have seen is minister after minister in this portfolio be removed. Minister Moylan and Minister Bishop fell by the wayside because they got it wrong. We told them they would get it wrong and they got it wrong. Our second reading amendment draws attention to the various problems that have been created and worsened by this government in the area of aged care since it came to office. We will also move a specific amendment in the committee stage that will ensure that the payment of an accommodation bond is required only for care recipients categorised as low care. I will deal with that in the committee stage. We support the changes proposed in this bill, but there are many other issues in aged care that we will no doubt come to debate in due course.