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Monday, 30 November 1998
Page: 957

Mr SWAN (8:00 PM) —The Aged Care Amendment (Accreditation Agency) Bill 1998 will insert into the Aged Care Act 1997 the facility for the minister to set a schedule of fees that the Aged Care Standards and Accreditation Agency would then charge when processing applications from aged care facilities for their accreditation under the Aged Care Act 1997. Accreditation under the act will be a prerequisite for receiving government subsidies from January 2001.

The Labor Party supports any initiative that seeks to improve the standard of aged care in Australia. Residents in these facilities are potentially in a vulnerable position and may be unable to effectively represent their own interests, while providers are often struggling to remain financially viable. It is in this context that this bill has been introduced, and that context leads to many of the objections and reservations that the Labor Party has about this bill.

As all members would be aware, there have been substantial funding cuts in the area of aged care over the last three years. This has put considerable pressure on nursing home proprietors and on the quality of care in nursing homes. We have seen, for example, very substantial cuts to the recurrent grants that fund nursing homes.

Originally, it was a Labor government that introduced an annual inspection system, which has acted to ensure that aged care facilities were required to maintain a reasonable standard of care. We do not believe this government shares our concerns about the standard of aged care in Australia, given the size of recent funding cutbacks and the consequent pressure that those cutbacks have put on the standard of care in nursing homes right across this country. We believe the government has demonstrated a lack of concern by slashing funds and generating high levels of anxiety amongst the aged and their families by continually amending and altering its policies in this area.

Let us just consider for a minute the recent history of this government's nursing home policy, which is quite relevant to this bill. This government believes that our seniors—who have paid taxes all their lives and survived depressions and world wars—should, in a time of need, be forced to pay for essential nursing home care. This government believes that seniors should sell, mortgage or borrow against their family home to pay for that essential nursing home care. We believe—and we said this during the term of the last parliament—that this sends a dreadful message to our seniors, and that message is very clear: if you are young and you are sick, you get free treatment under Medicare; if you are old and frail and sick, you pay, you pay and you pay. That has been the history of the last three years. It has been the history of the entrance fee and the history of the very high daily fees.

All of those members opposite claimed in speeches elsewhere—in bills concerned with aged care and our seniors—to value the contribution of the elderly in our community. But when it came to nursing homes—the most essential aspect of care for the elderly in this community—they all walked into this House and voted for the pernicious policies that we have seen over the last few years. They did not speak up for the elderly. They were mute. They put their party interest first and the elderly last. So we have great reservations about how this proposal may work.

It was those opposite who forced those with no substantial asset other than their family home to sell, mortgage or rent that family home to gain access to essential care. For over 70 per cent of pensioners, their family home is their only asset. So the approach with nursing homes was to force people with very few assets, or their only asset being the family home, to sell it. That is what it meant. But if you had substantial assets over and above your family home, or your family had substantial assets over and above the family home, there was no requirement to sell it.

Just think of this: for the first time in Australian history it was the Liberal Party that introduced a policy in this House that forced battlers to sell their family home by including it in an income and assets test. That is something that will not be forgotten very quickly.

In addition to including the family home in determining eligibility for entry to nursing homes, the government has brought in the entry fee and additional daily fees. The thing about the additional daily fees that were brought in is that there was no requirement that those fees be spent in upgrading nursing homes. All of that money went straight to the Treasury—straight to the Treasurer, Mr Costello. It did not go into upgrading nursing homes.

There has been a lot of debate about this policy, and it is still the case that members opposite come into this House and claim that there is no requirement to sell the family home. Well there is a requirement to sell the family home if you are a battler. This is what the Australian Catholic Health Care Association had to say about this policy:

. . . the accommodation charge is nothing more than a wolf in sheep's clothing . . . selling their home will be the only option for many . . .

That is the climate that has been created. The climate in aged care is one where people who need essential care have been told they have to pay. If it means selling the family home, so be it. In many ways, this bill represents just another of the changes that this government has made to the Aged Care Act. It will not be the last, but it too will have a detrimental effect on aged care and nursing homes.

I am also told we will be seeing shortly another amendment to the act, which could have well been introduced now. I do not know why it has not been, but we will be seeing another one in the near future. If this government's record is anything to go by, it will be making more changes as time goes on because this measure, along with so many of the other measures, is simply unsustainable.

It is because of our concern for standards in aged care that we oppose the amendments to the Aged Care Act 1997. We oppose them outright. The amendments are an ad hoc approach to the funding of the accreditation of aged care providers which this government is attempting to rush through the parliament without full consideration of the issues. More importantly, the proposed amendments may jeopardise the very standards the government claims to be protecting.

Amongst providers in the aged care industry, there are genuine concerns being raised about the transfer of responsibility that this bill represents. In her second reading speech, the Minister for Aged Care indicated that the fee proposed in the amendment would reflect the cost of the accreditation service. The current arrangements for administering the standards in the sector, as established by the Labor Party, are budget funded within the Department of Health and Aged Care. Under the proposed amendment, the entire responsibility for funding the aged care standards and accreditation agency would be transferred on to the providers in the aged care sector, and this transfer could begin as early as 1 January 1999.

It is unclear what the cost of administering this function adds up to. Industry providers estimate the cost of actually carrying out the accreditation in each facility to be in the order of $5,000 to $10,000. If the minister is to be believed and the fee covers the total operating cost of the accreditation agency, we also need to add in the $5.5 million that the agency received in budget funding as reported in the 1997-98 annual report of the Department of Health and Community Services. This would add another $2,000 per facility per year, resulting in an accreditation fee of between $7,000 and $12,000 per facility.

According to the minister, this cost will be borne by each and every one of the approximately 3,000 providers in the aged care sector—that is, this industry will be required to pay up to an additional $36 million as a result of this bill. This comes on top of a funding cut during the period of the last government of around $500 million.

This is yet another slug that this sector will have to bear in an environment where it is struggling with recurrent funding cuts as well. When gauging the impact of the $12,000 fee on providers, or a $36 million fee on the industry as a whole, it is important to take into account the cuts that have already occurred. To the $500 million that was cut, we are going to add another $36 million. In addition, because of the resident classification scale that is currently being implemented around the country, most nursing homes across this country have also faced additional cuts in their recurrent funding.

I would like to briefly refer to a comment from one of the nursing homes in the Lilley electorate, the Freemasons home. I will quote from their 1998 annual report to demonstrate the magnitude of this problem. The report from the General Manager, Mr Gordon Blake, states:

Significant amendments to the documentation which forms the basis of assessing the dependency of a resident has created many changes to Nursing Home categories resulting in a reduced value of daily subsidies for the frail.

This has been repeated in nursing homes right across the electorate of Lilley and right across this nation. Anyone who is working in the nursing home sector, the unions representing nurses and the doctors will tell you that this reclassification has led to a decrease in most instances of recurrent funding in nursing homes, and that has produced redundancies across the board and threats to the quality of care in those homes.

This was something which was evident relatively early on, and the Queensland Department of Health, under the former conservative government, produced a report in January 1998 on this very topic. They produced a submission to a review of the resident classification scale for residential aged care. What the then conservative Queensland government had to say about these cuts to recurrent funding was this:

The funding implications of this—

that is, the new instrument—

are not completely clear . . . but initial estimates show an 8 per cent drop in overall funding.

I repeat: an eight per cent drop in overall funding in their institutions in Queensland, and this drop has been occurring across the sector, whether it has been in the private sector, the community sector or the government sector, since the government began its slash and burn approach to aged care.

That has produced tremendous pressure on the quality of care where staff struggle to maintain decent care, where staff struggle to keep up the quality of their work in an environment where more and more is expected and less and less is provided. It is into this environment that we now get this $12,000 fee, which would represent for many small nursing homes a significant additional impost. It would, for example, probably be about half the cost of a nursing assistant at a nursing home. This is not inconsequential. It is small in terms of the magnitude of the government's attack upon the aged care sector, but it is significant in the context of resources being absolutely and completely stretched to the limit by this government's arrogant and insensitive attitude to aged care.

It is worth noting that 50 per cent of nursing homes have fewer than 41 beds and that many of these smaller facilities are located in rural and remote areas. The closure of even a small number of rural and remote aged care facilities would represent a real crisis for many families in these areas who are already finding it very difficult to get the care and support they require for aged relatives.

In terms of the impact of any fee on the many small aged care facilities, a number of the submissions to the current productivity inquiry into nursing home subsidies suggest that 60 beds is the minimum efficient scale for the operation of nursing homes. In other words, facilities with fewer than 60 beds are already struggling to remain viable, so on top of that the government is going to introduce an additional fee. The proposed fees for accreditation, therefore, would only increase the financial pressure on many of these smaller facilities.

That we can only estimate the potential scale of any fee is yet another reason that we oppose this amendment. The government bill is virtually a blank cheque, one that providers will be responsible for when the government finally comes clean on the fee that will be introduced. That fee will be set by the minister without any accountability to parliament. This is absolutely breathtaking when you consider the government's recent record in this area. Providers have made repeated requests for some indication of the size of the fees that will be imposed on the sector as a result of this bill, yet the government has remained ominously silent on this issue. Perhaps we are about to have a repeat of the nursing home entry fee debacle of the last couple of years. Very understandably, the providers are nervous and somewhat afraid.

If the government had been honest enough to state what accreditation fees would be introduced, the providers would be able to properly assess what impact the fee would have on their operations and we would be ensured that the services provided by the sector would not be adversely affected. It is not as if this issue has arisen suddenly. The accreditation agency stated in a newsletter it published in March this year that it had devoted `much thought' to developing principles for establishing a fee schedule and that these would be `shortly sent to the minister'. Nine months later, and the minister is still silent on the schedule of fees. No wonder they are suspicious.

In the face of this uncertainty, the minister's claim that the amendment clarifies the government's intention that the Aged Care Standards and Accreditation Agency would charge appropriate fees is very difficult to understand and very, very difficult to believe. The amendment clarifies nothing other than this government's desire to strip publicly funded services and highlights the uncertainty and confusion this government has caused in the aged care sector.

It must also be remembered that the fee proposed by the amendment is not the only cost incurred by providers through the accreditation process. Facilities may need to introduce new quality control and management systems, provide training for staff and purchase new IT systems. A recent survey of providers indicates that the total cost of accreditation may be of the order of $50,000 per facility. Of course, on top of all of that, we are going to have the GST if the government has its way. That has tremendous implications for the cost of these facilities as well.

A number of submissions to the Productivity Commission inquiry have raised the issue of government subsidies to the sector being increased to cover the additional costs associated with accreditation. I am very sorry for them but, given the recent record of this government in slashing and burning funding in this sector, there is very little hope of that.

The accreditation process clearly represents a major new impost on aged care facilities. If this is not recognised in the subsidies paid to providers, they will have to meet these additional costs through a reduction in their services or capital expenditure—which has already been occurring because of other government policies across the sector over the last couple of years. It would be tragic if the implementation of an accreditation system designed to ensure the maintenance of standards in the aged care industry was in itself responsible for the erosion of those standards of care. Doesn't that say so much about the approach of this government not just in that area but in what has happened with the Job Network, with Centrelink and across the board?

The minister claims that the impact of any charges levied as a result of the bill on providers will be `minimal' given the financial advantages of becoming accredited. The financial advantage the minister is referring to is the opportunity for providers to continue to operate in the sector. So what the minister is really saying is, `We will let you live, but you have got to pay a fee of $12,000.' The only difference is that, under the proposed amend ments, providers will be required to pay potentially large fees for the right to continue to provide aged care and to support the aged.

That this government would characterise the status quo as `an advantage' reflects their whole approach to aged care—one, as I said before, that has seen $500 million worth of funding removed and services decline. What the minister is saying is that any facility that does not go backwards under her government is doing well—and I think that is probably true.

In the face of all of these concerns and uncertainty, it is not clear why the funding arrangements have to be in place by 1 January 1999—unless it is simply the case that the government wants to have the legislation passed before announcing the real impact it will have on the aged care sector. The accreditation agency is currently funded by grants under the Aged Care Act, and it should be able to continue its operations into 1999 on that basis. So what is the rush? This would allow the many providers to go through the first round of accreditation but would not require them to pay a potentially crippling fee on top of the many other expenses they will incur through the trialling of the new accreditation regime.

It must be remembered that this is very much a trial of a new scheme. Everyone involved in the process—the providers and accreditation agency auditors and assessment teams—will be dealing with the system for the first time. We remain to be convinced of the effectiveness of the new system and will be monitoring its implementation until the January 2001 deadline.

That the government is proposing to charge providers to participate in a trial of its new accreditation system is simply not appropriate. I think everybody in this House is aware of the importance of maintaining standards in the aged care industry. Unfortunately and sadly, there is now too much evidence that standards are under severe pressure. The failure of any quality assurance system will have dire consequences for thousands of aged care residents. For that reason, the evaluation of the new system through this first round of accreditation must be open and transparent to allow everyone to assess the impact of the new system on the standards of residential aged care.

The issue of any fee that might be charged by the accreditation agency should be re-examined in the light of the first accreditation round and after the impact of the many other changes that this sector has recently faced can be taken into account. This would also allow the report the Productivity Commission inquiry on the funding arrangements for nursing homes, which is due on 13 January 1999, to be taken into account.

I would also like to raise an issue we have become aware of in relation to the setting of fees for accreditation. Some providers report having their applications for accreditation refused by the accreditation agency, because the funding arrangements for the agency have not yet been put in place. It seems that the accreditation agency is refusing to process accreditation applications until this bill is passed and it is allowed to charge fees from the providers. If this is the case, the future viability of providers in the aged care industry is being made uncertain and being potentially placed at risk given the January 2001 deadline by which all providers must be accredited to receive subsidies.

The linking of the introduction of accreditation fees to the processing of accreditation applications by the accreditation agency represents a form of coercive pressure on the industry to accept the implementation of fees. This government is clearly saying that unless it can charge for the accreditation service it simply will not be provided. That would put standards of care in the industry at risk for the sake of the fee that this bill would reintroduce. As I said before, the aged care industry has already been the subject of a number of nasty government cuts through 1997-98, some of which have been just as hastily withdrawn when their impact was fully realised, but were then replaced by further cuts.

It seems that this government does not learn from its mistakes. The proposed amendments are another example of a blind user pays approach in a sector which, perhaps more than any other, requires considered and well thought-out initiatives to resolve fundamental funding and resource issues. The proposed amendments are yet another example of this government's failure to fulfil its responsibilities to elderly Australians.

On another issue to do with the accreditation process itself, the government in its second reading speech spoke about getting rid of red tape. I was looking through the materials provided to the nursing homes which are quite bulky and large and I think are far from being simple. The minister's second reading speech referred to the need to `not unduly burden small business with administrative red tape' and stated:

The agency will play a leading role in ensuring that residential aged care facilities achieve and maintain high standards of care and accommodation . . .

It went on to say:

. . . the impact on aged care services of paying an `accreditation fee' every one or three years, depending on the quality of service, will be minimal.

This is more from this government of the Orwellian approach where they keep saying, `Service is up, quality is up, funding is down, staff are cut, but it is all fine.' It is not all fine. It is not all fine in aged care and it is getting worse; it is not all fine in Centrelink and it is getting worse. But the government continues to bring forth these sorts of proposals which everybody in the industry who has a practical role in dealing with their effects knows will lead to further pressure on the quality of care, further pressure on the staff and, in the end, a lessening of the quality of our aged care system. It is for all of those reasons that the opposition opposes this bill.