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Unions defend aged care in Australia

07 December 2018
Australian PSI affiliates’ campaigns in aged care are gaining momentum as the industry comes under significant and broad scrutiny.

In a report entitled Who Cares, the popular TV news programme ‘4 Corners’ exposed industry-wide cases of elder abuse and neglect in aged care facilities. The programme backed the Australian Nurses and Midwives Federation’s call for improved staffing.

Over the last 30 years, residential aged care in Australia has shifted from being a mixture of publicly-owned and charitable institutions, to an increasingly private, for-profit industry. And the public sector has practically disappeared in most states.  Changes to the funding mechanism, which previously allocated funding specifically for staffing, coupled with decreased funding projections from the Federal Government, have seen staffing levels reduced to unsafe levels, as companies chase profits.

The night before the TV programme aired, the Federal Government announced a Royal Commission (RC) into the aged care industry in an attempt to avoid adverse political fall-out.  Although RCs in Australia can compel witnesses to provide evidence, and criminal charges can follow, recommendations made from an RC are not enforceable.  The Government’s announcement has been considered hasty, with the terms of reference unknown when it was made. 

On the other hand, the announcement is also seen as a delaying tactic, with politicians hoping the heat will fall out of the issue before the RC is finalised in 18 months’ time.  This has led unions to call for action now and not await the outcome of the Aged Care RC.  Brett Holmes, General Secretary of the ANMF NSW Branch, said that ratios need to be implemented into law as the first step. “We cannot wait for the conclusion of yet another Royal Commission which extends the timeframe for politicians to have to make a decision,” he stressed.

The Australian Nurses and Midwives Association (ANMF) NSW Branch has been fighting to have legislated career-to-resident ratios introduced into aged care.  The Federal ANMF commissioned the National Aged Care Staffing and Skills Mix Project Report 2016 that showed the care hours allocated to residents by employers are inadequate (2.84hrs per resident per day instead of the recommended 4.18). 

The study made recommendations for an appropriate skill mix of careers, and minimum hours.  Nursing unions are calling for the recommended hours and skill mix to be legislated.

This is a call the government, and employers in workplace agreements, have been rejecting for years.  However, the recent exposés have seen progressive politicians begin to pledge their support in the lead up to the Federal Election due by May 2019.

The Health Services Union has been calling for an increase in funding, which it says should go towards staffing and improved wages.  The Federal Government has cut $2billion from projected funding on aged care, a move the HSU says has led employers to cut staffing and refuse decent wage rises.  Gerard Hayes, General Secretary of the Health Services Union, says, “It is not acceptable for our workers to be told to wait until a person’s incontinence pad is 70 percent wet before changing, or that they are only allowed one set of gloves per shift, or that only $6 a day is spent on food for residents.

The two campaigns, along with the exposure of abuse and neglect, have built strong community support for improvements in aged care, and for increased accountability by the aged care providers to ensure that any increased funding flows to resident care.  This call for increased accountability has been bolstered through a Tax Justice Network Australia (TJN) report, commissioned by the ANMF Federal Office.

The report by Jason Ward, who is now the Principal Analyst for the Centre for International Corporate Tax Accountability & Research (CICTAR), exposed the tax minimisation practices of major for-profit aged care providers in Australia.  Global health industry player BUPA was amongst those named.

In Australia, aged care operators receive funding from government depending on the level of care needed per resident, and they can charge additional fees for services.  The providers also require residents to provide bonds. These are so high as to force families to sell the family home in order to access care.  The bonds are returned to the family, minus some fees, and the company keeps any interest earned on the amount.  This practice has been referred to by some as an enforced privatised death tax.

With 75% of their income coming straight from government, one would expect that the companies would be good corporate tax citizens, and for there to be transparency in their financial accounts.  However, complex company structures and the use of stapled trusts have seen their tax bills drastically reduced.  BUPA, given its corporate structure, has the least transparent financial practices of those named in the report.

The largest company, BUPA, had almost $7.5 billion in total income in Australia (2015-16) but paid only $105 million in tax on a taxable income of only $352 million.

  • BUPA’s Australian aged care business made over $663 million in 2017 and over 70% ($468 million) of this was from government funding.
  • Funding from government and resident fees increased in 2017, but BUPA paid almost $3 million less to their employees and suppliers.

 Tax Avoidance by For-Profit Aged Care Companies: Profit Shifting on Public Funds.  Proposals for Transparency on Government Spending (2018) TJN. p. 5.

The TJN report was received with alarm, triggering a Senate Inquiry into Financial and tax Practices of for-profit Aged Care Providers within two days of the TJN report being released, somewhat of a record in Australia.  The Inquiry has revealed that BUPA is amongst many aged care providers that are being investigated by the Australian Tax Office.  The recommendations from the report seek changes to Australia’s tax laws, removing some of the loopholes companies use to avoid paying their fair share of tax.

A newspaper report exposed the seven figure pay packets of for-profit aged care company CEOs.  With workers earning considerably less, some being amongst the lowest paid workers in the country, the community is clearly getting the message that aged care is seen as profitable for some, but that it is at the expense of residents’ and workers’ rights.

The unions are clear that the providers can afford decent pay and improved staffing. Their members continue to be active in taking the message to their communities and the politicians.

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