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Date 14th Sept 2004 Ref No. 2304
AGED CARE: AT THE CROSSROADS
UnitingCare Wesley is calling on all candidates in the coming Federal election to commit to addressing issues fundamental to the future care of older people and others with vital care needs in Adelaide.
Peter Bicknell CEO of Wesley Port Adelaide said, “The future of both residential and community aged care remains uncertain until these fundamental issues are addressed.
“Measures announced in the Federal Budget are welcome but only begin to address some of the challenges faced.
“All political parties must recognise that the fundamental issues can’t be ignored if we are to ensure that people continue to receive quality care when and where it is needed.”
Geoff Collins, CE of Wesley Bowden, said the issues threatening quality
care were:
§
Availability of support – affordable care when and where it is
needed.
§
Red tape creating inefficiency – we continue to choke on excessive
regulation and administrative requirements that add costs, inhibit innovation
and hinder flexibility.
§ Insufficient income – our costs continue to rise faster than income
despite our ongoing efforts to restructure, cut costs and improve productivity.
The Budget measures will only help in the short-term.
§
Ageing aged care homes – a new capital funding system is needed
to ensure we can continue to offer safe, comfortable and functional
buildings to meet people’s care needs.
§
The aged care workforce – action must be taken to assist us in
attracting and retaining appropriately skilled and motivated staff at
an affordable cost.
“The ever-increasing demand for aged and community care services require greater consideration of how best to promote more and better quality care”, said Sue Park, CEO of Wesley Adelaide.
“Inaction is only going to result in more people being unable to access the care they need, when and where they need it.”
Further Comment
Peter Bicknell, CEO UnitingCare Wesley Pt Adelaide Phone 8440 2203
or 0419 810 094
Sue Park, CEO UnitingCare Wesley Adelaide Phone 8202 5887 or 0408
971 306
Geoff Collins, CE UnitingCare Wesley Bowden Phone 8245 7120 or 0438
550 054
Please find attached Background Paper:
·
Aged and Community Care Australia: The Next Steps
Further background: Position Paper of UnitingCare Australia (available
at www.unitingcare.org.au/library/policypositions/index.htm )
The Next Steps
Over the past three years the Australian Government has undertaken
a number of reviews in the aged care field. The most significant of
these was the Hogan Review which reported in May 2004 and confirmed
many of the sector's concerns with residential care funding including
that:
·
the subsidies paid for residential aged care are not adequate;
·
providing care to people with special needs costs more than the standard
subsidy arrangements acknowledge; and
·
existing policy settings for capital raising are inadequate.
The Australian Government responded to many of these recommendations in the 2004/2005 budget, which contained a number of welcome initiatives, but it did not fully address the fundamental issues.
Professor Hogan’s recommendations need to be considered in the context of the whole range of care services needed and used by older Australians. The Australian Government must now consult with key stakeholders to make informed and sustainable decisions about the longer term future of Australia’s aged and community care services.
THE CRITICAL ISSUES
There are five critical issues which absolutely must be addressed
to ensure the future availability and viability of care services.
Availability of Support - More Community Care Services
The demand for aged care is increasing as the population ages. The majority of older people want to be supported to live in their own home. Funding for community care services needs to be increased to ensure that services are available – at appropriate levels - when needed. The Home & Community Care (HACC) Program represents the major Government effort in community care and provides services to approximately 700,000 Australians each year. It requires an initial 20% increase ($146m Federal Government and $98m State Governments) and at least 6% growth per annum (plus indexation) thereafter.
Locally Available Rural & Remote Services
Rural aged care services often experience different costs to deliver
the same services as metropolitan areas. Residential aged care services
receive a viability supplement in recognition of this while community
care services do not. While increased funding for residential aged
care viability was provided in the recent budget the formula for allocating
the supplement is to be reviewed. It will be important that this review
is done with a view to equity for rural and remote communities and
maintaining locally available services. Community care services should
receive a similar viability supplement.
All parties must commit to maintaining locally available aged and community care services.
Income & Cost - Appropriate Indexation
The current indexation method used for residential and community care services does not recognise the increasing costs experienced by the sector. Costs are estimated to be increasing by at least 7% each year while the latest indexation figure offered is 2% which, with the additional 1.75% supplement provided in the recent budget, takes the total increase for 2004/05 to 3.8% - or a little over half of the expected increase in costs. Clearly services can not continue to operate with this disparity between costs and income. Most services have already made as many productivity gains as they can without compromising the quality of care.
The welcome increased funding in the budget for residential care is provided only in the short term and will effectively be taken up with current wage cases. It will still not allow the aged care sector to offer comparable wages to the public hospital system. The budget did not have a comparable community care funding measure.
All parties must ensure that income matches costs through either an appropriate indexation formula or the maintenance of adequate supplementary payments for residential care and the introduction of similar measures for community care.
Quality Aged Care Homes - Consistency in Raising Capital
The current capital raising approach for residential aged care is not sufficient to ensure adequate funding is in the system to support the ongoing building of homes. While the budget provided a number of sensible changes to the existing system, the fundamental flaw – that high and low care capital raising is different – was not addressed.
Capital arrangements should be the same across high and low residential care with consumers being able to choose how they pay for their accommodation – through a lump sum or through regular charges.
Red Tape Creates Inefficiency - Taxation Issues for Retirement Villages
The Australian Taxation Office (ATO) is considering changing the application of section 38-250 of the New Tax System (Goods & Services Tax) Act 1999 to supplies made by charitable operators of retirement villages. The practical outcome of the proposed changes to the application of s38-250 would be to remove GST free status from charitable services. Government undertook at the time of the introduction of the GST that they would not adversely affect charitable service provision - which this change would clearly do.
All parties must now make a commitment to ensure charities are not adversely affected by GST legislation and undertake not to adopt the ATO Rulings as they are currently proposed.
THE AGED CARE WORKFORCE
Aged and community care services must be provided by a mix of appropriately
skilled and motivated staff.
Currently aged and community care is attempting to deal with a national shortage of Registered Nurses, difficulty for many in attracting and retaining personal care workers, an ageing workforce, wage rates set in the public hospital sector and an environment characterised by the excessive paperwork requirements of the Government’s regulatory and administrative regime
Australia as a whole has an ageing workforce. This is impacting in a number of employment areas and is having a marked effect in aged and community care.
A long term solution (tied to the ongoing funding of services) to improve the pay for aged care nurses must be found. The additional short term funding in the budget will stop short of achieving pay consistency with public hospital nurses.
