Release of Budget 2004-2005 Ageing Information Kit $533 million Budget leak Stephen Smith - Shadow Minister for Immigration, Acting Shadow Minister for Ageing & Seniors

Doorstop Interview - 7 May 2004

SMITH: Today we see a half billion dollar Budget leak in the Aged Care area. It relates to proposals to increase capital spending in residential aged care. What the documents make clear is that this is simply a political fix. We know the Government has been neglecting aged care for years and they have only got around to this because there is an election in a matter of months.

The detail from the Budget Information Kit is entitled ‘Aged Care - In Good Hands'. Nothing could be further from the truth than that glib title. Aged care has been in neglectful hands for a number of years, and the community and the industry have made it clear to the Government that there are concerns about viability, about quality and access. These have fallen on deaf ears until now we find an election in the offing.

When you look at the proposals most concern is the proposed 17% increase in the accommodation charge for non-concessional residents for high level care. This may place an extra financial burden on families already under financial pressure. That proposal is set to raise in the order of $95 million by way of extra capital.

The second substantive proposal is to increase the taxpayer contribution for concessional residents to $16.25, a 20% increase. Government measures are set to raise in the order of $438 million and that gives you the $533 million package, the half billion dollar leak.

The third substantive proposal is to remove the five-year limit for the charging of the accommodation charge to residents.

So in these documents, which are the text from the Minister for Ageing‘s Aged Care Information Kit, you essentially find the Government's capital raising proposals. It's clear, by any omission of reference to it, that the Government's not proposing to introduce bonds in the high level aged care residential care area. Mark Latham and Labor has made it clear since the beginning of this year that that's not a road that we would go down, so I'm pleased that the Government has followed in that respect.

JOURNALIST: How would Labor raise capital for this area?

SMITH: I welcome the fact that there is a commitment by the Government to increase the capital so far as industry is concerned. The point I make is the industry has been making this point for years and years and for years it's fallen on deaf ears. I said just generally there are a couple of things I want to do before making a conclusive view on the detail of what we see today. That is I want to see the totality of the Government's package on Budget night, because there will be no doubt proposals that go to the recurrent funding side of the industry.

As well I also want to have the benefit of the Hogan Report. The Hogan Report has cost the taxpayer $7 million. I'm old fashioned, I wouldn't mind having a look at that report and get the benefit of its recommendations.

So far as capital raising is concerned, in principle I welcome the fact there is an increased Commonwealth contribution to concessional payments. I worry about the extra financial burden that the proposed increased charge for high level care non-concessional residents will place on families under financial pressure. I also want to explore alternative mechanisms, including one which we have put forward before which is the notion of no interest or low interest loans to the industry for capital development purposes.

JOURNALIST: Any comment on the Government's change to the Baby Bonus?

SMITH: I'm sure my colleague Wayne Swan will go into much greater detail in the course of the day. It is quite clear in that the Government doesn't have a plan to relieve the burden on families. It's simply got a fix for the election and in the process it's effectively trying to rip off Labor's proposal. I'm sure Wayne Swan will add the detail of that later.

JOURNALIST: inaudible

SMITH: The point I make in this area is that for years consumers, Labor and industry have been saying there are serious problems in aged care that go to the viability of the industry which have very serious adverse impacts on the quality of care. As late as the last week of the Parliamentary sittings before the Parliament rose, we had the Minister for Ageing standing up in the Parliament and essentially saying ‘there are no difficulties, there are no problems here, everything is fine, the system is fine, everything is terrific, we've had it in place since 1997'. It's only with an election months away that we see the Government finally act. There's no long term commitment here to the quality of residential aged care. It's simply another classic John Howard political fix in the run up to the election.

JOURNALIST: Wouldn't you say better late than never?

SMITH: I welcome the fact that the information released today shows that the Government is proposing an increased contribution for capital raising purposes so far as the industry is concerned. I want to have a look at the entire package before I give a concluded view on all of the detail. But I welcome the in-principle commitment to increase the Commonwealth contribution. My worry is the financial burden placed on residents not in the concessional category. What I want to do is have a look at the totality of their package. There may well be as it's been speculated, increases for the daily charges which will also place a burden on families under financial pressure. So I want to have a look at the totality and I make this point, given that we've spent $7 million of taxpayers money on the Hogan Report it would be nice to look at that and have the benefit of that advice. I certainly hope that the Government publishes the Hogan Report together with the Budget documents.

JOURNALIST: If this has been a problem as you say that's been going on for years and years, why has Labor only got one idea about low interest loans?

SMITH: As I said earlier today that is not the only idea we have. I said we had previously committed ourselves to that. I am in-principle supportive of going along those lines. We are also exploring other mechanisms. There is more than one way to skin a cat so far as capital raising in concerned. There has been in some areas a public policy obsession with bonds. Bonds are simply one device to raise capital for the industry. The accommodation is another, no or low interest loans is another. There are a variety of financial mechanisms and I am fully exploring those.

When I've seen the totality of the Government's package, when I've seen the benefit of $7 million worth of advice that Professor Hogan has for us you will very quickly see Labor's detailed proposals for aged care as election commitments in the run up to the next election.

I know there will be recommendations in Professor Hogan's report with which I wouldn't agree but I don't want the $7 million to go down the gurgler without us at least having the opportunity of examining those proposals whether we agree with them or not.

JOURNALIST: What's the worry about the bond?

SMITH: In 1997 you will recall Labor resisted and opposed the extension of bonds into the high care area. The rationale at the time was that in 1997 the question of high level care was more akin to health care rather than low care accommodation. We resisted it on that basis and the Government eventually conceded the point. The Government has, on the basis of these documents, decided not to extend bonds to the high level care area.

JOURNALIST: inaudible

SMITH: I don't know what the Government's rationale is you would have to ask them. Our rationale as I've said from a substantive public policy point hasn't changed over the period. In other words we do see and tend to see high level care as being more akin to health care compared with low level residential care. On that basis this point becomes even more pressing. We don't want to see high level residential aged care determined simply on the basis of a person's ability or capacity to pay. We also need to look at the need, and that analysis is much more pressing at the high level care area than it is in the low level care area.

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