Scott Lynda: Social Security (Long-term Residential Care) Amendment Bill — First Reading 
Scott Lynda: Social Security (Long-term Residential Care) Amendment Bill — First Reading 
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Dr LYNDA SCOTT (National—Kaikoura) 
: 
 I think Ruth Dyson will feel really bad when she faces up to Grey Power with this half-hearted lukewarm response that tries to keep a promise. Here we are in the depth of the night bringing in this bill. It has been brought in at this time to minimise its impact because Ruth Dyson knows very well that the Social Security (Long-term Residential Care) Amendment Bill has been a long time coming. It was promised through two elections that this Labour Government would remove income and asset testing. Well has it? 
Simon Power 
: Have they? 
Dr LYNDA SCOTT 
: No. Has this Government removed asset testing? Absolutely not! Has it removed income testing? Absolutely not! Not only is that the case but what it has done is to put some clauses in this bill that will probably bring the rest home industry in this country to its knees. 
For two elections this Labour Government has dangled the carrot of the removal of income and asset testing for residential aged care before the noses of Grey Power and older voters. Finally tonight we see the bill. Why do we see it at this time? Why has it been rushed on to the Order Paper? Simply and utterly so no one will hear what is going on. Yes I think Grey Power and most of New Zealand expected more than this bill from Ruth Dyson. But they have got very little because the Government has not removed income testing or asset testing. 
Let me quote from new section 145(1) of the Social Security Act which is proposed to be inserted by clause 4: “An eligible person who has been needs assessed as requiring long-term residential care services indefinitely”—now that raises the question of what will happen because we do not always know whether someone will need care indefinitely so that will be interesting—“may apply at any time for a means assessment.” A means assessment! New section 146(1) then states: “The first stage of a means assessment is a means test as to assets” and new section 147(1) states: “The second stage of a means assessment is a means assessment as to income”. 
Income and asset testing remain. All that has happened is that the threshold has been lifted. Guess who did that back in 1998? National lifted the threshold then. This bill makes no changes to the actual regime of income and asset testing. It does not remove it. This Government is simply increasing the amount of assets that a person can keep. In 1998—or it might have been 1997—the then National Government did the same thing. It increased the amount that a single person could keep from $6000 to $15000 and increased the amount for a couple from $15000 to $30000. A married person with one person in care keeps the house the car and $45000 in assets. That is what the threshold was raised to then. 
 Now under this bill which does not come into force until 1 July 2005 a single person or married couple can keep $150000 in assets. The amount does go up by $10000 per year but that in no way removes asset testing. Members can just think about what a house was worth 10 years ago. Most houses have doubled in value over that time and some have risen in value a great deal more than that. So we can think about house prices now and expect them to double over the next 10 years. But assuming that the average price of a New Zealand house now is $230000 and that under this regime someone can keep $250000 in 10 years we know the house is likely to be worth a great deal more than that then. So to say that this bill removes asset testing is simply and utterly a con. All that it does is increase the amount of assets a person can keep. 
There is one very socialistic part of this bill where the Government has decided that there will be a maximum contribution that an individual can pay for any type of care: rest home hospital or dementia care. That maximum contribution will be $636 per week. Any top-up of that will be down to the Government. At the moment if someone wants to go into hospital care that is the case and that has been so since the mid-1990s. But that provision is now to be applied to rest home care. It means that if people want to pay more than the maximum—because they happen to have the money to do that they choose to live somewhere that happens to have high property values they want to be at the home that is down the road and they can pay for it—they cannot do so. They will not be able to do that under this Government. They will not be able to pay more because $636 is the maximum that anyone in this country will pay. 
What will that measure do to the industry? It will bring people to their knees in an industry that has developed and provided excellence in aged care. I have travelled through the United States through Australia and through Britain and I know that our aged-care sector has done an excellent job. Where is the freedom of choice in that and where is the equity? There is none. This Government is deciding the maximum amount that people can pay. What about the price difference between Auckland and Invercargill and the difference in investment needed to meet the cost of developing a rest home in those areas? The cost is far higher in Auckland so in Auckland rest homes would want to be able to charge more than in Invercargill. But they will not be able to do so under this Government which is going to dictate what can be charged above that figure of $636 per week because the Government will fund it. That will constrain the value of the industry but the Government does not care about the wages of the people who work in it. We have heard so much about this Government caring about workers but it does not care about the wages of those people. It is only by the sector being able to make more money that it can pay its care workers more. 
This measure is inequitable. This one rate to fit all does not fit New Zealand’s health-care sector and it will mean that we will see the rest home industry brought to its knees. The level of dependency of people going into rest home care has increased markedly. Someone was telling me just today that when that person’s mum went into care years ago she drove to the door and the home needed a certain number of car-parks for the residents. Now they go there in an ambulance because in the 1990s National put a huge amount of money into what was called Ageing in Place to pay for home care and personal care in people’s own homes. We put a huge amount of money into that. 
Hon Rick Barker 
: Wrong wrong. 
Dr LYNDA SCOTT 
: I know that happened because I happened to be a geriatrician—a doctor working in that area—at the time. I think I know a lot more than the member sitting over there on the Government benches who has probably had nothing to do with the aged-care sector in his whole life. If he wants to say something why does he not get up and actually take a call? 
The fact is that if people want to move into rest home care they should be able to pay more than the maximum if the services cost more or if it is in an area of high cost. But this Government does not understand the principles of business and it does not understand free choice. It believes that everyone should be the same and brought to the lowest common denominator. Rest homes around New Zealand have been struggling and this measure will kill some of them. 
The removal of asset testing for 50 to 64-year-olds will affect a small number of people and those are people who have things like multiple sclerosis and early-onset Alzheimer’s disease. We have yet to really determine the cost of the legislation—I see that Ruth Dyson said that it would be $110 million in the first year. Older New Zealanders need to realise that if $110 million gets spent under this legislation it will not be spent on new services for the elderly—not on carer relief not on increasing home-based care not on equipment not on more rehabilitation and not on more day care for people with Alzheimer’s disease. This is where the money will go and who will benefit from that? It is not the older person who will benefit but his or her children—it is their inheritance that will be increased. Older people need to realise that. We think that $150000 is a very high level to raise the asset level to and we consider that older New Zealanders will get very little from this legislation. 
In summary asset testing remains but the level has increased for the assets that people can keep. Income testing remains. Older New Zealanders will receive very little in the way of any new services because of this legislation. Wages will not go up in the industry and the $636 cap all over New Zealand is inequitable and will lead to industry failure. We very reluctantly support this bill going to a select committee but we will want to see major changes occur in this bill after the submission process before we can support it any further.