AGED CARE AMENDMENT BILL
Dr JENSEN (Tangney) (4:00 PM) —After almost a year in office, the
government continues to distinguish itself by the utter contempt it
shows our older citizens. Dragged kicking and screaming by the
opposition, flinching in the face of the financial crisis, it finally
did as we had urged and made some extra funds available to pensioners.
But what else has the government done to aid seniors, whose standard of
living has steadily declined throughout its term in office? Government
members should be hanging their heads in shame over the government’s
treatment of seniors. Just last month the OECD reported that Australia
has the fourth-highest poverty rate for over-65s among the world’s most
developed nations. For singles aged over 65, Australia had the highest
relative income poverty rate in the OECD. The Prime Minister said he
could not survive on the age pension, yet he expects others to do so.
The bonus payment promised last month is not going to provide any more
than light relief, especially when we know the government is giving
with one hand but planning to take away with the other.
There was a very disturbing report last month from the University of Western Australia’s School of Population Health which said pensioners were skipping potentially life-saving medication to save money. Pensioners’ use of essential medicines had fallen by up to 11 per cent as the price of filling their prescriptions rose to $5 early this year, one of the school’s research associates said. How much worse will things get when the government has its way next year and takes the Commonwealth seniors card from many retirees who are already struggling?
That is the government’s plan. They want to punish people who manage to put away some superannuation for their retirement by treating their super as assessable income so that they can steal the benefits of our seniors. Until now, that income from super has not formed part of the assessment for entitlement to cards which older Australians use to access a range of benefits, the most critical of which allows the purchase of medicine at highly subsidised prices. But this is what the government want to do, effective next financial year. It is a disgrace.
In my electorate of Tangney, more than 3,000 retirees sent in postcards to express their disapproval of the Rudd government after learning of this plot. More than 200 crammed into a local hall to express their rage at what they see as abuse by a government which does not care—a government which is intent on punishing seniors for reasons known only to itself. Then there is the planned change to partner service pensions. Spouses of veterans who separate from their partners are set to lose their entitlement to the pension. Those affected are all women aged over 50. The pension is paid to those who served in conflict. The government claims this will save money, but the reality is that these people, often after a lifetime of supporting their—
Ms Hall —Mr Deputy Speaker, I rise on a point of order. The member has not once referred to the actual bill—not once. He has not even mentioned the name—
The DEPUTY SPEAKER (Hon. BC Scott)—I have been listening to the contribution of the member for Tangney. He is talking about veterans, and I would have thought aged care and the entitlements they receive are correlated, but I would also remind the member for Tangney of the bill before the House, which relates to amendments to the Aged Care Act and other measures.
Dr JENSEN —Instead of receiving an entitlement in recognition of service to this nation, they will be scrounging scraps from Centrelink, receiving unemployment benefits or the age pension—
Ms Hall —Mr Deputy Speaker, I seek to intervene.
The DEPUTY SPEAKER —Would the member for Tangney accept an intervention?
Dr JENSEN —No, I will continue with my remarks. The government says that if a wife and a veteran separate then 12 months later or when—
Ms Hall —Mr Deputy Speaker, I rise on a point of order. I have before me the bill and nowhere in the bill does it talk about veterans; rather, it relates to the Aged Care (Bond Security) Act 2006 and it looks at the regulatory safeguards that are around high-quality aged care for Australians. Does he know the difference between aged care and income support?
The DEPUTY SPEAKER —The member for Shortland will not debate the issue. The member for Shortland has raised a point of order in relation to the bill which is entitled the Aged Care Amendment (2008 Measures No. 2) Bill 2008. The member for Tangney has been talking about veterans who I thought would have been obviously considered beneficiaries, in some cases, of aged care pensions. But I would remind the member for Tangney of the bill before the chamber. I also say that often there has been quite a lot of leniency by the chair in both the Main Committee and the House in relation to bills. On this occasion I would bring the member for Tangney to the bill before the chamber.
Dr JENSEN —This speech, as you correctly assert, refers to aged care and things such as pensions for elderly people. Of course, we welcome last month’s announcements of the one-off payments to be made to pensioners.
Ms Hall —Mr Deputy Speaker, I rise on a point of order. This bill refers to police checks and aged care accommodation bonds; it does not refer to pensions.
The DEPUTY SPEAKER —I remind the member for Shortland that the Aged Care Amendment (2008 Measures No. 2) Bill 2008 is a bill for an act to amend the law in relation to aged care and for related purposes. It is quite a long title. I call the member for Tangney.
Ms Hall —Mr Deputy Speaker, I rise on a point of order. I am really sorry to be so pedantic—
The DEPUTY SPEAKER —We are not going to debate the issue.
Ms Hall —The further issues are things like police checks and relate to the way in which disclosure of aged care providers—
The DEPUTY SPEAKER —The member for Shortland will resume her seat. I have ruled on that matter and I also drew the member for Tangney’s attention to the bill before the chamber, but it does refer to related purposes and I think he was referring to aged care as he commenced his further contribution.
Dr JENSEN —That is entirely correct. As I was saying, of course we welcome last month’s announcements of one-off payments to be made to pensioners. We have been demanding action on that for months, but the payments should not be seen as some sort of a gift as the government seems to believe. A reasonable lifestyle with a pension that is sufficient to survive on is a right for people who grew up with the understanding that their tax contributions would be returned in part in their retirement. The fact that we have more recently moved increasingly toward self-funded retirement is irrelevant. We owe today’s pensioners much and we must provide a reasonable pension. When we have older Australians skipping medication because they cannot afford it and subsisting on jam or baked beans because a reasonable diet is beyond their reach then something is very wrong.
Ms Hall —Mr Deputy Speaker, I rise on a point of order.
The DEPUTY SPEAKER —The member for Tangney will resume his seat. The member for Shortland has not risen on a frivolous point of order, I hope.
Ms Hall —It is certainly not frivolous, Mr Deputy Speaker—absolutely not frivolous. The fact is that the member has not once even mentioned the title of the bill or any issue that relates to this piece of legislation. I ask that—
The DEPUTY SPEAKER —The member for Shortland has made her point of order. I again call the member for Tangney. I would also point out to the member for Shortland that the bill at item 3 proposes to insert after paragraph 8-3(1)(g):
(iii)
the person’s record of financial management, and the methods that the person uses or used in order to ensure sound financial management …
Ms Hall interjecting—
The DEPUTY SPEAKER —No. I have ruled, and the member for Tangney has clearly got the message. He knows the bill that is before the House. I have allowed some leniency. But I have also pointed out, in relation to veterans’ entitlements, that a person’s financial management is referred to in the bill. The member for Tangney has the call.
Dr JENSEN —For the benefit of the member for Shortland, the bill is the Aged Care Amendment (2008 Measures No. 2) Bill 2008.
Ms Hall —That’s right.
Dr JENSEN —As far as the Economic Security Strategy is concerned, the coalition stood ready to offer full bipartisan support; all we asked of the government were details. Did we receive them? No. Offers of talks and discussions with the opposition, and even ideas put forward, were recklessly dismissed. The Prime Minister and the Treasurer simply decided to go it alone, not even bothering to have discussions with the Governor of the Reserve Bank. Apparently they knew better than the governor!
This failure to listen, this failure to heed advice, caused a huge mess. I refer particularly to the introduction of the unlimited bank deposit guarantee scheme. The freezing of thousands of people’s funds, a lot of whom are self-funded retirees who need that money, only added to the chaos. But this was in keeping with the repugnant disdain with which the government view the aged. Clearly, no thought went into the possible outcome of their rushed, headline-grabbing attempt to save Australia. Their advice to those people whose funds were frozen, leaving them in hardship, was to ‘just head down to Centrelink’. What an insult. What a joke. The opposition asked for details—
The DEPUTY SPEAKER —Member for Tangney, you are testing my patience. I know that with most bills the issue of relevance in both this chamber and the main chamber becomes almost irrelevant from time to time, but I would like to see the member refer a little more to aged care and the provision of aged care, which are the main words in the title of the bill before the chamber.
Dr JENSEN —Okay. The aged-care system is also a disaster-in-waiting, and if it cannot cope with the demands of today then it will truly be in crisis as our ageing population applies more pressure in the years ahead. In my state of Western Australia and elsewhere in the country, aged-care providers are rejecting offers of federal funding because the margins have been eroded to almost nothing. See? All you needed to do was wait a little bit, until after the preamble.
Ms Hall —Fifteen minutes?
Dr JENSEN —Well, it would have been about five if it had not been for the interruptions?
The DEPUTY SPEAKER —Order! The member for Tangney will continue.
Dr JENSEN —And what has been the government response? Did they talk to industry? Did they try to work out how those funds could be used in a viable way to create new aged-care places?
Ms Hall —Yes.
Dr JENSEN —No. No. According to reports, in one case they actually referred the matter to the ACCC. So an organisation which declined to take up a flawed offer of federal funding—because to do so would have been economically unviable—is being investigated for possible trade breaches. What a joke. Presumably the minister thinks that private sector interests should be run at a loss to satisfy the government’s political whims.
Earlier this month, consultants Grant Thornton reported that the average return on investment in a single bed aged-care room was equivalent to just 1.1 per cent per annum. Average earnings before interest, taxation, depreciation and amortisation in 2008 were only $2,934 per bed, down from $3,211 a year earlier. The average cost to providers for the establishment of each bed, excluding land, has soared from between $74,000 and $85,000 in 2003 to $176,000 today. With figures like these it is easy to see why there is a reluctance to invest in aged-care facilities. Why take any risk for such a trifling return when even a bank savings account will pay more?
Financial considerations also mean that aged-care facilities are not being maintained or redeveloped appropriately. The Grant Thornton report noted that 44 per cent of the facilities are more than 20 years old and another 30 per cent are between 10 and 20 years old. Some facilities were closed after providers became insolvent, causing immeasurable stress to residents and their families. Again Grant Thornton states:
These closures are likely to become more common unless the underlying problems with current pricing and regulatory arrangements are addressed.
Those are your problems. Similarly, there is evidence that some facilities have been forced to cut back recreation activities which do so much to contribute to the quality of life of residents.
There must be incentive for private sector activity if the burden of providing aged care is not to fall on the state, which is really in no position to cope with this alone. This is the problem with the bill before us today—it offers no substantive change at all. It tweaks the edges of the issue but addresses none of the major problems afflicting the aged-care system. It is all very well to make these minor changes, but it is ultimately pointless if there are no beds available.
There are 2.8 million Australians over the age of 65. It has been estimated that about half of them require regular help, mostly in their own homes. There are 150,000 in residential aged care, which they enter at the average age of 82, and more than 100,000 of them are receiving high-level care, which is the most demanding of resources. Today there are 400,000 Australians aged over 85 and that number will increase to 1.6 million by 2047. Today there have been only 2,860 people aged over 100. By 2055 there will be 78,000. At the same time, in 2007 there were five people of working age for every person over the age of 65, but by 2047 there will be only 2.4 people. It is a recipe for disaster unless the government comes to grips with the issues today.
Major changes are needed to ensure that our aged are properly cared for. News reports say that the government is planning to provide 37,000 extra beds over the next three years. But, at the same time, 10,000 existing places have not been taken up by the industry. They do not want beds, because it is simply no longer a viable proposition. The government urgently needs to sit down with industry and work out sensible pricing and funding so that it can meet the needs of both providers and those requiring care. While the Prime Minister and his family may be lucky enough never to need such care, and are certainly lucky enough that they could afford private arrangements if they were necessary, the reality for hundreds of thousands of Australians is completely different.
Surely the minister is aware of the Productivity Commission research paper released in September which calls for action to fix the aged-care system. Perhaps I can jog her memory. It said:
The ageing of Australia’s population will call for the provision of aged care services to much larger numbers of people over the next few decades. Services will also need to meet the challenges posed by the increasing diversity of older people in terms of their care needs, preferences and affluence.
It added:
… there are concerns that current institutional arrangements, which rely on a planning mechanism in concert with aged care assessments and controls over extra service provision and pricing of services, could involve significant avoidable cost. For example, these controls in their current form combine to limit the scope for competition between providers, distort investment decision-making, restrict consumer choice and weaken incentives for innovation.
The proportion of GDP required for government spending on aged care was 0.7 per cent in 2006-07 and will almost triple to 1.9 per cent in 2046-47. Given all this, it is disturbing that today we are looking at a bill which deals only with the trivial, a bill which is mere window-dressing.
Mankind has made massive strides in improving health over the last century, consequently increasing lifespan by many years. This change in longevity and the accompanying changes in disease patterns will require new planning for the provision of aged care. It also highlighted other aged-care issues which need to be addressed now if the system is to be effective in the future.
There was a very disturbing report last month from the University of Western Australia’s School of Population Health which said pensioners were skipping potentially life-saving medication to save money. Pensioners’ use of essential medicines had fallen by up to 11 per cent as the price of filling their prescriptions rose to $5 early this year, one of the school’s research associates said. How much worse will things get when the government has its way next year and takes the Commonwealth seniors card from many retirees who are already struggling?
That is the government’s plan. They want to punish people who manage to put away some superannuation for their retirement by treating their super as assessable income so that they can steal the benefits of our seniors. Until now, that income from super has not formed part of the assessment for entitlement to cards which older Australians use to access a range of benefits, the most critical of which allows the purchase of medicine at highly subsidised prices. But this is what the government want to do, effective next financial year. It is a disgrace.
In my electorate of Tangney, more than 3,000 retirees sent in postcards to express their disapproval of the Rudd government after learning of this plot. More than 200 crammed into a local hall to express their rage at what they see as abuse by a government which does not care—a government which is intent on punishing seniors for reasons known only to itself. Then there is the planned change to partner service pensions. Spouses of veterans who separate from their partners are set to lose their entitlement to the pension. Those affected are all women aged over 50. The pension is paid to those who served in conflict. The government claims this will save money, but the reality is that these people, often after a lifetime of supporting their—
Ms Hall —Mr Deputy Speaker, I rise on a point of order. The member has not once referred to the actual bill—not once. He has not even mentioned the name—
The DEPUTY SPEAKER (Hon. BC Scott)—I have been listening to the contribution of the member for Tangney. He is talking about veterans, and I would have thought aged care and the entitlements they receive are correlated, but I would also remind the member for Tangney of the bill before the House, which relates to amendments to the Aged Care Act and other measures.
Dr JENSEN —Instead of receiving an entitlement in recognition of service to this nation, they will be scrounging scraps from Centrelink, receiving unemployment benefits or the age pension—
Ms Hall —Mr Deputy Speaker, I seek to intervene.
The DEPUTY SPEAKER —Would the member for Tangney accept an intervention?
Dr JENSEN —No, I will continue with my remarks. The government says that if a wife and a veteran separate then 12 months later or when—
Ms Hall —Mr Deputy Speaker, I rise on a point of order. I have before me the bill and nowhere in the bill does it talk about veterans; rather, it relates to the Aged Care (Bond Security) Act 2006 and it looks at the regulatory safeguards that are around high-quality aged care for Australians. Does he know the difference between aged care and income support?
The DEPUTY SPEAKER —The member for Shortland will not debate the issue. The member for Shortland has raised a point of order in relation to the bill which is entitled the Aged Care Amendment (2008 Measures No. 2) Bill 2008. The member for Tangney has been talking about veterans who I thought would have been obviously considered beneficiaries, in some cases, of aged care pensions. But I would remind the member for Tangney of the bill before the chamber. I also say that often there has been quite a lot of leniency by the chair in both the Main Committee and the House in relation to bills. On this occasion I would bring the member for Tangney to the bill before the chamber.
Dr JENSEN —This speech, as you correctly assert, refers to aged care and things such as pensions for elderly people. Of course, we welcome last month’s announcements of the one-off payments to be made to pensioners.
Ms Hall —Mr Deputy Speaker, I rise on a point of order. This bill refers to police checks and aged care accommodation bonds; it does not refer to pensions.
The DEPUTY SPEAKER —I remind the member for Shortland that the Aged Care Amendment (2008 Measures No. 2) Bill 2008 is a bill for an act to amend the law in relation to aged care and for related purposes. It is quite a long title. I call the member for Tangney.
Ms Hall —Mr Deputy Speaker, I rise on a point of order. I am really sorry to be so pedantic—
The DEPUTY SPEAKER —We are not going to debate the issue.
Ms Hall —The further issues are things like police checks and relate to the way in which disclosure of aged care providers—
The DEPUTY SPEAKER —The member for Shortland will resume her seat. I have ruled on that matter and I also drew the member for Tangney’s attention to the bill before the chamber, but it does refer to related purposes and I think he was referring to aged care as he commenced his further contribution.
Dr JENSEN —That is entirely correct. As I was saying, of course we welcome last month’s announcements of one-off payments to be made to pensioners. We have been demanding action on that for months, but the payments should not be seen as some sort of a gift as the government seems to believe. A reasonable lifestyle with a pension that is sufficient to survive on is a right for people who grew up with the understanding that their tax contributions would be returned in part in their retirement. The fact that we have more recently moved increasingly toward self-funded retirement is irrelevant. We owe today’s pensioners much and we must provide a reasonable pension. When we have older Australians skipping medication because they cannot afford it and subsisting on jam or baked beans because a reasonable diet is beyond their reach then something is very wrong.
Ms Hall —Mr Deputy Speaker, I rise on a point of order.
The DEPUTY SPEAKER —The member for Tangney will resume his seat. The member for Shortland has not risen on a frivolous point of order, I hope.
Ms Hall —It is certainly not frivolous, Mr Deputy Speaker—absolutely not frivolous. The fact is that the member has not once even mentioned the title of the bill or any issue that relates to this piece of legislation. I ask that—
The DEPUTY SPEAKER —The member for Shortland has made her point of order. I again call the member for Tangney. I would also point out to the member for Shortland that the bill at item 3 proposes to insert after paragraph 8-3(1)(g):
(iii)
the person’s record of financial management, and the methods that the person uses or used in order to ensure sound financial management …
Ms Hall interjecting—
The DEPUTY SPEAKER —No. I have ruled, and the member for Tangney has clearly got the message. He knows the bill that is before the House. I have allowed some leniency. But I have also pointed out, in relation to veterans’ entitlements, that a person’s financial management is referred to in the bill. The member for Tangney has the call.
Dr JENSEN —For the benefit of the member for Shortland, the bill is the Aged Care Amendment (2008 Measures No. 2) Bill 2008.
Ms Hall —That’s right.
Dr JENSEN —As far as the Economic Security Strategy is concerned, the coalition stood ready to offer full bipartisan support; all we asked of the government were details. Did we receive them? No. Offers of talks and discussions with the opposition, and even ideas put forward, were recklessly dismissed. The Prime Minister and the Treasurer simply decided to go it alone, not even bothering to have discussions with the Governor of the Reserve Bank. Apparently they knew better than the governor!
This failure to listen, this failure to heed advice, caused a huge mess. I refer particularly to the introduction of the unlimited bank deposit guarantee scheme. The freezing of thousands of people’s funds, a lot of whom are self-funded retirees who need that money, only added to the chaos. But this was in keeping with the repugnant disdain with which the government view the aged. Clearly, no thought went into the possible outcome of their rushed, headline-grabbing attempt to save Australia. Their advice to those people whose funds were frozen, leaving them in hardship, was to ‘just head down to Centrelink’. What an insult. What a joke. The opposition asked for details—
The DEPUTY SPEAKER —Member for Tangney, you are testing my patience. I know that with most bills the issue of relevance in both this chamber and the main chamber becomes almost irrelevant from time to time, but I would like to see the member refer a little more to aged care and the provision of aged care, which are the main words in the title of the bill before the chamber.
Dr JENSEN —Okay. The aged-care system is also a disaster-in-waiting, and if it cannot cope with the demands of today then it will truly be in crisis as our ageing population applies more pressure in the years ahead. In my state of Western Australia and elsewhere in the country, aged-care providers are rejecting offers of federal funding because the margins have been eroded to almost nothing. See? All you needed to do was wait a little bit, until after the preamble.
Ms Hall —Fifteen minutes?
Dr JENSEN —Well, it would have been about five if it had not been for the interruptions?
The DEPUTY SPEAKER —Order! The member for Tangney will continue.
Dr JENSEN —And what has been the government response? Did they talk to industry? Did they try to work out how those funds could be used in a viable way to create new aged-care places?
Ms Hall —Yes.
Dr JENSEN —No. No. According to reports, in one case they actually referred the matter to the ACCC. So an organisation which declined to take up a flawed offer of federal funding—because to do so would have been economically unviable—is being investigated for possible trade breaches. What a joke. Presumably the minister thinks that private sector interests should be run at a loss to satisfy the government’s political whims.
Earlier this month, consultants Grant Thornton reported that the average return on investment in a single bed aged-care room was equivalent to just 1.1 per cent per annum. Average earnings before interest, taxation, depreciation and amortisation in 2008 were only $2,934 per bed, down from $3,211 a year earlier. The average cost to providers for the establishment of each bed, excluding land, has soared from between $74,000 and $85,000 in 2003 to $176,000 today. With figures like these it is easy to see why there is a reluctance to invest in aged-care facilities. Why take any risk for such a trifling return when even a bank savings account will pay more?
Financial considerations also mean that aged-care facilities are not being maintained or redeveloped appropriately. The Grant Thornton report noted that 44 per cent of the facilities are more than 20 years old and another 30 per cent are between 10 and 20 years old. Some facilities were closed after providers became insolvent, causing immeasurable stress to residents and their families. Again Grant Thornton states:
These closures are likely to become more common unless the underlying problems with current pricing and regulatory arrangements are addressed.
Those are your problems. Similarly, there is evidence that some facilities have been forced to cut back recreation activities which do so much to contribute to the quality of life of residents.
There must be incentive for private sector activity if the burden of providing aged care is not to fall on the state, which is really in no position to cope with this alone. This is the problem with the bill before us today—it offers no substantive change at all. It tweaks the edges of the issue but addresses none of the major problems afflicting the aged-care system. It is all very well to make these minor changes, but it is ultimately pointless if there are no beds available.
There are 2.8 million Australians over the age of 65. It has been estimated that about half of them require regular help, mostly in their own homes. There are 150,000 in residential aged care, which they enter at the average age of 82, and more than 100,000 of them are receiving high-level care, which is the most demanding of resources. Today there are 400,000 Australians aged over 85 and that number will increase to 1.6 million by 2047. Today there have been only 2,860 people aged over 100. By 2055 there will be 78,000. At the same time, in 2007 there were five people of working age for every person over the age of 65, but by 2047 there will be only 2.4 people. It is a recipe for disaster unless the government comes to grips with the issues today.
Major changes are needed to ensure that our aged are properly cared for. News reports say that the government is planning to provide 37,000 extra beds over the next three years. But, at the same time, 10,000 existing places have not been taken up by the industry. They do not want beds, because it is simply no longer a viable proposition. The government urgently needs to sit down with industry and work out sensible pricing and funding so that it can meet the needs of both providers and those requiring care. While the Prime Minister and his family may be lucky enough never to need such care, and are certainly lucky enough that they could afford private arrangements if they were necessary, the reality for hundreds of thousands of Australians is completely different.
Surely the minister is aware of the Productivity Commission research paper released in September which calls for action to fix the aged-care system. Perhaps I can jog her memory. It said:
The ageing of Australia’s population will call for the provision of aged care services to much larger numbers of people over the next few decades. Services will also need to meet the challenges posed by the increasing diversity of older people in terms of their care needs, preferences and affluence.
It added:
… there are concerns that current institutional arrangements, which rely on a planning mechanism in concert with aged care assessments and controls over extra service provision and pricing of services, could involve significant avoidable cost. For example, these controls in their current form combine to limit the scope for competition between providers, distort investment decision-making, restrict consumer choice and weaken incentives for innovation.
The proportion of GDP required for government spending on aged care was 0.7 per cent in 2006-07 and will almost triple to 1.9 per cent in 2046-47. Given all this, it is disturbing that today we are looking at a bill which deals only with the trivial, a bill which is mere window-dressing.
Mankind has made massive strides in improving health over the last century, consequently increasing lifespan by many years. This change in longevity and the accompanying changes in disease patterns will require new planning for the provision of aged care. It also highlighted other aged-care issues which need to be addressed now if the system is to be effective in the future.
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