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Wednesday, 1 June 2011
Page: 5586

Mr RANDALL (Canning) (17:27): I am very pleased to speak on the Aged Care Amendment Bill 2011. As previous speakers have mentioned, this bill introduces a number of amendments to the Aged Care Act 1997 which are part of the reform agenda to strengthen consumer protection for accommodation bonds paid to aged-care services and to improve the arrangements for handling complaints about Commonwealth funded aged-care facilities. If this bill is passed it is proposed that the reforms regarding accommodation bonds for approved providers will take effect after 1 October 2011 and the new complaints mechanisms will take effect on 1 September 2011. I am sure that my colleagues have already mentioned that there will be a transition period, so I will not just repeat what everyone else has said about these matters.

There was a need for reform because things have happened with accommodation bonds. The original policy was that they were to be used for capital funding for investment in the building of stock; however, the principal amount of the accommodation bond was not clearly articulated in the legislation. In other words, the act needed clarification and that is what this bill does. It makes it clear that bonds must not be used for purposes other than those related to providing aged care to recipients. The bill also provides that, where a bond is charged, the approved provider is entitled to income derived from that bond and the principal can be deducted from it for specific purposes. The bonds were generally invested in deposit-taking institutions, such as banks et cetera, but they did venture into other areas, such as credit unions, syndicates and other sorts of trusts. There has been a very wide use of bonds and there has been a lack of consistent interpretation regarding permitted uses of bonds. There have been a number of anomalies which have been identified by the Department of Health and Ageing. These included using accommodation bonds to make loans to related parties, related entities and individuals, and failing to meet existing prudential standards relating to bonds.

Grant Thornton, in his Aged care performance survey in November 2007, found that 40 per cent of all providers were operating in the red. Without going through all the issues, that is why we are here today. Let us get on to some of the real issues in relation to why there is a crisis in aged-care funding. I suspect that you, Mr Deputy Speaker Scott, would be the only one who has been in this House long enough to know that in 1997 there was a massive argument in this House about the charging of bonds and it essentially brought down the minister of the day, the member for Pearce. She was attacked roundly by the member for Jagajaga for trying to charge accommodation bonds where it related to the family home.

I will not revisit that whole experience, other than to say that we supported sensible arrangements to charge bonds because no government can afford the growing aged-care industry capital spending that is required. There needs to be a blend of funds from government, the investment sector and individuals. As we know, at that time, many people entering aged-care facilities had a home and they could have used the value of that home to help provide capital for accommodation by providing a bond to the aged-care facility. But that proposal was not supported, and people like Francis Sullivan from the Catholic association helped the Labor Party opposition at that time savage us over this issue.

There are still massive underspends in what is required for aged-care accommodation. I see on the opposite side of the House the former minister for aged care. I am sure as she travels around this country she would hear—as all members hear in their electorates—that they are desperate for funds in this area. At the moment, there is not only a crisis but also a massive underspend because these facilities cannot create a business case. I have met with my aged-care providers, and earlier this year the member for Hasluck and I met a delegation of aged-care providers at Amaroo Village in Perth. We met with David Fenwick—who is very vocal on these issues—Trudi Hodges, from Dale Cottages, and a number of other providers. They said that we had to do something about supporting their parlous situation and they wanted us raise this issue in the parliament—and this debate gives me the opportunity today.

What is happening in Western Australia—and it is happening right across Australia—is that they are handing back the allocation of funds for beds and they are handing back licences because they cannot make a business case. Charitable organisations, churches, community based aged care et cetera cannot make a business case at the moment. As a result, they are experiencing real problems trying to expand or even do with what they have now.

I feel very, very chastened because during the election campaign I visited one of my aged-care facilities, the Graceford Hostel, an independent living facility in Byford in my electorate, and they pleaded with me: 'Mr Randall, can you do something about helping us?' While showing us through the home, they said, 'We are in a desperate situation here for a whole number of reasons: we are swamped by regulation, we are swamped by the massive amount of compliance and we can't get aged-care nurses.' They are not very well paid. I think they are 30 per cent under the average nursing payment ratio, particularly agency nurses. They cannot get qualified nurses or even nurses who want to work in the sector. As you know, Western Australia has a shortage of labour in a whole range of areas, and this is exacerbated in the aged-care area. This home had no ability to get capital funding to expand the services even though they had a massive waiting list.

All of these aged-care facilities are asking me, 'Can you help us?' One of the things that they came up with at the forum that I attended with the member for Hasluck was: 'If there is all of this money being offered for beds—and 2,000 in Western Australia alone have been handed back—obviously there is a massive underspend in that area because they are not taking them up.' They said—and I am sure that the member for Hasluck will corroborate this—'If there is this massive underspend and the money is not getting out the door, why can't you cobble it together and put out more per bed to make a business case out of it, because at the moment the amount per bed just will not make a business case for any organisation that wants to invest in age care?'

What is the end result to this? In 2007, Kevin Rudd said that he would end this logjam in hospitals, where aged people were being parked up in hospitals. He was going to do something about it, but it never happened. It did not happen through the Rudd years and it certainly has not happened through Prime Minister Gillard's years. There is a logjam and people, particularly in rural and regional areas, are getting parked in hospitals rather than going into aged-care facilities. The residents at Quambie Park in my electorate are so frustrated that Ken Landwehr, the CEO, sent me a petition from them. It said:

Let Canberra know about the needs of older Australians—their right to quality care and support now and in the future.

This is how desperate they are.

Pam Corker and Quambie Park have actually opened a further expansion of their dementia facilities. But they did this largely through legacies left to them by former residents and the community. The strange thing about it is that the legacy left to them by one of their former residents made it more difficult for them to get ongoing and recurrent funding. They were told, 'You have too much money.' The system is just not flexible enough. Since the Labor Party has taken over, compliance has, if anything, increased and made it harder for people to get on and do the actual job of nursing. In addition to compliance, as I said, you cannot make a business case out of the funding available.

The tsunami is coming and this government is not prepared for it. In 2007, there were 400,000 people over 85—1.7 per cent of the population. There will be 1.6 million people in this age group by 2047—that is the size of the aged-care exercise that is heading our way. In addition to that, the growing incidence of dementia means that specialist facilities have to be built—in other words, more capital funding. In 2009, 245,000 people were deemed to have dementia. By 2030, it is predicted that there will be 591,000 and the prediction for 2050 is a staggering 1.13 million. And yet this is an underfunded area. It is not a priority of the Gillard government; aged care is not a priority area for the Labor Party at all. In fact their failure to act is indictable.

We have an ageing population. In 2007, there were six working people to support every person aged 67 and over; by 2047, there will be only 3.2 people for each aged person. So where is the plan for the future? Where is the investment for the future in this sector? That is what aged-care providers in my electorate are asking me to raise here. At their meeting with the member for Hasluck and me, they even asked: 'Can you get someone to have the courage to look at the housing situation again? Obviously any way of freeing up capital for aged-care facilities, nursing homes et cetera would be a blessing for us, because we cannot make a go of it.' As I said, rather than expanding their services, many of them now are reducing their services or even selling them. Who is buying them? It is the large aged-care providers in Australia. There are economies of size, but you do not get the same level of care from these large providers as is provided by the hands-on community aged-care facilities found in many suburbs and rural and regional areas. Ageing in place? That is ideal and it should happen. Without economies of scale, however, it is harder.

I say in the House today to the government: investment in this area has not so far been a priority of yours. While we were in government under John Howard, we made it a priority and we certainly made sure that there was accreditation and that standards were lifted. We are asking you, on behalf of the aged and frail of Australia, to finally get off your hands and do something about getting funding into this sector. (Time expired)