Transcript: The PC final report media conference

Read what went down at Monday’s PC report media conference with Prime Minister Julia Gillard and Minister for Mental Health and Ageing, Mark Butler.

Above: Prime Minister Julia Gillard and Minister for Mental Health and Ageing, Mark Butler, officially launched the PC’s final report at a media conference in Canberra yesterday

Minutes after the Productivity Commission tabled its final Caring for Older Australians report, the Prime Minister Julia Gillard and Minister for Mental Health and Ageing, Mark Butler, conducted a joint media conference.

To kick matters off, the PM officially launched the final report and spoke about the principles upon which the aged care system of the future should be based. She recommitted to start reforming the sector this term of office and stressed that public consultation would first take place before the government delivered a policy response to the report. 

Minister Butler spoke about the sector with more detail about the recommended financing arrangements before both ministers took questions from the media.

Below is an edited transcript of the joint media conference.

Editor of AAA, Keryn Curtis, was in Canberra to attend the report lock up and media conference, and asked the minister about sector support for reform.

To read the Prime Minister’s introductory comments on launching the final report, scroll to the bottom.

Minister Butler

“…The final report is indeed comprehensive. I think the Prime Minister is only holding up the initial volume. Its comprehensive nature runs to fully 750 pages, plus appendices with 58 very far-reaching recommendations.
But an important theme of the report is that of independence. We know that older Australians overwhelmingly want to live independently in their own home as long as possible and preferably, if possible, for the rest of their lives.
This report emphasises the need to gear our aged care and our health systems around that preference, as well as a more general emphasis on greater consumer choice.

The report obviously deals also with financing arrangement for residential aged care – what we used to call nursing homes and hostels. Now, this will inevitably raise a degree of speculation about the role of accommodation bonds in aged care. It’s important to be very clear about how the system currently operates and has operated now for many years.

Right now, almost 40 per cent of older Australians in residential care or in nursing homes have had to pay a bond to get their bed. Bonds currently average about quarter of a million dollars. The Productivity Commission Report tells of many bonds in excess of $500,000 and even in excess of $1 million. They are usually raised through people having to conduct effectively a fire sale of their own home at the point when they realise they need to enter residential aged care.
Now, the Productivity Commission was urged by some providers to extend that arrangement of lump-sum entry bonds to the rest of the residential aged care sector, particularly to high-care beds. It is important to note that the Productivity Commission has not recommended an extension of lump-sum accommodation bonds. Instead it’s proposed other options for older Australians to be able to contribute to the cost of their accommodation, and those options will obviously be a very important part of the conversation that we have now with the aged care sector, and more importantly with older Australians and their families themselves.
It’s also important, I think, to say that the report recommends much stronger links between the aged care sector and the broader health system; links which are much easier to comprehend now in light of the Government’s reforms in primary care, emphasis on preventative health and development of a 21st Century e-health system.
This report, in broad terms, is incredibly complex. It has very significant ramifications, not only for government, but more importantly for older Australians themselves, in the way in which they manage their own affairs.
The Government’s approach, as the Prime Minister has outlined, has been to release the report quickly, in order to allow a conversation to begin immediately with older Australians and with the aged care sector about its recommendations, and I start that conversation tomorrow morning.”

Questions from the floor

JOURNALIST: Prime Minister, I know you’re not ruling anything in or out, but this report does seem to present at least one palatable option to selling the home and that is this Government extended credit scheme. Are you, can you at least say you’re attracted to that in principle, or something similar to that? Does it hold any appeal for you?
PM: Look, we are going to go through the process I’ve just outlined. The journey to date, obviously we as a Government asked for this report. I, in the last election campaign, said to the Australian people that we did want to make a start on aged care reform in this period of government, and now of course after a draft report we’re here with the final report.
And we genuinely believe the right thing to do, given the significance of this issue to the Australian community, is to have the review, an analysis and discussion of these recommendations – some of that work being done within Government, but much of it being done by Minister Butler out in the community.

Above: PM Gillard and Minister Butler take questions

JOURNALIST: (inaudible) timetable for actually announcing decisions?
PM: We will start the conversation out in the community. I understand, Michelle, that there would be a number of people in the aged care sector who would say to themselves, ‘Well, there’s been reports in the past and many of them are now on people’s shelves gathering dust, so what’s going to be different this time?’
What’s going to be different this time is we are determined to start this reform agenda in this period of government, but we are also determined to do it the right way and that is in a consultative way, out in the community and with providers. There are many people who want their voices to be heard here, so it will take the time necessary to get that done, but we will be making a start on aged care reform in this period of government.
JOURNALIST: Prime Minister-
PM: -Yes?
JOURNALIST: -Your Minister’s just talked about a fire sale, people having to sell their homes. Won’t that make it harder for the Government to walk away from the recommendation that says people shouldn’t have to sell them homes?

PM: There’s about a million assumptions in that question and I’m not going to share any of them.
JOURNALIST: Are you expecting to start these changes in next year’s budget?
PM: We will work through, I mean this is clearly a big fiscal sustainability challenge, and let’s remember we asked the Productivity Commission to give us a report, not just for the next few years, but for the next 20 years, and the Productivity Commission itself says the phasing in period would be around 5 years, and many of the experts and stakeholders have said that they think it would actually take longer than that and some of them are publicly talking about periods like 10 to 15 years.
So, we are talking about a major and profound reform. So, I’m not at this stage going to set time scales for when this will be dealt with in a budget context. We will start aged care reform in this term of government.
But, I do want to say something about the way in which the money works and the financial sustainability works and I’ll actually go to Minister Butler on this as well. For me and for the Government this is not a savings exercise – this is not about savings.
Now, there are some conclusions in the Productivity Commission Report. Obviously all of its costing would need to be comprehensively worked through as part of this process of review and analysis within Government, but I may turn to Minister Butler for some comments just on these issues in the Productivity Commission Report.
MINISTER BUTLER: It is important to say that one point on which we don’t agree with the Productivity Commission is their modelling about the fiscal impact of their proposed recommendations in the first three years. I think in the overview they say that there would be significant sums saved in the Commonwealth budget in those first three years.
Now, the assumptions underlying that modelling, firstly, are that a new user contribution system would start on 1 July next year, even though the Productivity Commission itself says that at the earliest that should start in the third year.
Also, it assumes that there would be no grandparenting arrangements for existing residents or recipients of aged care, even though in its recommendations it says that there should be.
It contains no modelling for workforce initiatives, which are a significant part of the report, no allowance for things like implementation costs and such likes.
So, our initial look at that through the Department of Finance indicates that those savings the Productivity Commission says are available in the first few years are not there. As the Prime Minister has said, this is not being approached by the Government as a savings exercise. There are structural increases built in in the aged care budget that simply reflect the ageing of the population.
So, it’s important for us to be clear that we don’t agree with those savings outlined in the Productivity Commission’s overview.
JOURNALIST: Prime Minister, I remember – maybe I’m old – but I remember the last time the Howard Government did this. Judy Moylan was the minister. It was very divisive and painful to put in place the current system. You seem to be very seem to be very sensitive today not to give your position. Is this out of concern for how older people might think they will be affected? What is your message to older people who are thinking ‘oh, what’s the Government doing’?

PM: The position we’re taking today is borne of a determination to get this right and we understand that this is a big issue for Australians: it’s a big issues for older Australians; it’s a big issue for people of my generation and dare I say it, this Minister’s generation; some younger people, who are concerned about ageing from the perspective of looking at their parents and wondering what the journey will bring.
And we do know, of course, that people are looking for more options now. Overwhelmingly, people want to live independently, hopefully to the end of their lives. A lot of society attitude towards residential aged care has changed over my lifetime and I’ve had a little window of that working as I did way back when in a part-time job in residential aged care, so the level of frailty of people going to the system is very different now.

So, our approach today of not ruling things in and out is borne of a determination to get this right, and to get it right we believe we do need to do the reviewing and analysis of the recommendations in this report, but we also need to do the discussions out in the community.
I too, Matthew, am old enough to remember the earlier debate and I would say a number of things have changed since the earlier debate – particularly, the attitudes of many involved in the sector about the need for reform have changed since the earlier debate – but I’m also well aware that if you wanted to take a simplistic approach to this and pick it up and start challenging the Government to rule things in and rule things out then that could happen. My words would be the best way to have this conversation in a respectful way, so we do the right thing by today’s older Australians and the generations of older Australians to come, is to have the open conversation in a mature way about every aspect of this report.
We’ll go to Andrew and then come over to Philip then to-
JOURNALIST: (inaudible) equity, do you agree with the basic premise that older Australians who are rich or wealthier than others should pay more for their aged care?
PM: I believe the system has to have sustainability in it, and before I indicated to you the various principles that we would bring to bear, and let me just indicate the relevant one: that the system is financially sustainable in a way which is fair for those being cared for as well as for the rest of society-
JOURNALIST: (inaudible) pay more for their aged care.
PM: No, that’s the aim, and obviously in all complex areas of public policy there’s not one way of realising an aim, and part of the conversation will be about the best way of realising that aim informed by this report.
JOURNALIST: But we shouldn’t be ashamed of that, expecting the richer people to have to pay more. Will you express that?
PM: We’ve got to remember that this is an area where we are talking about older Australians’ health care needs and the like, and obviously we take a view about a community of interest in having good quality care for everyone, so for example when we are talking about our public hospital system, we take a view point of having good quality care for everyone. So the report is obviously asking us to reflect on all of these issues. The recommendations are there and we’re not going rule things in or out or predetermine the conversation now.
JOURNALIST: Can I try and pin you down on a principle at least? Do you agree with the broad thrust of the report that emphasis should be put on keeping people out of residential care, allowing them to stay in their own homes for as long as possible, but when they have to move into residential care that there should be some sort of user pays system and there should be an alternative to having to sell your house to pay for that care?
PM: Well, you keep inviting me to make specific responses to the recommendations and we’re not going to do that today, but what I can say to you is it’s obvious that people want, in the modern age, to stay in their home, living independently for as long as possible and we are going to be increasingly dealing with a generation of retirees who will be healthier, better educated, more prosperous and demanding of more choices than the older Australians who have gone before them.
The Baby Boomers will bring a different view of what it is to be an older Australian to ageing than earlier generations of Australians, so we will need to be answering the questions about how best to look after people, and I think people will be very determined to live independently as long as possible.
I made a reference before to working in aged care myself. I did it as a part-time job when I was in high school so it was a long time ago – I’ll invite you to reflect on how long ago – but when I worked in residential aged care when I was in high school in a facility for women, there were women who lived in that residential aged care facility who could still drive.
Now, the whole world has changed. Many of them had gone from their parental home to their marital home and then on the loss of their husband moved straight into residential aged care and spent 20 years of their life in residential aged care, and when they first went in they were still physically very hale and hardy and able to do things like driving.
Now, no-one in today’s society would say to themselves that with 20 years of life in front of them and able to do things like drive, that they would move into residential aged care. Those attitudes have changed across my life time. Attitudes are going to keep changing and keep evolving where people will want to be more independent with more choices.

The Minister might want to just comment on that as well.
MINISTER BUTLER: Well, no, I think that’s entirely right, with respect Prime Minister. Consumers overwhelmingly-
PM: -If you say something about young now you’ll be in a lot of trouble.
MINISTER BUTLER: Consumers overwhelmingly are telling us that they want a range of options to choose from, but the overwhelming choice that they want to make is to able to live at home independently for as long as possible, and if possible for the rest of their lives, so gearing an aged care system and a health system that supports older Australians to do that is going to be something that increasingly older Australians expect of their Government. 
AAA JOURNALIST: Prime Minister, you said before that there was a lot more support in the aged care sector for these reforms than there had been-
PM: Not necessarily these reforms, but for reform, certainly.
AAA JOURNALIST: Do you think that you have the sector behind you now?
PM: I think there’s inevitability more than one view, but I think there is a reform mindedness in the sector because they understand that if the status quo continues to wheel itself out year after year after year, that we will see increasing problems in the sector, but I’ll go the Minister, who’s obviously in very close contact with the representative groups.
MINISTER BUTLER: Well, I think to hark back to Matthew’s point about the attempt in the late ‘90s for reform, back then significant parts of the provider sector, particularly non-profit groups like the Catholic health groups, most of the consumer groups, the aged care unions, were all opposed to a significant reform in aged care, which I think was a significant reason why it didn’t proceed.
This period, there is an alliance that includes all of these significant provider and consumer and aged care union groups, as well as a number of other service providers involved in the sector, who have signed up to a vision, they call it, through the alliance, of reforms. So, while there might not be complete stakeholder agreement with the Productivity Commission recommendations – we’ll hear from them later today, I guess – there is an appetite for reform in the sector that I just don’t think there was 10 or 12 years ago.
JOURNALIST: Prime Minister, you’re asking for a respectful debate on this, but this issue does lend itself to a vigorous political scare campaign. Do you have the Opposition on side on this issue?

PM: Well, you’ll have to ask Opposition spokespeople about their view, but I do believe that– I would hope, that looking across not just politics in the sense of people who are in representative politics, that is, members of the House of Representatives or the Senate, but more broadly across the political voices that get heard in our debates, stakeholder voices that the Minister’s just gone to and more broadly, I would hope that there’s a recognition that there is a need for reform; that the status quo simply can’t continue year after year after year, with the nation doing the right thing by older Australians.
So, the status quo locked in forever will not meet the needs of older Australians over time. Therefore, we do need to have a reform conversation and I would hope that we can have that reform conversation in an open way.
What people now have before them is a Productivity Commission report. The Productivity Commission is widely respected. Now that doesn’t mean, that whether it’s in this area or any other area, that they get everything right. We know we’ve had Productivity Commission reports before, We’ve worked through and discussed issues with people and reflected on them. We want to do that again and we want to do that in an environment where people are engaged in the conversation. So, I would hope that’s the way that this can roll out.
For specifics from Opposition spokespeople, you’ll need to talk to them.

PM launches the final report

“I’m pleased to be here today to launch this report. It’s rightly said that you can tell a great deal about a society by the way in which it treats its older members, and against that standard Australia’s aged care sector has a lot to be proud of. There are a lot of people working in aged care who have done tremendously good work over many years.
“But there are many challenges and many opportunities that lie ahead, as our society ages and as the choices and needs of those Australians who are becoming older evolve.
“Understanding that ageing was changing, that the number of older Australians were changing as a proportion of our society, that their choices and options would need to be different than those of the past, I asked the Productivity Commission in 2010 to get on with the job of looking at aged care for us and presenting the Government with very detailed options for reform.
“I’m very pleased that we’re in a position today to launch this report as a result: Caring for Older Australians. Now, we know that in the future Australians are going to live longer; they are going to be healthier as they age; they are going to be more prosperous than previous generations.
“Indeed, last week I remarked in a speech that we are really dealing already with two generations of older Australians, with our most elderly Australians and now with the retiring generation of baby boomers.

And as I remarked, those generations have got different outlooks and different aspirations, and in particular as the baby boomers age they are likely to reshape what it is to be an older Australian, the way they reshaped what it was to be a younger Australian, and the way their generation has reshaped the understanding that we have of adult lives and the choices within adult lives.
So, as a nation we face the challenge of providing care to these older Australians, knowing that the number of older Australians will grow.

We’ll bring our principles to determining the future as our society ages and in terms of the treatment of older Australians.
Firstly, we will recognise that older Australians are rightly viewed as an asset to our nation. We will also recognise that every older Australian has earned a right to access appropriate care as they age. We won’t be leaving anyone behind.
We’ll also want to see a system that offers more options than the past has; a system that is financially sustainable and is fair for those being cared for, as well as for the rest of society; and a system which meets the highest standards of quality.
Now, I recognise that the question of ageing is not only a question for Australians ageing themselves, but also for their family members. Many Australians of my age concerned about their parents as they age, so I understand the interest in the report that we are releasing today will be wide and deep in Australian society.
The PM on the process of consultation

And I want to say that what we will do as a government in dealing with this report is we will be ensuring that there is a proper process of review, discussion and analysis of its recommendations. That won’t be a process just within Government, though of course within government we’ll be thinking about it very deeply – it will be a process that engages the community and will be led by Minister Butler.
Minister Butler will be assisted in consultations and conversations about this report by the National Aged Care Alliance and the Ageing Consultative Committee. We will be working through what the recommendations of this report mean in a conversation with Australians.

The government will do that work before we respond to this report.
Can I say that all of that work means today we are not responding to the recommendations of this report, and we are not going to rule things in or out arising from this report. I know that it would be simplistic to rule things in or out before they’ve been subjected to appropriate review, analysis and discussion, so we will not be taking the course of ruling things in or out today.
And I’d say to anyone who wants to take that kind of simplistic approach, that in my view that would be letting the community down at this critical point for our aging population.
We need, as a society, to have this conversation. We owe it to our parents and we owe it to the current generation of baby boomers, as well as to Australians who are already retired, to ensure that we treat this report respectfully and that we work through the complex and comprehensive issues that it raises, mindful of all of the difficulties of finding solutions in this area.

Tags: ageing-consulative-committee, caring-for-older-australians, minister-for-mental-health-and-ageing-mark-butler, national-aged-care-alliance, prime-minister-julia-gillard, productivity-commission,

1 thought on “Transcript: The PC final report media conference

  1. With the release of the PC report into ageing the media focus is squarely on the risk or cost to the consumer, which is understandable as it is controversial and therefore sells advertising. At the same time there is risk in structural change to existing aged care providers.

    Few people doubt the need for change. The current process for funding aged care is unsustainable in general, though undoubtedly profitable to a small number of providers.

    Many providers have structured their operations around the status quo. Many have their financing structured around investment returns on bonds for example, or have nil interest loans that are being repaid from bonds.

    Aged care is a large ship and as such will take a long time to change course. Not only is it important to protect the consumer through transitional arrangements that enable time to adapt it is equally as important to protect existing aged care providers, especially small, independent providers with transitional arrangements that enable them to adapt.

    The future of aged care is equally as dependent upon the survival of the majority of existing providers as it is upon the emergence of new providers and new models of service provision.

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