I was never in favour of the National Disability Insurance System as I saw it as a defacto privatisation and reliance on a ‘market’ which would have another layer of assessors, who may or may not get it right in a single interview, the award of ‘packages’ of money which may or may not be enough and/or may or may not be wisely spend. The greatest problem was that as a ’market’ it would be always liable to have glossy marketing to vulnerable families, with services delivered as cheaply as possible, by unqualified people and profits skimmed off. The government coffers were topped up by increasing the Medicare levy, which just ensured that the private sector was given huge amounts of public money.
When I was in the NSW Parliament’s Social Issues Committee which looked at the issue, a key problem was that there was no actual numbers of what the needs were for disability services. There were two ways of calculating it. The first was to add up all the people on benefits on the assumption that everyone who needed benefits was getting them. The other way was to ask the Australian Institute of Health and Welfare (AIHW), the government-funded research body what percentage of the population had a disability and multiply that percentage by the population. Their answer was many multiples of those on welfare, presumably either because their relatives or support networks were looking after their problems, or there was unmet need.
It seemed obvious that:
There would be a huge increase in demand when more resources were (at least in theory) available
There would be a lot of bureaucracy that would waste a lot of money
Those actually doing the job and who knew the needs at a practical level would have less control so the decision making would worsen
There would be a lot of profiteering
Disability workers would face a race to the bottom in pay and conditions.
It might be noted that NDIS cuts out when you are 65, so the whole process restarts with recipients having to apply for a Disability Support Pension (DSP). The current government has boasted that it is putting only a third as many people on the DSP as formerly. My experience was that when the NSW government stopped all Workers Comp payments after 5 years, many people who had been on this support for 5 year at least had to apply for the DSP. Figures were rubbery as the NSW government did not want to know how many people were simply tipped off income support, but the best estimate was that about 20% got the DSP and the rest had to go on Jobseeker. I wrote a lot of detailed medical reports for people who were still unable to get the DSP, and then the government wrote to me and said that I could only charge a very modest Medicare amount to write such reports, so presumably doctors will not be able to take much time on them. I cannot write them in the time that the allowance pays. I had one patient who was 61, ethnic, unskilled and illiterate in English who had been on compensation for a back injury 13 years and was carer for an invalid wife and was refused the DSP despite my best efforts and put into the ‘mutual obligation’ multiple job application system.
But to get back to the NDIS itself, I recently chanced across this article recently from an old issue of Green Left Weekly- a personal story. It seems very credible.
My view is the NDIS needs to be abolished, but it will be very hard to rebuild a public welfare support system against a well-funded and established private lobby that is making a fortune and has at least one major party ready to undo any efforts in this direction.
NDIS is also making life harder for disability workers
I am employed as a disability support worker by a council and, since the introduction of the National Disability Insurance Scheme (NDIS), I will soon lose my job. This is my story.
I am in transition to becoming “self-employed” with an ABN (Australian Business Number), which makes me a small business, and enables me to sign individual contracts with each client.
The other alternative was to become an employee of a private company that has contracts with NDIS clients.
From these two bad choices, I decided to go with the former.
We have been told that NDIS will be much better for hundreds of thousands of Australians. But is it?
Once families receive NDIS funding, it is their responsibility to make the choices for their child or adult family member and manage their finances over a 12-month period.
The idea that they are in control of the life choices of their family member may sound appealing. But the stress levels rise with the amount of bookkeeping required and when it is difficult to clearly define their needs.
Parents are encouraged to employ an advisor, but that person is paid for by the funding for their family member. That NDIS planner will recommend “one of theirs”, someone who will ask many questions and tick many boxes but who doesn’t really know the needs and interests of the person concerned.
I was once supporting a child at home when the NDIS planner was interviewing his parents. One of the questions was “Do you own your home?” I invited the planner to meet the child but she declined, saying it wasn’t necessary.
As much as I agree with giving parents options in choosing a carer for their child, the options being presented are often inadequate to the task at hand.
By privatising the disability sector, many people are obtaining an ABN (which is easy to do online) and presenting themselves as a qualified support worker. They do not need background checks and parents who search online for support workers only see promotional material.
I am qualified and have many years of experience, but l am now in competition with an untrained person who is willing to provide “services” at a cheaper rate. They call it business. I call it a dangerous rort.
NDIS has also meant that our work is now casual: we no longer have permanent employment with leave benefits, superannuation and union support.
A few weeks ago a parent asked me to do a buddy shift with a potential new carer as she lives near the client. Having a carer nearby is appealing for parents who may need to call on you at the last minute.
l agreed to do the shadow shift. I found that the inexperienced carer had no idea about the work responsibilities or the safety measures. She had no knowledge about supporting someone who is non-verbal with behavioural difficulties, who needs support in all aspects of daily life. She appeared to be more interested in the times of shifts, rather than the child’s needs.
It is easy to be blinded by the NDIS marketing, but just as the privatisation of the aged care sector has led to cuts in staff, quality meals and wound management, the same is true for the disAbility sector.
There are also many grey areas concerning the care of people with a disability.
Statistics show that as the number of people being diagnosed with autism (done by general practioners) has increased in the past few years. This adds to the NDIS budget.
As a result, NDIS bureaucrats are thinking of using “their people” to make the diagnosis. If this happens, we can expect a decline in the numbers of people being diagnosed with autism and many who need support will not be eligible for funding for appropriate services.
Another grey area concerns supporting people transitioning from childhood to adulthood, and teaching them to become more independent.
It is sometimes possible to teach a person to take public transport to an activity. However, it becomes a crisis situation when the bus/tram/train is late or cancelled and the person has lost all points of reference and they have to navigate replacement measures.
The NDIS planner may have ticked a box for someone to take public transport to an activity when things are going well, but an unexpected or crisis situation which causes the person anxiety is not factored into the plan.
It is imperative that we continue to support vulnerable people in our community. We must not be blinded by the NDIS hype when the reality is vastly different.
As we all wonder at the level of corporate rather than individual fraud, a Federal review of JobKeeper found that 31% of recipients who triggered compliance checks were ‘not eligible at all’. This was after a survey of 13% of the recipient companies.
The ATO seems reluctant to say who they were or how much. 31% of the recipients may not mean 31% of the $89 billion given out.
Only $194 million has been repaid (which is around 0.2%) of the total payout.
The Government response contrasts starkly when compared to the amount of attention that went to Robodebt, where welfare recipients received relatively small amounts of money. The ATO is very concerned about the confidentiality of Tax records, but this is not tax records, it is money given out.
The current issue in the NDIS (National Disability Insurance Scheme) is the government’s efforts to introduce ‘independent assessments’ of people on the scheme and those who want to get on the scheme. The idea has been abandoned for the present, but that is not the end of the story. It is the beginning.
Some context is needed here. I was on a State Parliamentary inquiry into disability funding during which we heard evidence of inefficiencies within the disability sector where often there were shortages of appropriate services, and in some areas there were none at all. The real crunch time was when parents with children with disabilities realised that they were going to die eventually and wanted to make a plan for the rest of their child’s life. People would apply at various facilities, and be turned away as there were no places. They then assumed that they were on a waiting list, but usually no lists were kept. When a vacancy occurred, whoever applied at that time got it. It was mainly luck. Naturally the people trying to help their loved one wanted a guaranteed package that would continue after their death. More articulate parents and carers, who had struggled for years just wanted the money to buy the services that they felt that they needed. Many carers simply wanted more services, and hoped that a national system that guaranteed services for disability.
Given the political context of privatisation and reducing government involvement in everything, the scene was set to have disability services delivered by the private sector as a massive market for services. The private sector naturally wanted to get access to services that had been provided by government as a source of business and profit.
Government also had a real estate agenda. Some large institutions were on valuable land. The large facilities at Peat Island in the Hawkesbury and Stockton Disability Centre was on beachfront land just north of Newcastle. There was a residence for the grossly disabled opposite Wollongong Hospital that had taken years of fundraising for the parents to achieve. These could be sold off as the mental health facilities had been a few decades earlier, with the catchy slogan of putting the residents ‘back in the community’. The idea that the residents were better off isolated in a suburban homes with few facilities rather than in a community of people with the same problem and a well-structured programme of activities seemed a dubious proposition to me. Resident groups such as the relatives of long-term psychiatric facilities at Bloomfield in Orange were very scared of the suggested changes. There had been problems with the old system and some inappropriate facilities, but an overall lack of facilities was the major problem. It was not even throwing the baby out with the bathwater; it seemed more like smoke and mirrors.
The key question in dealing with any problem is how big a task is it? When the Committee asked how many people with disabilities there were, there was no answer. No register was kept. The two ways of calculating it were:
To add up all the people on all the types of possible benefits and get to a total.
To look at the AIHW (Aust. Institute of Health and Welfare) figures of what percentage of the population was disabled, then multiply this by the total population.
The latter method gave figures about ten times greater. So clearly if help or services were made more available, the numbers involved were going to blow out hugely from what was currently funded.
John Howard passed the Aged Care Act in 1998, which was the blueprint for the privatisation of the sector. Old people are very vulnerable. They have often sold the family home, so they are temporarily cashed up, looking for accommodation and long term care with mental and physical facilities failing, or they would not be there. Carers faced with responsibilities that they were not used to and uncertain of what care was needed were easy pickings also. The whole sector is more like a dysfunctional real estate market; a market failure due to insufficient ‘consumer information’, but also distorted incentives and priorities.
The NDIS was similar. Private operators with slick marketing made promises which would not be tested for some time, but people were signed up now. The not-for profit sector had never paid staff well, but most had a ‘care ethos’. Some of the private providers did not, and regulatory supervision was minimal. The government was pro-business and trying to give away responsibility.
But an absolute shortage of services was still a big factor. A neighbour who was a 95 year old retired academic widower wanted 2 hours a week of home help. For some reason he could not get a community nurse. The best deal he could get was 2 sessions of 2 hours at $65 an hour. The lady delivering the service was paid $21/hr. So much for private services; the ‘overheads’ are huge. I had suggested to Kevin Rudd’s 2020 Vision in 2000 that the Government needed to licence service providers as individuals if they wanted a market model, and our neighbour could have selected a person on a one to one basis. (I never even got an acknowledgement).
Now the government wants ‘independent assessors’ to evaluate cases, presumably to lessen costs. A number of points can be made about this. It assumes that the assessors will learn more about the patient in an interview than the people who work with them already know. The new management philosophy since the 1980s always assumes that a manager at the top will know more than the person actually doing the job. Naturally if the object is to save money and have the person at the bottom paid minimally, requiring no skills and interchangeable in staffing, this may be true. But if the people at the bottom were respected, trained and empowered, the need for the middle level experts might be much less.
‘Independent Medical expert’ assessors are used in the Workers Compensation and CTP systems. They work for agencies hired by insurance companies. Often they find the patients either have nothing wrong with them, or it is degenerative and not related to their injury. These experts are even flown from interstate and save insurers money by denying treatments. Presumably if they find in favour of the patients, their agency gives them less work. The agency takes its cut and has to please the insurer. So the systems are more complicated and an ever higher percentage of the money is spent in trying not to give services. The NZ National Accident Compensation scheme, though it was government owned, went to a private insurance model and the same thing happened. Doctors who had a track record of denying liability were flown around the country to do their medicals.
The assumption may still be that well intentioned assessors still can do better. My widowed mother lived alone in the family home and had a stroke. A neighbour noticed her confused, walking on the balcony. She recovered, but seemed to have lost some judgement. She was assessed by an ACAT (Aged Care Assessment Team) who said that she could live alone in supported accommodation. So we got her into a unit in the grounds of an old house, where she could book a dinner at a days’ notice in the communal dining room, have a nurse onsite during the day, and had a right to a nursing home bed if she ever needed one. Seemed perfect. She said that she could look after herself. Can you microwave a dinner? Yes. OK. Do it. It got done. No problem. Dinners in the frig. Sweets in the jar on the mantelpiece; see you in 2 days. Arrive in 2 days. Dinners still in the frig. Lolly jar empty. Very hungry- can we go to lunch? She could do anything when asked, but could not initiate a process. She could not think to get a dinner from the frig, or book lunch tomorrow in the communal dining room, nor ask for help. The one-off team could not pick this. Neither did the family. But it emerged when the situation at home was known. This is just a story, but a carer who is savvy and properly trained will know more than a university-qualified assessor who has only a short knowledge of the patient. And naturally the person on the job actually delivers the service and is not an extra cost. They can also judge relative needs of people on a run or in an area if resources are limited.
So the scheme to bring in assessors is the tip of an iceberg.
Private insurance models have huge problems at many levels. The overheads of Medicare are a bit under 5%. The overheads of Private Health Insurers are about 12%, and they cannot refuse to pay doctors. The overheads of US Health insurers are about 12-36%, as the best way to improve profits is to cut costs (payments to patients) rather than increase services and then try to prove you have and sell on that basis. At the bottom of the efficiency barrel is our own NSW CTP system with overheads of almost 50%. The question has to be what is the focus of the system? Delivering services, or saving money? The US health insurers, like our CTP scheme are very good at making money. What they make their money from just happens to be people rather than widgets. The main cost savings of privatisation seems to be destroying award conditions and lowering ‘staff costs’. The immense administrative savings from universal systems, where determining entitlement and paying for profits are eliminated cannot be matched by any private system, despite what the ideologues might pretend.
The NDIS is currently a fund supposedly to help people with disabilities. These people apply to get ‘packages’ of money and services. Businesses persuade people to spend their packages with them. It is a market. But there are more people with disabilities than was expected, for the reasons discussed above. So a new level of assessors, were to be rolled in, but a huge outcry has prevented this temporarily. But the problems that led to the need for the assessors remain implicit in the design of the NDIS, which is fatally flawed. The government, particularly this one, is not going to take this very large bag of lollies from the private sector. The totally inefficient Private Health Insurers (PHI) give money to political parties and advance by stealth, letting Medicare become irrelevant for health care. Disability is now also privatised, and a new private lobby is in there. It has not yet generated a Royal Commission into its rip-offs, but it will, not that the Aged Care Royal Commission has stopped the privatisation of aged care. The political forces are too great. It is ironic that as Medicare is starved and pays less and less of the doctors’ fees its levy was increased, using a wave of sympathy for people with disabilities to make a bigger pool of money for increasingly private disability providers.
How to fix the problem?
I do not pretend to have all wisdom on this, but in dealing with difficult political problems I think it is wise to set a direction, take some basic steps and consult widely, looking for advice particularly from those who do not get an immediate financial benefit.
Here is a start:
Recognise that disability is not a sickness. Some disabilities are inherited; others are acquired due to accident, illness or aging. The sector is quite diverse, often divided up by the type of disability or how it was acquired. Sickness has an ‘episode’ model, based on traditional infectious diseases or surgical treatment models. Disability tends to be long-term and may improve or be worked around, or may degenerate gradually. As such it needs long-term solutions like welfare, but using the term ‘welfare’ now implies charity. Disability funding is funding to enable those less fortunate to have as normal a life as possible. From our common wealth, we give more to those who need more so that our society has equal opportunity for all. We are being taught that tax must be minimised and if we are getting less than we pay we are being ripped off. A better model is to consider the statement by Rhonda Galbally, ex-CEO of VicHealth, ‘There are two populations, the disabled and the not-yet disabled; if you are lucky enough to be in the second group, you should be happy to help pay for the first’.
The idea of a universal service obligation is the cornerstone. We should start with the assumption that people with disabilities should live in our society with as normal a life as possible and we should adapt to support them in as cost-effective way as possible.
My suggestion is that the Community Nursing service is the basic structural framework. We assume that people with disabilities will be living in society, and need varied and integrated support. If they are born with a disability or acquire one, they will come in contact with the acute hospital system, which will hopefully document their situation and alert the community support system. People on the ground will then liaise with family to see what support there is for independent living, and organise resources, calling in specialists of required. The cost of home support may be part of a package or allowance. Individuals may register to offer services for everything from shopping, cleaning and lawn mowing to medical or paraplegic support services. The government will register and insure both practitioners and those who use their services and may put training requirements on those who wish to register for some skills. A market with consumer feedback as exists for restaurants or other practitioners will allow people to hire help directly without big corporations adding massive overheads.
Whether the monies are paid separately of via Centrelink is an administrative question, but Centrelink has to have a major makeover so that it is not the niggardly decider of the ‘worthy poor’ with its chief function being to avoid paying anyone, or paying as little as possible. If society cannot find everyone employment, we must share what we have to those who are disadvantaged by disability or circumstance. This will collide head on with the problem of increased numbers of those with disabilities, but the extra load must be seen as part of having a decent society.
The way we are going seems to be privatising, allowing huge profits, then running out of money and shutting the gate on those who do not yet have packages. The independent assessors were merely the instruments of Managers who were not able to make their own assessments and did not trust the people who actually deliver the services. The assessor problem was the tip of the iceberg of a system that has all its underlying assumptions wrong, but sadly has a lot of political power that having been created, may not be able to be undone. The first step is to understand what is happening. Hence this lengthy post.
The whole model of the NDIS is wrong. It is all about turning care into a commodity for private profit. The con was that the people with disabilities would have ‘choice’ and could buy services from a range of providers, who would compete to give great service. But there are big structural faults.
Firstly, big corporations want big profits, so this creates an overhead so there is less money available.
Secondly, people are assessed by ‘experts’ so how much money you get based on a single interview. They are not people who actually do the job and could allocate compare the needs of different people in an area. The assessors are an overhead- another layer of managers.
Thirdly, once the money is allocated, those who have it will be encouraged to spend it whether they need it or not. And of course, this will favour those who present well (usually the middle class) and totally disfavour those who did not get a ‘package’.
Fourthly, the ‘market’ model does not work. Those who need the services do not necessarily know who can give them what they need. They are vulnerable to sales pitches from a limited number of providers and they may not even know about other options. In some geographical areas there may be only one provider, so there is no competition anyway; the provider can set the price and the profit.
Finally, the government can just lessen the amount of money and packages available.
When I was in a Parliamentary Committee looking at disability, the first thing we tried to find out what how many people were disabled. No one had wanted to keep records. People who had tried to get services from a provider and been knocked back because there were no places assumed that there would be a list there and if a place came up they would be offered it. Wrong. Usually there was no list, and a new person got the place if they happened to know someone or turn up at the right time. But at a broader level, experts we asked about how much disability there was either told us how many people were on various schemes and tallied these up, or looked at AIHW (Aust. Institute of Health and Welfare) figures, which said what percentage of the population had a disability and multiplied this by the population. The second method gave figures that were about 10x the people on benefits. So it was very obvious that if there was a supposedly universally available system the cost was going to blow out enormously because of the unrecognised demand.
The solution in my view was to have a universal support system that was community-based, like a district nurse model, and then ask the people actually doing the job, who needed more, and who could be helped to get their own home help from a number of people who would be registered in classes of carers. The government would then buy services in response to the needs identified and quantified by those doing the job. The essence of this was the empowerment of those actually doing the job. NDIS actually does the opposite. It is about the government shovelling money to the private sector with some middle ranking experts supposedly swooping in and saying how much money is needed. If they were embedded in the service delivery framework, they would be discussing needs and relative needs with those actually delivering services.
But modern management and politics assumes it knows best and those at the bottom need to be ‘managed’, i.e. told what to do. My experience is that people doing a job usually know more about it than anyone else and the intelligent use of their expertise is the most solid base for management. My experience is also that putting people in charge who are there for the money rather than the job are unlikely to do a better job than those who are more concerned with the job than the money.
I put this in a paper to Kevin Rudd’s’ 2020 Vision’ in 2000, but never even got an acknowledgement. The NDIS, like the Aged Care Act of John Howard seems to have used ‘choice’ as a Trojan Horse for a market model and privatisation. We need to start again. This is just a suggestion of a better model, but given the power of money in politics I am not hopeful of change.
A new article in The Saturday Paper 10/4/21 looking at the cost blowout and blaming those who need the services has a depressingly familiar ring. The blowout was eminently predictable and cost control by victim-blaming at the bottom is more likely than looking for corporate rip-offs at the top. This is what I see every day in Workers Compensation and CTP insurance.
Aged Care Reform Now is the name of a group that is working to try to get the Aged Care Royal Commission conclusions implemented. Like many inquiry reports, implementation is by no means certain.
John Howard’s Aged Care Act of 1997 allowed the sector to be ‘for profit’, and a poor system was made worse. At a webinar that I attended geriatrician, Joseph Ibrahim was of the opinion that when the dust settled, the government would do what the big for-profit companies wanted as they had a direct line to the government, and there was no serious organised advocacy as there had been for the gay lobby in the AIDs crisis or for disability. (The write up of that seminar is on this website- search Ibrahim).
Here is group trying to do advocacy. They will need all the help that they can get!
‘Mutual Obligation’ is the new buzz word for unemployed people. If they are to get ‘welfare’ they have to be trying to get a job. An index of this is to make a lot of job applications, that surely must be the bane of every employer in the land, with an obligation of job seekers to apply for 20 jobs a month and about 8 job seekers for every vacancy.
‘Noblesse Oblige’ is a French term dating from when English royalty spoke French after the Norman conquest (of 1066) and refers to the benevolent, honourable behaviour considered to be the responsibility of persons of high birth or rank. The term is so quaint and medieval that is often used ironically. But these days with the growing gap between rich and poor, and the lack of sanction on poor behaviour by the empowered class, it may be that old fashioned ethics is all that remains to help poorer people. And they are in short supply.
If there were mutual obligation, a government would be obliged to give its citizens a decent life. In the 1950 and 1960s it was considered a government responsibility to get everyone a job and governments fell if the unemployment rate was over 1%. In the 1980s when I worked at Sydney Water, it ran employment programmes for ex-prisoners, people who had been unemployed for more than 3 months, and people with disability. The employment was for a 6 month term, and my job was to check that applicants were physically able to do the job. There was a programme to separate sewage and rainwater in inner city areas and a pipe replacement programme. Both of these programmes were simply canned. The Apprentice School, which had about 180 apprentices including plumbers, electricians and carpenters was closed. Sydney Water’s staff went from 17,000 to less than 3,000, and all the wages saved were simply turned into ‘dividends’ from the State Owned Enterprise’. A tax in short. Contractors were used, and mains repaired when they burst. The government had out-sourced the work and outsourced the responsibility for employment. The latter was less obvious.
The Global market place that was created in 1944 to lessen the chance of wars allowed countries that produced things cheaper due to cheaper labour costs to prosper, and multinational corporations moved their factories. The Americans call it ‘off-shoring’. But our governments have acted as if none of this exists. An abstract entity, ‘The Economy’ is now responsible for job creation and unemployed people are responsible for getting them. The government has outsourced job seeking to private corporations, and as we know, their duty is to make as much money for their shareholders as possible. So if it is better to churn many people through short-term jobs to get a commission every time someone starts, hey that is the way to go. So it is about how the rules are written. If the old CES (Commonwealth Employment Service) clerks could find someone a job they did. No one complained that they did not try to place people, and there was no incentive for them to do anything other than to try to place people in the best way possible.
I work with the Workers Compensation insurer, iCare, whose remit seems to be to minimise the cost of claims by saving on both claims managers and payments to injured people, and they are still paid a bonus if the ‘customer’ (i.e. patient) gets back to work, so there is pressure to force them back. The CTP insurers are always in a total conflict of interest position. They get the premiums and every dollar they avoid paying out goes to their bottom lines. The idea that a private market will fix things is complete nonsense.
Now we have revelations of gaming the system in the privatised job placement agencies. The whole dismantling of the public system relies on the assumption that people will not work without incentive payments and private is always better than public. I was in the public sector for many years as a salaried doctor and then in Sydney Water. My experience was that the public sector did its job quite well and thought about better ways to act, undistracted by incentive schemes that would distort resource and time allocation. The Dept. of Public Works built most of this state; Sydney Water built Warragamba Dam.
Privatised rorting is now a major industry draining resources from CTP insurance, Aged Care, the NDIS and now job search. This is not to mention over-priced private monopolies in toll roads, transport, land titles office or oligopolies gaming electricity supplies.
Will there ever be a government that rebuilds the public sector to put an end to this? Will Labor just roll over as Liberal Lite as they did to get an extra $3.50 on ‘JobSeeker’?
But the key issue is that everyone has the right to decent life, and if the government cannot provide jobs, it should provide income support. Noblesse Oblige. As one of my more insightful friends said, ‘There is no shortage of work. Everyone I know can think of things that need doing. It is not a shortage of work, it is an unwillingness to pay’.
Watch this video re the privatised employment agencies.
We all saw the callous and incompetent saga of Robodebt, where the tax database and the welfare database were imperfectly matched, the welfare recipients were accused of understating their incomes and put in the unenviable position of having to prove that they system was wrong, as their support payments were cut to below survival level.
Now we see some companies who are doing very well getting Jobkeeper and being asked politely if they would mind paying it back.
Nick Scali, the furniture retailer has done very well out of the lockdown as people still at home and working, with forced saving on their out of home recreations have upgraded their furnishings. His profit has risen 99% to $40 million, and the share price from $3 to $10.51 in the last 12 months. The dividends are up 60%. Nick Scali as the major shareholder with 13% of the company will make $4.4 million personally. The company has received $3.5 million in Jobkeeper payments, so Labor MP Andrew Leigh has asked that it be repaid. Of course, Scali has done nothing illegal and has taken money that companies were entitled to. But the Government which is so careful and niggardly when it comes to poorer people getting money is totally silent on this situation. They are very thorough when it comes to giving out Jobseeker or any type of pension, yet seem unable to restrict much more generous handouts to business, let alone having a mechanism to get it back. The stockmarket profit reporting season is just starting so we are likely to see many more examples of this.
The only explanation I can find is ‘For to every one who has will morebegiven, and he willhave abundance; but from him who has not,even what he has will be taken away.’ — in Matthew 25:29, Revised Standard Version.
This submission addresses the Terms of Reference in order. It is written from practical experience, economic knowledge and with some research. Areas in which the author does not have expertise are not mentioned. This does not mean that they are unimportant. Comments on policy are made in relation to the term of reference, even if they are not directly asked in that term.
An Acceptable Standard of Living including housing.
Two of the Four Freedoms in the UN Declaration of Human Rights are Freedom from Want and Freedom from Fear. It is necessary that in Australia with a relatively high national income that people have enough money for food, shelter and some money to associated with others and enjoy some quality of life. The amount of money needed for this last depends to a considerable extent on how much society’s resources are free, such as parks and health care, how much they cost such as transport, and this to some extent depends on the extent to which monopoly products, such as roads have been privatised.
The most critical item is usually accommodation. The widespread use of negatively geared real estate as an easy route to riches for those who have surplus income has led to property being seen as an asset class that cannot lose money and almost a national Ponzi scheme where everyone buys on the assumption that prices will continue to rise. This has been self-fulfilling[i], but the national private debt has grown enormously[ii], which economists have been concentrating on public debt. The bottom line of this is that property has risen hugely in value, and in 2016 the median Sydney house price was 14 times the median income, but most of this value is in mortgage debt, which our banks have borrowed from foreign banks. So those who have cashed out their capital gains have done so at the expense of those who bought, and as a nation, Australia still carries the debt, requires large interest repayments, creates a national vulnerability to a fall in our dollar and limits Australia’s ability to invest in more productive assets or industries. The national obsession with real estate has been worst in Australia than other countries, and this must surely relate to the negative-gearing tax legislation.
At a practical level, rents have risen as property prices rise and this has been worst in Sydney. People on fixed incomes simply cannot afford shelter, and this is compounded by the almost complete cessation of the building of public housing, which has resulted in housing stock being taken by those on welfare or with age and disability, creating a subculture of welfare dependency with few role models.
It is therefore an oversimplification to see the problems as just one of income. But to address the problem requires pro-active policies in social structures and resources as well as infrastructure and education.
Given that many landlords see their properties as an investment, they are naturally keen to maximise returns. As prices rise the rental returns fall as a percentage of capital invested, even if that capital was not invested by the landlord, but is a function of the overall market price rise. Since house prices are rising much faster than inflation, there is therefore pressure on rents to rise faster than inflation and faster than wages. Unsurprisingly, landlords and agents often encounter resistance from tenants when they try to get rent rises greater than inflation. It is therefore easier simply to terminate the tenancy and start again with ‘market rent’. This leads to tenants being forced to move every year or so, and always having to take the rent rises. This has meant that rents have been an ever-increasing share of incomes particularly in Sydney. The dislocati0on associated with forced moving is an ever-present reminder of the power structures in society and a significant demoralising factor for a considerable segment of the population.
The changes in tax so that housing investment was seen as more long-term might begin to addresses these problems, but it requires some political courage as the idea of negative gearing is embedded in the society. Property investors are aware that they are getting rich by borrowing but less aware that the selling to get rich relies on someone else’s borrowing and cannot be sustained at a nati0onal level.
the labour market, unemployment and under-employment in Australia, including the structural causes of long term unemployment and long term reliance on Newstart;
Governments in Australia need to face the fact that there are not enough jobs for the Australians who need them and that the price structure is moving in a direction that is worsening the situation. There are a number of reasons for this:
The use of automation to replace labour, resulting in the closure of many offices and factories
The mobility of information, capital and goods that has allowed competition from cheap labour countries to replace Australian industries with a big competitive advantage in cost structures, so that more goods are imported.
The weakening of unions and the rise of labour hire companies that has allowed for increasing sub award wages, cash payments and a reduction of job security.
The use of work visas for unskilled labour, creating a sub-class of workers in the agricultural, cleaning services, hospitality and semi-skilled building industry where low wages are paid and Australian residents do not even compete for jobs.
It begs credibility that the Government is unaware of what is happening as they increase the number of unskilled workers to come to Australia on temporary visas, leave the unions emasculated and the Fair Work Tribunal under-resourced for any sort of policing role. The large number of foreign students who are in Australia as paying University fees who also need work and are a significant pool working illegally, again for cash or sub-award wages. Naturally they are in no position to complain, so act to lower real paid wages, even if they have no direct effect on statutory rewards. Australian government must face the reality that Australia’s cost and price structures are such that employers cannot compete on price in many cases and have therefore become importers. Structurally there will a continuing and probably worsening problem that many Australians will be unable to get jobs, and there needs to be a national strategy to create industries that are world competitive in a balance of payments sense and which will create lasting employment. Failing that Australia could take a Middle Eastern or Norwegian solution that charges far more royalties to companies exporting our resources and invests these in long term assets to support our economy. The development of renewable energy has been suggested as an export industry to develop, but it appears that the influence of the coal lobby is undermining innovati0on in this area. Those who chronically cannot find work remain on Newstart and the demeaning effect of continually applying for jobs that do not exist must demoralise even the most resourceful person. The ghettoization of poverty as outlined above compounds this, and it is surprising that there has been so little backlash from employers getting thousands of job application that they have no possible positions for. Presumably such correspondence is easy to ignore and dispose of.
The policy that allows ‘choice’ in schools and subsidises bus fares for children of more upwardly mobile families to attend either private schools or schools in better locations also leads to a residualisation effect where those who have less choice are all together and social disadvantage tends to be concentrated, so that there is less social help available in terms of knowledge and resources in the neighbourhood. Shortage of capital compounds this.
All this means that there are long-term structural problems in the Australian economy, which are compounded by the inequality of opportunity in the education sector. Currently this effects disadvantaged people more, so can be ignored by the more privileged classes if governments choose to ignore the long-term implications for the society as a whole. There are some in government who think that they are only there to get a larger slice of the pie for their own voter segment and that they do not have an overall responsibility for the progress of the nation. This approach must not be allowed to dominate, as a refusal to recognise the above structural issues will simply compound the difficultly as addressing them in the medium term.
Clearly those that are inappropriately trained or those who try to insist on an award wage where this has been allowed to be totally eroded, will be unable to find work and will need NewStart for a long time, particularly if there are not enough jobs.
the changing nature of work and insecure work in Australia
The changing nature of work as noted in b. above means that many jobs are either displaced by technology or ‘offshored’ where wages are cheaper. There are also an increasing number of ‘guest workers’ on 457 Visa who are supposedly skilled and now there are provisions for unskilled workers under designated area migration agreements (DAMAs). These people are supplemented by the large overseas student body who often also need work, but are legally restricted in how much or how long they can work, making them ripe for cash jobs, sub-award wages and exploitation. With foreign workers at least 10% of the workforce, and union membership plummeting, there is very little enforcement of pay and conditions. It also seems that governments want to turn a blind eye to the situation. Employers in the Northern Territory readily concede that DMA mainly are in the hospitality and tourist industries, which could presumably be done by native Australians. If native Australians are only to get ‘better jobs’ then the government which is allowing all these jobs to be taken by temporary workers ought either organise such jobs or stop blaming those in Australia who do not have jobs. It may be that if fruit pickers were paid award wages the Australian fruit could not compete in the market, but with a consumer premium on Australian product and possible action to reinforce this, it is unlikely to be the case if a real effort were made at an all of government level.
As far as the 457 visa are concerned, many of the trades coming to Australia, such as tiling, gyprocking, cement rendering, plumbing and cooking could be done by Australians, but the educational emphasis on universities and training in the medical, legal and financial areas and the deliberate neglect of TAFE, technical skills and apprenticeships has meant that Australia has a huge oversupply of wannabe CEOs and a severe shortage of tradesmen. What training our youth have is not actually appropriate for our long term needs. The two concepts of making education a for-profit exercise and letting ‘the market’ decide as if it has intrinsic wisdom, has made many young people do inappropriate training, before ‘the market’ teaches than the error of their plans. Governments may not be able to predict exact numbers of each occupation needed in the next 20 years, but they should at least make an effort. The absurd mismatch of skills needed and current training practices begs serious attention.
Employers, facing competition from imports with lower wages structures have lessened their cost by making work casual and only paying for workers when they are needed. From an employee’s point of view the casualisation of work means that they do not have stable income, which has both immediate effects and also longer term ones in that they cannot get home loans or even rental properties on that they cannot show that they will be able to meet financial commitments reliably. This further marginalises many workers and adds to social inequality.
the appropriateness of current arrangements for supporting those experiencing insecure employment, inconsistent employment and precarious hours in the workforce
The Author does not fully understand the overall situation with regard to current arrangements but can make some observations and recount anecdotes that relate to experiences as a professional coming into contact with support systems. The author currently works as a doctor treating Workers Compensation and Motor Vehicle accident injuries, so observes the action of insurers who act as private support for these people and also Centrelink in terms of people getting NewStart or the Disability Support Pension.
It might be noted that the NSW government has made legislative changes to reduce the time that workers compensation and third party insurance are paid to 5 years and to give insurers more discreti0on to deny payments to injury victims. This was in order to be able to lessen premiums and be able to claim that the State was ‘business friendly’. The premiums have fallen and the private insurers have had a windfall, but this has been at the cost of payment to injured workers, both in terms of treatment denied and in terms of income benefits obtained. The author wrote a detailed submission to the Hayne Royal Commission re this.
The effect of this legislation has been to force people who were on compensation to seek either NewStart of the Disability Support Pension from Centrelink. I might be noted that the Workers Compensation legislation of 2012 gave long-term compensation patients another 5 years of support, but this came to an end in December 2017. Most of these patients had been on compensation for more than 5 years, despite the funded rehabilitation and job training programmes. It might be stated that his gave them a better chance of finding a job than others in the same physical condition who had not been injured at work. Nevertheless Centrelink has resisted putting many of these people on the Disability Support Pension and insists on NewStart for many people. A discontinued survey be SIRA (State Insurance Regulatory Agency of NSW) found that only 29-30% were on some sort of benefit. 8% had been declined by Centrelink, 12% were still being assessed by Centrelink, 18% had too many assets to get a benefit (and leaves 32% not mentioned). Prime Minister Morrison boasted that fewer people were being put on Disability Support Pensions, but this actually started under the Gillard Government. The author has a patient, a migrant illiterate in English, and probably his own language who was 61 years old, had been on Workers Compensation for a back injury, had Parkinson’s disease and was a carer for his sick wife and was refused a DSP. His chance of getting a job was negligible. When the doctor took some time to write a detailed report to help the man, Centrelink stated that they would not pay more than $150 for the report, which took a couple of hours to do as his medical history was very complicated. He was forced onto NewStart and given a provider and lot of literature on ‘mutual obligations’ that he was not even able to read. Attempts to call Centrelink result in waiting times on the phone of up two hours. A computer eventually answers the call and cuts the person off if they cannot give the number and its suffix (which it may not have) in a very short time. If complaints on the website are not filled in in a certain time, the site simply switches off, losing the draft complaint. The systemic arrogance and indifference shown by Centrelink to its clients has to be experienced to be believed.
The author recommends that all the Committee assessing this issue try to contact Centrelink by phone, attend an office and personally interview a few people in the situation.
the current approach to setting income support payments in Australia
It would appear that the level of benefits is set historically and rises only when political pressure is applied to the system. There does not appear to be any logical formula setting the level of benefits in relation to costs, inflation, rents or the poverty line. If this is indeed so, it is no basis to run the welfare system of a country with systemic unemployment and the need for some degree of equity to maintain social harmony. If Australia has boom times it is fair that the success be shared, if there are bad times, it is fair that the pain also be shared and the effects of downturns not borne disproportionally by the most disadvantaged.
the impact of the current approach to setting income support payments on older unemployed workers, families, single parents, people with disability, jobseekers, students, First Nations peoples, people from culturally and linguistically diverse backgrounds, people living in regional and remote areas, and any others affected by the process;
The author does not have quantitative data on the impact of different groups, but has anecdotal evidence of patients utterly depressed about how they were treated by Centrelink, in despair about their ability to pay their bills and expressing a lack of hope for the future and suicidal ideation. Older workers feel that they have no hope of ever getting a job. Young unemployed complain that they cannot have a life as they have no money to get to job interviews, cannot join their friends for a drink or any social activity such as a coffee or a movie. This is very destructive of their self-esteem.
the impact of geography, age and other characteristics on the number of people receiving payments, long term unemployment and poverty;
The author works in suburban Sydney where the effects are very significant as stated above. Unemployed people have difficultly even getting to a doctor in suburban Sydney due to lack of funds and are frequently changing address as they have to couch-surf as they cannot afford rents.
the adequacy of income support payments in Australia and whether they allow people to maintain an acceptable standard of living in line with community expectations and fulfil job search activities (where relevant) and secure employment and training
The oncome support level is quite inadequate for any sort of quality of life, and there is insufficient money even to carry out job search activities. Young people need computers, printers and stationery to write and send resumes to meet their ‘mutual obligation’ targets, and it is even difficult to get haircuts, reasonable clothes and transport to the interviews if any. The costs of mobile phones are also a significant expense. If they do not have unlimited time on their mobile phone contracts they are likely to run out of credit before Centrelink even answers the phone. If they do not have unlimited time they cannot afford to call Centrelink.
the economic cost of long-term unemployment, underemployment, poverty, inequality and inadequate income support payments;
It is difficult to quantify the long-term costs of unemployment. The loss of self-esteem and the behavioural changes that this may create may be very destructive but are also an opportunity cost; what may have been is lost. The loss of experience means defects in a CV and those who have a current job are usually preferred over those who do not, creating a spiral of long-term unemployment as the longer the unemployment, the more likely it is to be prolonged. Eventually the long term unemployed form a subculture of demoralised and invisible people. It is somewhat surprising that there has not been more street crime with muggings such as happens in the US, when the unemployed lose all faith that society will look after them, see the average person’s indifference and therefore target random employed people. What society decrees as ‘survival of the fittest ‘in the normal economic and social framework may become a far more basic ‘survival of the fittest’ in a back alley, as happens in the USA.
the economic benefits – including job creation, locally and nationally – of increasing and improving income support payments and supports, and decreasing poverty and inequality
It is likely that the fiscal stimulus of an increase in NewStart payments and the DSP are likely to be very beneficial . It must be noted that the governor of the Reserve Bank, Philip Lowe has called on the Federal government to provide fiscal stimulus as the tax cuts and low interest rates have not been enough to increase consumer spending, which is the major engine of economic growth. It is know that poor people spend a much greater percentage of their income, in that they are not able to save. Hence money given as an increase in NewStart or the DSP is likely to have a better economic multiplier to the economy than either tax cuts or infrastructure spending as the tax cuts tends to go proportionally to higher income who have an increased propensity to save, and infrastructure spending also has corporate profits retained. The RBA has noted that long term increases in income lead to a greater propensity to spend than one-off payments, an unsurprising conclusion. It has been stated that poorer people spend close to 100% of extra income, and this is certainly likely to NewStart recipients, whereas wealthier people may save up to 30%, having a far lesser multiplier effect in stimulating the economy.
The social effect of raising the income of welfare recipients are likely to be a reversal of the problems detailed above in proportion to the magnitude of the increase. It will reduce inequality, give some hope to those on welfare and as such it is very important to the social cohesion in Australia.
the relationship between income support payment levels, minimum wages and wage stagnation in Australia and other comparable economies
The level of income support needs to approach wage levels to achieve the ability of welfare recipients to have a reasonable life. Some people assume that if the unemployment benefit level approaches that of a low wage that unemployed people will not strive to get work. This assumes that work is only an economic activity. It is far more than this; it is a route to social acceptance and feeling of participation. Those who take this highly economic view of work are usually very dry and have not spoken to those who are unemployed and would benefit from doing so. There is only danger if the loss of transport and health concessions by virtue of being unemployed are lost as soon as work is started and then have a long lead time to be reinstated. One of the more callous ‘reforms’ of the Morrison government was to only pay benefits when they were granted, rather than backdated to when the application was first made. This has doubtlessly saved the government money, but people do not apply for benefit until they can demonstrate a need for them and they are able to demonstrate such need at the time that they apply. Clearly they have difficulty surviving while their claim is processed and there should not be an incentive for Centrelink to delay processing application, which is currently the situation.
It is unlikely that the level of welfare affects the level of wages. What is more important is that those who only have welfare are able to have a decent life. There are too many policy makers who mix up their private moral prejudices with evidence-based policy. This leads to assumptions that those without jobs do not want them and they must be punished for not having a job. A more cynical view is that blaming the victims encourages people not to look at the inadequacy of the elite who unable to govern for the whole of society, unable to provide enough jobs for those who need them, or even to have an honest examination of the problems in society that cause these problems. As one humane person commented, ‘There is not a shortage of jobs. Anyone could give you a laundry list of things that need to be done. There is lack of structure that will pay the people who do not have jobs to do things that need to be done’. A job as currently defined is a task that either makes a profit for the employer or the government is willing to subsidise with taxpayers funds. With government shrinking, and international and technological competition restricting industry, and government following an ideology that it must become smaller, most industries are shedding labour, even when it would be better to have it, for both the workers and the society.
the interactions with other payments and services, including the loss of any increased payments through higher rents and costs
The cost of providing people with a basic income should not be surrounded by a paranoia that other costs may rise. It is certainly possible that a rent subsidy as an isolated measure may raise rents if it increases the resources of the renters without changing the quantity of rental stock. Presumably the only thing that would keep rents down is vacancy and people unable to pay the asking rent. So if the amount people can pay rises these properties will rise in rent. But to simply subsidise rent without a policy to provide affordable housing will inevitably have this effect. The problem is not the rent subsidy; it is the lack of provision of affordable housing.
the cost and fiscal sustainability of any changes
The cost of increasing Newstart can be calculated. The fact that this is of comparable magnitude and is almost discussed as an option illustrates how little care the government has for the welfare of people that they are unable to provide jobs for. The price is the price of having a fair society. If this requires a bit more tax this should be raised. The permanent cutting of taxes when there is a temporary boom in commodity prices is extremely irresponsible policy, and it may have to be reversed. The achievement of a surplus at the expanse of giving poorer people the means to live says a lot about the priorities of government, the commodification of people, and how out of touch our leaders are with quite a large segment of society. If they wish to take a moral stand, one might remind them that a society should be judged by how it treats its weakest members. Pious people shod remember the story of the Good Samaritan and the questions asked, ‘Who was this man’s neighbour?’
the relative merits of alternative investments in health, education, housing and other programs to improve outcomes;
One of the key needs is affordable housing. Without housing it is very difficult to organise a life. Currently unemployed people in Sydney have great difficulty finding accommodation and rely on friends or relatives, sharing rooms, couch surfing and moving relatively frequently. Money put into affordable housing would be money well spent, and is frankly a disgrace that housing has become an asset class for investors who build for the aspiring middle class rather than affordable housing and the government seems content merely to watch as inappropriate housing is built for much of the need. Indeed government housing is now largely confined to more and more disadvantaged groups, creating ghettos of social problems. The provision of affordable social housing should be a major priority as shelter is a major human right.
The provision of access to health is also a human right. The word ‘health’ has been appropriated and now in common political parlance refers to ‘access to insurance to pay for treatment of sickness.’ Health is actually the absence of sickness and it is far cheaper and better to maintain it than to merely pay for treatment of those already sick. Access to good food and housing are far more cost-effective than medical programmes, particularly private health insurance, which has an increasingly elective nature in terms of what is done, and the degree of luxury in which it is done. A retiring US Surgeon-General was asked ‘what was the greatest medical advance in your time?’ and to the surprise of the questioner replied, ‘The introduction of Food Stamps’. He recognised the importance of nutrition in the maintenance of health. In the US, with its niggardly attitude to welfare there are increasing problems with nutrition for r poor people and controversy over the payment for this such that there is a discussion of the need for better nutrition. Australia with its poor levels of NewStart and its controversy over the cashless welfare card probably has a similar problem which is as yet not recognised. It might be noted that there was free milk at schools in former times in Australia, and more recently there is a ‘National School Lunch Program’ in the US for children in lower socioeconomic areas as they recognised that students were undernourished and this was affecting their education. In terms of alternatives to raising NewStart, Australia may want to consider such programmes as it may increase equality of opportunity and school attendance in disadvantaged communities. New Zealand makes use a school nurses with a wide range of functions. This may a better way of delivering welfare to areas of disadvantage, especially if parents are dysfunctional.
In terms of preventive health, as opposed to treatment programmes such as school-based dental care, vaccination, or learn to swim classes may help improve health and save lives in disadvantaged communities and improve equality of opportunity.
In terms of the cost-effectiveness of education spending, two features stand out. The first is that Australia is falling down the league tables of world school education at a serious rate and a serious level. The second is that the Gonski Model of education funding has not occurred and there continues to be very high levels of subsidy to the private sector, with corresponding neglect of public school education. Education is like health in that it is more important that those at the bottom get a reasonable basic standard than that those at the top get everything that can be offered. Yet the political imperatives work the other way. ‘Choice’ in education has a very detrimental effect in that subsidies, such as free travel and private school subsidies allow more privileged children to move to be with similar privileged children. There is then residualisation. All those with disadvantage are congregated together with lesser resources and a lack of role models. Clearly the poor results achieved in this situation drag Australia’s average down, as well as condemning children from disadvantaged areas to perpetuate their parents’ disadvantaged situation. Funding equality of opportunity would give these children a better start in terms of education, hopes, and employment, and as such would be an investment in reducing longer term unemployment.
It might be noted that universal health insurance is also very important. Medicare is being undermined in that the Medicare rebate to doctors, which was set at 85% of the AMA fee in order to get doctor support for the concept, has been totally undermined. The government has not raised the rebate with inflation for over 30 years, so that the real value of the Medicare rebate has declined form 85% of the AMA rate to 46%. This s an almost 50% cut from a doctor’s point of view and is a demonstration of very bad faith by successive governments. Treatment of Medicare patients has thus returned to the status of ‘charity’ in the minds of many doctors. Almost all specialists and many GPs will not take Medicare without a co-payment, so the ‘bulk-billing’ rates as trumpeted by the government are based on the GP habits, where quicker and more consultations have been used to make up the income deficit. But these bulk-billing figures also neglect to mention the fact that a co-payment exists for many services in addition to the Medicare bulk-bill. Many patients go to the Emergency Departments (EDs), rather than a GP because these are free. This tends to be discouraged by the EDs so patient present later and sicker. ED visits are far more expensive than GPs, so it is false economy to save money on GPs and to push patients to EDs. It is also a cost transfer from Federal to State payments system and the overall cost to Government is greater.
other countries’ approaches to setting income support payments, minimum wages and awards
The level of payments depends to a considerable extent on the supply of shared or public resources. If there was universal access to affordable housing, free education, free health care and cheap public transport, income support needed would be less. Similarly if there is poor public transport, car dependency, privatised toll roads, education and health with many co-payments for doctors’ visits, school excursions and sports, more money is needed in welfare payments if there is to be any hope of equality of opportunity for children and a reasonable life for welfare-dependent adults. Yet usually these aspects of social policy are seen in isolation. Though the private sector is assumed to be highly efficient, the countries with the highest standard of living such as Denmark and Sweden often have very large public sectors. The point is that natural monopolies can deliver goods more cheaply than private organisations as they do not have to factor profits into their operations, so if both private and public systems were run with the same efficiency, the public one would be cheaper because of the lack of need to generate a profit. The need for public good also needs to be calculated. A public transport system that loses money might have huge benefits that could be costed, such as the savings o roads and parking, better air quality and making central city jobs available to people from the outer suburbs. Parents in inner city locations are familiar with problems such as difficultly staffing their child care centres as the lowly-paid staff cannot afford transport costs from the outer suburbs and either seek jobs closer to home, or do not work. Making each element in society pay its own way without looking at an overall picture of spending and benefits amounts to having policy options confined by a very simplistic accounting system.
other bodies that set payments, minimum wages and awards in Australia
The setting of award wages in Australia has been traditionally done in the Courts which has in theory prevented political interference, but the destruction of unions by both changes in the concentration of workers and by deliberate political action has allowed the forces of both a global market and a large ununionised and unsupervised pool of temporary visa workers and students needing income has allowed the eroding of wages, particularly in the lower socioeconomic groups. This has allowed the growth of an increasing ‘cash economy’. This has created a US-style ‘working poor and underemployment, who may not be actually unemployed, but have the same problems as if they were, at times exacerbated by the lack of benefits such as a Health Care card or transport concessions that may be available to those officially on welfare. In the mid-1980s the Australian Bureau of Statistics defined ‘unemployment’ as having less than 25 hours per week of work. The US definition was that anyone with regular work, even an hour a week was ‘employed’. Commentators such as Maximilian Walsh even compared the US rate to Australia’s, concluding that Australia was doing very poorly! Political pressure soon made Australia adopt the ‘international definition’ and our unemployment rate plummeted. The calculation of index had been consistent, but the number has been relatively meaningless ever since.
the role of independent and expert decision–making in setting payments
The principle that wage setting must be kept separate from government should be extended to unemployment relief. The politicisation of welfare, the moral judgements that go with it and the relative political powerlessness of those on welfare means that a neutral and evidence-based approach to welfare needs to be established. This may appear a radical proposition given the relatively large cost of welfare. But the danger of political interference has been recognised in having the Reserve Bank as an independent entity, and this principle is endorsed by all leading economies. The Boilermaker’s principle in law upheld the need for an independent wage arbiter. There are also pricing tribunals that set electricity prices. While it is true that a higher welfare payout may cause government inconvenience in that thy will have to budget for this, the current practice to grant tax cuts which are electorally popular, favour wealthy people and are granted when the economy is enjoying high commodity prices for exports also makes for budget pressures later. It is an irony that governments concerned about the effect of welfare expenditures are the same ones that grant tax cuts, and are keen on privatisation deliberately undermining long term government revenue. An independently-determined, reasonable level of welfare would create a cost obligation that would have to be managed by future governments, but this might make them less cavalier about giving away their revenue sources and make them recognise that they must manage the country for all Australians, not merely the demographic that voted for them.
I attended a DRS (Doctors Reform Society) zoom webinar on the future of health care with Professor Stephen Duckett and aged care with Professor Joseph Ibrahim of Monash Uni, a geriatrician whose experience is in evidence-based aged care.
It was not encouraging.
My own experience of nursing homes was initially as an after-hours doctor when I used to judge nursing homes by what I turned the Urine Smell Index; the worst ones smelled of urine when you opened the door at night. As a GP years ago I found it increasingly difficult to find someone trained to talk to about the patients’ treatments.
In New South Wales Parliament as an MP I was asked to pass legislation that lessened the number of trained nurses required on staff. ‘Flexibility’ was the key and many homes and facilities ‘had people who were not really sick’ we were told. I was not convinced but the legislation went through anyway.
When my widowed mother was no longer able to cope at home and the family went looking for supported accommodation it soon became clear that the driving force in Aged Care is real estate profits. The family home is sold and the object is to get the family to buy an overpriced retirement Villa with varying levels of support in the villa and then hopefully automatic entry into an attached nursing home, usually with quite a poor urine smell index. When the old person dies the villa profit largely reverts to the corporation.
A dear old widower professor who lived up the road needed support in his 90s. The home support contract offered needed at least 4 hours per week at $65 per hour. The person delivering the care was paid $20 an hour. I am unsure how District Nurses are allocated.
In 2000 Prime Minister Rudd asked for ideas for his ‘2020 Vision’. I wrote and suggested that he register the skills and training of Home Care workers so that they could be hired and evaluated like Uber of any other online service and the ‘quality control and insurance’ would not be why the contracting agency became so ‘vital and expensive’ (that it would end up costing more than the person who actually did the work). I never even had an acknowledgement of my suggestion.
Prof Duckett was of the opinion that things had got a lot worse since the 1997 Aged Care Act, John Howard’s work, which created ‘a business opportunity’ Prior to this there was a system called CAMSAM which was two modules; Care Aggregated Module and Standard Aggregated Module. These were funded separately. If they did not spend their Care money it was forfeited, so they could only profit on Services.
After 1997 there was no distinction so profits could be made from either component, so the quality of care declined, usually with lower staffing levels.
Some private-for-profit nursing homes have good care, but this is not common. Some not-for-profits also had very poor care, but the general rule is that the standard of care relates to the number and training of staff. The low wages (approximately equals $20 per hour) mean that the staff need to work multiple jobs in multiple locations which is what spread the COVID epidemic in Melbourne. Government run homes tended to have better staffing ratios, so were better able to act against the infection.
Professor Joseph Ibrahim commented that the terms of reference of the current Royal Commission on Aged Care were very narrow, only covering 5 years, and could not lead to prosecution. He felt that this was deliberate. The issues of overprescribing and assault have come up often.
He felt that this meant that it’s conclusions might be weaker and then not implemented, with a tendency to kick difficult problems down the road.
The commissioners themselves were of interest:
Richard Tracey had died before the enquiry started
Another, a Western Australian prosecutor had opted out (an unusual action as being on a Royal Commission is normally a good career move).
The two final commissioners are:
Tony Pagoni, Chairman- a retired judge who had had a specialisation in tax law and
Lynette Briggs- a career health bureaucrat
Commissioner, Briggs has put out a report asking that aged care be returned to the control of the health department. Prof Ibrahim comments that is very unusual for one Commissioner to make a public statement before the final report and this indicates that the commissioners are not in agreement.
Currently there are about 250,000 care workers and about 200,000 Professionals. The care workers need six weeks training at a TAFE level to get a ‘Certificate 3’ About 1/3 are new migrants. They are paid about $20 per hour and casualised to decrease staff costs. The unions are worried that the new RECP (Regional Comprehensive Economic Partnership) trade treaty actually allows trade in people and that more visas for cheap labour in these areas will not help residents or local jobs.
The $20 billion dollar industry is founded approximately $14.5 billion from government, $4 billion from RADS and $2-4 billion for additional services.
There are not-for-profits, but the large for-profit providers have increased since the 1977 act and are largely highly profitable big corporations, some multinational like BUPA.
Professor Ibrahim is concerned that there is a lack of supervision.
There are no forensic accountants looking at what it costs to run an aged care facility and this has allowed supernormal profits by big players. Money has been spent poorly or ‘hived off’. Obviously if the government runs some homes themselves there will be public service experience.
Prof Ibrahim believes that the future directions of aged care will be set by the multinational for-profit providers because these are the people who have direct access to the government. There is no significant advocacy for aged care residents. He contrasts this with breast cancer advocates who pressed for less radical operations, and for Gay men who pressed for more enlightened AIDS/HIV policies.
There have been discussions of ‘quality-of-life’ that have tended to be spoken of as needing less healthcare, but quality of life cannot be good without good health care.
The aged care industry likes home care as it lessens their costs and also pushes the liability back onto GPs. A sense of proportion is necessary:
There are 2.5 million well older people and 200,000 in aged care.
More radical treatments are now done in older age groups such as dialysis or cardiac surgery in the over 90s, very is some debate over this period some would say that it is a just to deny routine treatments but there is some distortion of priorities by having these lucrative procedures as fee-for-service, and there is also some inequity.
Since the development of antibiotics, medicines are seen as curative, but in fact they should be seen as being in three classes:
There is quite a lot of cost-ineffective medication use, such as for osteoporosis.
Solutions. (These are not just from the presenters)
A national registration system for all levels of care workers period this should include people who do home help with shopping cleaning and gardening as well as Medical & personal care workers.
Existing TAFE courses should be recognised but more courses will be needed.
There needs to be a feedback database for complaints/praises and ratings as there is for AirBNB, restaurants etc. The feedback database needs to be actively monitored by the regulator to follow up complaints or untoward events.
There needs to be a regulation system with accreditation and regular random inspections of facilities and surveys of residence.
Academic researchers such as AIHW (Aust. Institute of Health and Welfare) should be at arm’s length and should have long-term commissions to do longitudinal studies of aged welfare and satisfaction so that individuals cannot be targeted if they state that they are not happy with the care in their institutions.
This should be combined with health research.
There should be formal structured feedback systems with residents’ groups having paid advocacy groups and formal places and rights on regulatory bodies.
There must be minimum wages and conditions for all workers and minimum staffing standards.
The Regulatory body must have a policing function, supervising staffing and wage levels and food and care standards
Note there are a large number of public submissions on the Royal Commission website, many of which make discouraging reading. The privatisation seems to have led to profit-seeking rather than an improvement in care, and the political forces seem likely to continue this.