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Thursday, 16 May 2013
Page: 3557

Ms O'DWYER (Higgins) (17:36): I certainly echo the sentiments expressed by my colleague and good friend the member for Bradfield in his speech to the House this afternoon. I rise today to also speak on the package of bills, including the Aged Care (Living Longer Living Better) Bill 2013, the Australian Aged Care Quality Agency Bill 2013, the Australian Aged Care Quality Agency (Transitional Provisions) Bill 2013, the Aged Care (Bond Security) Amendment Bill 2013 and the Aged Care (Bond Security) Levy Amendment Bill 2013.

In amongst the bickering and the quarrelling that sometimes take place in this House—and the somewhat more elevated debate—there is one thing that I am very confident that each and every member of this place can agree on. We can agree that we have a duty to ensure that senior Australians live their lives in security, with access to quality care, and to make sure that they have real choice in that care. Every Australian should understand and respect the service and dedication that previous generations have given to build this great nation. If not for the sacrifices of older Australians, we would not be in the position that we are in today. That is why we must do all that we can to provide for our older Australians to make sure they get the dignity and respect they deserve so that they may live out their retirement years in peace and security.

However, no matter how meaningful or profound those sentiments may be, it matters very little if the detailed plan is not in place to put those words into action, and that is where this government has failed so dramatically. It talked big, but its rhetoric does not match the reality. The government has been in power for coming on six years. The Treasurer has delivered his sixth and, hopefully, his last budget—I say this not out of arrogance or hubris but rather out of a very deeply held belief that Australia cannot afford another budget that delivers more debt, more deficits, more taxes, more spending promises and more uncertainty all round. Yet, despite this extended period in government and despite all of the talk, there has been very little advancement in the aged-care sector. If anything, there has actually been a regression. It has been reported that, despite increase in demand, only 40 per cent of residential aged-care providers operate at a profit, meaning more than half are unsustainable in the long term. This in turn has seen a number of providers handing back their licences, which in turn has put extra strain on the public system.

A significant factor that is contributing to this decline in viability is the ever-increasing regulatory burden placed on aged-care providers. I find it somewhat ironic that this government has a minister for deregulation yet, in its time in government, has increased regulations by over 21,000 and repealed a tiny fraction of that. Many of these regulations apply to the aged-care sector. I can only imagine what it would have been like if there had been no minister for deregulation. The coalition has committed itself to a realistic reduction of red tape and regulation based on actions, not words. We have committed to cutting $1 billion of red tape and regulation. We will ensure that we keep the standards and safety levels but allow the aged-care sector to get on with doing what it should be doing: concentrating on looking after our senior Australians.

It is because of the crisis in the aged-care sector that the Productivity Commission were engaged to conduct their report Caring for older Australians, which was released by the Minister for Mental Health and Ageing on 8 August 2011. It then took this government 250 days to respond to the 58 recommendations in this report. With much fanfare, the government announced a moderate increase in funding and the Living Longer Living Better package of bills, which is the subject of this debate. As with all of the initiatives of this government, they managed to coin a creative name but it lacks substance and detail. It is the detail that always concerns us on this side of the House.

The reason we are concerned over the detail of this bill is that the government is trying to force through the bills in this House prior to the Senate Community Affairs Legislation Committee completing their report. Already concerns have been expressed during the Senate inquiry—concerns that pertain to home care user co-payments, residential care pricing arrangements, rural and remote services, the homelessness supplement, the dementia supplement, the amendments to the bond security legislation, the pricing authority, faith-based sex discrimination, the Productivity Commission's approach as an alternative and, finally, the consultation processes as to how we are at this point today.

Specifically, though, we are concerned that, under the Living Longer Living Better package, there will be cuts in the order of $1.6 billion to ACFI funding due to assertions made by this government that the system is being rorted. To date we have yet to understand specifically where those accusations are coming from and the substance and details of those assertions. It does sound somewhat similar to the assertions that were made more recently by the Minister for Immigration and Citizenship on 457 visas. He admitted that he made up some assertions and forecasts but said in his defence that everybody makes up forecasts, so why can't he? I suppose he was taking a lesson from our current Treasurer.

These cuts will have a real and significant impact on aged-care providers. In a media statement released in 2012, Leading Age Services Australia, or LASA, stated:

Aged care providers face a revenue black hole of more than $750 million over the next two-and-a-half years …

It also outlines research findings as follows: 89 per cent of aged-care facilities will face unrecoverable losses of revenue under the ACFI changes of 1 July; the average reduction of care funding for each affected resident each year is between $20,000 and $23,000; and the average loss per aged-care facility is more than $125,000 each year, with some facing revenue shortfalls of up to $560,000 and smaller and rural facilities potentially being the most affected.

We are also concerned that the Living Longer Living Better package will increase the regulatory burden rather than decrease it. These bills will establish the Aged Care Funding Authority, a new bureaucracy which will act outside the remit of parliamentary scrutiny and dictate prices, bonds and other measures. The justification for this super-regulator was once again predicated on some pretty spurious assertions—again, the claim of rorting through the issuance of superbonds of more than $2 million. Yet it is my understanding that only one person in Australia has a bond in excess of $2 million, and this is because highly specialised equipment was needed in that case.

However, most concerning to the coalition is the $1.2 billion workforce supplement, which will supplement the wages of some in the industry. To access this funding, providers with more than 50 beds will have to enter into EBAs and meet certain obligations in order to gain access to the government's supplement. The cuts to ACFI, followed by the introduction of this access measure, clearly indicate that the government only wants to reward those providers who have workers with union memberships.

That is quite wrong. It will not help our older Australians more broadly but will simply pander to special interest groups. This measure will force up the wage costs of all providers and, as I mentioned earlier, many are already operating at a significant loss. This particular concern was highlighted in a number of submissions made in reference to the package of bills. I read from some of those concerns that were expressed. Mr Ray Glickman on 29 April said:

There are four reasons why the workforce supplement should not go ahead. First of all, it is wrong in principle. To take away funds from ACFI, which essentially belong to our residents, and then transfer them to workers, is wrong in principle. And it is particularly wrong in an environment where consumer direction will be the future. Also it is futile, because robbing Peter to pay Paul does not generate more money in the system, sustainably, to pay higher wages.

This measure is secondly wrong because it industrialise what is essentially a funding issue. It centralises industrial arrangements and takes away the outcomes that one negotiates individually as an enterprise. It also seems designed to promote the interests of the union by driving clauses that have been rejected by many employers in their own enterprise bargaining arrangements. Many of the initiatives that had to be included are also costly and do not directly benefit residents, or clients.

Thirdly, it should be rejected because the proposition is not fully funded. So, in addition to recycling existing funds, so we have no more money, it does not cover on-costs. That includes numerous expensive expenditure items that will be part of the overall deal. Our calculation suggests that the cost will outweigh income by two to one. That seems extraordinary, but it is true once you add up all the elements. We have an example from the bush, where to gain $17,000 will cost $30,000.

The fourth reason it should be rejected is that it is discriminatory. The majority of regional, remote and rural providers will not be able to comply with the requirements - and they are the organisations who are most in need.

To summarise those points: this supplement is very poor piece of public policy. Let us not call it a compact, because it certainly has been agreed with provider organisations. It takes money from care to return to some employers who can strike a deal.

Ms Marie-Louise MacDonald, a board director of Masonic Care Alliance, on 30 April said:

The workforce subsidy … is a major concern. We as an organisation and all of our alliance have EBAs which pay above the awards. We all want to do well by our staff and in our own way we put in place a number of things around family friendly environments and rostering around those needs and such to retain our staff. We would love to give them more money as well. The problem is that subsidy is a shortfall for what we actually need. In WA an average worker would have six weeks annual leave - that is a carer. If they are a registered nurse or an enrolled nurse they can have seven weeks if they work a rotational shift, and if they were lucky enough to be moving from a state award into the federal they would get an extra week on top of that - so that is eight weeks. The accruals that relate to that workforce are substantial. Any subsidy that comes through has to recognise the flow on of the accrual cost that goes with that. For organisations like mine it can be millions of dollars that you have in accruals.

Why is this all so important? Why is it essential that we look after our senior Australians, those people who have raised our parents, who have in turn raised us?

It is critical that we get this right because we know our population is ageing. In fact, around nine per cent of the population is 70 years or older and this is expected to increase to 20 per cent by 2051. By the same year, 3.5 million Australians are expected to be using aged care, accounting for around three per cent of GDP. If we do not address this issue now it is going to be more difficult in the years ahead.

A government that is so much in chaos—that perverts the proper course of government in a vain attempt to win the headline of the day and does not do its homework properly to address these real and critical issues facing our nation—is not a government that can be trusted. After six long years this government has still not realised the fundamental truth that good policy makes good government. If the government actually implements real change that improves the lives of people, not makes it more difficult, people will respect it. But this will not occur while it is simply chasing the media cycle and a headline and not doing the detailed policy work.

I support the amendment before the House to defer these bills until proper scrutiny has been applied and we can see the full and complete report of the Senate Standing Committee on Community Affairs. This issue is too important not to get right. It is too important not only to the senior Australians of today but for all of us who will become senior Australians in the future. We have a responsibility and we need to honour that responsibility.