ACAA Congress: 5 views on Minister Butler’s speech

Above: Minister for Mental Health and Ageing, Mark Butler, addresses the ACAA National Congress, held on the Gold Coast this week.

By Stephen Easton

The Minister for Mental Health and Ageing, Mark Butler, fronted the Aged Care Association of Australia (ACAA) National Congress this week and delivered an update on what he has learned from his ‘conversations’ with consumers, before taking questions from the audience.

Mr Butler’s relatively informal speech entertained much of the audience with humourous anecdotes from his recent travels, and reassured them that he is aware of the issues they face as aged care providers.

The appearance was generally well received, as was the minister’s willingness to once again take ‘questions without notice’, although some delegates expressed disappointment with his announcement that as yet, the government has no plans to make next May’s Federal Budget ‘the aged care budget’.

Mr Butler reiterated the government’s commitment to starting aged care reform in the current term of government, and reminded delegates that the Productivity Commission’s recommendendations were designed to take effect over at least five years.

Loud applause followed a question from Pip Carter, CEO of St Andrews Ballina, about whether the government would address the indexation mechanisms for aged care funding. The Minister’s noncommittal response did little to allay concerns among some well-placed industry figures that this year’s “inadequate” indexation would be repeated in 2012.

Mr Butler listed what he saw as the most important issues in aged care reform, including the workforce, which he described as “probably the one thing that keeps me up at night the most, because there are just so many factors beyond our control”.

The following day, AAA asked five aged care leaders at the ACAA National Congress for their thoughts on Mr Butler’s speech:

Brian Dorman
CEO, Regis Group
President, Aged Care Association of Australia

What the minister did say was that the questions consumers were asking him were not the ones that [the aged care industry] thought they would be asking. We thought they would be worrying about their financial position, but they’re talking mostly about how they’ll make the transition, and what kind of care they’re going to get. He also spoke about not expecting anything too quickly – and I think he had to say that – in terms of change with the PC report. 

… I don’t think he could say anything else [about the 2012 Federal Budget], because he doesn’t have a direction from Cabinet. It was the truth. He is very articulate, but he’s also a very honest person. Even in private conversations with him, he says the same thing – ‘I don’t have Cabinet clearance’.  What the Prime Minister said was that they would do something in this term of government – and by the way, it doesn’t have to be in the next budget.

… I’d rather we get reform right than be pre-emptive, or rush it. I know there are people in the Department [of Health and Ageing] preparing something of substance that will probably allow us to get something in the budget, but they’re not in a position to say what that is yet, because the minister hasn’t completed his ‘roadshow’, the Department hasn’t finished its reports, and the NACA (National Aged Care Alliance) working groups haven’t come forward with a firmer picture on some of the PC issues. 

… The question [about indexation] got a round of applause, not his response. We’ve always had a problem with our COPO (Commonwealth Own Purpose Outlays) indexation – it’s always been half or a third of what the real cost of the wage increase is.

… I did some numbers about six years ago showing our wage cost had increased about 20 per cent and our COPO had increased about 9 per cent, so we were well behind the eight-ball in that whole process, and that was six years ago. Now, it’s obvious that gap has widened.

[Minister Butler] actually also quoted a 4.2 per cent ACFI funding increase – I told his advisor he was misquoting there. I said the 4.2 per cent is because of the increased acuity of the residents. They need more care, therefore we’re delivering more care. … It’s an increase in the level of care and the number of staff interactions.

Valerie Lyons
CEO, Villa Maria
Board member, Aged and Community Services Australia

I thought Mark’s speech was very broad ranging, very effective, and certainly got a key message through to delegates at the ACAA Congress. I think the fact that he was prepared to answer questions in such an open forum was very, very positively received by everybody.

It’s a challenging time in the context of the broader [national] issues. I think we’ve got to look at … the environment in which the Minister is putting these views forward. 

Obviously we have some significant [national] issues at a political level, given that we have a potential change of government [in 2013], as well as the key issue around whether we have a deficit or whether we have a surplus, which is driving the need to reconsider how we might take things forward, and how quickly, with the PC report.

My read of some of the comments yesterday from the Minister was that we probably wouldn’t anticipate significant additional funding [next year]. 

I guess the real concern for us as a sector would be if, in fact, there is any desire to cut the funding in any manner or form, given that there’s going to be quite a push to achieve a surplus. The cuts have to come from somewhere, so that is an underlying concern.

… In the context of issues around budget expectations for next year, I think the underlying message, while it wasn’t clearly stated, was that perhaps we can’t expect to have what we would call reasonable indexation [next year], and that there are a range of different issues [for the government] to consider.

Gerard Mansour
CEO, Aged and Community Care Victoria
Acting CEO, Aged and Community Services Australia

There’s no doubt the government and the minister have heard the call for reform. I’m increasingly positive that the government’s committed to act. Now it’s down to what’s in the detail, so this is really ‘our time’ as an industry, and we should be doing exactly what the minister said – making sure the government hears from us the type of priorities that we’ve got. 

So that’s capital raising reform, support for smaller services, support for rural areas and special areas, and annual indexation. The minister’s named the issues; we’ve now got to go on and make sure the government acts in the right way.

All the minister was doing was re-stating the obvious, that is, that the government has made a commitment to act in the current term. So he acknowledged the call from the industry and, mind you, from consumers – not just the industry – that we want 2012 to be ‘the aged care budget’. He’s heard that, but he’s saying that the government’s [only] commitment is the current term of office, so we’ve still got to work on that one.

If they deliver in 2013 [the government] can say, ‘That was our commitment,’ but our view is different. Our view is they have to act in 2012.

Robert Oxford
CEO, Hardi Aged Care

I think the Minister was being pretty honest in terms of the government’s view. In terms of indexing, he covered that one off as just one part of a broader approach [to aged care funding].  

I think 2013 came up as the likely first point of call for consideration of the PC report – so I think there was a bit of disappointment it’s possibly not going to be 2012. I think the issue with 2013 is it will probably be an election year, and I’m not sure how much they’ll be able to grapple with during an election year, on top of the carbon tax and the like.

The upshot is that the opposition is coming from a fairly similar angle, and the government has committed to changes. The report’s been delivered so I think from our point of view, we have to hope that they’re going to give it full consideration and make the changes that are necessary – particularly in relation to capital funding.

Cynthia Payne
CEO, SummitCare

I think that realistically, politically, [Minister Butler] came from the right position; he didn’t have any other position to come from. Personally, I think he is honest; he is one of the most decent ministers we’ve had in the last ten years. 

In terms of reform, there’s no question that we will move ahead, irrelevant of what his position is today, because the movement is so strong. The reality is, whether they’re in government or not, the momentum for change is so substantial that it’s going to happen. 

We’re all having the dialogue of not if, but when, so I think it is a foregone conclusion that we will have change. Otherwise there will be an absolute uprising – consumers won’t tolerate it, providers won’t tolerate it, and the system will be corrupted. And no one can afford to see that happen.

I think in reality, it’s like a jigsaw puzzle – you need all of the pieces. And one of the key pieces for providers is the financial viability. It unlocks the entrepreneurship of the industry, allowing us to be able to step up to the customer demand.

While we have such a completely, ridiculously constrained system, you have a frustrated industry that can’t actually move itself towards meeting the needs of the consumer. It’s obvious, it’s simple, it is not difficult and yet it’s the single thing that governments, present and past, have struggled to deal with because I think fundamentally, they have this perception that once they take the lid off the boiling pot on the stove, they’re not going to stop it. 

That is not the reality. The world won’t end tomorrow if we increase the charges to consumers, and allow us to adjust our businesses to meet their needs.