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Monday, 3 June 2013
Page: 5002

Mr FRYDENBERG (Kooyong) (20:01): I rise to speak on an issue that is extremely important to the people of Kooyong, namely, the future of aged care. Be under no illusions: there is a crisis in aged care. Only 40 per cent of residential aged-care providers are operating in the black. Under its reforms the government has cut $1.6 billion from the Aged Care Funding Instrument, with Leading Age Services Australia, LASA, saying that there will be a revenue black hole of more than $750 million over the next 2½ years.

There is insufficient support for people to remain in their homes. For example, in 2011 there were 24,000 applicants for the 1,698 community care places advertised. Attracting high-quality nursing staff is difficult, with aged-care nurses receiving in some cases up to 30 per cent less than their colleagues working in acute care. And the sector is suffocating under increased red tape and regulation, with aged-care nurses reporting that up to one-third of their time is spent on paperwork. Add to this mix that through its new workforce supplement the government is seeking to unionise all those who work in the aged-care sector, and one could not imagine it getting any worse.

But it will, as Australia is facing a demographic time bomb—not unlike many other countries in the world, but we are simply ill-prepared. Today 13 per cent of our population is over the age of 65, a number which will reach 26 per cent by 2050. Today, 2,700 people are over the age of 100, rising to 78,000 by 2050. Today, the ratio of working Australians to every person in retirement is just over five to one, but by 2050 it will nearly be 2.7 to one.

These numbers will create huge funding problems in the aged-care sector, as the number of users continues to grow: some 3½ million people each year by 2050, with governments expected to meet the costs of funding concessional and assisted aged-care residents. Indeed, by the Department of Health and Ageing's own numbers, by 2050 five per cent of the Australian workforce—over 827,000 people—will be engaged in the provision of aged care. So, given this tsunami of demand that is coming our way, what is the Gillard government doing to prepare us for the future? The answer is 'very little'.

Back in August 2011 the Productivity Commission released an important report, Caring for older Australians. It is one of 20 reviews and three Productivity Commission reports undertaken by this government. But rather than respond quickly to the report's recommendations, which included shifting the ration system of licences and packages currently in place to an entitlement system where aged care would be part of the health system, the government took 250 days to announce its response—which in the end was contrary to the recommendations of the Productivity Commission, as it introduced new regulations to pricing.

What this government clearly does not understand is that accommodation bonds as refundable deposits play a critical role in the aged-care funding model, building the capacity for investors to construct new facilities and open up more beds. The government's proposed legislation, which is being hastily rushed through this parliament—including by truncating the reporting dates for an important Senate inquiry—will see the creation of a new bureaucracy, the Aged Care Pricing Commissioner, which will make a discretionary determination regarding the pricing of bonds. This has created huge uncertainty and a disincentive to invest.

In addition, the aged-care workforce supplement I referred to previously will require aged-care operators with 50 or more beds to enter into enterprise bargaining agreements as a condition of receiving additional funding. Those operators with under 50 beds will have to abide by the conditions of the supplement nonetheless. Like the government's tactics in the childcare sector, this is a brazen attempt to increase the membership of the depleted and scandal-ridden HSU, as well as boosting the stocks of Minister Mark Butler's old union, United Voice. This reform is going ahead despite being roundly rejected by the peak provider bodies.

Enough is enough. This government has to be called to account for its failure to prepare for a better future for aged care. Its policies have been more than disappointing; they have been detrimental in the extreme. It is with that in mind that I oppose the member for Shortland's motion today.

Debate adjourned.