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Speech at the Gadens Lawyers seminar on vertical integration in the aged care industry

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Australia's Commonwealth Department o f Health and Aged Care. Speech - Bronwyn B.. Page 1 offr-·

Speech Bronwyn Bishop



18 NOVEMBER 1988

Ladies and Gentlemen,

Thank you for inviting me to speak with you this evening. I am very pleased to be here.

Let me say at the outset that I am eager indeed, enthusiastic and honoured to have appointed Minister for Aged Care.


I come to my portfolio with a profound belief in the intrinsic worth of each individual throughout the course of their life.

The philosophy of individualism in which I believe, will mould the policies I bring forward. Focusing on the individual means ensuring that older Australians know that they are valued and valuable to our society.

I will be working hard to get to get media and opinion makers to recognise the contribution older people have already made and will continue to make to our society.

This means that I will be working with my colleagues in Federal and State jurisdictions as well as with business and the voluntary sector to enhance the ways in which older Australians can participate fully in our society.

As fitter, older Australians become an increasing proportion of out population, the concept of "old age" will no doubt continue to change, just as we have retimed the onset of middle age. Once a 40- year-old was regarded as middle aged. This is no longer the case.

Advances in medical science and improved nutrition and physical exercise mean that many people can lead active and fulfilling lives into their late 70's and indeed 80's.

When older people need care, we need to make sure that care is quality care which enables individuals to live with dignity and as much enjoyment as possible.

I am concerned to do all that I can to making sure that the longer life span to be enjoyed by older Australians is one of quality throughout all life.

It seems that repeated surveys say that most older Australians find their lives satisfying and happy; they experience low levels of depression compared to the rest of the community and indeed they are often more aware of the importance of healthy lifestyles than are younger people. A number of studies have shown that older people deliver substantial benefits to their families and communities, through both informal support to friends and family members and voluntary work. 03/12/1998

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Yet we have widespread negative stereotypes about older people and these images are reinforced in the mass media.

International Year of Older Persons

The 1999 International Year of Older Persons offers an important opportunity to portray older Australians in a more realistic and positive light. I know that some of these 'International Years' have been rather overdone - but I do think full support is warranted for this one.

The Government is thus committed to fostering a sense of pride in the achievements of older Australians. The Commonwealth is approaching the International Year as the catalyst to help our society appreciate and value not only the past achievements of older Australians, but to recognise

their ongoing contributions in so may aspects of our life.

The International Year, coming as it does on the eve of the new millennium and the centenary of Federation, offers us the opportunity to see our society of the 21 Century being one marked by inter-action and respect across the generations giving a flowering to our society the likes of which we have not seen.

Statistics are useful in identifying the raw numbers of people over the age of 65 years and to show the estimated increase in the proportion of people over the age of 65 over the next 30 years.

• In 1976, 9% of the population (or 1.3 million people) were aged 65 and over; • By 1996, this had increased to 12% or 2.2 million people; • By 2016 it will be 16% or 3.5 million Australians.

Let me say now that I do not view 65 years as old. My idea of middle aged is Sean Connery and as someone who was a war time baby - the start of the baby boomers - believe me they don't see 65 as old either.

People not only now live longer but are healthier. But worrying figures are those relating to retirement.

Age at Retirement

1986 1997

45 to 60 yrs 34.4% 48.1% 60 and over 65.5% 51.9%

An important new element is the older age at which people now start work. Over the ten years between 1987 and 1997, the proportion of 15 to 19 year old school and tertiary education leavers entering the workforce decreased from 70.3% to 45.1%. They are delaying their entry to the workforce to seek further education. Thus, you can expect them to extend retirement to an older age.

The role of government

The principles of free enterprise to which I am committed define for me the business of government. Thus, the business of government is two-fold: to do those things which the private sector cannot or will not do; and to provide for those who cannot provide for themselves.

In accordance with these principles, it is clearly government's responsibility to create a climate in which individuals can plan for themselves in their post-paid working life through to old age, and to provide for those who cannot provide for themselves. Here again, the numbers are relevant. The internal age structure of the older population will change significantly:

• In 1976, one in six older people was aged 80 and over; • In 1996 it was one in five 181198.htm 03/12/1998

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» In 2016 it will be one in four.

Government does provide, and very substantially, for those who need assistance. Residential care is heavily subsidised by the taxpayers - currently $2.9 billion per year. In addition, a further $1 billion is contributed by individuals and just over 90% of the 135,000 residents are in receipt of a

pension or part pension.

There are 2.2 million people over 65 years of age. There are, as I said, only some 135,000 people in nursing homes and hostels, representing around 6% of the over 65 population. As you can see from the above figures, the vast majority of older people do not enter residential care.

And this sector receives Government funding of $2.9 billion per year.

The integration of hostels and nursing homes has been an intelligent move, giving individuals more choice about where they will live as their care needs increase, if they require residential care.

Providing the Opportunity to Remain at Home

The Government is committed to seeing as many people as possible remain in their own homes throughout their life - where they want to be - by providing stay at home packages of care to give them this choice.

The Home and Community Care Program (HACC) is a great Australian success story. The Commonwealth allocation for this financial year is $500 million, an increase of 5%. This is 60% of the expenditure with the states adding the other 40%. We are keeping more people at home longer - where they want to be; we are expanding HACC programs to reach Australia's multicultural community; and HACC is providing satisfying employment for people through public and private service delivery schemes. Australia is a world leader and innovator in providing

home and community care and we can be rightly proud of achievements in this field.

In addition to the HACC program, the Government last year announced the Staying at Home program. At a cost of $280m over four years, this highlights the Government's strong commitment to meeting older people's wishes to be cared for in their own homes.

In the 1998 election, the Government also committed to additional funding of $80m to expand respite for carers of individuals with dementia.

I will be also paying particular attention to maximising the opportunities to provide seamless care for older people. Individuals have complex care needs that should be met in a holistic way. I will be looking with interest at the results of the coordinated care trials and examining potential for a greater integration of the aged are and health systems by working with the States within the framework of the new medicare agreements

Accountability to the Taxpayer

In the time left to me, I would like to concentrate in more depth on an issue, which I know will concern this audience. That is industry viability against a background of capital restructuring to achieve building certification and accreditation.

With regard capital funding, let's not lose sight of what the Coalition inherited when it came to power in 1996. In 1990-1 there was approximately $240 million available for capital funding of nursing homes and hostels. In 1992/93 that amount had dropped to $90 million. By 1995/6, the

financial year in which the Coalition government came to power, the amount available nationally for capital funding of nursing homes and hostels had been dropped by the Keating Government to $50 million. That is a drop of $190 million over five years. We had to repair the damage wrought by that period of uncontrolled budget slashing with no policy of replacement.

Controversy raged concerning the attempts first made to deal with the matter. But in November 1997, the Prime Minister resolved the issue and the current system was put in place. It will remain 03/12/1998

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in place.

Certification and accreditation become the most important tools to ensure accountability to the taxpayer for the subsidies they provide for residential care. For the record, to achieve Certification, a residential aged care facility is inspected for the standard of its fire safety, security, access, hazards, lighting, heating, cooling and ventilation. Assessments began in 1997. Over 3000 residential aged care facilities have been visited. Initially only 6% failed certification. There have been 200 reassessments and 80% of these facilities achieved certification as a result work carried out to improve building standards.

Industry and government must work together to effectively raise the standards of quality and safety of aged care buildings. A Technical Reference Group on Industry Restructuring (TRG) was established in the first half of 1998 to advise the Minister on priorities and processes for the targeting of a $20 million restructuring fund. In addition $10 million is allocated each year to services requiring urgent capital work to meet Commonwealth, State and local government regulations. Priority is given to services in rural or remote areas from this $10m capital sum.

In total, some $60 million has been allocated for capital improvement or rebuilding in the residential aged care sector between now and the end of 2001. And this is in addition to the substantially greater funds that are available to the majority of facilities from accommodation charges and bonds. For nursing homes, this will exceed $130m per year by financial year 2000/01. Forecasts show that this will provide an additional capital income stream of $1.3 billion over ten years. This clearly exceeds the benchmark established by the Gregory Report.

Figures on building upgrades are very encouraging. Data provided by the industry for the Annual Report of the former Department of Health and Family Services suggest that around $400 million of building activity is currently underway.

New measures will soon be in place to make funding applications simpler and more efficient. Now, instead of operators having to apply for various funding options on a range of forms, I will put in place the promised single application for providers who want to restructure their services to ensure long-term viability. This single application will cover:

• additional new places; • capital grants • extra service status • amalgamations • relocations • changes in ownership • diversification or partnerships.

Providers seeking a range of approvals will now be able to apply in one process.

Certification will not create difficulties for providers that deliver services that give older people dignity and respect. Good, forward-looking proposals for restructuring will be supported where they are focussed on better and more viable care for residents. But proposals will be assessed against the needs of current and future residents.

I suspect that in ten years we will look back and see that the consumer demands of an ageing population have taken the industry beyond the minimum requirements of certification. You must meet building requirements, but also consider most earnestly where the marketplace is taking aged care and the concern of this Government for quality of life throughout life for all Australians.

Accreditation is a very visible way the public the public can be assured that facilities are of a standard worthy of their trust and financial commitment.

The Aged Care Standards and Accreditation Agency has been established to manage the accreditation arrangements and to provide education, training and information for aged care providers to help continue the push for improved care standards. 03/12/1998

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Accreditation is not intended to be an expensive or difficult process. It is based on the concept of continuous improvement, which will mean greater flexibility for the industry as a whole. The fee structure for accreditation will take account of the diversity of the industry, including the very different operating conditions that impact on smaller or geographically remote facilities. For most facilities the effort to achieve accreditation will not be in documented procedures or in purchasing expensive systems. But the effort will be in bringing about a cultural shift in the facility; working with staff and residents to value quality, seeking to continually improve on the way tasks are carried out. All services are expected to be accredited by 1 January 2001.

It is my firm belief, that the coalition's reforms of aged care have placed the aged care industry in a strong position. The banking industry now sees residential aged care as a secure area for investment with strong potential, due to the positive increases in income streams and retum-on- investment attributable to the new accommodation charges and the anticipated reinvestment of those charges in capital works.

The aged care sector has enormous potential and an historic opportunity before it. Those who embrace this challenge and move to harness good business practice for the betterment of the elderly will prosper. Those who seek to shelter in the past or in the belief that good commercial

practice should not apply in aged care, will deservedly and, I trust, rapidly, discover that the community has little time for those who would give to the elderly less than they would expect for everyone else.

The need for good commercial practice sensibly applies to both the for-profit and the not for-profit sectors.


When speaking in public, I often reflect that it was the study of history that led me into a career in politics - I wanted to have a say in what happened to my country.

I said earlier that the business of government is two-fold: to do those things which the private sector cannot or will not do; and to provide for those who cannot provide for themselves.

In the areas of aged care and ageing broadly, this translates as responsibility of government to create a climate so that individuals can plan for themselves in their post-paid working life through to old age, and to provide for those who cannot provide for themselves.

That latter responsibility is vital and this Government has significantly improved on the flawed system we inherited so that, more than ever before, we can be confident we are supporting those who most need our support.

I do think, however, that this often dominates the thinking around aged care and more broadly around images of older people in society - as uniformly frail, dependent and vulnerable. To be sure, some are. But most are not, and this stereotype denies their individuality and their contribution to society.

As Minister for Aged Care, I will be working hard to ensure that older Australians now and in the future can enjoy their later years in optimum health, with security, with real choice in how they live and the support they get and with the respect and dignity each individual in society should


The focus of my Ministry will be to ensure that life for older Australians is to be enjoyed, not endured.

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Last updated 27 November 1998 03/12/1998