Aged Care Sector needs to open up the books

19 Oct 2020
Aged care

A Private Member’s Bill seeking greater financial transparency about how the aged care sector spends its money on people living in residential facilities has been introduced today by the Federal Member for Mayo Rebekha Sharkie.

The Bill mirrors legislation introduced by her Centre Alliance colleague Senator Stirling Griff in June last year that would have required aged care providers to disclose their income, costs of food and medication, staff and staff training, accommodation, administration and monies paid to parent bodies in annual financial transparency reports to the Aged Care Quality and Safety Commissioner.

Hansard speech here:

Youtube clip here:

"At the time the government was not interested in taking up the legislation. Senior Australians and their families haven't lost interest and, in the interim, the impact of COVID-19 has only highlighted the under-resourcing in the sector,” Rebekha said.

"In my time in office, I have been approached numerous times by constituents deeply worried about the quality of the food served to their loved ones and the number of staff available to help with feeding and hygiene.

“This legislation will enable families of loved ones, stakeholders and the public to have a clear view, for the first time, on the proportion of income that providers actually spend on costs of care and how much is just being pocketed or wasted.”

Rebekha’s Aged Care Legislation Amendment (Financial Transparency) Bill 2020, if adopted, would require aged care providers to disclose their income, their spend on food and medication, the amount spent on staff and staff training, accommodation, administration, and how much they pay out to their parent bodies.

The providers would be required to submit an annual report to the Aged Care Quality and Safety Commission who would then make the report available to the public. The Bill also seeks to amend the Corporations Act 2001 to ensure residential aged care providers include detailed financial information in their annual financial statements.

Rebekha said it came as “no surprise” that a recent independent report to the Aged Care Royal Commission found a complete lack of transparency surrounding the billions spent in aged care facilities.

“Australia cannot wait for the final report of the Royal Commission and the delays in dealing with the pandemic to have greater transparency about the financing of the aged care sector. We must act now,” Rebekha said.

“Estia Health, Japara and Regis Healthcare are all residential aged care providers, and all ASX listed companies.

“According to recent investigations conducted by The Saturday Paper, the trio have received a combined $8.4 billion in revenue from Government subsidies and resident charges in just the last five years alone.

"At the same time, these three companies have paid out $600 million to shareholders.

“We've heard allegations of directors of aged-care companies who have had the ability to use their funds to buy luxury cars.

“There's money in offshore bank accounts. We hear allegations of where rent is more than double the commercial rate, with money being funnelled back into church coffers.

“At the other end of the spectrum, reports carried out by Stewart Brown Advisor earlier this year – and pre Covid – show that 75 per cent of aged care providers in rural and regional areas are operating at a cash loss and questions remain as to whether small community-based providers can remain viable.

"There are a number of not-for-profit facilities in Mayo that were built thanks to the generosity of local communities and are being sustained by the hard work of local communities. This precarious situation cannot continue indefinitely.

“Clearly, something has gone horribly wrong in the financial management of the aged care sector but without shedding a light on each aged care facility, we won’t know the extent of the damage.

“My Bill simply seeks information from providers so the Government, and the public, will have a clearer picture of how facilities are resourced.

“This will be crucial if we as a Parliament are to engage in sustainable reforms to the sector that will improve the experience and treatment of vulnerable elderly people living in residential aged care.”

Share on Twitter Share on Facebook