Social Security (Long-term Residential Care) Amendment Bill

The debate on Part 2 is much wider ranging, because there is a lot more detail in this particular part. One question that really concerns me when we are talking about being able to pay a maximum contribution of $636, is whether that applies just to rest homes and hospitals. In the past it was for hospitals. In 1994, when it was brought in, it was for hospital level care, and the Government gave a top-up on top of that. Rest home care at that time was about $450 per week, so it was much less. Now it is $636. Most rest homes are asking that; that is the minimum one pays for rest home care. Then there is a hospital care top-up on top of that. So even if people are paying $636 for contracted services, the Government will face quite a price to pay the top-up for people even in rest home level care and hospital care. Home cannot deliver quality care at that price. They will exit.

I become concerned about the merging of rest home and hospital level care. In the past, hospital level care was for those people who needed the care of a registered nurse. They needed to have a registered nurse on duty 24 hours a day to provide a much higher level of care. Rest homes are required to have a nurse for so many hours per day but the nurse does not have to be there at all times. Hospital level care means care for people who are very disabled. We often have people who are dying of cancer, who have tracheotomies, who have advanced Alzheimer’s and need a lot of care, or people who have catheters. They need registered nursing care.

To get a registered nurse these days, with the very low unemployment rate that we have, is very difficult, and these homes can no longer afford to employ nursing staff. Therefore, most of them are looking to the Philippines and other overseas countries, to be able to bring in nurses to staff these facilities. They have found it so hard, with the payments they receive, to be able to have qualified nursing staff. It has been very, very difficult. [Interruption] I do not know the actual level of ability of nurses who are brought in from overseas, but presumably they would have to meet New Zealand standards to be able to work here. However, it does mean that it is very difficult for rest homes to be able to do that. In fact, the increased asset money will go to the relatives of the people going into care. That is where the money will go. From July 2005, people can keep $150,000 worth of assets when they go into care, but it is not the elderly person who will benefit. It just means that the person’s relatives will benefit.

Although National would support the increasing of the asset level, it has come at the cost of all other aged-care services. We have seen, all over New Zealand, people having difficulty with access to equipment, difficulty with assessment to get into rest homes and hospital care, and difficulty with being able to pay for home-care workers so that people can remain within their own home. The whole sector is under pressure because of this bill that we are debating tonight.

I would like the Minister to take a call and explain to us why the Government set the asset level where it did, at the expense of all other aged-care services in this country. Because that is what is happening. This Government came into office, having irresponsibly gone from one end of this country to the other saying it would remove income and asset testing, but it was not able to deliver on that promise. I want to hear from the Minister why she thinks the asset level the Government has set is the right level, when all other levels of aged-care services in this country are under pressure. They are under so much pressure that the not-for-profit organisations in the sector have had to exit. Presbyterian Support Services has exited, and The Salvation Army today announced it is exiting, and that is the reason. Those providers who came to the Social Services Committee were very concerned about the $636, which was going to be the maximum contribution someone could pay. Their concerns were that they could not deliver the services at that level. What is happening is that public patients who may be in a public hospital, who then go into a hospital in the community, are being subsidised by private patients.

I just want to express my disappointment at the announcement today that The Salvation Army is pulling out of providing services. The Salvation Army has done a tremendous job in providing services for aged care up until now.

I wonder whether the Minister could take a call and clarify some concerns that I discussed with somebody yesterday. The person called me from a retirement village in Auckland and put its case to me. There are 37 residents in that retirement village, and, of those 37, two are in long-term residential care. The organisation claims the $636 figure for each of those two persons, but the cost to the organisation is actually in the vicinity of $750. It has applied for a top-up and it receives $1 a day per person, which is a long way short of the $750.

I see that the Supplementary Order Paper does go some way in amending that and taking that $636 limit to be adjusted and decided in regulation, and in regional divisions. So perhaps Auckland could be at a higher level, but there is no guarantee. The Supplementary Order Paper does not guarantee that that figure of $636 will be increased in areas of high demand and high cost. It states that if any area is under that figure, then the maximum amount is set at $636 and it remains at that until that particular region supersedes the $636. But nowhere does it explain whether that $636 is going to be increased, other than by the consumer price index adjustments.

The rest home was concerned that it was providing a service to those two long-term residents in its retirement village. One of them is not able to pay any additional fees, but the other one does have the means to pay and is willing to pay, but the village is under the apprehension that $636, or whatever the regional limit is going to be, is all they can collect from that resident. Its decision has to be whether it pulls out of long-term residential care—in other words, pushes its clients out of the retirement village—or reduces the services it is providing to those two individuals. The rest home’s concern is that if it has to push them out, where do they go? Do they end up back in their homes with their families looking after them?

Those two individuals do not want to be a burden on their families any further. That is why they went into a retirement village, and they do not want to go back into their homes or outside of the retirement village and be looked after by their families until such time as they have to be hospitalised. That is another phase. When they go on to be hospitalised, then they do require additional services and additional care. But it is during that in-between stage—when they are in long-term residential care—that those people want a reasonable level of care and service, and some of them are willing to pay for that, but the retirement village is uncertain as to whether it can ask them for additional funds. If it can ask them, then that is fine. But what is the mechanism that allows the village to charge those clients for additional funds? I ask the Minister to take a call and explain that so I can get back to that retirement village and explain it.

I would like to take a call on Part 2 of this Social Security (Long-term Residential Care) Amendment Bill, and I would like to refer to the promise that the Labour Party made in its 1999 election brochure that it was all about people, not money. That was the election brochure where Helen Clark’s photo was airbrushed; members will remember the lovely, airbrushed photograph. Anyway, the brochure stated: “Labour will abolish its asset testing. We say asset testing older people is wrong. It will go.” Now, if members refer to schedule 1 of the bill, which contains the new schedule 27—which clause 5 of the bill proposes to substitute for the current twenty-seventh schedule of the Social Security Act—they will see a table that shows asset testing being abolished, but does it happen next year? No. Does it happen the year after? No. Does it happen the year after that? No. It happens in the year 2026. That is when the asset-testing regime will go. So can the people of New Zealand rely on Labour Party promises? The answer is no, absolutely not.

While we are talking about promises—because this bill is meant to be the delivery of an election promise—I remind members what Helen Clark, our current Prime Minister, said in this brochure: “Under my leadership a Labour-led Government will deliver public health services we can all be proud of. We are going to put the heart back into the health system.” What do we think the more than 3,000 New Zealanders who died on the waiting list think about that? Will they believe—

💬 Hon Richard Prebble: Not much, I don’t think.

No, I do not think they can think of much, because they are not actually here! The Labour Party Government’s health system failed those New Zealanders. What about the hundreds of thousands of people waiting on the waiting list?

💬 Hon Richard Prebble: 173,000.

There are 173,000 people waiting on the waiting list for health services. What will they say? They will say that Labour’s delivery of health services to New Zealanders is an absolute disgrace.

We have another failed Labour Party promise in this bill before us now. Labour said it would be used to abolish asset testing. I say that this type of bill from Labour is wrong. In this case, it is intergenerational theft. It is asking future generations of New Zealanders—our children of today—to pay huge amounts of money for an asset-testing regime that this country does not need. What it needs is an ability for older New Zealanders to retire with money in the bank. To enable New Zealanders to afford to save a decent amount for their retirement, this Government should be introducing tax cuts. If we had tax cuts, then this sort of bill would not be needed. Tax cuts is an idea whose time has certainly come. We have the Progressive Party, the Government’s own coalition partner, agreeing that taxes are too high in New Zealand. We need tax cuts to allow New Zealanders to retire with money in the bank; then, this sort of poorly designed legislation would not be needed. That is why the ACT party is opposing this bill.

A point that submitters made one after another was that this type of residential care for the elderly, this type of business, is increasingly difficult to provide, not because of a whole bunch of other stuff but because of the Labour Government increasing the regulations on their sector, and, in particular, increasing the cost of wages and salaries and industrial relations concerns. The Government has regulated the labour market so much that organisations like The Salvation Army find that they no longer have the money to be able to keep their care facilities ticking over. The costs have now gone beyond the pale, and they have had to close their doors.

One of the things that Part 2 deals with is changes in the provisions relating to needs assessment. At present there is a very complex process for working out who gets what. In talking with the people at the Montecillo Veterans’ Home and Hospital in Dunedin, I was concerned at the long drawn-out process that needs assessment currently involves. Sometimes it can take months and months of caring for a person before the hospital or residential care facility gets its first payment. There is so much toing and froing between the district health board and the residential care facility that it is no wonder there is a lot of concern about how this part will be interpreted. That concern led not only to quite a few minor amendments to the bill but also to some major ones seeking clarity on that particular point.

There is one aspect in this part that I do agree with. It is that those New Zealanders who are aged between 50 and 64 will be captured within the funding, so that if they are in need of residential care they will not be in the position of having to sell everything in order to pay for their care. The reason for that is that some New Zealanders from the age of 50 and onwards suffer from the early onset of, for example, Alzheimer’s disease, and from other sorts of disabilities and illness that required them to go into residential care facilities to be looked after much earlier than most other Kiwis would like to go into such facilities.

Muriel Newman, in her speech, read out two very pertinent points from the brochure. One of them was that Labour would abolish asset testing. It did not state Labour would kind of abolish asset testing, nearly remove asset testing, or partially change asset testing; it stated Labour would abolish asset testing altogether. The second part of what Labour stated in its brochure was, if my memory serves me correctly, that the asset testing of old people is wrong. Well, has Labour not changed its tune, I say to the ladies and gentlemen sitting over there on the Government benches as arrogantly as ever, about what it will actually deliver? Young Darren Hughes can be as smug as he likes, because basically this legislation will be fully implemented by the time he retires. I can see why he is smiling: he is thinking that this legislation will be in place ready for when he retires. I think he will be very disappointed. One of the things we have seen is a number of groups say that they will get out of the provision of residential aged care altogether. I wonder who will be providing those services when members of Parliament who are here today require that level of care.

As we have heard from previous speakers, we have seen quite a change in the residential aged-care market over a period of time. I think that some of the amendments to Part 2 will introduce greater clarity to the understanding of the sector, but I am concerned about the complexity of the legislation. That was something that was brought up by submitter after submitter to the Social Services Committee. People were unsure how an eligible person would be defined. They were unsure of what constituted a contracted service, of what was a specific service incorporated within the $636 funding cap, and of what was part of the contract and what was not. One of the things that indicates that ideology plays a part in this legislation is that the Government is not only stating what the publicly funded providers can charge but also telling private providers exactly what they will charge. In any other business that is called price fixing. The Government is getting involved in meddling in areas that it should not be involved in.

I move, That the question be now put.

This bill has been characterised by the absolute silence of the Minister in charge of it, the Minister for Senior Citizens. For a decade she went around campaigning that Labour would remove asset testing. She has not denied that, and neither has the Government removed asset testing. Despite many of my colleagues asking for her to take a call, she has failed to do so. It almost epitomises that little saying: “What a tangled web we weave when first we practise to break election promises.” I was not going to say the “d” word again, but really that is what should be said.

Part 2 is unnecessarily very complicated. It has various sections relating to needs assessments, clothing allowances, residential care schemes, and means assessments. Yet if Labour had kept its promise and removed asset testing, as in 1999 it said it would, all this complicated legislation and this complicated Part 2 would not be here before us. After all, as Muriel Newman read out, Labour’s 1999 election brochure said very clearly: “We say asset testing older people is wrong. It will go.” So here we have Part 2 with this highly complex, tortuous piece of bureaucracy, which requires everything, from needs assessments to means assessments, clothing allowances, and residential care schemes. All those things would not be necessary if Labour was prepared to keep its promises, or even if Labour was prepared to make legislation simple and straightforward. But, oh no, it has gone ahead over the last 6 years and introduced one of the most complicated health systems known to personkind, with 21 district health boards. That is just being repeated 6 years later by this very complicated Social Security (Long-term Residential Care) Amendment Bill.

Section 153(1), in clause 4, states: “The maximum contribution is the amount, to be prescribed by an Order in Council made by the Governor-General, that is $636 per week …”. It is very salutary to see what Major Alistair Herring of The Salvation Army told the Social Services Committee. He said: “The Salvation Army believes that the bill should, at the very least, commence with the adjusted figure of $757.14.” Not to do so is to continue the situation of underfunding that the residential care sector has experienced over the past 9 years. Right throughout Port Waikato, almost on a weekly basis, I hear the same cry that the Labour Party Government fails to recognise that residential home care and institutions are going under because it is not prepared to be realistic about funding. It has totally ignored the Price WaterhouseCoopers report of 1999-2000—absolutely ignored it. Instead, it has watched as home after home has closed down.

It is a particular tragedy when we hear that The Salvation Army itself is exiting from residential care. That is one organisation that most New Zealanders trust. It is an indictment on the Labour Party Government that it has presided over the time when The Salvation Army, which has been in the business of looking after the elderly for 70 years, has, due to the Government’s absolutely unrealistic formulations, exited the industry.

I rise on behalf of United Future to speak on Part 2. It is interesting to see the voting by all the parties here in the Chamber. This bill has been severely criticised, and major concerns have been brought to the Government’s attention, not by parties that oppose the bill but rather by parties that support it. It should be a major wake-up call to the Minister in the chair, the Hon Ruth Dyson, and to the Government, that those who support the basic principle of this bill, which is the removal of asset testing, are speaking out so fervently and bringing such major concerns to the attention of the Government.

Progress reported.

Report adopted.

The House adjourned at 9.57 p.m.