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It is worth noting that this inquiry was held against a back drop of a massive decline in nursing home funding during the last five years of the Labor Government. Funding for capital stock dropped from $47 million in 1991-92 to $10.7 million in 1995-96. This represents a 77% decrease in funding which needed to be redressed.

A minority report is essential given that the Labor dominated majority report condemns all the initiatives created by the Government following the above decline in funding.

While the terms of reference for the inquiry were very wide the emphasis in both the submissions and the evidence provided at the hearings clearly revolved around he Aged Care Bill 1997. Given the emphasis on the legislation it could be easily argued that the hearings should have been conducted by the Legislation Committee and not the References Committee.

This Report reflects the views of the Government Members of the Committee.

It seeks to rebut the many distortions, misinformation and inaccuracies that have formed the basis of the views expressed by Labor Party Committee Members.

It contends that the passage of the Government's Aged Care Bill 1997 represents the best chance this Parliament has had to implement meaningful change to a sector long deserving of better service and care.

And a sector that for thirteen years had been miserably treated by the former Labor Government.

It contends that all the Government is seeking to do with its Aged Care Reform package is to build on existing measures as they have been successfully applied to the hostel sector for the last decade by Labor. It is therefore perplexing to note Labor's opposition to the extension of their own initiative with added protection for those affected.

During the hearings of this inquiry, Committee Members heard about a whole raft of concerns, worries, apprehensions and anxieties. While some of these concerns are understandable given the nature of the sector of the community that will be subject to the Government's reforms, many, this Report argues were “politically inspired”, borne of an apparent unwillingness by many people giving evidence to accept existing government assurances on a whole range of issues and/or a total lack of understanding of the detail of the Bill.

It was apparent to the Government members of the Committee that many people giving evidence had a very cursory understanding of the government's reform package and in some cases had not even read the draft exposure bill. The many consultative processes conducted by government on the proposed new measures have sought to include as many of the stakeholders as possible.

Indeed, some of the evidence given during the Committee's hearings seemed to adopt the rhetoric of the irresponsible political campaign waged by Labor Party members across the country.

While it is not the role of this Minority Report to respond to each and every complaint made against the Government's Aged Care Reform package, it is its intention to respond and rebut the key concerns (and in some cases “furphies”) spread about the Government's intentions in this important area of public policy.

Allegation: 'Consultation Has Not Been Extensive Enough'

By any measure, consultation has been very extensive but the Government has had to strike a balance between consultation and meeting industry and consumer expectations of action to address serious problems. Despite this, the implementation process has been carefully structured to enable industry and consumer groups to be involved in each and every step of the process.

It should be remembered that the Government produced and distributed an exposure draft Bill so as to allow as much community feedback and industry and consumer input as possible into the final legislative product.

Four working groups were established to better focus the consultation process. These were:

1. The Funding and Other Implementation Issues Working Group which concentrated on issues including: measures to protect the financially disadvantaged; ensuring flexibility in the payment of the accommodation bond; prudential arrangements; residents agreements; viability funding in rural and remote areas; coalescence of rates and many other issues relating to funding.

This Group has met ten times since September 1996 and includes organisations such as Aged Care Australia; Alzheimers Association; Australian Catholic Health Care Association; Australian Council of Trade Unions; Australian Nursing Home and Extended Care Association; Council on the Ageing; Australian Pensioners' and Superannuants' Federation and the National Association of Nursing Homes and Private Hospitals.

2. The Certification Steering Committee

This Committee is overseeing the work of a consultant who is developing a design to assess the quality of construction of nursing homes before individual operators are allowed to charge accommodation bonds.

This Committee has met five times since October 1996 and includes many of the groups mentioned above.

3. The Quality Assurance Working Group

This Committee considered models for devising new standards for residential care facilities. It has already met five times and includes, apart from organisations already mentioned, the Australian Association of Gerontology; Carers Association of Australia; Federation of Ethnic Community Councils of Australia; Geriaction Inc.; and the University of Newcastle Faculty of Medicine and Health Science.

4. Technical Reference Group

This Committee focused attention on developing a new Single Classification Instrument (SCI) to apply to both nursing homes and hostels. It has met five times since November 1996.

Extensive consultations have been held on the Government's aged care reforms across the nation with over 1,000 industry and consumer representatives.

As well, the Government has committed to an information strategy which it believes will provide the very best advice to all interested parties on the Governments' Aged care reforms.

Allegation: 'Pensioners Will Be Forced to Sell Their Homes'.

This particular “furphy” has been a favourite of those that are determined to see the Government's aged care reforms defeated, particularly those in the Labor Party who started this rumour soon after the budget last year but did not make the same claim when the same measure relating to hostels was introduced by Labor.

Nobody will be forced to sell their home to get into a nursing home or to access quality care.

Already over fifty percent of nursing home residents choose to sell their home prior to entering a nursing home.

For individuals choosing to enter a nursing home while leaving their spouse, relative or partner in their principal place of residence, there will be protections to ensure that there will be no financial penalty for retention of the home as the principal asset. For those who either wish to not pay or defer payment of an Accommodation Bond, the option of periodic payments exists.

For those financially disadvantaged individuals who cannot afford to pay an accommodation bond, the Government will legislate to impose a quota on nursing home operators which will ensure that around thirty percent of total residents are “concessional” or financially disadvantaged individuals.

The Government's aged care reforms will focus on the needs of the individual and not the means.

Allegation: 'Accommodation Bonds Must Be Capped Or Else Only The Wealthy Will Access Nursing Homes'

This particular political line has been one of the cornerstones of the Opposition's scare campaign.

As stated before, Accommodation Bonds are an extension of the system introduced by the then Labor Government to the hostel sector nearly ten years ago.

Although the Bill allows for the Minister to set a cap on the level of accommodation bonds, the Government believes it not necessary to involve itself in the setting of Accommodation Bond levels these arrangements will be decided by private agreement between the nursing home provider and the individual seeking care, as is the structure put in place by Labor in the hostel sector.

The Government is not relying solely on so-called “market forces” to determine the levels of accommodation bond. Rather a combination of strategies involving regulation, incentives and consumer pressure will, we believe, keep accommodation bonds to realistic levels.

For those who can afford to pay an accommodation bond, there will be limits based on their assets to ensure that nobody will be asked to pay what they don't have. No-one paying an accommodation bond will be left with less than $22,500 (single) or $45,000 (married). To state otherwise is to wilfully misinform.

And despite what some critics claim, this does not mean that an accommodation bond will be the total of a person's assets less $22,500 (single) or $45,000 (married). The exact same system with the exact same limits, which was introduced by the Labor Party for the hostel sector, has not resulted in such outcomes and indeed has managed to keep average hostel contributions down to a very reasonable level.

As well, it is important to remember that over ninety percent of the accommodation bond is refundable with only a portion (a maximum of $2,600 per year) being retained by the provider in each of the first five years of a stay. The balance is refunded to the individual or their estate when the resident leaves.

Allegation: 'Financially Disadvantaged Persons Will Miss Out Under The Government's New Scheme'.

As we all know, Residential Care is costly. Currently, the Government pays around $29,000 for each nursing home resident. The Government now believes that it is appropriate for those who can afford to, to make a small contribution towards their nursing care via an accommodation bond.

But there will be adequate protections for the financially disadvantaged to ensure that access to nursing home care is based on need and not means or capacity to pay.

Under the current hostel system, many hostel operators accept more than their apportioned share of financially disadvantaged persons in need.

Under the Government's Aged Care Reforms a certain percentage of residents of each nursing home will be classified as financially disadvantaged or “concessional”. While there will be a set concessional quota for each nursing home there will also be additional factors taken into account in rural and remote areas to ensure that financially disadvantaged persons are adequately catered for.

What this concessional quota will mean is that financially disadvantaged people and those better off will all have access to quality care regardless of their financial circumstances or location.

Given that the Government will provide financial incentives to providers to take on concessional residents, this will act as a further incentive for nursing home operators to take on their fair share of financially disadvantaged persons in need of care.

Allegation: 'Standards Of Care Will Deteriorate Under The New System'

This is a completely fallacious argument with no basis in fact and is designed to frighten the aged.

Facilities which are not accredited under the new arrangements will continue to be assessed against the Residential Care Standards by the Department until January 1998 and then by the new Aged Care Standards Agency.

This will ensure that the present standards of care will be maintained. To suggest otherwise is simply untruthful.

Where facilities are identified as being of poor quality they will be required to improve or lose their access to funding. They will not be protected.

Under the new system, all residential care facilities must be accredited by January 2001. The new accreditation arrangements will require all facilities to demonstrate their quality against a more comprehensive set of standards than the current set of standards require.

The new accreditation system will also recognise the higher quality facilities, providing encouragement for all facilities to improve. This is in stark contrast to the present system which makes no provision for better facilities.

In other words, the current system put in place by Labor discourages "best practice".

The new accreditation system will ensure that quality care is delivered by appropriately qualified staff. That is, facilities that do not employ appropriately qualified staff will undoubtedly be penalised and if they do not change their ways they will be defunded.

Allegation: 'The New Single Classification Instrument Will Encourage Lower

Standards Of Care In Nursing Homes'.

Indeed, the Government's absolute commitment to ensuring quality of care is maintained and where possible improved is evidenced by the exhaustive research that has been undertaken in devising the Single Classification Instrument (SCI). 400 facilities across the country and over 20,000 residents made up the sample.

By bringing nursing homes and hostels under the one funding classification that Labor introduced for hostels, the Government believes that:

The quality of care will not be compromised.

Nursing home staff will also benefit from the new funding Instrument.

The current nursing home funding system has substantially prevented the development of innovative staff management practices in nursing homes. It has prevented effective enterprise bargaining and played a part in restricting the capacity of nursing home staff to develop flexible work practices and training opportunities with their employers.

The Government's reforms to aged care will bring opportunities for staff to benefit from a simpler, less bureaucratic approach to funding and regulation. They will also enjoy broader career opportunities as providers take the opportunity to deliver care to a more diverse range of residents.

Extensive consultation took place with the Australian Nursing Federation (ANF) and agreement was reached in relation to accreditation, setting of standards etc and the Single Classification Instrument. The Department ensured that the ANF concerns about staffing requirements were resolved to their agreement.

Allegation: 'The Government's Proposals Will Lead To A Two Tier System of Care'.

It has been the current system that has encouraged a two-tiered approach to the hostel and nursing home sector, with two different sets of funding rules and different arrangements as they apply to capital.

The new funding arrangements will do away with the two classes of care that currently apply to the hostel and nursing home sector.

It will introduce a much fairer system of funding, with all residents funded according to the level of care needed.

The new funding arrangements will also allow people access to services closer to their preferred location than has been reliably assured in the past.

The new accreditation system will recognise quality residential care facilities as well as promoting ongoing improvement of the physical facilities and standard of care.

The bottom line is that something must be done to replenish capital stock of nursing homes given that successive Labor governments had not made any investment in replacement or upgrading for six to seven years.

The fact is that (as mentioned earlier) under a Labor government, funding for nursing home capital stock shrank at ever increasing rates from an already inadequate base.

In 1992-93, funding in the area totalled $45 million, by 1993-94, it was reduced to $26.5 million, in 1994-95 it reduced to $15.7 million and by 1995-96, funding was down to $10.7 million.

Allegation: 'Prudential Provisions Won't Be Enough To Protect An Individual's Accommodation Bond'.

The Government is strongly committed to robust prudential arrangements to protect the refundable portion of accommodation bonds.

It should be noted that when the Labor Government introduced contribution fees for hostels in 1987, there were no such accompanying prudential provisions to protect individual contributions.

The extension of accommodation bonds to nursing homes will provide both private and charitable sector providers with a significant new stream of income to meet capital costs. It is not unreasonable that a proportion of such resources are directed to ensuring that all residents in nursing homes are able to have confidence that their bond moneys will be refunded to them or their estate on departure from a nursing home facility.

The details of the prudential arrangements will be spelled out in subordinate legislation to be released in the near future.


This report considers many of the misleading statements concerning the Aged Care Bill 1997.

Aged Care in Australia cannot afford to have the Government's package defeated or delayed.

It is tragic for so many ageing Australians that they have been subjected to such a scurrilous and deliberate misinformation campaign.

Hundreds of nursing homes across the country are in need of substantial capital upgrade. The Government's package of reforms represents the best opportunity to achieve such an outcome.

The Government's package again represents the best opportunity to implement improvements throughout the nursing home sector and to ensure that thousands of elderly Australians live out their frail and declining years with access to proper care and improved facilities.

At the end of the day, the major concern for the Parliament should be the quality of care Government can deliver to the aged and frail in our community. Playing politics and embarking on scare campaigns with the most vulnerable in our community should be condemned by all fair minded Australians.

Senator Sue Knowles (LP, Western Australia)

Senator Helen Coonan (LP, New South Wales)

Senator Alan Eggleston (LP, Western Australia)

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