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Monday, 17 September 2012
Page: 7057

Senator KROGER (VictoriaChief Opposition Whip in the Senate) (16:17): I rise to speak on this important matter, the crisis in the aged care sector and the impact of the government's recent funding changes, largely because many people in Victoria have raised it with me. Not only is it a matter of concern in Western Australia, as Senator Siewert has just pointed out, but also it is significant in Victoria. I know millions in Australia are focused on the aged care sector and on how they are going to be affected by what is available for their families over the coming years. I would like to support and endorse the comments of Senator Fierravanti-Wells, who has been representing most effectively and speaking out on behalf of the coalition. Also, I would like to acknowledge the despair we feel on this side of the chamber when we know that the aged care sector requires such a big injection of capital funding yet we see such significant financial incompetence and mismanagement of the Treasury coffers. Only in the last few weeks, and indeed over the last couple of months, we have seen the Prime Minister hell-bent on going on a spending spree, knowing full well that she has no capacity to a fulfil her promises.

We know that facts do not get in the way of this Prime Minister, so long as she can influence her own electoral support on the basis of pledges which she knows in her heart she cannot deliver. We have seen her promise billions, for instance in the disability sector with the NDIS, which has bipartisan support. We all support the need for an NDIS, yet we know that the government has not demonstrated how they are going to fund that program.

Likewise, more recently we have seen big statements made about commitments over the next three years and about education funding which will not start until 2014. We know that this government has no capacity to deliver on that education funding. That is why it is with great despair that I rise to talk about the aged care sector today—because so much money has been thrown up against the wall, money which could have been invested more wisely, certainly in the aged care sector.

We know this sector is going to require greater resources because most of us visit aged care residential facilities. We know that, with the ageing of the population and improved medical procedures, technology and advances, we are all living longer and this ultimately will strain the aged care sector.

I note Senator Brown's observations about the reprioritising of the aged-care sector, with greater emphasis on home care packages, which are also important. But there is one fact that you cannot get away from, and that is, when people finally go into aged-care residential service facilities, they require a greater level of support. It is that greater level of support that is of critical concern to those in the aged-care sector.

Only a couple of weeks ago, I was visited by and had a meeting with Ms Kate Hough, who is the Victorian CEO of Leading Age Services Australia. In that discussion, she clearly demonstrated why they have such concerns with this new funding model, because it will lead, without doubt, to a $750 million black hole in the provision of aged-care services. This is not me using this as a political football. This is me referring to independent financial analysis that clearly demonstrates this. The financial analysis of the federal government's Aged Care Funding Instrument, ACFI, shows that losses associated with these changes will rise to over $350 million by the year 2014. Whilst it is reasonable to say, 'Crikey, that sounds a lot,' what does that mean for every resident? What does it equate to on an individual basis? When you work out the numbers, it works out to between $20,000 and $23,000 per year per resident, which amounts to some $56 to $63 per day per resident. So we are talking about a significant amount of money that will affect the on-the-ground delivery of service and support to these people.

This really points out just how out of touch the Prime Minister is in thinking that this will not effectively hurt those on the ground. According to this independent analysis, the average loss per aged-care facility will amount to some $125,000 per year. Some facilities in Melbourne could face losses of up to $560,000 per year. Those facilities that are on a smaller scale, which do not have the opportunity to explore and exploit economies of scale, where they may not be a provider of more than one residential facility, will face greater losses, particularly those in rural and regional Australia.

Noting the time, I will just quote one thing from a media release that was issued by Mr Gerard Mansour, of Leading Age Services Australia:

To ensure a viable aged care industry, we’re strongly advocating a move away from a funding model which is artificially constrained by the Federal Government’s budgetary limitations, to one which genuinely matches care funds to people’s needs.

(Time expired)