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Wednesday, 20 June 2007
Page: 143


Ms HALL (6:19 PM) —At the commencement of my contribution to the debate on the Aged Care Amendment (Residential Care) Bill 2007, I would like to acknowledge many of the statements made by the member for Lingiari. I have visited quite a few aged-care facilities in the Northern Territory. I have been to Docker River and I understand the problems that they have out there. The thing that really impressed me the most about the way aged care is done in the Northern Territory is that the people involved in the industry try to be creative and culturally aware of the needs of the Territorians, particularly Indigenous Australians. I would have to say that the member for Lingiari has really got his finger on the pulse when it comes to aged-care issues in the Northern Territory.

I believe—and I suspect, Madam Deputy Speaker Bishop, that you might share my belief in this area—that aged care and ageing generally within Australia is probably one of the most important issues facing us as a society. Today we are looking at issues surrounding aged care but I do not necessarily believe that ageing per se is all a negative for our community. I think there are a lot of positive things that we as a parliament and a nation can do to improve the situation in relation to ageing. I note that Madam Deputy Speaker is nodding in agreement. I have had the pleasure of hearing her speak on this topic on a number of occasions, and on a number of things we have very similar views—although, of course, not on all.

We on this side of the House are supporting the legislation before us today. I am actually quite pleased about some of the changes included in it. Over a long period of time, providers within the aged-care industry have experienced a number of difficulties. I have a very close relationship with a number of facilities within my electorate. They have been forced to cut costs in order to survive. This has led to staff being cut and there have been a number of problems experienced by aged-care providers.

The issues that have been raised with me time and time again by aged-care facilities and providers include the fact that they feel like they are drowning in a sea of red tape and that they constantly face bureaucratic hurdles. I see that this legislation will assist in addressing some of the issues surrounding red tape. In the last parliament, I was a member of a House of Representatives committee on ageing and we looked at a number of issues surrounding aged care and ageing. One of the issues that came up time and time again was red tape. But, unfortunately, one of my worst experiences in this parliament was associated with that committee’s report, because we did not table a full report before the election in 2004. It was very hotchpotch and only a draft report was tabled. I do not think it homed in on all the issues.

The bill before us today introduces a new arrangement for allocating subsidies in residential aged care. It is designed to reduce the amount of documentation—in other words, red tape—that is being generated in aged-care facilities. That red tape is about justifying classifications. In the 2004 budget the government said it would implement a new funding system for residential aged care in response to a recommendation from the review of pricing arrangements that was conducted by Professor Warren Hogan. The new funding model draws partly from work undertaken in the RCS review of 2002-03 and projects arising from the RCS review, such as the reduced RCS questions project. The new system will have fewer basic funding categories. That will be much welcomed by providers. Time and time again, the committee I was involved in was told that the number of categories and the burden that that placed on the staff in facilities was far too great. The new system will also include two new supplements. The new supplements are intended to better target available funding towards the highest needs—in particular, residents with dementia and challenging behaviours, and residents who have complex health and care needs, including palliative care needs.

Stepping away a little bit from residential care, the extension to the number of EACH places that are now available is a positive innovation. I visited an elderly person who was a very active community worker prior to becoming quite frail. He had an EACH package and was able to live in his home on his own and everything was designed around him. I think that we should be doing whatever we can to enable people to stay in their own homes for as long as possible, but the fact of the matter is that some people need to have residential aged care. The health of the constituent I was talking about a moment ago finally deteriorated to the extent where he had to move to a high-care residential aged-care facility. That is why it is so important that we do the right thing in the area of aged care, not only because of my constituent but because of the needs of all older Australians.

All government funded aged-care facilities were invited to participate in the trial that was run by the government. It is my understanding that some 678 homes participated in the collection of data, and that concluded at the end of October 2005. Based on the trial data and feedback from participants, amendments were made to the ACFI, the Aged Care Funding Instrument, in place now. I really hope it works. Some providers in my area had some concerns about the way it would work, but I think that having fewer categories can only work in favour of the residents because it will allow the staff to do what they are employed to do: spend time with residents in the aged-care facilities—the people who live there and whose home it is. Reducing the number of funding levels in residential aged care and providing subsidies for the care of residents with complex needs, including palliative care, is definitely a move in the right direction.

There are changes to the arrangements whereby classifications expired at 12 months, and the requirement for providers to submit reappraisals is removed. One of the areas that I received the most complaints about from aged-care providers in my area was the fact that they are constantly subjected to reappraisal. They feel that this is very time-consuming and that, quite often, the way it is carried out is inept. I think that that is a positive move too. A very positive move that should be embraced by this parliament is that this will allow a resident’s current residential classification to move with them from one facility to another. It will remove the need for that person to undergo another assessment. I think that is in the interests of the resident and the facility. We must never forget what aged care and these facilities are about: to provide quality care for all older Australians, whether they live in a residential care facility—a hostel or a nursing home, as they were once called—or whether they can benefit from the aged-care package, which is a very positive initiative.

One issue that I am not so happy about is that, in Shortland electorate, the number of aged-care beds we have is disproportionate to the requirement of the area. Shortland electorate falls both within the Central Coast of New South Wales, which on the last audit had a shortfall of 596, and within the Hunter region, which had a shortfall of 390 aged-care beds. Shortland electorate has the 10th highest number of people over the age of 65 in Australia. I see the member for Paterson sitting in the House. His electorate has the 13th oldest population in the country. Also in the Hunter we have Newcastle electorate, which has the 16th highest number of people over the age of 65. Charlton sits 50th on that scale, Dobell is 29th and Robertson, on the Central Coast, is fifth. So I am putting before the House that this is an area with a very old population, and we have a high need for beds both in high care and low care. We have a large number of facilities applying for beds within those areas, and I have a number that are being knocked back. Sometimes I question the way those beds are allocated, when quality facilities that are operating in the area have their applications declined and out-of-area, privately owned organisations are given beds. But that is another argument, on a different topic.

The other issue that relates very much to this shortage is the fact that a number of beds are phantom beds—in other words, they exist on paper but they are not operational. I believe that the government needs to revisit the way those beds are allocated. There is a definite argument for reforming the allocation process. There is a definite argument for changing the process. I have put my ideas on this to the government, but to this day it has not embraced them. I think that the whole planning process is flawed and the government really needs to revisit that process.

In the time that is remaining, I would like to refer to the government’s securing the future package. In doing so, I am going to refer to correspondence I have had from the Aged Care Association Australia. They point out, in this letter to me, a number of shortcomings in the package. First of all, they point out that they initially welcomed the release of the package, but once they had a look at it they found that maybe it was not quite as good as they had thought it was. That is quite often the way when you look at anything that the Howard government puts before you. On first impressions, things look a lot better than they really are.

My understanding from reading the correspondence I have before me is that the package removes the operating care supplements—the additional basic care fee and the pensioner supplement—from the care funding pool and transfers them to the capital scheme. It applies these two supplements to the capital pool as part of the additional funding, and therefore it is removing them from the provider’s service budget. That means a lot when you are operating a residential care facility. It really impacts on the ability of the provider to care for its residents. The overall financial impact of this has been estimated as a reduction in care financial support for residents, in the first year of the scheme—this is just the first year of the new scheme—of $50 million, and it is going to rise to $350 million in the year 2012-13. From March 2008—that is what we initially thought it was going to be, but now there is some thought that it may be July 2008—aged-care providers will be forced to adjust their care service, and that will lead to a reduction in staff numbers to accommodate that change. A reduction in staff numbers means a reduction in care to those residents living in the facility.

The package does not address an adequate aged-care funding index and maintains the existing COPO index. I have raised issues surrounding COPO on numerous occasions in this House. COPO is a very unfair index. It does not take into account all the costs that are experienced by residential care facilities: workers compensation, rising electricity—you name it. The COPO index is inadequate and does not work well for aged-care providers. How does this affect the residents in aged-care facilities? It means that those facilities have less money for staff, which in turn affects the care that the residents receive. The additional index provision of 1.75 recommended by Hogan and accepted by the government in the 2004-05 financial year ceases on 30 June 2008. What then? That is my question: what then?

The package makes an assumption that the construction cost in the industry is $105,000 per residential bed. I know for a fact that that is not true. I have spoken to providers in my area and they have told me that that is not the case. The ACAA has highlighted this and said:

The actual cost ... is currently estimated at $170,000.

I feel that this is going to impact once again on the quality of care received by frail and aged people. The ACAA also said:

The accommodation supplement of $26.88 to which the industry will gradually move from—

in March 2008—

will service a borrowing of $109,000, well short of the average construction cost outlined above.

I have already touched on that and the fact that in all probability it will be in July 2008. The Aged Care Association is less than happy with what the government has done in this area.

The other peak group is the Aged Care Industry Council. In a press release, they have said:

Australia’s aged care sector is facing a looming crisis and will not be able to deal with the demands of a rapidly ageing population ...

And it goes on to state:

At the start of the 20th Century just four per cent of Australia’s population was 65 or over and that figure will increase to 21 per cent by 2040.

I argue very strongly that the government is failing older Australians and has constantly failed older Australians. The government has bumbled its way from one disaster to another in aged care. It has overseen a system that has forced aged-care providers to cut costs in order to survive. What we are going to see is more of the same. It has led to reductions in staff. It has led aged-care providers to have to cut corners in order to be able to survive. It is a system overwhelmed with bureaucracy and red tape. The good thing about this legislation is that it will go some way towards cutting that the red tape. I support very strongly the changes to the resident classification system. I will be supporting this legislation, despite the failures of the government in the area of aged care. (Time expired)