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Thursday, 20 September 2012
Page: 11476

Mr CROOK (O'Connor) (16:50): Over the months, I have been meeting with aged-care service providers in O'Connor and Western Australia generally. This has included various meetings and correspondence with Julie Christensen, CEO of Narrogin Cottage Homes and Karinya residential care; Stephen Kobelke, CEO of Aged and Community Services, Western Australia; and Susan Harris and Jillian Nalder on behalf of the board of Waratah Lodge in Wagin.

I feel their frustration with this government's handling of aged-care policy, particularly with respect to the claw-back of the Aged Care Funding Instrument. However, I have also noted that, as yet, they have not been fully assured that an alternative government would address their concerns, particularly with respect to the rural and regional services in WA. To this end, I have invited the shadow minister to my electorate of O'Connor to engage directly with these stakeholders to address these concerns.

The aged-care industry have raised a number of issues with me, but I rise today to specifically speak about the government's changes to the Aged Care Funding Instrument, ACFI, and the decision not to apply indexation. The ACFI is the instrument that allocates the government subsidies to residential aged-care providers. The government has decided to achieve more than $430 million of savings through ACFI changes, as well as millions of additional dollars through its refusal to apply indexation to the ACFI.

There are a number of critical government failures in relation to this decision. I will address each in turn. The first and fundamental failure relates to the government's refusal to acknowledge that the ACFI changes are a funding cut. No cute words by government about 'adjustments to trends' and no amount of sidestepping referring to apparent funding boosts in other areas will escape the truth. The government's sidestepping of the fact that this is a cut is entirely unhelpful for many service providers who are suffering under its decision. The second failure in relation to ACFI is the government's failure to advise or engage with the industry before making the decision.    In fact, industry representatives have advised me that they found out about the cuts just seven days before they were implemented.

The third failure in relation to ACFI is that a blanket decision not to apply indexation to the instrument fails to acknowledge the huge cost pressures in Western Australia. In WA, the mining boom is resulting in skills shortages, upward wage pressures and increased operational costs, including soaring accommodation and utility costs. To not apply indexation in this environment is entirely untenable.

The government claims these cuts are required because of overclaiming by certain aged-care providers. The final failure is that these cuts do not address this problem. As the board of Waratah Lodge in my electorate has rightly pointed out, if the government's concern is really with overclaiming, why wouldn't the government sanction or punish those facilities rather than implementing a whole-of-industry subsidy cut?

The effect of these failures in WA, especially in regional areas, is significant and in urgent need of redress. Many service providers in my electorate operate on a very thin, or even no, profit margin. For example, Waratah Lodge is an 18-bed low-care facility in Wagin. It has been open since 1985 and has become an integral part of the community. Waratah Lodge's current-year budget is for a net profit of zero. It simply cannot afford to shoulder the burden of the ACFI cuts this financial year. A similar story exists at Narrogin Cottage Homes, an aged-care facility that was started in 1978 and has 35 ageing-in-place beds. This facility operated at a loss in July and can simply not sustain the cuts to its subsidy.

The reality is: aged-care service providers face unique cost pressures in WA as compared to other states. Additionally, service providers in rural and regional Australia face unique cost challenges as compared to their city counterparts. Despite these differentials, subsidies are pegged at the same level across the country, and it adds insult to injury to then introduce blanket cuts to the subsidies without notice.

I call on the government and the opposition to urgently provide assistance to WA regional, rural and remote service providers and consider calls for a proper cost-of-care study which would unveil the real costs of delivering care services in the regions. I also call on the government to immediately reverse its ACFI funding cuts decision.

Before I sit down, I think it is important to reflect on what this debate is really about. It is about caring for older Australians. It is a debate about our parents, our grandparents, our community leaders and, in many cases, the pioneers of our regional and rural communities. In this place, we have a responsibility to ensure proper care for these older Australians, without defaulting to political point-scoring. I am passionate about supporting the aged-care sector in regional and rural Australia. Older Australians should be able to access proper care and support in their regional towns, where they have played such an integral role for so many years. (Time expired)