/ ~rikr~r~neiiH-ir-~ri aegis consulting australia pty ltd ABN 32100477147 australia ACN 100477147 Sydney 18 wigram road glebe nsw 2037 australia phone. 61296601 706 SUBMISSION NO 107 tax. 61296601 759 AUTHORISED: @ACA,~ 4/’ Brisbane P0 Box 739 bulimba qld 4171 australia phone. 6173899 0540 fax. 61738990540 www.aegisconsulting.com.au 25 April 2005 Mr James Catchpole Secretary Standing Committee on Family and Human Services Parliament House Canberra Act 2600 Dear Mr Catchpole SUBMISSION TO THE ENQUIRY INTO BALANCING WORK AND FAMILY - THE FRENCH GOVERNMENT’S PLAN FOR HUMAN SERVICES Aegis Consulting Australia is a boutique consultancy assisting clients to link their business development and corporate strategies with government policy, regulatory and political objectives. We work across industry sectors and policy issues at national and state level. 1. Background One of our clients is Accor, which is a French multinational company and the largest hotel group in Australia, employing more than 10000 people. One part of the worldwide Accor Group is Accor Services, which assists governments to deliver social welfare payments and services, and employers to provide benefits to their employees in 34 countries. Accor Services does this by designing, implementing and managing smartcard, voucher, electronic voucher and web based systems which are applied by governments to: • Link the use of direct payments and tax subsidies to the purpose for which they are provided; • Target welfare delivery to particular areas of need; • Improve the ability ofwelfare recipients to choose the services they need; • Integrate payments and services of various government agencies; and Linking business development with public policy, regulatory and political strategy 1
Transcript
/ ~rikr~r~neiiH-ir-~ri aegis consulting australia pty ltdABN 32100477147
australia ACN 100477147
Sydney18 wigram road
glebe nsw 2037 australia
phone. 61296601 706
SUBMISSION NO 107 tax. 61296601 759
AUTHORISED: @ACA,~ 4/’ BrisbaneP0 Box 739
bulimba qld 4171 australiaphone. 6173899 0540
fax. 61738990540
www.aegisconsulting.com.au
25 April 2005
Mr JamesCatchpoleSecretaryStandingCommitteeon Family andHumanServicesParliamentHouseCanberraAct 2600
DearMr Catchpole
SUBMISSION TO THE ENQUIRY INTO BALANCING WORK AND FAMILY -
THE FRENCH GOVERNMENT’S PLAN FOR HUMAN SERVICES
AegisConsultingAustraliais aboutiqueconsultancyassistingclientsto link theirbusinessdevelopmentand corporatestrategieswith governmentpolicy, regulatoryand politicalobjectives.Wework acrossindustrysectorsandpolicy issuesatnationalandstatelevel.
1. Background
Oneof ourclientsis Accor,which is aFrenchmultinationalcompanyandthelargesthotelgroupin Australia,employingmorethan 10000people.
For example,in the United Kingdom it haspioneeredan electronicvouchersystemtoenablefamiliesandemployersto receivetheGovernment’stax subsidiesfor childcare.
2. Human ServicesStrategy in France
In Franceone governmentstrategyin which Accor hasparticipatedconcerns‘humanservices.
Given the termsof referenceof the inquiry by the StandingCommitteeon Family andHumanServices,wehavetakenthis opportunityto bring to yourattentionthedirectionoftheFrenchGovernmentwith respectto the ‘humanservicesindustry’.
• Promote home based care and therefore reduce the cost to government ofinstitutionalisedcaresuchashospitalsandagedcarefacilities.
To ensure that the community can optimise its useof ‘human services’, the FrenchGovernmenthasembarkedon astrategyto:
Linking business development with public policy, regulatory and political strategy2
(a) Value, recognise,regulate, and properly reward the professionalswho deliverthoseservices;and
(b) Promotethroughtax incentivesthepurchaseof suchservicesby families andtheprovision of such servicesby employersto employeesaspart of employmentbenefits.
As a result the strategyis desiguedto promotethe sharedresponsibilityfor the fullspectrumofcareby government,thecommunityandemployers.
A voucherschemeis a vital elementofthis strategyandAccor ServiceshasadvisedtheFrenchGovernmentonthemosteffectivewayto usesuchaschemeto delivergovernmentobjectives.In essencetheuseofvouchersto purchasea servicetriggersthetax incentiveofferedby thegovernment.
The French Government’sanalysis is that 1.3 million are employedin the ‘humanservices~industry, which has demonstratedthehighestgrowthin employmenttermsof
any sector. Its strategyto regularise the industry is desiguedto stimulate a further500 000jobs within it.
We haveattachedfor the informationof theCommitteea paperpreparedby theFrenchDepartment of Employment, Labour and Social Cohesion, which sets out theGovernment’sobjectivesandstrategyto optimisethehumanservicesindustry. Oneofthemostremarkablethings aboutthis strategyis that is hasco-ordinatedthemissionsof 20governmentdepartmentsinto onewholeofgovernmentagenda.
This documentwas originally preparedin French and the attachedcopy is a literaltranslation undertakenfor the Committee. As a result, someof the phrasesmay becumbersome.Neverthelesswetrust it is of interestanduseto theCommitteeaspartof itsdeliberations.
3. Relevanceof French Strategyto Australia
Thereasonsmotivating theFrenchGovernment’sstrategyhavea rangeofparallelswithsocialand economicdevelopmentsin Australia,andappearto be particularlyrelevanttothe terms of referenceof the StandingCommittee’s inquiry into balancingwork andfamily.
This is becausethe ability of Australianparentsto begin families and to enterorreturnto theworkforcewhentheyhavechildrenand/orotherdependentslargelyrelieson:
• The availability and affordability of quality, trustworthy and flexible care forchildren,elderly anddisableddependents;and
Theseoutcomescanbe bestachievedthroughan integratedstrategywhich includesgovernmentsubsidiespaid directly to entitled recipients,and tax incentiveswhichencourageemployer contributions towards employee care costs and/or salarysacrificing by employeesfor their care costs. This combination optimises theopportunity for governmentto deliver equitableaccessto affordablecare for low,
Linking business development with public policy, regulatory and political strategy3
middle and high income families consistent with their means and needs. Thecombination of direct government assistanceand incentives for employercontributions is best internationalpractice in most countrieswhere governmentschooseto supportfamilieswith subsidies.
A fundamentalissuein thedesignofthis strategyshouldbe thatany subsidy,whetherpaiddirectlyby governmentor deliveredvia tax incentivesto encourageemployerstoprovidecarebenefits,should assistfamilies with theircashflow to fundtheup frontweekly cost of care.This is becausesubsidypolicy that is focusedon assistingfamilieswith theirweeklycashflows for carecostshasahigherchanceofpromotingworkforceparticipationby bothearnersin acouplefamily aswell assoleparents.
Accordingly, rebatesandtax deductionsfor costswhich areonly claimablevia thetaxreturnprocessat the end of the financial yeararea misplacedinvestmentof publicfunds, especiallywhere governmentis interestedin decreasingwelfaredependenceand lifting workforce participation. Such policy doesnot assist families with theirweeklycashflow andthereforedoesnot encourageworkforceparticipation.
For example, in 2000 the FederalGovernmentabolishedthe rebate schemeforchildcare costs and replacedit with the Childcare Benefit (CCB) which entitlesrecipientsto a subsidyfor childcare,and paysthat subsidydirectly to the childcareprovider chosen by the recipient. One of the significant problems with theaccessibilityof the former rebateschemewas that families could only claim theirrebate at Medicare Offices, which are sparsely located. As a result it was aninconvenientway for working families to usea governmentsubsidyto assisttheirupfront childcarecostsandrelatedworkforceparticipation.
In the2004electioncampaigntheFederalGovernmentcommittedto providinga30%rebateon theout of pocketexpensesof CCB recipients.Howeverthis rebateis onlyclaimableoncea yearaspart of thetax returnsystemandthereforedoesnot assistafamily meettheirweeklyup front childcarecostsin orderto work.
Similarly, even if the cost of care is madetax deductiblefor employeesas manygroupspropose,it aloneis of little assistancein relationto a family’s weeklyup frontcarecosts.To be effectiveasa subsidypromoting workforceparticipation,carecoststhat are tax deductiblefor employeeswould also needto be exemptfrom FringeBenefitsTax (FBT) andtax deductiblefor employers.
By ensuringthat care costs are FBT free, governmentwould createincentives,andoptions for employersto contributeto the care costs of their employeesthroughfortnightly or monthly benefits in addition to salary. It would also create theopportunity for employeesto reducethe cost of careon a weekly basisby salarysacrificingtheircarecosts.
Tax deductibility for employeecare costs alonewill not achievethis becausetheclaimantonly receivesthebenefit from the AustralianTax Office at the end of thefinancial year.
Linking business development with public policy, regulatory and political strategy4
In the remainderof this paperwe have discussedthe costs and benefitsof FBTexemptionsfor childcareand home and communitycare to identify somerelevantissuesfor theinquiry.
3.1 Child Care
The ability of families to accessaffordablechildcareis a key determinantin the level
ofwomen’sworkforceparticipation.
In its 2003 Inter-GenerationalReport, the AustralianTreasuryadvisedthat futureGDP growth dependedon increasingwomen’sworkforce participationand keepingpeoplein the workforce longer. The OECD considersthat women aged25-54 areunderemployedand lifting their participation is key to minimizing the adverseeconomicandsocialeffectsofpopulationageing.1
It is clear that thereis plenty of scopeto rais~ the participationrateof women inAustralia. For example,in Australia45% of all motherswith a child undertheageofsix areemployedcomparedwith 62 % in the US, 56 per cent in the UK, 73% inNorway,and70 percentin Belgium.2
Themajority of children areborn to womenaged25-34.The bulk of thesewomenhave either beenin the workforce since they left school or obtainedboth tertiaryeducationandemploymentexperience.3Availableresearchindicatestwo trends- (a)womenare lesslikely to work asthe numberof young childrentheyhaveincreases
• Enoughaffordableout of schoolhoursandvacationcareplacesfor womenwithschoolagechildren.
3.1.1 TheCostofCare
The cost of childcarecan be a significant impedimentto workforce participation.Rather than alleviating this, current government subsidies can also operate todiscourageworkforceparticipation,particularlyby women,because:
• TheGovernment’sChildcareBenefitreducesasfamily incomeincreases;• Other family paymentssuch as the Family Tax Benefit (Part A), parenting
paymentandmaternitypaymentalsoreduceasfamily incomeincreases;and• The Family Tax Benefit (Part B) is not incometestedandpaidto single income
families.
1 PaulSwaim, ‘Women in Employment’,presentationto ‘Putting More Womento Work Colloquium,atwww.oecd.ore.au2OECDEmploymentOutlook, 2001.
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Wherethe costof careconsumesoneperson’swagethereis little financial incentivefor bothearnersin a couplefamily or a soleparentto work. If one ofthem (usuallythe woman) leaves the workforce, the couple or sole parent savesthe cost ofchildcare,andreducestheirhouseholdincomewhich:
(a) Reducestheirmarginaltax rate;and
(b) Entitlesthemto receivehighergovernmentsubsidies.This is aperversepolicyoutcome,in any environment,butparticularlywhenthe economyneedsto liftparticipationto maintainGDP growth.
Thenationalaverageannualcostoftwo childrenin long daycare(90hoursperweek)is about $18 000 (about $360 per week).5 Researchwe commissionedin 2004indicatedthat this costcanbe up to $33 000 in Melbourne(about$650 a week) and$46 000(about900 aweek)in Sydney.6
Childcarecostsincreasedby 32%between2002and2004which is morethan6 timestherateofinflation (5.2%)?Anecdotallyit is widelyacceptedthat theaverageannualcost of long daycarefor a child ($9000)canbe as,if not more,expensivethan thecostofsendingthatchild to privateschool(both independentandcatholic).
Families using approvedchildcareare entitled to receivethe Government’sChildCareBenefit (CCB). The CCB that a family receivesis paiddirectlyto thechildcareproviderof theirchoice. Childcareprovidersrely on CCB paymentsfor about60%oftheir revenueand this is the way the CommonwealthGovernmentfunds childcareplaces.
TheCCB is incometestedandreducesasafamily’s incomeincreases.A family withanannualincomeofabout$33 000 a yearis entitled to receiveCCB worthabout75%of theirchildcarecosts.A family with anannualincomeof about$90 000 a yearisentitledto receiveCCB worthabout10% of theirchildcarecosts. TheaverageCCBpaymentis about$53 aweek.8
Familiesentitledto CCB canalso claim a 30%rebateon theirout ofpocketchildcareexpenses(commencingin 2006 and cappedat $4000 per year). This canonly beclaimedasa lump sum at the end ofthe financialyearthroughthetax system.As itdoesnot assist a family with theirweekly cash flow to fund the up front costs ofchildcareit is unlikelyto significantly stimulateworkforceparticipation.
~AustralianBureauof Statistics~The Governmentspent$1.4billion ontheCCB in 2003-04andit wasclaimedby about546 000familiesfor 48 weeks.TheGovernmentanticipatesspending$1.5 billion on theCCB in 2004-05.
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Unlike the Frenchexample(and also in theUK, Spain,and Germany),thereis littleattemptby governmentin Australiato usetaxincentivesto encouragetheprovisionofemployerbenefitsfor childcare.
Such incentivesmaximisethe opportunity for employersto sharethe responsibilityfor employee childcare, and importantly ensure that governmentsubsidies forchildcarearebeingoptimally usedto stimulateworkforce participation.This sharedresponsibilityapproachbenefits:
3.1.2 Other Optionsto AssistFamilieswith Childcare Costs— FBTExemptions
Linking business development with public policy, regulatory and political strategy7
In a periodof high employmentand skill shortages,employerbenefitsfor childcareareavaluabletool for employersto retainandrecruit staff.
Currently in Australia employersare entitled to an exemptionfrom Fringe BenefitsTax (FBT) wherethey provide workplacechildcareon their businesspremisesorpurchaseplacesfor employeesat childcarecentre.Howeverto receivetheexemptionemployersmust manageand/orcontrol the centresthey establishor purchaseplacesfrom.
Very few employersutilise this FBT exemption.In 2004 wesurveyed30 employersacross16 industriesemploying more than 500 000 employeesabout their use ofworkplace and non-workplace childcare.’0 The survey identified that only 5employersprovided a total of 240 childcareplacesvia workplacefacilities or thepurchaseofplacesat otherchildcarecentres.Employersindicatedthat the provisionofworkplacechildcareis unattractivebecause:
• The capital cost is too high, particularly if an employerhasmultiple businesslocations.Thecostcanbeupwardsof$2 million in theSydneyCBD.
• It is uneconomicalunlessthereareat least 1000 employeesin anyone locationandatleast40 childrenusingthefacility.
• It creates increasedpublic liability insurancepremiums, OH&S and otherliabilities andrisks.
• Fire and otherregulationsrequiringworkplacefacilities to be locatedon groundfloor areasmakeit prohibitivewhentheseareasarepremiumretail spaces.
• It is non-corebusiness.• It cannotbeprovidedequitablyto all employees.• Mostemployeespreferchildcarein theirlocal communities.
As analternativeto workplacechildcaremostof theemployerswesurveyedpreferredto be ableto providechildcarebenefitsthat their employeescould useto purchasechildcareservicesoftheirchoiceoutsidetheworkplace.
Employersprefer this option becauseit doesnot requirecapital investmentor theassumptionofrisk by them; deliversgreaterchoicefor employees;is moreconsistentwith the childcarepreferencesand patternsof employees;and promotesequitableaccessto childcarefor all employeesneedingit.
This anomalybetweenthe tax treatmentof workplaceand non-workplacechildcarebenefitsshould be addressedby the FederalGovernment.The absenceof an FBTexemptionfor non-workplacechildcarediscriminatesagainstemployeesof smallerand medium size employers,and employerswith multiple businesslocations forwhomworkplacechildcareis too expensiveandimpractical.
10 Conductedby the AustralianResearchGroup
Linking business development with public policy, regulatory and political strategy8
The provision of an FBT exemption for employer benefits for non-workplacechildcarehasbeenrecommendedpublicly by theAustralianChamberofCommerceandIndustry,AustralianIndustryGroup,NationalDiversity Think Tank(14 largecorporatesincluding financialandbankinginstitutions,HoldenandLendLease)andarangeof othercorporates,includingAccor, ManpowerandMacDonalds.
It was also one of the recommendationsby the StandingCommitteeon Employment,WorkforceRelationsand WorkforceParticipationCommitteein thereport of its recentinquiryinto increasingworkforceparticipation.
An FBT exemptionfor employerbenefitsfor non-workplacecarecould allow suchbenefitsto be providedasan additionto salaryor takenasa salarysacrificeby theemployee.A salarysacrificedbenefit of $18 000 a year (averagechildcare costs).would providea family (with an annualincomeofbetween$60 000 and $100 000)with a gain of betweenabout $100 and $140 a week for spendingon childcare,dependingon their incomesplit. This compareswith amaximumof about$40 CCBthattheyareentitledto.
Theadvantageto familieswould varydependingon theincomesplit of thecouple(asthis is influencedby themarginaltaxrateatwhichthedeductionis claimed),anddoesnot increasewith higher income alone. As a result, a lower income family couldreceiveahigherbenefitthanahigherincomefamily. Table 1 belowillustratesthis.
Gain to familyafterFBTfreesalarysacrificeof$18 000 forchildcare($)(2004-05)
5115 5670 5670 6672 5514
The tableaboveindicatesthatit is possiblefor familieswith differentincomelevels to receivethe samebenefit(compareexamples2 and3); familieswith the sameincomelevels to receivedifferentbenefits(compareexample3 and 4) and higher income families to receiveless benefit than lower incomefamilies (compareexamples1 and5).
Linking business development with public policy, regulatory and political strategy9
Howeverit is offsetby reducedCCB paymentsbecauseundercurrentpolicy apersoncannotreceive CCB if they salary sacrifice their full child care fees and theiremployeris exemptfrom payingFBT on the cost of theirchildcare.The costcouldalsobe limited by cappingtheamountableto besalarysacrificed.A salarysacrificedbenefitwouldbe no costto employers.
Thebenefitof this optionto an employeeand costto governmentand employersisillustratedin Table2 below.
Table 2 —Illustrates the cost/benefitto an employeeand employerwhen a salarysacrificefor non-workplacechildcareis subjectto FBT comparedwith it beingFBTfree.The family incomeis $100K andtheincomesplit is 50/50.
• Thelevel of employerbenefitthatwould attractthe FBT exemption.
For exampleanemployerbenefit for non-workplacechildcarecouldbe FBT freeupto a limit of $1 perhourofcareto amaximumof$50 aweekperemployee.
If this benefit was usedby about 250 000 families (half the numberof familiesclaiming CCB) for anaverageof about30 hoursa week, the net costto governmentwould be $83 million per year.’1 For an employerthis samebenefitrepresentsa netcost of about $1500 a year per employee.12By comparisonemployersspendonrecruitmentanywherebetween$3000and $60 000 peremployee,dependingon theirseniority,andexperience.13
The annualnet costto governmentof $83 million canbe achievedby reducingCCBfor middle andhigherincomefamilieswho receivean employerbenefit. This wouldmaintainequitybetweenincomegroups.
For example,thecombinationof an employerbenefitof$1 perhourofcareandCCBcanfund 100%oftheaveragelong day childcarecostsfor low incomefamilies, 70%for middle incomefamiliesand60%for high incomefamilies.This is higherthantheavailablerangeof CCB paymentswhich commenceat 75% ofthe long daychildcarecosts for low incomefamilies. In comparison,to providechildcaresubsidesworth100%- 60%ofcarecosts,without an employercontribution,governmentwould haveto spend$287million peryear.
The net cost to governmentunder both the salary sacrificed and salary top upscenarioswould dependon savingsandrevenueflowing to governmentfrom:
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Another advantageto families, governmentandthe childcareindustryofencouragingemployercontributionsand/or salary sacrificing for non-workplacecare, is that itprovidesnewsourcesofrevenuefor addedinvestmentin childcareplaces.
Researchindicates that childcarewaiting lists grew by 40% in 2003 and that theaveragewait for placesfor 0-2yearolds is two years.16This limits theopportunityforwomenwith youngchildrento returnto theworkforce.
Currently investmentin childcareplacesis dependenton Governmentfunding (theCCB) which childcareprovidersrely on for 60%oftheir income.It is not sustainablefor governmentto continueto fundchildcareplacesto meetdemand.For exampletheGovernmentis estimatedto spend$1.5 billion on theCCB in 2004/05.This is a 67%increasesince2000/01whenit wasintroduced.17
Savingsto families from salarysacrificingcarecostsand employerbenefitsfor carewhich are encouragedby the FBT exemptioncan be usedto fund investmentinchildcare places in accord with demand,and therefore reducethe reliance ongovernmentfunding.
In Australia, homeand communitycareservicesarejointly fundedand administeredby the Federaland Stategovernments.Some Stateand local governmentsdirectlyprovidehome and communitycare services.Communitycareis primarily deliveredby NGOsunderthefollowing programs:
• HomeandCommunityCare(HACC) Program;and
• CommunityAgedCarePackages(CACPs).
Governmentprovidesno tax incentivesfor employersto contributeto thecostofagedcare for their employees,and doesnot permit employeesto salarysacrificefor thecostofsuchcare.
The availabilityandaffordabilityofhomebasedcareservicesfor elderlyanddisabledpeople,like thoseincludedin theFrenchGovernment’shumanservicesstrategy,canalso beamajorfactorin thedecisionof families,particularlywomen,to participateintheworkforce.
The needfor suchservicesfor the agedin particularare likely to increaseas thepopulationofelderlypeoplein theAustraliancommunitygrows.This is becausemostagedpeoplerequiringcarepreferto remainin theirownhomesor with relativesfor aslongaspossible,ratherthanenterinstitutionalisedcare.For example,only 7%ofagedpeoplerequiringcarearecurrentlyin residentialcare.’8
It is widely acceptedthat the proportionof peopleaged65 and over is projectedtogrow from 12.4% in 2001 (2.4 million people)to over 21.9% in 2031 (5 millionpeople).
Currently1.7 million peopleareover 70 yearsold (8.9%of the population).This isestimatedto grow to 3.7 million in 30 years(15.9%ofthepopulation).Overthenextten yearsthe growthin the numberof peopleover 70 is estimatedto be 2.2 timesfasterthanthegrowthin thegeneralpopulation.
Currently582 000 areover 80 yearsold (2.9%ofthepopulation).This is estimatedtogrow to 1.3 million in 30 years(5.8%ofthepopulation).Overthenexttenyearsthegrowthin the numberof peopleover 80 is estimatedto be 4.2 times fasterthan thegrowthin thegeneralpopulation.
Currentlyabout52 % of olderpeoplereceivethe full pensionandabout25%receivepart pensionsand this is expectedto grow in proportion to the populationgrowthdiscussedabove.19
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Relianceon homecareservicesmayalsoincreaseasthehospitalsystemcomesunderincreasingpressureto deal with the conflict betweentreatingan ageingpopulationandoptimisingtheuseof andthroughputon availablebeds.
For example,60% of peoplemoving into residentialcare go there straight fromhospital. This reflectstherealitythat elderlypeoplewho becomeseriouslyill tendto
20requirelong terminstitutionalisedcare.
However, the economicsof the health system also encouragehospitals to moveelderlypatientsto residentialcareaftera specifiedperiodin orderto freeuphospitalbedsfor otherpatientswho mayrequireless care. Studiesby the AustralianInstituteofHealthandWelfarein 2000/01indicatethatin publichospitals:
Whenfiguresforpublic andprivatehospitalsarecombinedit is clearthat:
• Thepopulationgroupaged65 yearsand over (about2.4 million or 12% of thetotalpopulation)accountedfor 2 million or33%ofhospitalprocedures,andabout11 million or 48%ofpatientdays.
• Theaveragelengthof stayin hospital for this agegroupwas 5.3 dayscomparedto3.7 daysfor all patients.
• As the agedpopulationgrows, this demandis likely to increaseand homebasedcaremay becomean increasinglyappealingoption to reducehospital systemcosts.
3.2.2 HomeandCommunityCare (HACC) Program
Currently, there is a range of home and community care services funded bygovernmentandgenerallydeliveredby NGOs.Theseare:
• Homehelp(includingpersonalcare)suchashousecleaning,washing,ironingandshoppingand personalcaresuchasbathing and dressing.Volunteercarersoftenprovidetheseservices.
20 Ibid
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• Respitecare,which allows family membersor otherpermanentcarersof olderpeoplethe opportunity to takea break.This canbeprovidedeitherby a trainedpersonassumingthecarer’sresponsibilityathomefor a short time orlongertermrespitecarein adaycentreornursinghome.
• Home maintenanceand modification, which involves assistancewith essentialhomerepairsandmodifications,suchastheinstallationof safetyramps,supportrails, doorwaywideningandalike.
• Transportserviceswhich provide older people with the opportunity to accessprivatetravel (taxis) to assistthemwith shopping,doctorsappointmentsetc.
• Foodservices,which involve the deliveryof mealsto an olderperson’shomeorcommunitycentrewheretheyarestaying,andfoodpurchasing.
Federal and Stategovernmentshavefundingagreementswith communitycareservicebrokers.Fundingis administeredbyvariousgovernmentagenciesleadingto poorintegrationandsocialoutcomemeasurement.
Community careservicebrokers — NGOs andlocalgovernment— receiveFederalandStategovernmentfundinganduseit to purchaselocallybasedhomecareservicesforconsumersbasedon need.
• The averageage of a HACC client is 71.6 years with 66% beingfemale,93%beingpensionersand52% havea careravailableto assistthem(usuallya familymember).
• The most hours of carewereprovidedby the following servicesin this order—
CACPsareindividually tailoredpackagesofcareservicesto frail olderpeoplein theirown homes.Aged Care AssessmentTeams(funded by the Federal government)assessthepackageofcareservicesapersonrequires.CACPsareusuallyappliedasanalternativefor thosepeopleassessedto be frail enoughto qualify for aplacein lowlevel residentialcare,but who preferto remainin theirownhomes.
CACPsservicesaredeliveredunderthe following model:
4,
22
SomeCACPsfactsare:
• Over24 100 peoplereceiveCACPs.
• Up to 5%ofexistinglow level residentialcarepacesmaybeconvertedto CACPs.
21 Ibid22 Ibid
Federal governmenthasfundingavailablefor usebyACAT.
p
Aged Care AssessmentTeams—basedin heathserviceareasorregionstoidentify servicesrequiredbyagedpersonathomeandrecommendfundingbygovernment.
Individual requiringhomebasedcare— elderlyanddisabledpeoplewhocannotleavetheirhomes.Somecostrecoveryrequiredfromconsumerswheregovernmentfundingis not sufficient.
Home care serviceprovidersdeliverservicesto elderly anddisabledpeople.ServiceprovidersareusallyNGOs,volunteergroups,someprivateproviders.
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• For CACPs, themaximumfee ratefor pensionerson thebasicrateof pensionisaround $1850. The maximum Federal government subsidy per person is$11 216 annually.
As with various internationalmodels, smartcard,electronic voucherand/or papervouchersystemscanbeusedto link the tax incentiveto its usefor the carecostsforwhich it is intended.This eliminatesany potential for fraud andpermitsgovernmentto targetincentiveschemes.
In this contextsmartcardsystemsoffer themostadvancedplatformbecausetheycanhostsuchtax incentivesas well asotherdirect governmentsubsidiesto which anagedpersonis entitled.For example,asmartcardcanhost:
• Direct governmentsubsidiesand employerbenefitswhich a personcanuse topurchaseHACC services.This promoteschoicefor the userof HACC servicesandstimulatescompetitionfor thedeliveryofHACC services;
• VariousFederalandStategovernmenthealthsubsidiesprovidedto agedpeopleinregional areasto purchaseprivate medical servicessuchasdentistry, tests andpodiatry;and
• Medicareand private health subsidiesfor high and low level medical servicesprovided in a person’s home, ranging from regularmedical assessmentsforpreventionand management,to post operativeor post treatmentcareaimed atassistingapersontransitionfrom hospitalto home.This couldreducethedemandthatolderpeopleplaceon bedsin publichospitals,which hasobviousbenefitsforhealthsystemmanagementandfundingat StateandFederallevels.
This approachis botha strategicandlocalisedonebecauseit enablesgovernmenttofocuson theneedsofagedpeopleasusersorclients ofservicesandstimulateservicedelivery to meet those needs. This is often preferableto systemswhere serviceprovidersdictateserviceprovisionto attractgovernmentsubsidies.
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4. Conclusion
As discussedin this submission,the French Governmenthas a strategyto support aspectrumof careissuesfacing families throughtaxationincentivesthat also encouragessharedresponsibilityby employersfor the care needs of their employees;promotesworkforce participation generally; stimulatesjob creation in its highest growingemploymentsector(humanservices);and reducescosts to governmentassociatedwithinstitutionalisedcare.
This is an excellentexampleof creativeandjoined up thinking by governmenton astrategicandgrandscale.
Therearesimilar opportunitiesfor theAustralianGovernmentto usethetax systemandnew technology such as smartcardsand electronic vouchers to encouragesharedresponsibilityfor carecosts by government,employersand employees.By taking thisapproachgovernmentcan reduceits costsbut simultaneouslyoffer families accesstointegratedand cheaperchildcareand home and communitycare (HACC) servicestosatisf~~theircareneeds.
Doing so also promotes choice for the recipients of care and ensuresthat careresponsibilitiesdo not impedeworkforceparticipation.
If you requirefurther information pleasecontactmeon 0407 992 633orvia my emailvberi(~aegisconsulting.com.au
Yours sincerely
Vish BenDirector
Disclaimer
AegisConsultingAustraliaprovidesno warrantiesandmakesno representationsin relation to theinformationprovidedin this advice.AegisConsultingacceptsno liabilityfor relianceon the informationinthis adviceby anypersonororganisation.Anypersonororganisationusingthisadvicedoessoatits ownriskandagreesto indemnifyAegisConsultingAustralia for anylossor damagearisingfromsuchuse.
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