Senator Chris Evans asked the Minister representing the Minister for Aged Care, upon notice, on 28 April 1999:

With reference to the current capital activity in the residential aged care sector and, in particular, a circular sent to the industry on 22 April 1999 in which the Minister states that, `upgrades, rebuilds and new facilities worth an estimated $409 million were completed during the survey period of 1 October 1997 to 30 June 1998':

(1) (a) On what information was this estimate based; and (b) can a copy of this information be provided.

(2) What information was provided by the industry to support this estimate.

(3) If a survey was carried out across the industry, what are the details of that survey, including the numbers surveyed, the number of responses and the distribution of those surveyed.

(4) When was any information from the industry provided.

(5) Of the $409 million, how much was spent: (a) on upgrades and rebuilds; (b) building new facilities; (c) on low-care facilities; (e) on high-care facilities; (f) in privately run facilities; (g) in not-for-profit facilities (h) in each state/territory; and (i) in rural/remote regions.

(6) Does the $409 million include Commonwealth capital grants under the previous funding arrangements; if so, how much were these grants worth.

(7) How much of the $409 million spent in this period was spent in combination with Commonwealth capital grants under the previous funding arrangements.

(8) How much was provided to the sector in the 1996-97, 1997-98 and 1998-99 financial years through capital grants under the previous funding arrangements.

(9) Does the $409 million include the annual $10 million capital funding pool for rural areas and the $20 million special capital funding pool announced in 1998.

(10) With reference to the statement in the Minister's circular that projects worth an estimated $317 million were in progress: Given that it is not clear when the estimate is current, when was there an estimated $317 million worth of projects in progress.

(11) Of the $317 million, how much was being spent: (a) on upgrades and rebuilds; (b) building new facilities; (c) on low-care facilities; (d) on high-care facilities; (e) in privately run facilities; (f) in not-for-profit facilities; (g) in each state/territory; and (h) in rural/remote regions.

(12) Does the $317 million include Commonwealth capital grants under the previous funding arrangements; if so, how much were these grants worth.

(13) How much of the $317 million spent in this period was spent in combination with Commonwealth capital grants under the previous funding arrangements.

(14) Does the $317 million include the annual $10 million capital funding pool for rural areas and the $20 million special capital funding pool announced in 1998.

(15) Does the fall from $409 million to $317 million represent a fall in capital investment in the residential aged care industry.

(16) (a) What estimates does the department have for future development within the sector; and (b) what is the basis for these estimates.

(17) (a) What departmental processes are in place to monitor capital development within the sector; and (b) will the department produce regular updates on the capital activity in the sector.

(18) What is the process by which the department monitors the use of: (a) the accommodation charge in upgrading capital infrastructure; and (b) the concessional resident subsidy in upgrading capital infrastructure.

Senator Herron (Aboriginal and Torres Strait Islander Affairs) —The Minister for Aged Care has provided the following answer to the honourable senator's question:

Due to an administrative error by the Department of Health and Aged Care, the second page of questions Senator Evans asked were not addressed in my previous answer to question No. 706. These questions are included in the answer below.

(1) (a) The estimate of $409 million was based on a survey of facilities that were required to report

on their upgrading, rebuilding and new building activity. Facilities were required to report the actual cost of projects completed during the period from 1 October 1997 to 30 June 1998. The results of the survey were projected industry wide to produce the estimate.

(b) A copy of the survey instrument requesting the building activity information is at Attachment A.

(2) Facilities reported the actual cost of upgrading, rebuilding and new building projects completed during the period from 1 October 1997 to 30 June 1998.

(3) The survey was conducted across all services (approximately 3030). The survey was completed and returned by 1685 services, or about 56% of all services. The distribution of responses and those surveyed is presented at Attachment B.

(4) The survey was conducted during August and September of 1998.

(5) Of the $409 million,

(a) $255 million was reported as spent on upgrades and rebuilds;

(b) $154 million was reported as spent on new facilities;

(c) $192 million was reported as spent by low care facilities;

(e) $218 million was reported as spent by high care facilities;

(f) $104 million was reported as spent by private facilities;

(g) $249 million was reported as spent by religious and charitable facilities (the balance of $56 million was reported as spent by Government and Ex-Government facilities);

(h) The amount reported as spent in each state and territory is as follows:

State Amount reported

(i) $119 million was reported as being spent in rural and remote areas.

(6) The survey did not include questions on whether the facilities were in receipt of Commonwealth capital funding.

(7) The survey did not include questions on whether the facilities were in receipt of Commonwealth capital funding.

(8) Actual Expenditure (please note that capital expenditure for these years reflects capital grant approvals for years before 1996-97):

1996-97—$105.2 million; 1997-98—$39.8 million; 1998-99—$ 26.4 million to 30 April 1999.

(9) The $409 million does not include funding from the Targeted Capital Assistance pool or the Industry Restructuring pool as this funding was not taken up by industry until after the survey period.

(10) The estimate of $317 million worth of projects in progress was based on a survey that covered the period from 1 October 1997 to 30 June 1998. The estimate therefore refers to the estimated

cost on completion of upgrading projects in progress on 30 June 1998.

(11) In relation to the $317 million,

(a) $225 million was reported as the cost on completion of upgrades and rebuilds;

(b) $92 million was reported as the cost on completion of new facilities;

(c)$111 million was reported as the cost of projects on completion by low care facilities;

(d) $206 million was reported as the cost of projects on completion by high care facilities;

(e) $59 million was reported as the cost of projects on completion by private facilities;

(f) $218 million was reported as the cost of projects on completion by religious and charitable facilities (the balance of $40 million was reported as the cost of projects on completion by Government and Ex-Government facilities);

(g) The amount reported as the cost of projects on completion in each state and territory is as follows:

State Amount reported

(h) $119 million was reported as the cost of projects on completion in rural and remote areas.

(12) The survey did not include questions on whether the facilities were in receipt of Commonwealth capital funding.

(13) The survey did not include questions on whether the facilities were in receipt of Commonwealth capital funding.

(14) The $317 million does not include funding from the Targeted Capital Assistance pool or the Industry Restructuring pool as this funding was not taken up by industry until after the survey period.

(15) The difference between the $409 million and $317 million amounts does not represent a fall in capital investment in the residential care industry. The $409 million amount represents the estimated building activity completed during the period from 1 October 1997 to 30 June 1998, while the $317 million amount is the estimated cost on completion of projects that were in progress on 30 June 1998. Other projects would have commenced after 30 June 1998.

(16) (a) The Department has just initiated another survey of building activity within the sector. This survey will be used for estimating the amount of building activity for the financial year 1998-99. (b) The basis for these estimates will again be the extrapolation of the results of the survey across the sector.

(17) (a) The Department has just initiated another survey of building activity within the sector for the financial year 1998-99. The survey will be conducted annually. (b) The Department will be including the results of these surveys annually as part of an Annual Report on the Operations of the Aged Care Act 1997. These reports will be publicly available.

(18) The Department monitors building activity annually through the survey of building and upgrading activity. The survey also gathers infor mation on the amounts of accommodation bonds and charges that facilities are charging. Services that do not invest in capital upgrading and subsequently cannot meet strict building certification

requirements cannot ask residents to pay accommodation charges or bonds. Services whose quality of care and services do not satisfy the accreditation standards by January 2001 will not be funded.

Attachment A

Copies of the attachment are available from the Table Office.

Attachment B

Distribution of responses.