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Tuesday, 2 December 2003
Page: 23433


Ms ELLIS (3:09 PM) —I open this debate on the matter of public importance on `The failure of the Government to provide adequate aged care services'. I regret that we have to have this debate, but we must have it because the aged care sector is in, or is heading straight into, crisis. Today I will discuss how the sector came to be in this crisis position under the Howard government and the impact that this is having on the adequacy of aged care services. This includes an inadequate funding model, an inadequate accreditation system and an inadequate planning ratio.

I begin with how the sector came to be in the position of crisis that I believe it now faces. The government failed to ensure that providers were able to remain viable following the sweeping reforms of 1997 which had major implications for the way in which the aged care sector is funded. Many analysts have argued that the aged care sector has not been viable since the Howard government's aged care reforms. The National Aged Care Alliance commissioned La Trobe University to examine whether the new system of government funding adequately meets the needs of the sector following those reforms. The report, Residential Aged Care Funding: fourth report,concludes that `current indexation arrangements using Commonwealth Own Purpose Outlays'—or COPOs—`do not adequately adjust for wage cost increases', and, due to the current indexation method, the sector has been underfunded up to $405.8 million since 1996-97, which is an average of approximately $50.7 million per year over eight years. The reason for this underfunding is that the COPO indexation method underestimates the cost pressures faced by residential aged care providers. As a result, the funding is inadequate.

The aged care industry had every right to be appalled by the 2.2 per cent increase in residential aged care subsidies this year, especially when the CPI was 3.3 per cent. The Chief Executive Officer of the Australian Nursing Homes and Extended Care Association said in the INsite journal of October/November 2003:

The first five years of the post 1997 reforms have seen a 10.6 percent increase through indexation with cost escalations during the same period varying from state to state but some running as high as 26 percent.

It does not help that the government claws back money from the sector through its RCS reviews. Information I obtained through Senate estimates shows that $30.2 million was clawed back between July 2002 and June 2003. When one newspaper recently highlighted this, but unfortunately distorted the nature of the clawback by portraying the process as a rip-off by the aged care sector, I was disappointed that the government did not move to clarify the situation. The Howard government allowed the media to portray the aged sector in this negative light, despite the challenges the sector faces due to bad government policy.

Aged care providers are expected to provide high-quality care and have to follow complicated and time-consuming processes to receive funding and pass their accreditation assessments, but they do not have the resources that allow them to do that. Many facilities have closed down or gone into receivership over the past few years. I know of some providers who are planning to close down some of their facilities because they are no longer viable. Recent actions taken by aged care providers and by aged care staff demonstrate very clearly that there is a crisis in the sector. There are several campaigns now being run by groups within the aged care industry.

One example is the campaign by Aged and Community Services Australia, which will be launched tomorrow. They are calling it `Aged Care: Who'll Care?' As part of this campaign, many members of parliament will have already received letters highlighting the challenges faced by the aged care sector. I look forward to the launch of that campaign tomorrow. Another example is the campaign being run by the Australian Nursing Homes and Extended Care Association, involving a $750,000 fighting fund which is being managed by a former adviser to the previous Minister for Ageing, Mr Andrews. It is fair to say that when providers face financial pressures there is likely to be reduced quality of care for residents of aged care facilities. In fact, the pricing review submission by Aged and Community Services Australia states:

The pricing arrangements in place since 1997 have eroded product quality by reducing the quality of life of residents. They have done this through the pressure they have imposed on funding levels. This has resulted in a reduction in support for the quality of life of residents due to a reduction in the time staff are able to spend with them.

The letter sent to members of parliament from Aged and Community Services Australia states:

Unless these issues are addressed, the reality is that Australia is facing the collapse of the aged and community care system as we know it. This is not over-stating the case. Many of our members, despite making substantial productivity improvements, are carrying deficits that increase every year. Some can afford to carry these for a time through subsidisation from other areas. Most cannot. Without fundamental change to the current funding system, all our members will soon be facing the decision of whether they can continue to operate, if they are not already.

I am extremely concerned about the impact this has on the quality of care provided to residents. When I make statements in the press or in parliament about concerns in relation to the quality of care, I am not for one minute saying that providers intentionally neglect their residents—in fact, it is quite the reverse. I honestly believe that most, if not all, providers have the best interests of their residents at heart and deliver good care despite the difficulties they face. Aged care providers do the best they can but, in order to survive financially, they often have to cut corners and this can include reducing the levels of staff. This should be of great concern to everyone.

There have been many cases of aged care facilities failing accreditation standards, and many horror stories. I will not focus on these because I do not want to portray aged care facilities in that negative light. However, some stories are horrifying and something must urgently be done to ensure that our residents receive the quality of care they deserve. The Labor Party and the aged care sector have been calling on the government to take urgent action to address the funding crisis, but the government has constantly stalled, using its reviews as an excuse. Time is running out. The aged care pricing review is due at the end of this month. I call on the Minister for Ageing to release the pricing review report as soon as it is completed. This pricing review is costing Australian taxpayers $7.2 million. It is an important review that will contain vital information that is needed by the sector. The minister cannot allow this review to be referred to a committee, to be left on a bookshelf collecting dust or to be locked away somewhere. The sector needs action urgently.

I now move on to the inadequacy of the Howard government's aged care accreditation system. What I am hearing from various sources is that the system is failing. And these sources do not come from just the aged care sector. If there were any doubts about the failure of the government's accreditation system, then the report by the Australian National Audit Office, the ANAO, on the accreditation agency unfortunately put those doubts to rest. The ANAO report confirmed what many in the industry have been saying for years: the Howard government's accreditation system for residential aged care may not improve the quality of care for residents. The report, Managing residential aged care accreditation, concluded that there is no way of knowing whether or not the accreditation system improves the quality of care for residents because the government has not undertaken an evaluation program to determine this vital information. I find that incredible and unacceptable.

The accreditation system costs the government millions of dollars—in fact, an estimated $11.5 million in 2002-03—and the service providers are charged a fee for each accreditation review. It is astonishing that the Howard government would introduce an accreditation system without ever developing an evaluation program to see if it achieves its goal of improving the quality of care. I am extremely pleased that both the accreditation agency and the Department of Health and Ageing have agreed with the recommendation of the National Audit Office to develop an evaluation plan. It took a report from the National Audit Office to highlight what should have been obvious. As a result of the failure to develop an evaluation plan, the well being of frail and elderly residents is not protected to the degree that it should be and residential aged care providers are being asked to participate in an expensive and time-consuming process which may not necessarily achieve the right goals.

I now turn to an area in which the government has misled the aged care sector, and this relates to the aged care planning ratio. The current aged care planning ratio is 40 high-care places, 10 low-care places and 10 community aged care packages for every 1,000 people aged 70 years and over. Some regions in Australia have more aged care residential beds and CACPs—community aged care packages—than that recommended in the ratio, yet people still suffer long waiting lists for bed places and for CACPs. This ratio should have been subject to regular review over the last seven years. The Howard government has not reviewed this ratio since it came to power. I do not understand how the government can continue to allocate beds on that ratio, considering the changing demographics of our society. This lack of forward planning has led to massive shortages of aged care places. People in the community are crying out about the shortage of both community and residential places. My figures show that there is a shortage of 10,388 residential places in Australia based on that ratio. So we can safely assume it is an underestimate of the shortage and the real need.

When asked at budget estimates in June whether the government was planning to review the aged care planning ratio, we were told that the government was not planning to review the ratio. In August, the then Minister for Ageing, Mr Andrews, said in parliament that the Department of Health and Ageing was going to review the ratio. But when we asked again in budget estimates last month what progress the department had made with the review of the planning ratio, we were told that it was not reviewing the ratio. One minute the department says it will not, then the minister says it will and then the department says it will not. I hope the new minister is honest with the aged care sector—I am sure she will be. They are fed up with all the talk and no action from the government.

The aged care sector is in crisis. The government introduced the reforms of 1997 and then left the sector and everyone in it to themselves. It basically sailed off, having pushed the aged care reform of 1997 off into the wide blue yonder while hoping like billyo it would not sink. I have news for the government: it is looking like it is beginning to sink. What I ask of the government and what I implore the Minister for Ageing, who is at the table, to do is not to respond to this MPI by trotting out statistics of billions and trillions of dollars of expenditure and millions of places that have been created when we know that around the country there is an enormous level of concern. Despite the planning ratio, despite the government rhetoric, there is a financial crisis facing the aged care sector in this country. The sector will not be sustained unless something is done.

There are people who are trying to get loved ones and others into residential care, to get them CACP packages within their own homes and to do all sorts of things to offer to older residents, who need this sort of care, the care they want. Despite that, the government rhetoric is trotted out time and time again. They ask what we are worrying about. They say that we are scaremongering, we are creating a false impression. They say, `It is really okey-doke. We have spent so much money.' What I want, what I believe the sector wants and what I know the community demands is an honest response—acknowledgment of the crisis, acknowledgment of the need to do something and action on behalf of the government. Boy, am I waiting for that pricing review report to be in my hands. That is where it ought to be—in the hands of this opposition, in the hands of the sector and in the hands of the public so that we can see at first hand the true state of the aged care system in this country.