PM Scott Morrison warns of ‘bruising’ abuse tales

The nation needs to brace itself for some ‘bruising’ revelations of abuse in the $18 billion aged-care sector, Scott Morrison warned.

Prime Minister Scott Morrison. Picture: AAP

The nation needs to brace itself for some “bruising” revelations of abuse in the $18 billion aged-care sector, Scott Morrison warned yesterday, as he launched a sweeping royal commission in a move to outflank Labor on the issue, head off more damaging ­reports and recapture the vote of older Australians.

Just weeks after dumping a long-planned rise in the pension age to 70 and days after announcing some reforms from this year’s budget will begin immediately ­instead of in the outlying years, the Prime Minister will establish a royal commission that will begin as soon as possible and not report until “at least the second half of next year”.

“I think we should brace ourselves for some pretty bruising ­information about the way our loved ones have experienced mistreatment,” Mr Morrison said yesterday. “I think that is going to be tough for us all to deal with but you can’t walk past it, you can’t not look at it and that is what the government is ensuring that we don’t do.”

The Australian understands Labor had begun sounding out stakeholders such as the Council on the Ageing and Seniors Australia as recently as Friday on whether it should push for a royal commission and had a plan under “active consideration”. Bill Shorten backed the inquiry yesterday.

Mr Morrison has been telling his own MPs that the people most affected by aged care “are Coalition voters and people who should be supported”.

Coalition MPs in particular have been urging the Prime Minister to act, saying they have been inundated with constituent concerns about the state of the aged-care system, which has been the subject of at least five independent reports to government and two parliamentary inquiries in the past two years alone. Industry groups and peak bodies representing the elderly welcomed the news of a royal commission yesterday, adding that reforms under way should not stop while the ­nation waits for it to report.

Aged care graphic for the australian

Mr Morrison said speculation that he is trying to shore up votes was “cynical” and that cabinet signed off on a royal commission last week.

He guaranteed current reform work would continue, including moves to bring a “tough cop” to the sector in the form of the Aged Care Quality and Safety Commission, due to begin in January.

Mr Morrison said the number of serious risk notices given to aged-care providers had jumped 170 per cent in the past year and significant noncompliance in the sector has leapt by 292 per cent.

“When you are confronted with that, you ask a simple question: How widespread is this? Does it touch on the whole sector? Now until we can have clear ­answers to those questions I think Australians will be unsure,” he said. “And that is why … last week we discussed this together as a cabinet and we decided it was necessary to move forward with a royal commission into the sector which includes the care provided to young Australians with a disability in the residential aged-care sector.”

When Mr Morrison was ­treasurer, the increase in funding for the Aged Care Funding Instrument, which provides taxpayer subsidy for the direct care costs of residents in nursing homes, was reduced by a total of $2bn across the 2015 mid-year economic and financial outlook and the 2016-17 budget.

Overall spending under the funding instrument still rose by $1.8bn but it had been projected to grow $3.8bn before the savings measure was announced.

The Coalition argued at the time that aged-care providers were over-claiming.

The funding instrument covers direct nursing care costs, which make up the vast majority of provider overheads in the sector. Many operators said they were penalised by the bad behaviour of a few big players.

“This is why we are having a royal commission because I am not going to put up with lies being told about the aged-care sector,” Mr Morrison said yesterday.

“Policy must be based on facts, not facts that are dreamt up, not facts that are misinterpreted, not facts that have an agenda sitting behind them.”

The ABC’s Four Corners is due to air an investigation into the issue tonight. Just a month ago, minister Ken Wyatt told the program he did not think it was necessary to hold a royal commission.

“A royal commission after two years and maybe $200m being spent on it will come back with the same set, or a very similar set of recommendations,” Mr Wyatt told the program.

Labor’s aged-care spokeswoman, Julie Collins, said it was “no coincidence” the Coalition was moving to establish a commission.

“You cannot rip almost $2bn out of an aged-care system and not have an impact on quality,” Ms Collins said yesterday.

When Labor was last in government, it also raided the funding instrument and produced savings of $1.6bn over the forward estimates.

The three main ASX-listed aged-care providers — Regis, Estia and Japara — receive close to $200 a day from the government for each occupied bed. However, wages in the sector have grown about twice as fast as subsidies.

Consultants StewartBrown estimate nearly half of all aged-care centres are operating at a loss, a rate that worsens in regional areas.