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New free trade agreement could keep Australia’s aged care industry shackled indefinitely

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It is being called the ‘largest free deal in the world’. The Regional Comprehensive Economic Partnership (RCEP) is a free trade agreement between Australia and 14 other Indo-Pacific countries, liberalising trade across a broad range of goods and services.

But aged care advocates are worried it will keep the aged care industry chained to inadequate and antiquated standards.

The Federal Government made explicit exemptions for products or services pertaining to areas such as  ‘social welfare’, ‘child care’ and ‘health’ broadly, defining them as “the specific sectors and sub sectors or activities for which Australia may maintain existing, or adopt new or more restrictive, measures”.

It did not, however, include aged care, nor make any sub-clausal references to the industry for the sake of clarification.

The Regional Comprehensive Economic Partnership is the largest free trade agreement ratified in the world, but whilst the agreement specifically protects a number of health and social welfare areas,, ‘aged care’ is notably missing. Source: The Conversation.

Dr Sarah Russell, public health research and aged care advocate, wrote in Michael West Media that this oversight is the latest “deceit” by a government with a precedent for putting aged care reform on the backburner.

“Why include childcare but not aged care? Both cover the most vulnerable people in our society,” she wrote.

“Although the Royal Commission into Aged Care Quality and Safety highlighted an urgent need for tighter regulation of the aged care sector, the RCEP agreement contains provisions that would ‘lock in’ existing regulations.

RCEP effectively trades away our ability as a nation to provide the highest standard of care to older Australians and will limit our ability to enact the recommendations of the aged care royal commission, including ensuring minimum staffing and qualification levels.

Michele O’Neil, president of the ACTU

“The agreement requires signatories to ‘not adversely modify existing regulation in particular services sectors’.

Michele O’Neil, president of the Australian Council of Trade Unions, shares these concerns.

“RCEP effectively trades away our ability as a nation to provide the highest standard of care to older Australians and will limit our ability to enact the recommendations of the aged care royal commission, including ensuring minimum staffing and qualification levels,” she said.

O’Neil said that the policy does not recognise the struggle of Australian aged care workers, having endured eight years of record low wage growth.

“They need trade agreements that will benefit them, not one that has no demonstrated benefit for workers.”

Will the RCEP allow foreign-owned RACFs to eschew reforms?

The major concern pertains to residential aged care facilities (RACFs) which are largely foreign owned.

G.K. Goh Holdings Limited, a Singaporean investment firm, has a 48 per cent stake in Opal Aged Care Group, which operates 80 RACFs across the country.

In a statement to Aged Care News, a spokesperson from the Department of Foreign Affairs and Trade (DFAT) said the agreement will not override domestic governance over the aged care sector’s operation.

 “All aged care operators must comply with Australia’s laws and regulation, irrespective of ownership,” the spokesperson said.

“The RCEP agreement preserves the Government’s right to regulate to ensure that domestic and foreign aged care providers meet high quality standards across the entire aged care sector.”

However, a number of concerns were raised by the Australian Fair Trade and Assessment Network in an April submission.  

All aged care operators must comply with Australia’s laws and regulation, irrespective of ownership. The RCEP agreement preserves the Government’s right to regulate to ensure that domestic and foreign aged care providers meet high quality standards across the entire aged care sector.

A spokesperson from the Department of Foreign Affairs and Trade

“For the avoidance of doubt and greater certainty,” the submission read, “it would be reasonable to have separate listing for aged care as a reservation.

“This would better ensure that Commonwealth and state governments are not restricted in responding to recommendations for changes or increases in regulation.

“This is particularly important in the context of the Royal Commission into Aged Care Quality and Safety.”

The submission noted that the most pressing threats would be to:

  • mandated staffing numbers and ratios;
  • increased qualifications of staff; and
  • changes to quality of care standards and licensing.

Ron Carroll, founder and principal consultant at Aged Care Connect, told Aged Care News that the cited concerns are genuine.

“Australia has a regulated aged care sector which stipulates how aged care services are delivered, especially in relation to the important area of qualifications, training and experience of nursing and care staff,” he said.

“Having an overseas company owning, operating or contracted to provide human resources to the Australian aged care sector has the potential to deregulate or minimise the transparency of our current aged care system.

“The comprehensive Royal Commission into Aged Care Quality and Standards and the recommendations proposed and currently being developed could be at risk if this RCEP trade deal is allowed to steamroll over those findings and recommendations.”

Despite these concerns, no material changes were made to the policy before its signing.

Having an overseas company owning, operating or contracted to provide human resources to the Australian aged care sector has the potential to deregulate or minimise the transparency of our current aged care system.

Ron Carroll, founder and principal consultant at Aged Care Connect

Largest foreign-owned provider weighs in

A spokesperson from Opal Healthcare told Aged Care News that the company is “proud of its record of care” and will not be using RCEP provisions to evade implementing reforms.

“Standards are not set by the ownership structure of residential aged care homes, but by the care of those managing them,” the spokesperson said.

“Opal HealthCare adheres to all the same Australian aged care regulations and standards as all other providers and we will continue to do so.”

Rather than fear foreign influence, the spokesperson said that Australians should welcome input, including investment, from countries such as Singapore, “which has one of the best health care systems in the world”.

The truth is Australia needs to dramatically increase its investment in aged care to bring it up to international standards. Domestic and international investors will be needed to do so. Anything less will guarantee that older Australians will be left with an inadequately funded aged care system.

A spokesperson from Opal Healthcare

 “Australia needs international investment to fund its social and economic development and always has,” the spokesperson said.

“This is particularly so in aged care, where Australia still spends less than half of what comparable countries do on aged care (1.2 per cent of GDP vs 2.4 per cent for the rest of the OECD).”

“The truth is Australia needs to dramatically increase its investment in aged care to bring it up to international standards.

“Domestic and international investors will be needed to do so.

“Anything less will guarantee that older Australians will be left with an inadequately funded aged care system.”

Carroll replies that greater diligence from Government is needed to ensure companies operating in Australia maintain their commitment to best quality care.

“Mr Greg Hunt and Mr Richard Colbeck should provide clear statements to the Australian community on how RCEP will be integrated into the regulated Australian Aged Care sector,” he said.

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