Pearls and Irritations

It is a truth universally acknowledged – our aged care system is in a tragic mess. It has become a badly regulated, provider-centric system focused more on limiting Commonwealth budget exposure than supporting the dignity and independence of older Australians.

Stephen Duckett, Hal Swerissen and Anika Stobart have argued in the Grattan Institute’s latest report Rethinking aged care: emphasising the rights of older Australians that “turning this around requires wider recognition that older Australians have rights”. The authors propose five core principles to drive the design of a system that will be person- rather than provider-centric and rights- rather than budget-driven. The aged have a right to (in my formulation):

1. Independence, self-fulfilment, and social, economic, creative and political participation in the community within their abilities;
2. Informed and supported choice and control over their care;
3. Universal access to reasonable and necessary supports (including assistive technologies for the disabled);
4. Equity and non-discrimination; and
5. Dignity, including dignity in death.

We have experience with a rights-based approach

Accepting the Grattan proposals would be transformative – but it would not be an adventure into the unknown.

We have already demonstrated that a rights-based system can work in Australia. For all its faults, the National Disability Insurance Scheme (NDIS) is acknowledged as transforming the lives of many Australians with disabilities and their carers. The scheme is based on a rights approach – with its roots in the Convention on the Rights of People with a Disability (CRPD).

It meets the standards required for a just society. In a just society, the social contract we would form if we were drawing up society’s rules behind a veil of ignorance – unsure of whether we would be rich or poor, healthy or disabled, young or old – would aim to insure us against the risk of suffering a crippling disability or raising/caring for someone in that position. (John Rawls A Theory of Justice 1972. Described as the most significant work of political philosophy since John Stuart Mill!)

But to get the legislation through the Parliament, the Gillard government amended the Age Discrimination Act to enable it to discriminate against the disabled who would be over 65 at the commencement of the NDIS and those who acquired a disability after turning 65. This particularly offensive, and explicit act by government, reduced rights that would otherwise exist for older people. Australia is prima facie in violation of its undertakings under the CRPD.

Far from recognising the rights of the aged, the Australian Parliament decided that they deserved lesser rights than younger Australians.

The upshot was that those who had a disability and were over 65 when the NDIS commenced, or became disabled after they were 65, were excluded from the scheme. However, those who were under 65 at the time of the introduction of NDIS, and gained access to it, are entitled to continued NDIS support after turning 65. In short you could have people with identical disabilities and only a few years apart in age, all over 65, but who are treated entirely differently – an indefensible, discriminatory breach of horizontal equity.

The Government’s defence was that it was necessary to “protect the integrity (sic) of the aged care system”. The aged care system is designed, like the NDIS, to aid people who have severe or profound core activity limitations – whether physical, or increasingly due to dementia. It just doesn’t do it very well.

Make no mistake, the Government will be under pressure to extend a rights-based approach to aged care. This would resolve questions of horizontal equity arising from the disruptive differences between NDIS and aged care. It would enable the Government to say it is fully recognising the rights of older Australians to participate fully in society, to live in dignity and safety and to have a genuine choice between ageing at home or access to residential care for those who require it. It would bring Australia back into compliance with its treaty obligations.

It would also be hugely popular with a key electoral demographic for the Government and their adult children. As Paul Kelly put it in The Australian on 10 December, 2019: “The Liberal Party owns the over-65 vote, with the study showing this split 60-29 per cent ­Coali­tion over Labor. Scott Morrison has tied the ‘grey’ vote to his ­ascendancy, an iron law that will dominate the Prime Minister’s public policy affecting this demographic.”

Government-mandated standards for residential care will need to be increased, staff to client ratios, remuneration and skills have to be improved with an uncapping of the number of places funded. Assistive technologies will need to be provided on the same basis as is done via the NDIS. Regulatory activity will need to be increased and information systems developed and delivered for ensuring full transparency on the performance of aged care providers. New administrative structures built on the National Disability Insurance Agency (which administers the scheme) model will be needed to deliver client-centred support that provides the infirm aged choice and control over their care.

Recognising rights as a basis for aged care will bring it into line with the NDIS. Besides being just, this will enable practical economies for all involved in the delivery and development of aged care and disability support. Disability and care services providers currently have to meet three to four different funding and regulatory frameworks depending on who is funding their client for what services. At the Commonwealth level, policy and regulatory policy is split between three departments and one agency – the Department of Social Security and the NDIA for disability, Veterans Affairs for disability and aged care support to veterans and the Department of Health and Ageing for aged care. Then there can also be agencies at the state/territory level involved.

Co-locating policy responsibilities for disability and aged care in one Commonwealth department or, at a minimum, using a common client-based planning and funding system will save both the Commonwealth and the service providers money. It will also reduce the probability of unjustified disjunctions between policies between the disability and aged sectors.

It will, however, be expensive as it will require the extension of assistive technologies and ablement care to a new group of clients while removing the budgetary limits on places. As the Grattan report notes: “Comparable countries with high functioning aged care systems, such as the Netherlands, Japan, Denmark and Sweden, spend between 3 and 5 per cent of their GDP on long-term care. Australia spends 1.2 per cent (based on Dyer et al (2019). Review of International Systems for Long-Term Care of Older People. Flinders University, Adelaide, Australia 43–44).”

Of course all these countries have a higher proportion of their population in the dependency age groups, 65+ and particularly 80+, but even allowing for this, Australia’s current spend is low relative to other countries we would normally regard as comparators.

What is also markedly apparent is that Australia has a higher proportion of its long-term care recipients in residential rather than home care.

If we lift our standards to comparable levels, the surge in dementia cases continues and the community ages as we expect, our expenditure levels will rise. The total aged care budget could rise from its current $19.9 billion to closer to $50 billion over the next two decades.

This will happen in the context of a longer-term need to pay down current soaring debt levels (there should be no particular hurry about this), to increase defence spending (not unreasonable to expect this to lift to say 3-4% of GDP given the deteriorating international security environment) and fund the pipeline of committed infrastructure expenditure.

Part 2: How we might pay for a shift to rights-based aged care.

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