Editorial: Profits and the aged
Federal family services minister Warwick Smith was unable to defend the Coalition's massive hikes in fees for the elderly in need of nursing home places during an angry exchange with the studio audience on Midday show on October 16. The user-pays plan for aged care will come into effect on November 1.
Smith was so uncomfortable because the government's “reforms” attack some of society's most vulnerable -- the elderly poor who rely on pensions. The government has gone to some lengths to be seen to be making concessions to their original plan to slash government funding to nursing homes and hostels and deregulate the sector. This was strongly opposed by nursing home industry, especially the church-based nursing homes and hostels.
A deal was done between the government and the Democrats, represented by former Uniting Church minister and nursing home director Senator John Woodley. Three weeks ago the government secured passage of its legislation in return for committing an extra $40 million to the industry. This is to be paid in the form of marginally higher subsidies to nursing homes with a larger proportion of low income residents.
These changes may reduce some pressure on nursing home proprietors to exclude or minimise the number of low income residents (those with assets of less than $22,500 are exempted from the hostel and nursing home entry fee of up $100,000), but those wishing to enter nursing homes will still have to pay an entry fee and the means-tested weekly fees -- up from $26 to $63.30 a day.
The reason for the Coalition's “reforms”? Nursing homes are big business and the relative increase of Australia's aged population will force profit-hungry proprietors to spend more. This justifies, says the government, shifting the cost of social welfare onto individuals. The changes will encourage the nursing home sectors' cockroach capitalists to leave the poor and frail out in the cold.
Already, the new arrangements have been implicated in the suicide deaths of two elderly Australians.
The June 1996 National Commission of Audit report outlined the philosophy behind the government's user-pays approach. It argued that people's expectations of what governments should provide must be lowered and that social welfare services be privatised.
This means convincing those in the middle and upper income bracket to fund their own social needs and forcing the poor to rely on an increasingly run-down public welfare system. Obviously the benefits for private providers of health and welfare services will be immense.
Along with aged care, Medicare and the Pharmaceutical Benefits Scheme are major targets for the government's austerity drive. The Institute of Public Affairs, which two years ago urged budget cuts of $15 to $16 billion over two years, calculated that a $5 Medicare co-payment with the introduction of a “safety net” would save the government $1 billion per year. Savings would come from discouraging pensioners from making “unnecessary” visits to the doctor.
In the last budget the government increased the cost of medicines for everyone, including pensioners and healthcare card holders. Federal dental health subsidies were stopped. Bulk billing is under further pressure with no real increase in the Medicare rebate for GPs.
Various funding alternatives have been put forward: a special taxpayers levy or the introduction of aged care insurance (suggested by the Australian Pensioners and Superannuants Association), or a levy on superannuation funds (suggested by the National Ageing Research Institute).
But special levies or charges will slug all taxpayers or superannuants. What is needed is a genuinely progressive taxation system in which the wealthy and the corporate sector pay much more. Nursing homes should be integrated into a properly funded, quality public health system and not left in the hands of greedy entrepreneurs.
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