AAA journalist, Yasmin Noone, spoke to the Minister for Mental Health and Ageing, Mark Butler, at the Department of Health and Ageing’s National Aged Care Conference about recent claims concerning the government’s “clawback” of the Aged Care Funding Instrument (ACFI), making dementia a National Health Priority Area (read more), progression on the workforce compact and sector unity.

The minister answered all the questions posed about the subjects above in a frank, calm, open and respectful manner that was evident when listening back to the interview’s sound file.

However, as AAA is unable to upload the audio content online, we have instead included part of the interview transcript, edited slightly for improved readability, below.

Further responses will be included as quotes in a number of stories in AAA’s next magazine issue (Sept/Oct 2012), and will be attributed as such. 

The interview

AAA: When aged care reform was first announced on 20 April 2012, the reaction was extremely positive.  The atmosphere, at that point, seemed to favour the reform package and the federal government’s move to reform the sector.  Yet since then, the atmosphere has changed. This was especially noticeable around the time when the changes to the ACFI were announced.

Did you expect that the sector’s mood would change, at that point, as it did?

MB: “The changes with ACFI have been in the public sphere since November or December last year. And they are not connected to Living Longer Living Better.

“But I appreciate that they have come at the same time as [reform was announced]. So, in some people’s perception, they’ve been all packaged up [together with the reform].

“It’s taken us some time to work through why we are making these changes and what the precise impact will be. I’ve set up a monitoring group that will be meeting monthly to ensure there are no unintended consequences as a result of the changes to the instrument.

“But to be very clear, and we were clear when we introduced the ACFI 2008, that although there would be several years of very significant growth in subsides, per resident above indexation at around 6.5 per cent, after a few years that would have to return to trend growth.

“That was clearly understood by the sector and clearly set out in the budget papers.

“And the reason for these changes was that it had become clear (last year) that the growth was not trending back down, which is why we had to put $2.3 billion more into the budget in December, in the mid-year budget review.

“These things have been on the table now for really – [according to] one analysis, since 2008 [and according to another], certainly since last year when we indicated we would have to make changes to get that growth back to trend of around 2.7 per cent above indexation, per resident.”

AAA: Given that, as you and certain other groups (consumer bodies and trade unions) have said, changes to the ACFI have been on the table for quite a while. And, key sector representatives knew a bit about the issue for a number of months before changes were officially announced.

Could anything have been done differently to avoid the reaction to the changes and help the sector to better accept and understand the changes?

MB: “There’s always the benefit of hindsight about how these things should be rolled out. But, the peak organisations were brought into the tent on this before Christmas, as they were brought into be a part of a monitoring group which [was created] to better understand what is happening with ACFI growth.

“And the government does rely on those forums of communication, through peak organisations. I understand there’s been some movement in those peak organisations over this period of time, which may well have had an impact on the communication.

“But I also know that aged care providers [on the ground] are working hard doing their main job in delivering care rather than necessarily focusing on a debate that might be happening at a national level.

“So, look – we can always learn from these experiences – both the government and the peak organisations – but at the end of the day, I have a job to do which is to deliver an aged care system that is within the budgetary parameters given by government. And that’s what we are doing.

“But, there’s also a job for me to do to deal with the mythology surrounding this debate. For example, the claim that a number of organisations continue to make that there has been a cut in subsidies which is simply not borne out of any examination of the budget papers.

“They show that year-on-year-out, the subsidies will continue to grow by hundreds of millions of dollars, and even with the changes we’ve made to ACFI, the aged are subsidies in 2012 are still significantly higher (by over $500/400 million) than was going to be the case before the additional money was put in at Christmas time.

“If you were looking at last year’s budget papers, the 2012/13 figures stated there was going to be about $400 million less than what [the figures are] because of the changes we made at Christmas.

“So there are some myths floating around about this and part of my job is to get in front of as many people as possible and explain why we have made these changes and what, exactly, their impact will be.”

AAA: How do you expect to get the sector feeling overwhelming positive about the process of reform from here on end given this stumble in the process of gaining widespread support.

MB: “I expect that what everyone will do is separate the issues (of reform and ACFI changes) and recognise that there’s a job we all have to do to monitor the impact of the changes made to the ACFI…The ACFI monitoring group will start meeting in the next couple of weeks on a monthly basis…

“The sector is – and I’m confident of this from this conference and from the sorts of things the audience asked me in the Q&A – very focused on the medium and longer-term elements of these reform (building community care, doing dementia differently, moving to consumer-directed-care….and dealing with the longer-term financial challenges of residential care).

“Today, I released the draft guidelines for the Aged Care Financing Authority. Now that is going to determine how residential care facilities will be able to charge for accommodation in the future.

“I know that it’s going to focus the minds – very significantly – of residential care providers, their boards, banks and other investors.

“The ACFI is a very significant thing for the aged care sector. We are taking it very seriously as well but, there is before the sector and before the community, a significant reform package that needs to be implemented.”

AAA: When you delivered your first speech to the sector as Minister for Mental Health and Ageing at the ACSA National Conference in 2010, you spoke about the importance of the sector uniting with one voice.

You also suggested that the National Aged Care Alliance (NACA) be used as the medium for that voice to be heard. And again, when you just addressed the sector [at the DoHA National Aged Care Conference], you praised NACA for its united stance on reform.

But, given there has been mixed and negative commentary about ACFI and a bit about reform from within the sector, do you think that NACA is still as united today as it was three months ago? Or as it was in 2010?

MB: “From the outside, it appears to me, that there is still a very broad base of support for reform and for change.

“Now, I’ve never pretended there wouldn’t be disagreements within the sector or within NACA about detail but the fact that NACA was able to build a consensus for reform and agree about the broad elements of reform I think was a very significant step for them to achieve.

“…And it really differentiated this reform phase from previous attempts that failed, largely because of divisions within the sector.

“There will still be some stress tests put on the sector, I think, as we work on the implementation of the [reforms] but there seems to be, to me as an outsider, a level of maturity and a constructive attitude within NACA that it will survive that.”

AAA: Do you have a take-home message for the parties involved in the NACA and the people in which they represent, to encourage them to stay united irrespective of what challenges lie ahead?

“Well, at the end of the day, that’s their choice [to stay united or not].

“I’ve indicated pretty clearly my view that NACA is of significant benefit to the sector. It helps the government and community and parliament understand what the sector thinks is the direction for aged care reform, if the sector is broadly speaking with one voice.

“[But], at the end of the day, it’s up to them to see if they want to continue [speaking with one voice about reform]….”

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  1. I am absolutely sick to death oh this type of ongoing so called spin by the Minister.—-ACFI EQUALS ASSESSED CARE NEEDS. SUBSIDIES ARE VALIDATED. NOW THE GOVERMENT IS CUTTING BACK ON ACFI SUBSIDIES SO IT IS CUTTING THE COSTS OF CARING.QUALITY OF CARE MUST BE AFFECTED.NEXT YEARS ELECTION CANT COME QUICK ENOUGH ! By the way I see one of the Ministers Union mates is on the new Pricing Authority. Help !

  2. Isn’t it great that the Minister can remain calm whilst the industry and the opportunity for a generational reform is falling down around him.

    Just because people supposedly knew about the ACFI changes doesn’t mean it fits and adds value to the reforms, particularly when the Productivity Commission report was done after 2008. This is cold comfort for those vulnerable older people who are directly affected by the ACFI cuts – which are real and is clearly demonstrated.

  3. I heartily agree with the mesages posted by those who see through this facade. This is more spin by the minister. WHy don’t they just come out and admit that funding is based on what treasury says is available and let the myth that funding is based on care needs die? I know why, becuse then the government may have to let aged care providers charge a fee that represents the cost they actually face. It really is a joke that will not end up being funny when it all washes out. Look out older AUstralians there may not be a bed for you when you need it.

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