PDF printable version of transcript of interview on 2CC Canberra with Rod Henshaw (PDF 218 KB)
29 June 2017
Rod Henshaw: Well, aged retirement facilities have been in the news quite a lot lately. In fact, it was sparked off by that joint ABC Four Corners-Fairfax Media report into retirement village company Aveo, which uncovered exorbitant fees, complex contracts and it was a pretty ugly story actually. Residents at the multi-billion dollar retirement village industry have described buying into a retirement village as, quote, financial sickhole, unquote. One former resident described Aveo’s business practices as totally rapacious; I don’t know how they get away with it, was the comment.
Well, Fairfax Media and Four Corners spoke to current and former residents, their children, their lawyers, former Aveo staff. Lobby groups found several alarming business practices at Aveo, including safety issues, misleading marketing, advertising and property sales. And current and former residents also described the company’s model – which takes an exit fee as high as 40 per cent of the original purchase price, leading outgoing residents often forking in excess of $100,000 – they describe it as financial abuse of the elderly.
Well, following the Four Corners-Fairfax expose on Monday night, the Minister announced a new quality assessment device, ensuring aged care quality. And Ken Wyatt is the Minister for Aged Care, and kindly, he’s joining me on the line this morning. Minister, good morning.
Ken Wyatt: Good morning, Rod. How are you?
Rod Henshaw: Well thanks. And thanks for taking time to call us, or to talk to us this morning, rather. Can you explain how this measure is going to work and how- is it going to actually absolve or resolve the problems that Aveo are facing?
Ken Wyatt: No, we’ve got two issues here. One is the issue of issue around what Aveo has been doing, and certainly there are two significant reports – the parliamentary report that was handed down 10 years’ ago; but more recently, the Productivity Commission report, which also identified practices within the retirement sector that needed further work done on it. And when you look at the Four Corners program and read the Fairfax articles, the gouging of funding from people for both exit fees and fees that continue in respect to maintenance that range from $10,000-$13,000 per month before somebody sells the property that their loved one was in, means a significant reduction in the amount that an individual receives back.
Now, my challenge all of this is covered under state and territory legislation. We spent yesterday looking through that legislation and looking at ways that we need to address this issue and harmonise. But the second one in terms of the computer-assisted audit tool, means the technology will be in that hands of the assessors when they go into aged care. It means then that they have some real time connection back to the Quality Agency. It gives them the opportunity to focus on people within the facility, spend more time talking with residents, relatives, staff and management; and then spend time and observation, as opposed to the paper process where they wade through document after document and make assessment. This way it means we get feedback from individuals – which I think is a far better way – and it enables them to understand failings within the standards that they’re looking at within that facility.
Rod Henshaw: But of course, abuses of aged care in aged care facilities – they’re not new. This is only the latest. We hear it from time to time from, you know, I think in Melbourne they had a situation about four of five years’ ago which was pretty bad with nursing homes. And the same sort of thing has happened in New South Wales over time. But this one is just the latest in a series of them. Is there anything the government- is the government regulation or is the government legislation enough to protect the people who go into these places?
Ken Wyatt: Look, I’m looking at legislation. That’s why, with the Oakden context I ensured that we undertook a review of the way in which the Department of Health, the Aged Care Complaints Commissioner and the Quality Agency fulfil their functions in ensuring that standards, the safety of people within residential care, and the way in which there is an obligation for providers to make sure they accord every individual the level of care, and respect and dignity that they deserve. But equally, there are a number of advocacy groups who I’ve been meeting with, listening to the issues they’re raising with me. And there’s work that I’m now looking at and working with all three Commonwealth agencies to better improve the way in which we do things. And I’m equally appalled at the treatment of individuals across this nation within aged care facilities. And I have an appreciation of the heartbreak, and the anger and pain that family members have expressed to me, given the circumstances of the issue they have talked to me about.
But I think the other thing that we’ve got to acknowledge is there is significant quality within our aged care sector. I want to go back and look at staff training to make sure we get the right people within aged care who do care about the people who built this nation.
Rod Henshaw: That’s an ideal sort of thing, Ken. And I go with you on that one for sure – 100 per cent. And let’s face it, I think it’s got to be acknowledged, there are some good organisations; some good aged care organisations which are in existence in Australia that do a damn good job and they do the right thing. It takes a media expose between ABC and Fairfax to get together on this sort of thing to actually bring it to the fore. That’s the unfortunate part – it takes the media to flush these people out.
Ken Wyatt: Yeah, with the retirement villages, that is the case. One of my challenges in this – and I'm not excusing this – is that when you have states and territories with legislation dealing with retirement villages, then that’s out of the remit of the Commonwealth. And so we’ve now got to look at how we harmonise across the nation the legislation, but also the responsibility of every government to ensure that we protect senior Australians in whatever context – not only in terms of their care, but also the financial context in which they find themselves. And exploitation is, to me, is unpalatable. I have- I can't comprehend why you would want to make profit out of people in their final years of life.
Rod Henshaw: Well they don’t only make profit, that’s also a license to print money in some cases, we- as we know. It is very profitable.
Ken Wyatt: Well, I want to acknowledge the media’s role in highlighting this. Because when you work across a whole nation, you have information that is continually coming in to you. But equally, there are elements of effect that you have a knowledge of, but not the depth of what is occurring, until people speak up. And when people have spoken up, I have met with them individually to hear what the issues are, and then work these through with my department in addressing them to make sure that we remedy wherever possible- the issues as they arise.
Rod Henshaw: Ken, that Four Corners expose, where- it was an expose, on Monday night. It highlighted an issue with the fees at some retirement villages. And I think the exit fee is the one that sort of caused quite a few eyebrows to be raised; an exit fee, in this case, of 40 per cent after two years. Now, as I understand it, an exit fee is unique in the retirement industry and is calculated as part of the purchase price charged by retirement village operators when a resident sells a property. They can make a lot of money out of that, and they have been making a lot of money out of that. Is there anything the Government can do to regulate against that happening?
Ken Wyatt: Well, that’s what I'm now looking at. And certainly, my team were working on this yesterday and looking at the state legislation. And we will drill down on that and have further discussions with the relevant governments. It’s not acceptable. And when I look at the Fairfax stories – and I read The Age when it came out yesterday – and the circumstances of people who paid the exit fee, the refurbishment fee, and then if the sale of their property didn’t perceive then they were still paying $10,000 in maintenance per month. Now, it’s unacceptable in business practices if we want to be fair to senior Australians, and if we want to have an ethical position in making sure that we give people the best possible financial package, but also security of tenure within a home.
Rod Henshaw: Okay. You’ve outlined the challenges you’ve got. I’m just wondering how much freedom you’ve got to take action on those challenges. I mean, how much are your hands tied as Minister? You mentioned the Commonwealth state issues there. There must be a few others, I mean you can’t over-regulate and you can’t under-regulate. I guess, you know, you’ve got a free market out there and I guess those considerations have got to be taken into account also. But I mean, how- you can't go in with a big stick and say; you must do this, you must do that. But I mean, how do you get around it?
Ken Wyatt: No, no. What I’m going to have to do is certainly, as I said, work with states and territories. And then also work with the defector, and say; these are unreasonable measures, why- what are you doing to regulate your own sector? Because the moment you have to deal with things with a big stick, then that requires legislation across every state and territory. It requires Commonwealth to look at regulatory processes, or alternatively, the Commonwealth then taking responsibility for an area that really sits with states and territories.
Rod Henshaw: [Talks over] Have you had any worse …
Ken Wyatt: [Indistinct] a fair bit of work I have to do.
Rod Henshaw: Yeah, sorry. Have you had any- since the reports came out, have you taken any action or have you had any dialogue, if you like, with AVL and those people?
Ken Wyatt: I have had a couple of key people from the sector arrange to come and meet with me, and I will meet with them. And I will continue then to have dialogue- and I want to start a set of dialogues with states and territories, but certainly with my federal colleagues who have responsibility for elements within this. The ACCC as well, I'm curious as to why they’ve not looked at this issue, given it was raised in …
Rod Henshaw: A damn good point, damn good points.
Ken Wyatt: … significant reports.
Rod Henshaw: Yeah, exactly. That’s what they’re there for, isn’t it?
Ken Wyatt: Well it’s their role and their function. So it’s something that I will follow up on today with …
Rod Henshaw: You’re going to have a talk to Rod Sims?
Ken Wyatt: If I can get him. But he’s not – I certainly will be…
Rod Henshaw:: Mate, you’re the Minister. You can just ring him up and say; talk to me, talk to me. [Laughter].
Ken Wyatt: No, because the challenge …[inaudible] …is important to senior Australians. And, look- I look back and you can do the same. You look back on all of the people who have gone before us that we’ve known within our community. We’ve seen the way they’ve worked, we’ve seen their contribution, and we love them. And when you hear a story like this, you think; why the heck does somebody want to tear apart their financial savings for a game that’s not moral?
Rod Henshaw: Which is, in one word: exploitational.
Ken Wyatt: Yes.
Rod Henshaw: Ken, great pleasure to talk to you. And I do thank you for taking time to talk to us this morning.
Ken Wyatt: Not a problem, and thank you.
Rod Henshaw: No, thanks Ken. Ken Wyatt, Minister for Aged Care. Very reasonable man, and one- I’ll bet you he’ll get out there and he’ll get things done. He’s been around for quite a while, he’s a very sincere – and you can tell that, you know that – he’s very sincere, genuine guy. I’ve got no reason to doubt that - neither should you - that he’ll do whatever he can in his Government portfolio to try and end this, sort of, exploitation, as we finished up on there.
PDF printable version of transcript of interview on 2CC Canberra with Rod Henshaw (PDF 218 KB)