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Thursday, 2 June 2011
Page: 5738


Mr BUTLER (Port AdelaideMinister for Mental Health and Ageing) (11:56): I thank the member for Paterson for his contribution to this debate on the Aged Care Amendment Bill and for his interest in aged care. I thank members on both sides for their contributions to this debate, specifically about this bill but generally about the aged-care sector, which is such an important part of all of our electorates. I am very pleased to have the opportunity to sum up the debate on Aged Care Amendment Bill 2011. This bill seeks to amend the Aged Care Act 1997 to increase protection for accommodation bonds and to strengthen complaints management in aged care as part of the government's commitment to providing better health and better care for older Australians through the National Health Reform Agenda.

Since the introduction of the Aged Care Act in 1997 there has been very strong growth in the value of accommodation bonds held by the sector. As at 30 June 2010 approved providers held more than $10.6 billion in bonds on behalf of more than 63,000 aged-care residents. The average total bond holding held by an individual approved provider was about $11.2 million and the average new accommodation bond charged during the financial year was around $232,000. This is a significant amount of funds held by aged-care providers on behalf of their residents and, as the Australian population continues to age and the demand for aged care increases, the funds loaned to approved providers through accommodation bonds will continue to grow.

This bill provides greater clarity about the uses of accommodation bonds and strengthens the link to investment in aged care. Specifically, the bill reinforces that bonds taken after 1 October this year should be used for capital expenditure at aged-care services, repaying debt associated with capital works and refunding existing bonds. The bill also makes it clear that accommodation bonds can be used for investment in a broad range of financial products, consistent with current practice. The bill proposes that an approved provider would commit an offence when there has been a misuse of bond funds and, within two years of that misuse, the provider becomes insolvent and has at least one outstanding bond balance. In the very worst of cases, offences would also apply to individuals within the organisation, such as when the individual knew bonds were being used for a non-permitted use and was in a position to take, but had not taken, reasonable steps to prevent the misuse. These changes will reinforce the significance of approved providers' obligations to their residents in dealing appropriately with residents' funds and ensuring that refund obligations are met. Accompanying these changes all restrictions on the use of income derived from bonds, retention amounts and accommodation charges will be removed. This will free up these funds for use by approved providers, reduce regulatory burden and focus the regulation on the risks of the bond principle.

The bill also proposes to enable the investigation principles to be replaced with new complaints principles. The proposed new complaints principles will describe and improve the complaints scheme for aged care, with a stronger focus on resolution of complaints. This will provide consumers with a more flexible scheme where a range of options are available for assisting to resolve a complaint, including early resolution, conciliation and mediation.

I would like again to thank members for their contributions to the debate on the bill. It has underscored the importance of the role played by the aged-care sector now and into the future across the country. It has also highlighted the importance of achieving a balance between effective regulation to protect vulnerable and elderly people and reducing the regulatory burden on the aged-care sector. These changes will promote public confidence in the aged-care industry, provide regulation that is commensurate with the risks associated with bond holding in the aged-care sector and improve the way in which complaints are managed in aged care.

The government does not agree to the second reading amendment proposed by the shadow minister. Beyond saying the amendment clearly strays beyond the scope of the bill, and indeed beyond the scope of the principal act, it simply misconceives the effect of this bill. To recap, the effect of this bill is simply to clarify the original intent of the accommodation bond system, which was to provide a capital funding stream for the aged-care sector, and it actually removes regulation about how providers will be able to use literally hundreds and hundreds of millions of dollars of income every year.

I repeat: this bill removes regulation on the way in which aged-care providers can use the income that they derive from the bond principal, it removes regulation on the way in which aged-care providers can use the retention amounts extracted from the bond principal, and it removes regulation over the way in which aged-care providers can use accommodation charges paid by residents in high-care facilities—literally hundreds of millions of dollars of income are freed of any regulation by this bill. It also removes a range of redundant provisions, including two pieces of redundant legislation. For those reasons we oppose the second reading amendment proposed by the shadow minister and commend the bill to the House.

Question put:

That the words proposed to be omitted (Mr Dutton's amendment) stand part of the question.

The House divided. [12:06]

The Speaker (Mr Harry Jenkins)

Question agreed to.