Australia’s aged care hell at Earle Haven 

5 August 2019
Kaye Broadbent

The website of Earle Haven Aged Care boasts that the Gold Cast facility is accredited and provides care of a high standard. But in early July, 70 of its elderly residents were dumped in the car park and assisted by only a few staff after the facility abruptly closed.

What caused this disaster? A contract dispute between two corporations: People Care, the aged care provider, and the HelpStreet Group, the subcontractors providing nursing, catering and administrative services at the facility. The residents, many of whom suffer from dementia, have been caught in the middle.

Federal minister for aged care and senior Australians Richard Colbeck told Hospital Health he found it “simply outrageous that a contract dispute could escalate to the situation that it did”. But why would he be surprised at this outcome? He presides over an aged care system in which profits come first and cost-cutting is the order of the day.

Australia’s state expenditure on long term care is 1 percent of GDP. That is nearly half the OECD average. And the government plans $1.5 billion in budget cuts over the next four years.

Of the remaining funding, much goes to subsidise for-profit companies. For-profit aged care has grown to take up about a third of the total industry, and it’s heavily dependent on state funding. A 2018 Australian Nursing and Midwifery Federation report revealed that the six major for-profit providers received more than $2.17 billion in taxpayer subsidies – almost three-quarters of their annual revenue.

There are meant to be limits. To continue receiving subsidies, facilities are accredited and re-accredited regularly by the Australian Aged Care Quality Agency. But when accredited facilities are dumping residents in car parks, we are left to wonder how rigorous this process is.

The aged care sector in Australia is socially important: in 2018, 200,000 older people were living in residential care. It’s also big business, generating annual revenues of around $22 billion and annual profits of $1.7 billion. So the system is working for some.

For-profit providers don’t just get massive handouts. They’re often major tax cheats. A recent report from the Tax Justice Network Australia and the Centre for International Corporate Tax Accountability and Research found that private aged-care providers routinely practise “aggressive tax minimisation strategies”: sheltering money in offshore tax havens, concealing their corporate structures and failing to file statements with the Australian Securities and Investments Commission.

Living in a residential aged care facility is expensive. But that money seems more likely to end up in offshore tax shelters than in staff wages. Earle Haven staff had not been paid superannuation for eight months at the time of the scandal. No laws govern staff-resident ratios, so facilities are frequently understaffed.

As Beth Mohle of the Queensland Nurses and Midwives Union commented: “On the day the Earle Haven closure occurred, only one registered nurse was rostered on to care for 68 residents ... The union has repeatedly called on the federal government to stop the pain, suffering and premature deaths of elderly Australians due to understaffing and the dangerous under-regulation of Australian private aged care”.

The Royal Commission into Aged Care Quality and Safety has heard that $7 a day per resident is allocated for food, which compromises quality and quantity. Residents are sometimes left hungry. A staff member working in dementia care told the Guardian:

“Under our funding and management models they [dementia residents] are seen as a task, not as a person ... The carers are doing the best they can, but under the pressure of having to provide care for so many people within such a small timeframe, there is just not the time to make dementia patients feel at ease.”

Aged care shouldn’t be run for profit. Aged care needs a massive boost in funding, so that staff have the time and resources to care adequately for residents. But that funding shouldn’t be padding the accounts of for-profit tax-dodging private corporations. Instead, we should be massively increasing corporate taxes to fund high-quality public aged care, where staff have the pay and conditions they need, and patients are treated with respect and dignity.

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