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Thursday, 8 December 2005
Page: 15

Ms JULIE BISHOP (Minister for Ageing) (10:14 AM) —I move:

That this bill be now read a second time.

Having introduced the Aged Care (Bond Security) Bill 2005, I now present the Aged Care (Bond Security) Levy Bill 2005. Together, these bills will establish the legislative framework for a scheme to guarantee the repayment of bond balances to a resident or family, should an approved provider default in the repayment of that balance.

As I have indicated in the second reading speech for the Aged Care (Bond Security) Bill, under the guarantee scheme the Australian government will pay 100 per cent of the bond balance owed to residents—with interest—in the event that a provider becomes insolvent or bankrupt and is unable to meet its financial obligations to residents.

The government will then become a creditor of the insolvent provider and will recover the debt and associated costs from the insolvent provider and/or by levying all other providers holding bonds. 

This bill allows for the imposition of a levy to recover the debt. The levy details will be prescribed in regulations made in the future, if the necessity arises. The levy amount will be based on the provider’s accommodation bond holdings as a proportion of the total accommodation bond holdings for the aged care industry.

Approved providers holding accommodation bonds as a whole will not be levied any more than the total amount repaid to residents plus administrative costs associated with the refund and the attempt to recover from the insolvent approved provider.

As each default event is likely to be different, the government will take the necessary steps to work out the details of the levy when a situation occurs, including the rate at which the levy will be recouped. This will enable the government to consider all the factors which would influence how and when the levy is to be imposed and ensure that costs to government are recouped without jeopardising quality of care to residents.

These bond security bills, together with the Aged Care Amendment (2005 Measures No. 1) Bill 2005, which I will be introducing shortly, form the legislative framework for the government’s decision to strengthen the protection of residents’ accommodation bonds—which I announced on 15 September 2005.

I present the explanatory memorandum to the bill and commend the bill to the House.

Debate (on motion by Mr Murphy) adjourned.