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Minister discusses the Productivity Commission Report into Nursing Home Subsidies.

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Bronwyn Bishop, Federal Minister for Aged Care


The Government’s response to the Productivity Commission Report into Nursing Home Subsidies.




BRONWYN BISHOP:  Good morning John. It’s Bronwyn Bishop speaking.


LAWS:  Hello Bronwyn Bishop. What a nice surprise. How are you?


BISHOP: I’m very well indeed.


LAWS: They said you were going to call because you were going to announce something.


BISHOP: Yes. I’ve announced this morning in my capacity as Minister for Aged Care, the Government’s response to the Productivity Commission inquiry into the vexed question of coalescence, a term which I think is confusing for a lot of people. But what it really meant was, it was the Government’s attempt in 1997 to fix up Labor’s legacy that they left us of paying different states different rates for nursing home care.


LAWS: But isn’t that understandable that that was the way it was done, given the different sizes of the different states?


BISHOP: No. It was based on the premise that somehow it cost less to provide the care in different states.


LAWS:  I see


BISHOP:  And we believe that that wasn’t equitable and we moved to do something about

Okay. So, now is everybody going to be on an equal footing?



BISHOP: Yes. What we’re doing is speeding up the process. I’ve announced a package of $148 million of new money that will mean that Queensland and South Australia and Western Australia will move up to get the national rate very much more quickly.


The first payment beginning on the 1 January 2001, and in Victoria and Tasmania who thought they were going to get a dip in their subsidy we’ve put another $40 million into Victoria and $6 million into Tasmania to stop that happening, so it’s an equitable solution.


LAWS: Why does Queensland get $83 million? That’s a lot.


BISHOP: Yes it is, because basically they are the lowest funded state and they were receiving a daily rate which was considerably less than the national average, and so we’re moving them up with that $83 million to have them on the national average by the year 2002 instead of 2004—OS as was the original intention.


LAWS: I’m looking at the list here. Queensland gets $83 million, South Australia gets $14 million, Victoria gets $40 million, Tasmania $6 million, New South Wales gets nothing.


BISHOP: New South Wales is essentially on the national average but that’s in those rates that are being adjusted. Aside from that there will be continual real growth in funding for New South Wales as well as by the other states.


LAWS: My God, Queensland must have been a long way behind if they needed to get $83 million extra?


BISHOP: Well, they did John. They were on a rate. For instance, the average rate is about a $105 a day and Queensland was on just over $90 dollars a day. So, you can see they were much below the others and we thought it was equitable to bring about this, putting everyone on the national average, and the Productivity Commission also agreed that going to a national rate, of course, was the right thing to do.


But it was the time it was taking that we have decided was unfair and we’ve moved this new money in this very difficult climate and I’m delighted to have worked with the industry and to have the Catholic Health Australia and the Uniting Church and the Baptists all very pleased to back this new proposal as being equitable.


LAWS: Well, I imagine that everybody would be pleased. But how can you be certain that the money’s going to be spent where it’s needed? Do you have any control over it?


BISHOP: Yes I do. I have three tools to make sure that under our reforms that money is in fact spent in the way it ought to be, that is, care for individual Australians. The first is called the Residential Classification Scale which determines how much money is paid in respect of each resident according to their need and then we have an inspection system to make sure that they in fact meet the care plan that they write for every individual.


Then we have a Certification Standard and their buildings have to reach the certification standard, and then there’s now Accreditation. And if they’re not accredited by the year 2001, the 1 January, then subsidy will cease for that facility.


LAWS: If extra funding is being injected into the nursing home system, does that mean that residents will then pay less?


BISHOP: No. The contribution that they make is means tested both in accordance with income and assets testing and I might say about 70 per cent of people in high level care are pensioners who simply contribute a percentage of their pension.


LAWS: Okay. Well, that’s a pretty good Christmas present for every state except (laughs) New South Wales.


BISHOP: Well, New South ...


LAWS: Have they complained?


BISHOP: Well, New South Wales are on the national average. They’re already there.


LAWS: Oh, I understand that but New South Wales won’t understand that.


BISHOP: Well, they do because they will go on getting real increases in funding of around 5 per cent as we go through each year which is way above CPI.


LAWS: Okay. I hope you have a very happy Christmas. Are you going to take a break somewhere?


BISHOP: Well, I hope to John. I tried to last year and that didn’t quite work out so I hope I do and I hope you have a good and happy Christmas as does the Princess.


LAWS: Thank you. That’s very sweet of you Bronwyn. It’s wonderful to talk to you and we’ll talk soon I hope.


BISHOP: Yes indeed.


LAWS: Okay.


BISHOP: Thank you.


LAWS: Bye.




LAWS: Minister for Aged Care Bronwyn Bishop with good news. Queensland getting $83 million. As I say, they must have been a long way behind. South Australia gets

$14 million, so they couldn’t have been in too bad a shape and Tasmania, $6 million. They couldn’t have been in too bad a shape either.


New South Wales gets nothing and apparently hasn’t complained.