PARLIAMENT HOUSE, Canberra: I rise to speak on the Aged Care (Living Longer Living Better) Bill 2013 and the package of bills before us. The aged-care sector is at a crossroads. We have an ageing population. We have providers who are operating in the red, and we have a sector which has been reviewed and reviewed and reviewed but is not getting any reform to address its problems.
This package of bills before us does not address the problems either. Indeed, they may just make things worse. The sector urgently needs reforms and urgently needs the governments that can guide the sector through the many challenges it faces. Unfortunately, I do not believe that this government has the capacity to do that.
In the time that I have available, I would like to talk about four things. Firstly, to provide a bit of context within which we debate this package of bills and debate the aged-care sector more broadly. Secondly, to discuss some of the problems facing the sector right now that need to be addressed. Thirdly, to go through the bill itself and point out some of the issues which we have with the bill. Finally, to talk about what the Coalition’s alternative proposals are.
Before doing so, I make a point about the process in arriving at this situation. The Member for Gippsland made this point also. This package of bills is supposedly in response to the Productivity Commission inquiry and the recommendations made by the PC. Those recommendations were made well over 12 months ago, and it has taken this long for those recommendations to be placed into legislation and brought into the House. Now we have the situation where the government is trying to rush through the legislation without proper scrutiny and without proper thought as to the implications of the bill.
Furthermore, this is without proper consultation with the sector. I support the amendment to the bill which the shadow minister for health has put forward, which would see the Senate committee inquiry complete the course of its work before we debate the bill further. To me, that makes sense. We have a process in place that can further analyse the bill and further discuss with the sector what some of the issues are so that we can improve upon the bills if possible.
I go to the first substantive point to look at where we are at the moment. What is the context in which we are debating this particular package? There are three things. The first is that we have an ageing population, which means that there will be much more demand for aged care services. At the moment, around nine per cent of our population is aged 70 plus, but this is expected to rise to 13 per cent by 2021, and rise again to 20 per cent of the population by 2050. Those aged over 85 years, who are the main users of aged care services, will increase from about 400,000 people today to about 1.6 million people by 2050. We are going to have a huge increase in demand for aged care services over the years and decades in front of us.
The second contextual point is that despite this massive demand on the horizon we have an aged care sector which is seriously in strife at the moment. Indeed, many are struggling to stay afloat, and only about 40 per cent of aged care providers are profitable at the moment and operating in the black. This means that over half of our providers are losing money today and are at risk of failing. At a time when we have this huge demand, this is of great concern to all of us here in this parliament, and it should be of great concern to residents across Australia.
The final contextual point is that we have had review after review of the aged care sector in the last six years under this Labor government. There have been 20 reviews and three Productivity Commission inquiries, but despite all of those reviews and those inquiries we still have not had proper reform to address some of these issues and the structural problems I have just articulated.
Those reports, particularly the Productivity Commission reports, that I have referred to have been very good ones. They have outlined the problems in the sector and they have outlined the nature of the demand going forward. They give a clear picture of what needs to be done. I have found that in my discussions with my aged care providers in my electorate they echo many of the problems identified in the Productivity Commission’s report and in the other reviews which have occurred over the last few years.
Most recently, I had a round table discussion with many of the aged care providers in my electorate, along with the Shadow Minister for Aged Care. We discussed many of the issues. They all do a fantastic job under pressing circumstances, and they raised three particular matters.
Firstly, they talked about the amount of paperwork which they currently have to deal with. One of the providers from my sector pointed out that about 30 per cent of nurses time can be filled in completing paperwork—not attending to the residents of that facility but just doing paperwork. It is a ridiculous situation.
Secondly, they pointed out the general difficulties in making ends meet, and that many of them are struggling and cannot necessarily see a rosy horizon in front of them.
Thirdly, they discussed how the regulations on top of further regulations are making it increasingly difficult for them.
Finally, they discussed the problems which they foresee in the package of bills in front of us.
This package of bills has been rushed into this parliament and has not had full consideration and consultation with the sector. There are issues within this bill which need to be addressed. The first is that it does nothing about the burden of red tape and paperwork upon a sector already struggling to cope with the cost of government compliance. These bills are in addition to other changes in the Living Longer Living Better aged care package, and the burden of red tape has already been increasing through the implementation of the aged care funding authority, and this bill does nothing about the strangulation of aged care providers by this red tape. How does filling out yet another form ensure that the quality of service in our aged care facilities is improved? Again and again they say they are spending more time on red tape, and this particular package just adds to the burden of it.
The second issue which aged care providers have raised with me in relation to the package is the potential spike in labour costs which will be caused by the workforce supplement. The coalition is committed to seeing the wages of all workers rise. Under the Howard Government, real wages increased by 20 per cent. However, wage rises must be sustainable and they must be affordable. At a time when only 40 per cent of aged care providers are operating in the black, one must ask the question: how will they pay for the higher wages which the government is insisting upon through this package? I am worried that this will place further pressure on providers, particularly in my electorate, and potentially put some out of business altogether.
Providers such as Baptistcare have expressed their concerns to the government directly and publicly, stating that for every $1 they receive under this workforce supplement they will need to put in an additional $3. While the government is claiming that this is a direct government subsidy to boost wages of low-income workers in these aged care facilities, when it comes to the crunch the government is only providing a quarter of the overall cost of this wage increases. The CEO of Baptistcare summed it up when she said:
We are losing money out of the system faster than we are getting money in. There is real potential that without proper consultation these changes will cause a crisis in aged care, creating even more problems than they are apparently solving.
The third critique of these bills is there is a blatant attempt to unionise the aged care workforce through the workforce supplement. All the aged care sector have raised this; almost everyone you speak to is aware of this tactic. Under the supplement, providers with 50 or more beds need to enter into an enterprise bargaining agreement in order to access the funding. Those with fewer than 50 beds do not have to enter into an EBA. However, they must comply with the conditions of the supplement in order to access the funding. This is a blatant attempt by the government to force our aged care workers in to unions. It seems that the government cares more about boosting union mates at United Voice or the ANF and the disgraced Health Services Union than it does about getting genuine reform in the aged care sector. We are not the only ones that have raised this issue. Many have raised this publicly and many have raised this privately. Almost every speaker on this side of the House has made the strong point that this is trying to reunionise the workforce rather than trying to help the aged care sector.
Let me come to my final point—that is, the Coalition’s commitment to the aged care sector. We understand the sector needs real reform from a government that is fair dinkum about the aged care sector. It needs reform from a government committed not to increasing red tape and pushing its own political agenda through forced unionisation but to ensuring that our aged care providers survive and thrive. The coalition is committed to the delivery of a high-quality, affordable and accessible aged care scheme that meets the needs and preferences of older Australians. Our proposal is that for the first time in Australia we will institute a four-year agreement for aged care providers which will address the pressing concerns faced by the sector.
What this means in reaching an agreement is sitting down with peak bodies and negotiating with, consulting with and working out an agreement of mutual benefit to the government and the sector, in much the same way that the Pharmacy Guild agreements are struck. Overseeing this agreement will be an aged care provider agreement working group which will flesh out the details of the agreement and listen to the recommendations contained in the Productivity Commission inquiry and any other relevant reviews.
We will establish an aged care provider agreement steering committee of keys stakeholders to oversee the administration and the implementation of the agreement and to provide advice to the minister on a regular basis.
Most importantly, this agreement-making process must be rooted in reducing red tape not increasing it. It must also be rooted in the actual concerns of the aged care sector today and into the future. If we do not get this right and we do not get a system which is sustainable and affordable and where the aged care providers themselves can operate with surpluses rather than deficits then we will have a further crisis in the aged care sector.
As I said at the outset, the statistics show that there will be enormous demand on aged care providers in the years and the decades ahead. We will have four times as many people over the age of 85 by 2050 than we do today. Those people will need aged care services. But if the aged care sector is not thriving, if it is not operating in the black and if it does not have the support, the reforms and the cooperation of a government wishing to see it thrive then I fear many residents will not get the aged care services and provisions that they will need in the future.
I commend the amendments to the House and recommend that the further debate on this be postponed until the Senate’s inquiry has been completed.