The proposition embodied by this bill – that we should require transparency on how providers spend their public funding, and they should disclose what proportion of their funding is spent on care and what proportion is retained as profits, administrative and other non-care costs – was overwhelmingly supported by the majority of submitters to the inquiry.
A number of submitters called for the Aged Care Legislation Amendment (Financial Transparency) Bill 2020 to be introduced as a matter of urgency, as an important ‘first step’ towards improving financial transparency in the residential aged care sector – a step which can occur independently of the broader, longer-term reform plans of the Federal government.
Aged Care Crisis told the committee:
We think it is important to bring this in because a large amount of funding has been allocated now. In the past, when the industry got a large amount of funding, it didn't go where it was intended to go, particularly in 2014 and 2015. I think it is really essential that we monitor what happens very closely. So, we certainly support the legislation being brought in as soon as possible.
The Health Services Union (HSU) said:
Improving financial transparency is a necessary reform that can be achieved swiftly through adoption of this bill. The significant reform agenda for aged care set out in the Budget [in May] noting within that that the government has a particular focus on governance, first requires us to understand at a deeper level how providers operate and what resources are going to their care. This type of data can and should underpin the future of change in aged care, from effective regulation to high-quality care delivery, sustainable funding, and accountability from the industry and government to older Australians, their loved ones, the workforce and the taxpayer, who is funding the system. Taxpayer expenditure should be greater cause for curiosity from the government, the regulator, the Department of Health and other sector stakeholders. In fact, the royal commission found the regulator, the department and the government lacked this critical curiosity. There is no more time to delay, and we support the adoption of this bill.
The Older Persons' Advocacy Network reported that:
Older people have been telling us that they would like to see an increase in transparency now and for broader measures that align with quality indicators and other outcomes. The interim measure of reporting the hours by category of staff and the amount of spend by category of staff are both additions strongly supported by old people who are speaking to us at this stage.
Transparency must be at the heart of any reform of the aged care system. This is a system that desperately needs a light shone in the darkest corners. Financial disclosure will help us move beyond blind assurances and a reactive system to one that demands proper public accountability from providers. It will also help policymakers and researchers understand the pinch points in delivering quality care, and flag potential issues before they manifest in adverse care.
This inquiry is not the first to acknowledge the pervasive lack of transparency in the aged care system. This is a problem which not only saps confidence in the system - it also leads to sometimes catastrophic outcomes for residents.
The final report of the Royal Commission into Aged Care Quality and Safety (Royal Commission), which was handed down in February 2021, revealed that virtually no aspect of the aged care system is accessible, transparent, affordable, adequately funded or adequately staffed. The Royal Commission estimated one-in-three people living in aged care in Australia experience neglect, physical or emotional abuse. The system we entrust to care for our senior Australians is broken and it is not fit for purpose. As Commissioner Briggs observed:
A lack of transparency is a pervasive feature of the current aged care system. The consequences for the quality and safety of care have been profound.
The aged care system is poised for much-needed system reform as a result of the Royal Commission’s report. I consider that requiring financial transparency from providers must be a key part of that and, further, that this is something that should occur as a matter of urgency.
The HSU whose members are front and centre of care delivery in aged care, told the hearing into the bill:
Our members tell us about the heartbreak and grief of not being able to provide time to care, to provide nutritious meals, or to access essential training to develop their skills. They have watched the rise of contract and outsourced jobs and the diversion of money and oversight that comes with this. They hear concerns about where the money is going directly from residents and their families, and it is frustrating and it is heartbreaking for everyone.
Other submitters also demanded accountability to the public and transparent information on how taxpayer funds to the aged care sector are actually spent:
Enough is enough. Let the shine light [sic] on the sector and bring about accountability to the sector. It’s time to publicly open the books on every aged care provider in receipt of public funds. As long as public monies are received by providers, public accountability on the expenditure of these public funds is fundamental for the community to ever have the confidence that taxpayer money is going to where it is intended. This is the integral string attached to public money: public accountability for private expenditure.
There is too much secrecy of information regarding publicly funded providers caring for the most vulnerable members of our community. Our senior Australians deserve the best level of care.
I have regularly spoken out about the lack of available information on the quality and safety of services and questioned the lack of financial transparency by aged care providers over the significant public funds paid to them to provide care.
The Aged Care Legislation Amendment (Financial Transparency) Bill 2020, introduced on 12 June 2020 follows an earlier attempt, on 5 December 2019, to bring similar provisions through amendment to the Aged Care Legislation Amendment (New Commissioner Functions) Bill 2019. Regrettably, that amendment failed to pass the Senate by just one vote when Pauline Hanson’s One Nation voted with the Government to oppose greater financial transparency of aged care providers.
However, the pressure has been building for the Government to make significant changes regarding transparency. The Government says it is committed to fixing the broken aged care system, announcing $17.7 billion of extra funding over five years to the aged care sector as part of its response to the Royal Commission. Whilst those figures sound impressive, it is not nearly enough to adequately fund aged care into the future. The Royal Commission recommended an injection of $10 billion a year and the forecast budget falls well short of that. In fact, the Government’s response falls well short in many areas.
The Government has rejected a Royal Commission recommendation for a nurse to be on-site for 24 hours and delayed the start date for introducing mandatory reporting of care minutes per resident until October 2023.
Further, the Government’s timetable in relation to a number of transparency measures is too slow and opaque and only serves to affect the quality of care provided to senior Australians in care. For instance, the current Aged Care Act prohibits publication of the Aged Care Financial Reports (ACFR) submitted annually by providers. While the Government has accepted the Royal Commission's recommendation to require publication of a governance report containing financial information, this will only occur once the new act is legislated, years from now.
It is also important to note that the ACFR does not contain the type and level of information this bill requires from providers. The Government has belatedly made changes to the ACFR which, like this bill does, includes a requirement that information is provided at the facility level instead of as aggregated data, but this is only a small step in the right direction. The ACFR does not provide a true and detailed spotlight on the funds spent on direct care, what money is spent on staff wages, what is pocketed as profits, and what is paid to related entities – as this bill requires - and it baffles me that, having introduced additional reporting requirements for the ACFR in 2020-21, the Government has missed the opportunity to do more.
The Department has indicated that the Government response to the Royal Commission’s recommendations around transparency and reporting will be implemented over the next three years, which is too long for Australian families to wait for vital information to assist them in making an informed decision about residential care facilities.
Proposed amendments
A number of submitters have sought clarification of certain terms at 9-2A(2) such as 'direct' and 'indirect care'. While some of these categories have been developed in consultation with stakeholders, it is important that there be no ambiguity in the definitions of the categories the bill proposes to measure, if these categories are to be understood, applied and reported consistently by all providers. Some submitters also proposed broadening staffing categories at 9-2A(3) to capture worker categories across all jurisdictions and residential aged care settings. To that end, I would support such amendments and would propose to amend the bill to provide that clarity.
Some submitters wanted the transparency measures in the bill to go even further and sought various types of non-financial data including information about:
the use of external consultants and contracted agencies;
staff members’ professional qualifications; and
cultural diversity of residents, including their language preference and country of birth.
Such information has evident value and is also worth considering for inclusion in the bill.
Conclusion
This bill stands on its own merits and will have immediate benefits that are not reliant on the federal Government to enact future reforms.
Australians currently in residential aged care and those who will enter the system in the next few years deserve better. They and their families deserve better accountability and public transparency; they deserve to feel confident that their provider is investing in the true costs of care and that residents will be safe, well-nourished and have access to in-house professional help as needed, day or night. They should be assured dignity and respectful treatment in their final years.
There are excellent providers around the country. But there have been too many stories of residents abused and neglected, of providers making exceptionally high profits, of inedible and unappetising meals bereft of fresh ingredients, and care delivered by inappropriately qualified and over-worked staff. This bill is aimed at the providers who preside over these travesties. Greater financial transparency leaves poor performers with fewer places to hide.
The Government’s aged care reform plan will be slow and, with respect to transparent financial information, is not responsive or detailed enough to meet the needs of residents and their families and does not meet community expectation. We have an opportunity now – a rare, once-in-a-generation opportunity – to introduce meaningful reform that creates an aged care system we can be proud of. A system many of us may one day need to rely on. Financial transparency is at the core of this, as it exposes the funding underpinning decisions that result in good or poor care.
I urge Senators to support this bill.
Recommendation
That the bill be amended to provide further clarity to definitions at proposed subsections 9-2A(2) and (3).
Recommendation
That the amended bill be passed as a matter of urgency.