An opportunity missed: Analysis of the Royal Commission Report

Aged Care Crisis comment on these views

The Commissioners: Both Commissioners have a market background. Commissioner Briggs is a long-term bureaucrat and has been in charge of implementing governance processes to control market excesses since 2004. She is a prominent member of a governance group.

The other is a judge with expertise in Commercial law, but also a previous knowledge of social science, involvement in human rights and a board member of nonprofit organisations.

A system designed to fail: This is certainly true but also for many reasons they did not identify. They identified many problems in the aged care system itself. 

Their relationship with wider policies and other failed sectors, like the banks and the Vocational Education and Training (VET) system were ignored. Vulnerable people were similarly exploited in these and other sectors. As a result root causes (the disease) in society responsible for what they were describing (the symptoms) were not identified and addressed - only the failures that resulted in aged care itself.

The Community: This is a problem that they pay lip service to by allowing them input, but do not adequately address by giving them a role and power. Doing that would challenge ideology.  Their criticisms might still be managed rather than addressed.

The Nature of ideology in aged care: In 2015 Peter Shergold, an early departmental mentor of Commissioner Briggs, later chair of the Aged Care Sector Committee and then chair of Opal Healthcare, described the thinking of both government and industry that resulted from this ideology to an international industry meeting. 

Shergold indicated aged care was an immature sector with little market competition, constrained by government funding and over regulated because regulation in aged care was misplaced. 

He considered “the aged care sector should resemble the hotel industry”. Others who thought the same way had called for a trip advisor web service. The elderly could be enticed with an idyllic holiday sendoff – then as we now know neglected and abused.

This distorted view of ageing and aged care is an example of the ‘strategic ignorance’ that affected the entire sector – not acknowledging what they know.

That deep down he really knew what aged care should be, but did not acknowledge even to himself, is revealed when he said “government is concerned about a public backlash from people who believe that aged care should be a community service and not motivated by profit”.

Avoiding challenging ideology: The major contribution to failed policies made by earlier reviews (eg by the Productivity Commission in 2011) and of more recent government policies like the Living Longer Living Better (LLLB) reforms in 2012, the Red Tape Reduction program (2014), the Competitive Consolidation policies (2014) and the Aged Care Roadmap philosophy (2015) are not adequately addressed by the Commissioners.

The revolving door of appointments and the close involvement of industry as advisors and consultants in every policy decision made is largely disregarded. These would challenge their conclusion as well as the underlying ideology.

The public service: The explanation attributed to the Thodey Review to explain the decline of the public service is another escape from challenging ideology and the policies based on them by economists and the Commissioners. 

This is a great example of ‘strategic ignorance’ by an establishment for whom the truth is simply too challenging for believers to acknowledge to themselves although deep down they must know.

What happened is a direct consequence of the neoliberal free market policy of small government and privatising by outsourcing. It started under Hawke in the 1980s, accelerated under Keating and took off on steroids after Howard.

On 20 May 2000 The Australian reported that the “secretary of the Department of Prime Minister and Cabinet. Moore-Wilton has imposed corporate-style reforms with an evangelical zeal. Accelerating changes begun by the previous Labor government, the Coalition has increased the power and pay of departmental heads, outsourced all but core services, sidelined the unions, introduced performance-based incentives and cut jobs- -” . There was a 32% decline in government employees between 1987 and 1998.

In 2018 Bernard Keane wrote of “the huge downsizing of the public service under both Labor and the Coalition” and the “clear decline in the overall quality and experience of senior public servants”. He considered they were more likely to be “compliant with the government's agenda”. He goes on to describe the “growing problem of sheer incompetence” and multiple bungles as a consequence.

Bernard Keane is an example of the sort of witnesses the Royal Commission did not interview when redesigning the system. They would not have been considered credible.

Governments have not abandoned these policies started in the 1980s and the Commissioners are unrealistic if they think that government will willingly reverse this trend.

Comment on blame

While Commissioner Pagone is correct his explanation was a gross oversimplification. What the government did in 1997 and subsequently was based on advice from credible international and local industry corporate leaders who were advising on policy.

Government was told that too much money was unnecessarily being spent on care and they tried to stop this. Industry have been close advisers to government ever since. They are as culpable.

Background: In the USA in the 1990s there was a crack-down on fraud and misconduct with increased regulation first in health and then in aged care. This stimulated a strong interest in global expansion to countries where there was less regulation.

 ‘Expert’ advisers on international expansion indicated that success lay in ‘playing on politician’s pain’, which in most cases was the cost to government.

A very successful US Aged Care Company Sun Healthcare was welcomed into Australia in 1997. Its charismatic founder and ‘credible’ chairman’s message was that there was plenty of fat in the system and that you did not need expensive highly trained nurses in the sector. Government should butt out and the market would soon fix this costly system.

This was strongly supported by industry and their leader, Doug Moran, even claimed that the 1997 legislation enshrining rationing was his.

The self-serving myth that aged care is not a disease and that nursing homes were not hospitals so you did not need the expensive trained nurses has given credence to these policies. 

Companies like Ansell Strategic who advise aged care businesses, other prominent leaders and even board members of Leading Aged Care Services (LASA) have perpetuated this misinformation. Ansell Strategic even made this claim to the Royal Commission. 

The senate inquiry into regulatory failure after Oakden October 2018 clearly identified this myth as a central problem but nothing was done to address it.

The government was being advised by an industry that was ‘playing on their pain’ that they were paying too much for care and they responded accordingly.

Briggs is also correct in that perverse competitive financial pressures in the system dominated and the myth about ageing not being a disease provided a useful justification for turning a blind eye to knowledge and doing what competition required. The evidence was clearly there if the industry had looked. It is another example of belief being defended from challenge by wilful blindness and strategic ignorance.

Understanding this: In the 18^th century Adam Smith explained that it was good people who did the most harm in the world – people who believed. Their gut response is to deny and ours is to blame. But while we need to hold them responsible, we should all try to understand how and why people who believe behave like this. We should build social systems that insulate us against irrational belief, recognise it when it occurs and respond promptly when it does. That is what Aged Care Crisis is pressing for.

Comment on repealing the Act

Repeal of this deeply flawed Act that created a competitive free market, which was never going to work, is long overdue. This would have happened many years ago if there had been transparency and data had been collected, analysed and properly acted on.

Bill of rights: We have had bills and charters setting out the rights of older Australians since 1991 and in spite of that older Australian’s have been neglected and abused. These words and regulations became tokens - hiding the neglect and abuse that was happening.

Markets: As Adam Smith indicated 300 years ago and David Malouf said about Australians in the 1990s, businessmen look for and exploit any vulnerabilities they can find. Simply legislating rights becomes a constant battle as distant regulators struggle with powerful real life markets that seek out loopholes and opportunities while claiming to uphold rights.

Rights are a product of caring relationships and community values – not of markets. If markets are to respect the rights of citizens then they must serve communities and be fully accountable to them for everything they do as well as how they do it.

A new act: We agree that a new act should enshrine the right to good care for everyone and these rights should be legislated. But it should also create a system that will embrace these rights by clearly defining and restructuring aged care as a community-led service to which the market contributes.

Local Communities and regions should be helped to plan services for their communities, contract real estate companies to build facilities, vet providers carefully before contracting them to provide services, and then be able to easily replace those that do not deliver the care required without disrupting staffing or care. Governments are drawn from and represent citizens and communities. Their role is to build and support communities not push them aside as has happened.

Comment on independence

In our view Pagone has a better grasp of the ideological and cultural issues but both models entail a complex central bureaucracy. This is likely to lead to processes and guidelines for dealing with every problem. There will be greater rigidity and less flexibility and responsiveness.

But even Commissioner Pagone’s proposal might be a rather indirect form of independence. His new independent ‘Australian Aged Care Commission’ is to be appointed by the Governor General. 

The Governor General is appointed by government and is advised by government. Government appoints people who think and make decisions like they do. This structure does not free it fully from the dominant views of government and establishment.

We need only look at the ‘Independent Accreditation Agency’ established in 1997 and claimed to be independent until 2014 when all pretense was abandoned. It was never free of political influence and was ‘captured’ by a revolving door of representatives from the industry it was supposed to regulate.

In our view, independent regional management working with and supported by communities would address Pagone's well founded reservations about government culture and capacity more effectively than his proposals, although both might be better.

Comment on Regionalism

Regionalisation of management and oversight is only the first step in addressing the underlying problems responsible for the multiple failures. There was little specificity in how this would be done in the report. We would have liked to see more regional offices and greater involvement with local authorities to avoid duplicating staffing and services.

In the past: Inquiries in the 1970 and 1980s realised the system was so diverse and the individual situations so complex that they could not be handled centrally. They too recommended a centrally integrated but regional and locally managed structure. This advice was not followed and the reform strategy was abandoned in the 1990s.

We strongly support regionalism as a first step to the community-led system that is needed but we needed more detail. The way this would work with and involve communities was not specified by the Commissioners.

Neoliberal fee market ideology was spread across the world and into every facet of society by managers. What the Commissioners propose was not independent and could too easily become a mechanism for greater managerialism and tighter control of community.

It would also become an early warning system to alert government to the presence of dissident groups who challenged belief. If so government might come to see community involvement as a threat rather than the way forward.

Pagone has based his regionalism on suggestions in an early submission from Professor Swerissen from the Grattan Institute. We support that model of regionalism but would expand it further to ensure community engagement and empowerment.

The final Grattan Institute report, which they did not refer to, recommended community involvement as well as local and central community advisory bodies. It emphasized that regional managers should be independent regional organisations. We support this as a good beginning.

Briggs: Expresses a desire for a bottom up more regional system. We are concerned that the government departments she has in control are unlikely to relinquish control. They are likely to tie major regional offices up in a knot of processes and procedures, make them dependent and defeat the exercise.

Comment on Community involvement

Our position is that aged care is a community service without an effective customer. As such it needs to be organised in and with local communities. These communities need to play a major role in deciding who will provide care for their vulnerable members. They will then watch over them to see that their members are well cared for. Government’s role is to empower, support and help them. That would help to create an effective customer.

The Grattan Institute’s Final report on aged care in Nov 2020 advised Local Advisory Community Committees with some direct involvement in oversight. If implemented communities would be in a position to engage, build capacity and play an active role in controlling the market. We supported it. There would also be a national body representing communities. Commissioner Pagone who supported an earlier Grattan report ignored this.

The Council of Elders has all the features of another process that can be managed and controlled. We have seen too much to trust this. It is an appointed body and not a representative one.

Aged Care Advisory Council: Pagone’s Aged Care Advisory Council contains some community representation but does not represent the community. Members are appointed by the minister so not representative.

Carer hubs: This is clearly desirable. The 1975 Coleman report recommended something similar but more extensive with seniors community centres where resources, services and activities were concentrated.

Comment on Regulation

The regulatory conundrum: A system that requires so much regulation, so much disputation and so much steering in an attempt to control and prevent it from defrauding government and neglecting its charges is surely a system that is deeply flawed and not working. It needs to be structured to make it work and that means addressing root causes. The report does not do this adequately.

Necessary conditions: The economic insights that were abandoned in the 1980s go back 300 years. This shows that there are two necessary conditions for a market to work. The first is a knowledgeable, empowered and so effective customer. The second is an effective civil society that sets the limits of acceptable conduct.

When the customer is vulnerable then the community may need to assume both roles. The only effective alternative is a nationalised aged care system and that has problems too.

A community led market: We have advocated for a community led market system, which when fully developed would meet the necessary conditions.

Community structures supported by government would plan local services, oversee their construction, select and contract someone to act as their agent in providing services, work with and watch over them and replace those who fail to deliver with someone who did.

Success would depend on cooperation rather than competition so liberating managers and staff from the perverse pressures created within a commercial competitive free market and allow them to express their humanity.

In such a system much of the complex and ineffective regulation and oversight might be superfluous. When providers are freed from powerful perverse competitive pressures governance processes might be more effective.

Accreditation is one of the self-regulatory processes introduced in response to the failures of free markets. A potentially useful process it is no match for strong competitive pressures and has not worked in the USA or Australia. Until the industry was put in charge in 2014 the agency itself insisted that it was not a regulator.

We support continuous oversight by local community and regional management, a situation where problems are immediately identified, cooperatively investigated to detect systemic issues and immediate remedial action taken. Such a system ensures open disclosure.

This should be supplemented by objective measurement of outcomes and supported and overseen by a central regulator.

Oversight of the system: Central oversight without local support has not worked. We are not persuaded that making the Inspector General a government appointment makes it independent.

We think that a fully representative central community body drawn from local communities, advised by them and supported by academic research institutions should work independently but closely with any central inspector.

In Volume 3a Commissioner Briggs commented on “the benefits to having ‘multiple stakeholders’ in the oversight of quality” but the omission of community undermines the intent.

Probity: Prior to 1997 probity assessments by the states in health care and by the federal regulator in aged care focussed on the owners who hold the purse strings and control the providers.

Extensive evidence has shown that ownership and ownership type has been the most critical factor in the provision of good care and the Commissioners final report acknowledges this.

A decision to grant a licence to enter the sector was based on the level of control the new owner had as reflected by the financial holding (eg shares) of the entity lacking probity. One health care company was barred because of a holding of only 30%.

These probity requirements were abolished in aged care in 1997. Owners have not had to apply or be registered since then. Over the years information and objections were lodged to several companies buying into Australia with the Department of Health but they could not investigate or act. The market based approach and business practices they brought with them would have contributed to the failures in the system.

The Royal Commission’s new probity recommendations apply to providers but make no reference to the probity of their owners. Doing so would be seen as interfering with the free operation of the market and so a challenge to ideology and policy.

Home care: Because there are so few witnesses oversight is even more difficult. We think that a community organisation working with these elderly citizens, their relatives and friends, many of them also taking an interest in their community, would be far more effective. People living alone at the mercy of a carer will not complain to a feedback system. It needs to be done informally.

Complaints: In 1985 Giles advised community involvement in complaints handling. Since the Walton Review in 2008/9, Aged Care Crisis has pressed for empowered local community visitors to play a central first line role in dealing with any complaint and in promptly investigating it. After so many failed complaints systems this is surely essential now.

Advocacy too should be local and if issues identified are not addressed and ‘not translated into practice’ then clearly that provider should be replaced.

Serious incidents should also be immediately investigated by a local empowered visitor before being reported up the system.

Greater enforcement should certainly be available. That it is necessary is evidence of a system that is conflicted and not working. In the community-led system we advocate enforcement would rest lightly and strong enforcement measures should seldom be needed.

The most effective action would be for the community to replace any provider who fails to deliver with one who does and the system should be structured to allow that.

Comment on Governance

About Governance: Free market beliefs reject close oversight and strong regulation. In 1997 the market in aged care was finally ‘liberated’ from what they considered onerous and unnecessary regulations introduced in the 1980s.

Governance is an old term that has been used over the last 30 years to describe the principle method of self-regulation that has become the regulatory response to failures of the free market system.

Governance seeks to develop strategies, incentives and processes that will induce corporations to regulate themselves and behave responsibly. It tries to ‘steer’ them towards behaving responsibly’

It was strongly advised by the Royal Commission that followed the HIH and One Tel corporate collapses. It was introduced to the market by the Stock Exchange and into government by Commissioner Briggs when she was the Public Services Commissioner between 2004 and 2009.

While clearly a useful process governance is seldom backed by coercive power and has been no match for the powerful pressures created by commercial competition. It has not worked in the banks, in the VET system as well as multiple other markets including aged care. We do not believe that beating a dead horse to try to make it perform better is a good solution. We must do better than this.

Example: There is a conflict at the heart of governance and it is revealed in the Recommendations setting up required governance standards for industry. In recommendation 88 item ‘b’ it states “the constitution of an approved provider must not authorise a member of the governing body to act other than in the best interests of the provider”.

Yet throughout the rest of the report governance and governance recommendations focus on putting the interests of the recipient of care, their dignity, their interests and their care first.

If the provider and its owner are commercial operators their best interests will be the profitability of the provider and its owner. This will often be most effectively met by exploiting the weakness of others. As we have seen over the last 20 years acting in the best interests of the provider is not in the best interests of those who need costly care. Making sure that expensive care was provided to the elderly, when the provider could get away without doing so, would have breached their duty to the provider.

The perverse competitive pressures in the system ensure that the survival and prosperity of the provider will dominate other considerations. To be competitive other providers and even non-profits must conform.

The human response to this situation is to do what you must while pretending to do what you should. Wilful blindness, strategic ignorance, rationalisation and compartmentalisation are all terms used to describe the well-recognised psychological strategies used to do this without experiencing guilt.

This creates a huge regulatory problem as government tries to regulate a system that has deceived itself and has no doubts. It is blind to what is happening and indignantly insists it is doing well when it is failing those it is responsible for. That is the same system we have had for the last 23 years.

Community governance: The Report does not examine ‘community governance’ – the role that local communities can play by watching over and ensuring that the agents they have employed to care for their older members are meeting expectations

Comment on Practical Reforms

These are all important issues that need attention, but they come under constant pressure from perverse competitive commercial pressure in a free market system as they are seldom profitable.

Aged Care Crisis supports a reach down, mentor and support approach to the provision of health care and other services as they are delivered locally. This has a strong educational impact and builds local capacity.

Bombarding people with information is an ineffective way of educating them. It is far more effective to engage them directly in planning, setting up and managing aged care in their communities. They become receptive to information and are challenged to seek out and find out more.

Comment on MyAgedCare website and care finders

Myagedcare: In our opinion a central web based data resource is useful for care finders, researchers and some families. It does not always reflect real life but is a useful adjunct.

International studies and local experience shows that most families prefer to rely on local face to face advice when making choices. To be reliable that advice should be based on actual experience and knowledge of local services.

Care finders: We support a local care finder service but consider that COTA’s model duplicates the sort of service many local community governments already provide. This should be extended and built on instead.

COTA is likely to have some difficulty working within a community-led aged care system, because it has strongly identified with the philosophy and policies underpinning the present failed aged care system. Commissioner Pagone understood the difficulties in abandoning deeply held beliefs and the cultural implications of their persistence. We have the same difficulty with COTA.

COTA has played a central role in advocating for, participating in designing, supporting and unsuccessfully reforming the present failed aged care system. It has been too influential and as an organiser, it may be more of an impediment than a help. It would be better if it did not have an organising role until a community-led system is well established, when it would be able to play a larger part.

We realise that it already supplies many important social services and these should continue to be a part of a new system. It should be welcomed and included, but not be in a position to control the development of the new system.

We support an empowered local visitors scheme in which visitors are empowered to examine records and investigate incidents. They would provide oversight of care and be involved in complaints handling and investigation of all incidents. They would assist in collecting and verifying the accuracy of data.

Well structured and organised community organisations would ensure that case finders and assessment teams have an accurate picture of what is happening in local communities and nursing homes. Regional and central regulators would have an often onsite presence to verify and collect accurate data.

Care finders, advocates and visitors would be drawn from the same communities and work together. Communities would know exactly what was happening and would be able to act on that.

Comment on Staffing

Tardy and still well behind international standards: Staffing reform is the most urgent reform needed and the response unbelievably tardy when we consider the extent and urgency of the problem and the long delay in responding to this.

Data contrasting Australia’s average nursing staff care of only 2.8 hrs (168min) per resident per day with the 4.1 hrs minimum safe and 4 hrs actual average in the USA was supplied by Aged Care Crisis to the 2016 Senate Workforce Inquiry (almost five years ago), to the chair of the Aged Care Workforce Taskforce set up to address the issue in 2017, and to the Royal Commission in January 2019, two years ago. We had to wait until mid 2022, a total of six years, for any action. On average, USA residents are getting twice as much care from trained nurses and a third (about an hour) more care each day.

This will be a total of six years after this easily verifiable information should have set alarm bells ringing wildly. As we warned the Royal Commission in January 2019 the 2.8 hours fell well below levels that those advising US citizens in the USA described to be ‘dangerously low’. They refused to accept this.

The agenda of 200 minutes (3.33 hrs) average per day by mid 2022 and 215 minutes (3.58 hrs) after 3 years in mid 2024 is still well below well researched and established international safe levels of 4.1 hours. We will still be laggards.

Cultural and role conflicts: These changes are welcomed and will make a big difference. They do not however fully address the conflicts that arise when professionals driven by humanitarian motives are employed and managed by those whose primary objective are commercial.

This can result in cultural and role conflicts and even toxic cultures, which all impact on care and destroy motivation. The staffing problem will not be readily resolved and the sector would still not attract the right sort of staff while it remains industry-led and driven by commercial competition.

A Community and profession led aged care system would go a long way to address this problem.

The VET system: The Commissioners do not address the major problems in the privatised VET (Vocational Education and Training) system where most staff are now trained. They have exploited the vulnerability of students and provided substandard courses. Hundreds of degrees had to be withdrawn and students including those in aged care retrained. This too is an ideological failure.

These VET training services are poor role models for a profession whose success will depend on their adoption of professional values and motives. Training and greater exposure to good role models in geriatric units and selected aged care facilities would be desirable. The Commissioners do recommend more placements.

A reach down and support health system: We support a reach down mentor and support health service including geriatric hospitals and departments, and academically focussed residential services which would maintain oversight and support training across all sections. They would provide better role models.

Centralised expertise would provide ongoing health, allied health, nursing services, advocacy and much more, reaching down into community and residential care to provide expert opinions, mentoring, support and driving ongoing education.

Comment on Structure

These are important changes but we consider that local communities should be involved in planning and oversight.

Comment on suitable accommodation

In the community led system we advocate the community would be supported to design and build the sort of facilities that their members require. They would seek expert advice. Those providing the services would be contracted to provide what the community and their expert advisers consider is required. They would not need to be enticed.

Comment on Data collection and research

Data collection: Quality indicators (QI) and star ratings are not without problems, particularly when they rely on self-reported data in a competitive market. QI’s were first recommended 35 years ago by Giles in her 1985 report and we are still waiting.

In June 2004 the Victorian ‘Public sector residential aged care quality of care performance indicator project report’ warned that “a punitive approach will only result in low compliance and inaccurate recording”. In a competitive market, using Quality Indicators as public indicators of standards is punitive. It impacts on profitability. Self-reporting by providers is unreliable and this allowed Quality Indicators to be extensively gamed in the USA.

As 2015 and 2016 reports indicated, this sort of data collection can encourage cherry-picking of residents and also distort care by directing attention to matters that are measured at the expense of unmeasured or difficult to measure care items, like relationship building.

Accurate data: The empowered visitors scheme that was first advised in 1989 and again over the last few years would provide oversight and assist in data collection preventing these problems. They would see what was happening and prevent unmeasured care from being neglected.

Research: Commercial operators are very sensitive to the fact that research might expose problems in their facilities. They have sometimes obstructed that research. Those who spoke out about adverse findings have been attacked and attempts made to discredit their work.

In a community-led system, the community would work with the researchers and ensure that their agents, the providers, complied. They would be interested in translating research into practice even when it did not increase profitability.  They would see that providers complied.

Comment on Funding

Ensuring money goes to care: The last time the industry was given a large boost in income, it was spent on competitive consolidation to build corporate empires. It was used to borrow funds to do this so increasing debt. This additional funding will have to be protected from this.

Opposition members of the senate are acutely aware of the risks that money will be diverted away from care. Their attempt to pass a Financial Transparency Bill in 2020 was voted down by the government but they are going to bring it back. The bill would require providers to disclose where the money they get is spent and so ensure that it goes where it is needed. The Royal Commissioners have not required these details. We strongly support the bill.

Casemix funding: We are aware that the similar DRG (Diagnostic Related Group) funding has been rorted on many occasions in the USA. The Grattan institute has recommended that funding be based on care plans at the time that care plans are made or revised. We do not have the experience to comment.

Block funding: We agree that funding requirements for residents and for each region should be based on need, but prefer the provision of fully accounted for locally managed block funding because of the flexibility it provides.

While funding based on need is ideal, in the real world, there are often delays, societal crises and other priorities that limit funding for care and services. Block funding managed by local communities allows available money to be prioritised flexibly, and enables the community to respond and exert pressure on government when funding is insufficient and care is compromised.

Comment on Competition

The approach revealed here shows that the system is still conceptualized as a free market driven by self-interest in providing services.

It is not seen as a community service driven by community and professional altruistic values to which the market contributes.

Our preference: However the funding is assessed and raised, our preference is for fully accountable block funding for care. This is precisely because it allows cross subsidisation and so flexible local management. This should be protected from profit taking,

It is not possible to accurately specify every care eventuality and what is proposed reduces flexibility. People fall through the cracks as has been happening in residential and home care with the current funding system. (eg. physiotherapy).

The system needs to be managed locally precisely because it allows this flexibility and attention to individual need,

In a community-led aged care system, perverse incentives exploiting cross-subsidisation would be largely eliminated. Providers would (unlike the 1990s) be rewarded by paying them a suitable fee for managing this care. Those who attempted to manipulate the system would be replaced. Those who provided good services would prosper. 

A market-led system dependant on competitive commercial pressures creates ongoing problems in a vulnerable sector like this.

Comment on an aged care levy

Generational inequity: That there would be a growing number of seniors who would need care at the same time as the number of working young paying for the previous generation's care declined has been obvious for years. This developing generational inequity was recognised by economist Bob Gregory in the early 1990s. He recommended a hypothecated contribution added to superannuation contributions so that each generation paid for its own care.

This was ideologically unpalatable to both Prime ministers Keating and Howard and the opportunity was lost.

Pagone's prposal compounds the problem by making the current generation of workers pay twice - once for the previous generation, then for themselves.  Briggs does not address it.

Our proposal: In its submission Aged Care Crisis supported Gregory’s original proposal (similar to Pagone’s) for a hypothecated levy linked to superannuation.

It proposed addressing the large generational inequity problem that now exists equitably by introducing a temporary estate tax gradually reducing it over a 20 year period.

The present generation would pay for its own care but that payment would be reduced for subsequent generations as the hypothecated funds increased. This seemed the fairest way of undoing the harm done by Keating and Howard’s failure to act on the evidence.