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Community Affairs References Committee
25/10/2016
Future of Australia's aged-care sector workforce

TAPSELL, Mr Tony, Chief Executive Officer, The Local Government Association of the Northern Territory

[10:02]

CHAIR: Welcome. Can I just confirm that you have been given information on parliamentary privilege and the protection of witnesses and evidence?

Mr Tapsell : Yes.

CHAIR: Thank you. We have your submission; thank you very much. I would like to invite you to make an opening statement, and then we will ask you some questions.

Mr Tapsell : I think a lot of what we had to say is pretty much in the submission. The only further thing would be particularly in terms of the challenges in attraction and retention and factors impacting on aged-care workers and registered training organisations—those sorts of things. One area of feedback I do have from some councils about the Consumer Directed Care program—even though in our submission we did say that we supported the flexible funding arrangements of the National Aboriginal and Torres Strait Islander Flexible Aged Care Program, and we recognise that Consumer Directed Care program benefits—is that there are certainly some challenges with its operation. They can well understand how it would work well in a metropolitan area, where there are lots of providers. But when there is only one provider, that is quite a challenge, they are telling me, because there is not anybody else, or it is very difficult to get someone else. And if you have to organise a workforce around it and you are not sure about whether or not people are going to be employed because of the use of the money, then that can have an impact on the employment. Also, if because of the use of that money the job is not full-time anymore, then it is very difficult to attract people to a part-time job, particularly in a remote area. Those are just a couple of things that have come through from councils on the particular Consumer Directed Care programs.

And I know it is a related matter, but I would also like to refer you to this report here, which was put out by the Western Australian government. It is probably one of the more honest reports that I have ever read on Indigenous affairs, particularly in relation to government programs. It says things like having more place-based approaches to things, that centralised programs are often not working. It is quite a stark report, really.

CHAIR: If I could interrupt for two seconds: could you read the name of the report so that we have it on Hansard?

Mr Tapsell : It is called Resilient families, strong communities: a roadmap for regional and remote Aboriginal communities, by the Government of Western Australia, July 2016. It is quite an honest report. They do not hold back. They basically say, 'Look, we're spending a hell of a lot of money on lots of areas and we're not getting very good outcomes, and we're not evaluating the outcomes and in some cases we're duplicating them.'

CHAIR: Do you want to table that copy of that report?

Mr Tapsell : Yes, you can have that one, if you like.

CHAIR: It should also be noted: that report is regarded as a sort of draft, because it is still out for public consultation in WA. The government has sort of elaborated on that in WA a bit more. I am not saying it is not useful; I am just saying—with that caveat.

Mr Tapsell : So, it is still out there, is it?

CHAIR: Yes. There has been some discussion over the consultation over it. I was at a meeting where that was clarified.

Mr Tapsell : Fair enough. So, that is essentially my opening statement. Our councils are in the aged-care space—not all of them. They are certainly not in the metropolitan areas. When I say 'metropolitan', we have two types of councils, which we have put in our submission: municipal councils, which are based in the five major centres, and regional councils, of which we have nine.

CHAIR: You make a point of that in your submission. Would you mind explaining the difference, particularly as it relates to the topic of aged care? In the submission you talk about lack of flexibility, more for regional councils. Could you expand on that a little bit?

Mr Tapsell : The characteristics of the municipal councils are that they have the majority of population. They also have a confined area, which is generally a town or a city. So, the municipal councils are the City of Darwin, the City of Palmerston—which is the next city out—and then Litchfield Council, and then we have Katherine and then Alice Springs. They all have clearly defined urban areas which are where they provide the bulk of their services. Not all the municipals provide aged care. That is generally done by the NGO sector. They do provide childcare facilities. The City of Darwin has six childcare facilities, but it does not actually run the service. The characteristics of a municipal council are that they are able to access a lot more private firms in which to deliver services. So, you will find that a council like the City of Palmerston will have a workforce of only about 50 people. They are mainly admin people: corporate services, engineering and the like. They do a lot of contract management. A lot of the services are actually provided by firms because those firms are there. Also, the municipal councils have a good rate base, which is the bulk of their revenues. I think I gave you a graph in the submission. The volatility of the funding or the revenues of the regional councils is shown along the blue line on the graph. When you look at that graph, the differences can be up to almost $40 million in one year—a change which is enormous.

The municipal councils tend to provide more core local government services: animal management, roads, street lighting waste management and the like. The difference with the regional councils is that they handle multiple towns. For example, the Roper Gulf Regional Council—where Senator McCarthy is from—has the towns of Borroloola, Manyallaluk, Barunga and Beswick. It has to deliver across a wide geographical area and has multiple towns as service delivery points.

There are 250,000 people in the Northern Territory. There are about 180,000 in those five centres. Then there are 70,000 people outside of that in 60 towns, which equates to about 1,000 people per town. Certainly the challenge for the Northern Territory is that 70,000. Trying to deliver services across all those towns, many of which are really remote, is difficult for councils. The government, when they introduced the local government reforms, recognised a lot of that. We used to have a council for every single town, which was ridiculous and did not work.

Senator POLLEY: We have the same debate down in Tasmania.

Mr Tapsell : They just were not sustainable. They did not have capacity. In my role with the association, I spent most of my time putting out bushfires rather than doing anything useful. So we embraced the change. In fact, we supported it. If I had a crystal ball and said, 'What would it look like in the future?' I think we would have no more than about eight councils. The municipal councils tend to be financially sustainable—that is, their rate basis and the revenues they get from government are generally putting them in a strong, financially sustainable position. The regional councils do not have strong rate bases. In some cases, those rate bases are constrained because they are not able to raise rates from pastoral properties and mining companies to the level of other states or other councils. You only have to look at that graph to see that. There is high volatility in the types of revenues they get. There is an enormous amount of administration that is required to go with it. Some of our regional councils, for example, have up to 60 or 70 grant programs. It is not that they do not have financial strength or that they are not financially viable. They can pay their debts when they are due. But the big ticket items for infrastructure and whatnot down the track is waiting for some of them.

CHAIR: And they are delivering aged-care services?

Mr Tapsell : Not all of them, but generally, yes, when the Commonwealth has come along and said, 'Will you be a provider?' In some cases the Commonwealth was desperate for someone to do it. The other thing, as I said, is that the municipals have got firms within their cities and towns that can generally pick up a lot of this type of work. The councils would in some cases gladly offer it to somebody else if they were prepared to take it on. You heard the person before me that is doing Mutitjulu and places like that. Obviously, the MacDonnell Regional Council is not providing aged-care services in those areas and is quite happy not to. In a lot of cases, we get approached to do that sort of stuff because we are really the only organised organisation that is out there. We are in 60 towns. Some of them are a reasonable size—maybe 3,000 people, which is reasonable for the Northern Territory; it is not a bad size. Others are quite small. Belyuen over here has only got 150 people and it has an aged-care service. So they go from very small to, I guess, a reasonable size.

The turnover in staff in remote areas—the previous speaker also referred to this as well—is a major factor. For example, one of our councils first started in 2008 and had a workforce of 400 people—that is, virtually full-time equivalents. In 2010 they had employed 1,200 people. The change was great, too. A lot of people had to get used to the change of having a council that was based in a major centre. All the regional councils, with the exception of East Arnhem and West Arnhem—which is just Arnhem Land itself—are based in a regional centre. For example, in Katherine we have the Roper Gulf Council and the Victoria Daly Council; in Tennant Creek we have the Barkly Regional Council; and in Alice Springs we have the MacDonnell Council and the Central Desert Regional Council. That has worked, to a large extent, because you can employ to those areas, including aged-care workers and coordinators. A lot of the coordinators are not based out there—some of them are, but not all of them are. They are some of the challenges that the councils have faced.

We do have a shared services operation here in the Northern Territory which is working now. It did not initially, but it is working quite well now. We have a very good manager from New Zealand who is, I guess, starting to achieve the sort of thing that government probably wanted to achieve from day one when the change was made. Shared services means that all their IT systems come back here to Darwin and are managed centrally. That includes their aged care. If we can continue that sort of collaboration, then these councils will continue to get better, I think. That has been an initiative that I know the government had high hopes about, and I think it is only now that it is starting to realise it.

CHAIR: Thank you. We might go to questions now.

Senator POLLEY: Thank you for appearing before us and for your very detailed submission. When you say the councils are providing the aged-care homes and services, who underwrites the losses of those homes?

Mr Tapsell : Generally speaking the councils do, although on some occasions we sought funds from the Commonwealth to be able to pay for that. One of the key things is, because a lot of them are on Aboriginal land, it will depend on who takes out the lease on the land. In some cases some of our councils have said: 'No, we don't want the lease because if you pull the funding out we've got a facility there and then we've got to find out what we're going to do with it. We would prefer the Commonwealth to be responsible for that, rather than us.' I know that is the case in East Arnhem.

Senator POLLEY: I would not have thought that it would be councils' core business to provide such services, but it appears from your evidence that there is no alternative because in so many of these remote areas it would not be viable for other organisations or for-profit aged-care providers to provide those sorts of services. Would that be an accurate reflection of how you see the situation?

Mr Tapsell : Yes. Because the councils have always had a presence in communities, they do have properties there. One of the key sought-after properties is obviously housing. Councils have houses in all of these towns and they also have offices and depots. Slowly, over the years, they have been getting leases for them. But I know, with things like aged-care facilities and probably childcare facilities, they are a little bit reluctant to go down that line yet until they can get guarantees from the Commonwealth that the lease payments will be part of the grant program. Otherwise, they have got to find the money to pay for it.

Senator POLLEY: This morning you would have heard other evidence on the recruitment of staff and retainment of those staff being all wrapped up with being remote, and your submission touches on this too. The remuneration is an issue, and I understand housing would be an issue. What can the federal government do differently to assist in making sure that those people living in remote Northern Territory have quality aged care and that we do something in terms of being able to enhance the workforce and recruit more people.

Mr Tapsell : As I said, the recruitment side of it can be affected by those consumer directed care programs. Generally speaking, the councils have done really well in terms of Indigenous employment. Our nine councils employ anywhere between 60 and 80 per cent Indigenous employment. That is right across the board on all of their services, so they are doing extremely well in that area. They are trying to employ as many people as they can. They do all have strong employment policies and they are doing well. Where they are affected is where a program disappears or they are having to make up for it. As with all local governments, if funding does disappear from the Commonwealth and that is where you are getting the bulk of the money, then your employment levels are obviously going to be affected.

A similar thing happened with housing programs. I will give you an analogy. A lot of the councils were doing maintenance on housing and everything else, and they lost all that because it went to tender. In a way we were our own worst enemy, because we argued for longer term contracts rather than 12-monthly contracts. It is difficult to employ a carpenter when you say, 'We can employ you for the next 12 months, but that's it.' So we went for longer term contracts. We got what we wanted, but the trouble was it opened the market up and all kinds of people came into the market—some of them not good—and suddenly the council, which had a workforce, no longer had that workforce, so the Indigenous employment that was there disappeared. That can happen anywhere.

The other thing was that the people who came in said, 'We want your houses', because houses are premium in these places. The council said: 'No, we're not giving you our houses. We've got other uses for them and there's no way we're going to lose houses.' That created problems too, which meant that these people then had to travel because otherwise they would have had to get leases and build houses and everything else themselves. Sometimes not a lot of thought has been given to what council's presence in there is. There are some communities that have other organisations that can fill the gap, even in housing, and that is fair enough, but in a lot of cases there is nobody. The council is pretty much it.

Senator POLLEY: With the CDCs and how it is all going to change from February, I think for the better for the most part, consumers will be able to access whatever care and support, which they are perhaps not getting from their family, that they deem as necessary. You talked earlier about underemployment. How do you see the rollout of the CDCs having an impact? From your evidence, I am quite alarmed that there is going to be a negative impact on the support and care of people in their homes.

Mr Tapsell : That was one of the main points that one of the councils wanted me to make—that is, they are juggling this and they are finding it difficult to juggle. And if it changes the mix between full-time and part-time employment, then they are saying that it is going to be harder for them to attract people if all that is there is a part-time job. They will find it almost impossible to get someone with the qualifications to be able to do it.

The other thing that I should mention is the training for those people. Even if you try to get—even with Indigenous training, the registered training organisations will not do the courses unless they get the volume of people. That means a lot of coordination across councils, or even other organisations, to bring that together because the training organisations are not going to fly out to Alpurrurulam to deliver a cert IV for two people. They just will not do.

Senator POLLEY: So there are some challenges in terms of the extra cost and transport, and obviously key to providing services is accommodation.

Mr Tapsell : Yes.

Senator DUNIAM: In terms of the funding available to these regional councils, there is a very limited rate base and there are the tied grants. Is there another funding source?

Mr Tapsell : No, that is pretty much it. Local governments throughout Australia get Commonwealth financial assistance grants. In the Northern Territory they also get a reasonably generous operational subsidy in recognition of not getting rates.

Senator DUNIAM: In terms of the services provided by some of these councils in the aged-care sector, the funding for that is as if it were a private or a not-for-profit operator providing the service. They get the government funding and whatever a client is able to pay et cetera. Is that right?

Mr Tapsell : The councils are careful about what they do accept now. Initially, some of them dived into a lot of these services, but they are getting a bit more risk averse in terms of what it is that they are going to accept. For example, the East Arnhem council runs a night patrol service, and the Commonwealth agreed that they would fund it to a certain level. It was not acceptable to the council because they were 20 per cent short of covering their costs, but they have made a policy decision to cover that 20 per cent.

Senator DUNIAM: Where does that funding come from?

Mr Tapsell : It will come out of whatever rate revenue they raise and also their—

Senator DUNIAM: At the expense of something else, basically.

Mr Tapsell : Yes, but, generally speaking, if the aged-care side of it does not stack up, they are a bit reluctant to do it because they are going to have to fund the gap somehow.

Senator DUNIAM: Of course—that makes sense. Fundamentally, though—and obviously this model has come about because of the nature of these very remote communities—who else is going to provide the service? Is it the best model? Is it the model that should be used moving forward or are we talking about needing to rethink how things are done in these regional communities and seeing if there are other organisations?

Mr Tapsell : I think, based on the initial comment I made, we need to rethink some of those outcomes because the last thing you want, if you have only got one provider out there, is for them to not be able to cope. I can remember in the East Arnhem case the Commonwealth was beside itself. The people in the department were saying, 'We really need this council to do this because they're the only ones out there that are going to do it and we need to keep them on board.' They went to extraordinary efforts to try and get the council to accept it, knowing full well that it was all going to fall over unless they continued it. If they are doing it for the Commonwealth, you want to keep them there because, until such time that there is a viable and feasible alternative provider, it is their only option. That is always going to be difficult when they have not got housing and they have not got offices because you have to fly them in. We have had councils, for example, that have pulled out of doing water and sewerage on communities because they cannot strike a deal with the power and water authority in the Territory over a reasonable price. That is even with—not many—Indigenous essential services officers. They have said, 'We've tried, we've tried, we've tried, but you're basically screwing us and we're unable to keep doing it.' Some are still doing it because they are prepared to sponsor it—they have the deal they want. But one council in particular has pulled out altogether, and what did the power and water authority have to do in its place? They had to fly in people from all over the place and it cost them a motser. They ended up paying much more than what they would have paid the council, so that is the silly thing about it.

Senator DUNIAM: I just wanted to get to that fundamental point. Your considered view is it is about improving the support available to these entities to provide the service as opposed to rethinking the model altogether? You have answered that, and I thank you very much for that.

Senator McCARTHY: I was just looking at the conclusion on disability support in your report. Just for the sake of the committee here to be aware as well, you were talking about the councils across the Northern Territory—in particular on Groote Eylandt with the East Arnhem and MJD issue. Do you want to just share with us—

Mr Tapsell : MJD—you have got me there, sorry.

Senator McCARTHY: Yes, with the Machado Joseph Disease and how the people in Groote Eylandt are in the aged care there at Angurugu. You talk in your conclusion here about this committee considering other social service programs, such as disability support. Do you want to expand on that?

Mr Tapsell : Some of the comments that we got back from councils was that there are a myriad of Commonwealth services that are being provided, and it would help if there were synergies between them where they are closely related both in the funding and also in the program requirements. I think that is what councils are looking for. Councils have asked us, for example, can we negotiate with the territory and Commonwealth governments to have uniform reporting requirements for grants. That is an impossible requirement, really. We have tried it and it is in the too-hard basket, because there are so many different agencies involved and they have all got their different requirements. Just getting them to agree, let alone for one government, let alone something as big as the Commonwealth, puts it in the too-hard basket.

It comes down to: how do we administer all these things? How do we have the systems in place that can not only make sure that we are accounting for it properly? I think we are getting over that side of it pretty good. The systems that are in there now are pretty good, but it is the different reporting requirements and the different program conditions. I think that is mainly what they were looking for in terms of getting synergies between the various programs so that, I guess, they are easier to manage. That is probably the best I can give you on that. I might have to take it on notice if you want.

Senator McCARTHY: I thought it might give you an opportunity to expand, but I—

Mr Tapsell : I do not know that particular service that well, but I could certainly talk to the East Arnhem Council.

Senator McCARTHY: Have a think about it. If you think that there is more you would like to expand on with that, by all means provide it. I certainly am aware of the frustrations of all the paperwork that has to be done in so many different areas, both federally and Territory-wise. With aged care facilities, you mentioned about the leasing, and I wondered whether you might want to expand on some of the complexities there. Does every area have an aged care home? Can you give us that?

Mr Tapsell : I would have to take that on notice, too. I do not think so. The bigger ones definitely do. I am even surprised that Belyuen, which is our smallest community—it is only 120 people now—has got an aged care facility.

Senator McCARTHY: If you would like to take that on notice, just to give us an idea of the numbers. As I think Senator Polley asked, we know the fact that councils run this as a core business is something that other councils across the country do not have to do. So maybe for the benefit of the committee, if there is a greater awareness of what number of aged care facilities there is that Councils include as core business, that gives more information to the committee to consider. You also mentioned the leasing of land. Do you want to expand a bit on that, or would you like to take that on notice?

Mr Tapsell : No, no—I can talk on that. Since 2012-13 all governments have been looking at the question of leasing. In the Northern Territory we have got a couple of arrangements, but the main one, I guess, is that the territory government has now entered into lease arrangements for all of its properties—its properties are police stations, schools, hospitals and the like, and the staff accommodation that goes with it. For councils, they are the properties that I told you about, which is staff housing, council offices, depots and the like. The deal that we negotiated with the land councils was that we would use—

Senator McCARTHY: This is local government now, isn't it?

Mr Tapsell : This is local government. We deliberately waited until the territory government had finished its negotiations for leases because our legal advice and common sense was that if anyone is going to negotiate a good deal it is going to be the Northern Territory government, and we should leverage off that—which is exactly what we did. We went for 40-year leases; we went for UCV values, so whatever the value that the Valuer-General put on a particular property, we would pay a lease based on that value.

Our negotiation was that we would pay up to whatever the Northern Territory government paid but no more. We said to our councils: 'You've got to go in there hard and negotiate. You don't have the same capacity as the Territory government, so you will have to go for a rent that is lower than what the Territory government is paying.'

Initially, the council said: 'We are going to get leases for houses, for depots and for offices only. We are not going to go for open-space areas—dumps, airports or anything else—because we don't know what it's going to cost.' A lot of them have now got leases for those properties. What they said to the Commonwealth was: 'We don't want a lease for aged-care facilities. You should get the lease for that, because we are worried that, if we ever have to get out, we are still going to have this lease and we are going to have to keep paying it, and we don't know how we are going to pay for it because at the moment we are paying for it out of your grant. If we don't get your grant anymore, we don't want to be left with this asset.' Some councils have gone for the lease, so they have done their own thing. Others have said, 'No, Commonwealth—you pay for it.'

Senator McCARTHY: Can you give us a number on both?

Mr Tapsell : I will have to do that as well.

Senator McCARTHY: On notice? Okay.

CHAIR: You are doing lots of homework!

Senator McCARTHY: Yes, and I will check on you too, Mr Tapsell! I would like the number of councils that have gone for the leases for aged-care facilities themselves and how many have chosen for the Commonwealth to go for the lease of aged-care facilities.

Mr Tapsell : Okay. I would say it would probably be only one or two that have got the lease, because a lot of the councils are yet to get through the leases on their own properties. The land councils do not have the capacity in some cases to process all the leases. Just to give you an idea, out of those nine councils, there is only one that has 40-year leases for all its properties.

Senator McCARTHY: Which one is that one?

Mr Tapsell : Roper Gulf.

Senator McCARTHY: For all its properties?

Mr Tapsell : Yes. Other councils have had a hell of a problem getting the leases. Some have 12-year leases with a 28-year option, which brings it up to 40 years. But after the 12 years they are going to have to renegotiate.

Senator McCARTHY: Roper Gulf has 12-year leases?

Mr Tapsell : Roper Gulf has 40 years.

Senator McCARTHY: A 40-year lease.

Mr Tapsell : We were going for 40-year leases. Unfortunately, not all of our councils negotiated that, and I have no explanation as to why they did not, because we paid for a lawyer to get all that done. It is just one of the joys of working for the LGA!

CHAIR: Pity it is on Hansard!

Senator McCARTHY: Thanks, Mr Tapsell. I thought it was important for the benefit of the committee to be aware of that, given that nearly 50 per cent of the land mass is Aboriginal land, and one of the most complex issues is leasing.

Mr Tapsell : That is why they have taken that approach with aged-care. Some of them are getting around to getting leases for their dumps and for their open spaces, and then we have to do roads at some stage. All of this is in the pipeline. That is not to say that they will not take out a lease for an aged-care facility—they probably will—but it will be down the track. It will be when they have sorted out their money and everything else.

The reason they went for a smaller group was to see how much it cost. One of our smallest councils is West Daly Council, which includes the township of Wadeye. Wadeye is one of our biggest communities, about 3,000 or 3,500 people. It also includes Palumpa and Peppimenarti. They are the three towns within that local government area, and they pay $325,000 a year for leases. That is quite a lot of money. So the question over what other leases they are going to take out is crucial for them. They are probably paying a bit of a premium. Another one is Bathurst Island. The Commonwealth introduced the Office of Township Leasing. I do not know if you have ever heard of it—

CHAIR: Yes, we have.

Mr Tapsell : but the Office of Township Leasing also has leases on Bathurst Island and Groote Eylandt for townships, and some of the rents they are paying over there are very high. Marion Scrymgour, who is the CEO now, rang me up and said, 'How come we pay so much for this, Tony?' I said, 'Look, we give councils the template and I guess they have to negotiate.' Maybe in the case of Wurrumiyanga they relented. That is, they thought the only way they were going to get a lease is if they accepted the conditions. So in some cases they are paying a premium over there as well.

Senator McCARTHY: But that is separate, though, isn't it? The Office of Township Leasing is separate to the payment that goes to the land councils, so there are two leasing arrangements.

Mr Tapsell : That is right. There are separate lease arrangements.

Senator McCARTHY: There are two separate lease arrangements, so the one you are referring to with the Tiwis—

Mr Tapsell : Is with the Office of Township Leasing. I guess the disagreement we had with the office was that you should not be basing the UCVs on Darwin, which is apparently what they were doing initially, which is why the rents were so high. Anyway, for whatever reason, the council signed the lease and I guess in times to come they will have to try and negotiate. Maybe they will be in a better position to negotiate, knowing full well what everyone else is paying—if they can get that information.

CHAIR: We have run out of time. Thank you. You have taken quite a lot of homework on board. The secretary will be in contact with you about timing, how to get that in et cetera. Thank you for your comprehensive answers today and your submission. It is really helpful and it has given us a really good overview of the situation up here and the complications.

Mr Tapsell : Thank you.

CHAIR: That is the conclusion of today's hearing on aged care.

Committee adjourned at 10:47