Providers pressure government MPs over payroll tax

Aged care providers in South Australia are ramping up a grassroots campaign to lobby Coalition MPs over the Federal Government’s decision to cease the Aged Care Payroll Tax Supplement, saying residents in for-profit facilities have had their funding cut by $2,350 each a year.

The campaign being led by Leading Age Services Australia (LASA) South Australia has conducted a leaflet drop in the electorates of Boothby, Hindmarsh, Mayo and Sturt, which are held by Coalition MPs.

A briefing paper outlining the case against the supplement cessation has also been produced and is being distributed to politicians and the public.

Paul Carberry, chief executive officer of LASA SA and several of his members recently met with Christopher Pyne, MP for Sturt and federal Education Minister and Leader of the House, to raise the issue.

The Federal Government announced the cessation of the payroll tax supplement in the May Budget to achieve a saving of $652 million over four years.

The payroll tax, a levy charged on for-profit aged care providers by state governments, was historically refunded by the Commonwealth in the interests of ‘competitive neutrality’. Not-for-profits are largely exempt, except for those who subcontract certain services.

The cessation of the supplement was based on a recommendation from the Commission of Audit, however the government was widely criticised for implementing it without consultation with the sector.

The Federal Government has maintained the issue should be taken up with the state governments, but as Australian Ageing Agenda has reported while the states expressed sympathy for providers they have said they are not in a position to fund exemptions to the tax, and effectively referred the matter back to the Commonwealth.

‘Commonwealth’s responsibility not gone away’

Mr Carberry said that the premise behind the SA campaign was that aged care is a Commonwealth responsibility and in ceasing the supplement the Federal Government had “turned its back on the 47-year-old arrangement that ensured funding equity for the different types of aged care facilities.” Further, the Commonwealth’s handling of the matter had left the problem with aged care providers to solve, he said.

“We don’t think that’s satisfactory. That’s why I’m directing this campaign to the Commonwealth, because I think the responsibility starts with them, and it remains with them,” he told AAA.

Mr Carberry said the providers had told Mr Pyne that they had:

“a responsibility to represent the 66,000 senior Australians who live in private facilities who now have a different funding deal to the other aged care residents, and we don’t think that’s something we can stay quiet about.”

He said the campaign would “endeavour to make uncomfortable the position of our local MPs and if they want to come out and have a debate about it, I’d be happy to do that.”

Mr Carberry said the government’s explanation for the cessation had not been cogent or convincing.

“I’m hoping to put them in a position where they have to come out and explain it because at this point they haven’t had to do that. We have been having discussions behind closed doors and they have basically listened politely but told us nothing is going to change, and really they have to consider the consequences.”

Mr Carberry said the Commission of Audit’s report had warned the government that in implementing its recommendation some providers may struggle to continue without the supplement. He said he had been asking government MPs if they had “worked out who those providers might be” and what they would do when those providers failed.

According to the campaign’s briefing paper, the cessation affects 66,000 seniors who live in aged care facilities run by for-profit organisations. It estimates the average loss per resident is $2,350 per year or around $155 million per year total. “In South Australia the number of people affected is around 5,000 and their funding cut is around $12 million per year,” the briefing paper said.