Social Security (Long-term Residential Care) Amendment Bill — Second Reading 
Social Security (Long-term Residential Care) Amendment Bill — Second Reading 
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Social Security (Long-term Residential Care) Amendment Bill 
Second Reading 
Hon RUTH DYSON (Minister for Senior Citizens) 
: 
 I move  
That the Social Security (Long-term Residential Care) Amendment Bill be now read a second time 
. The current legislation regarding income and asset testing of older people in residential care is unfair. Older people are required to use up their assets to contribute to the cost of their care whereas younger people do not. In deciding the best way to change the policy the Government had the difficult task of balancing considerations of fairness for older people against the significant cost of changing the current asset-testing provisions and the demands of other priorities for social spending. The New Zealand population is expected to age significantly in the coming decades. This will increase demand for funding for age-care services. So to address this in a fiscally responsible manner a staged approach to reduce the impact of asset testing has been chosen. 
 The bill sets out the residential care subsidy scheme in a clear and comprehensive manner and includes aspects of the income and asset-testing regime that are currently found only in administrative policy and practice. The regime is complex and setting it out clearly in one piece of legislation is a significant step forward. The Social Services Committee has reported the bill back to the House after receiving and considering 33 submissions. It made a number of changes clarifying some of the definitions and other aspects of some of the provisions. From 1 July next year people aged 65 and over who require residential care indefinitely will retain significantly more of their assets than under the current regime. Currently single people in care can retain $15000. Couples where both partners are in care can retain $30000 and this figure will increase to $150000 from 1 July next year. 
However the committee made a substantive change to the bill regarding the asset threshold for couples with one partner in care. It changed the provisions so that couples with one partner in care can opt instead to be tested against the $150000 threshold which will also rise by $10000 a year. I support that change. It will bring greater equity to how different types of assets are treated. It is also consistent with the asset threshold for single people and couples with both partners in care. 
We consider that it is legitimate to expect people to contribute towards some of the costs of care because those costs would need to be met if the person were living at home. As such the income test is retained. At the moment the partner of a person in care is required to contribute towards the cost of his or her partner’s care up to a maximum of $636 a week. This creates disincentives for paid work. Therefore from 1 July next year the partner of an older person in residential care will not have to contribute from his or her personal earnings from paid employment for the cost of his or her partner’s care services. People will be able to retain a substantially increased amount of assets. Income from those assets such as rent will be included in the income test. The first $780 of income from assets will be exempt from the income-testing regime each year. That is broadly equivalent to the interest generated from $15000 in the bank. 
The select committee amended the provisions regarding the respective liabilities of people requiring care and district health boards to pay for care for clarity. It is now clearer that a resident can choose to pay more for services that are additional to those covered by the contract between the district health board and the provider. The committee also amended the regulation-making power. It now provides for some of the amounts in the bill such as for prepaid funerals and gifting to be amended providing greater flexibility. 
The total cost of the changes is forecast at $110 million in the first year of implementation. This figure will rise substantially over time reflecting the $10000 annual increase to the asset threshold and the growing number of older people in our population. The Government has made separate provision for the additional funding to pay for the changes in the legislation. 
I have released a Supplementary Order Paper to the bill that addresses further issues including the maximum contribution the gifting provision and the income from assets exemption. The maximum contribution at present sets the amount at $636 a week adjusted annually in line with the consumer price index from next year. Many of the submitters commented on that to the select committee. The Supplementary Order Paper proposes that people who pay privately for their care should not be required to pay more than the Government for the same set of services. Therefore we intend to amend the maximum contribution to set it at the same level as the price of the contract between district health boards and residential care providers in each region. 
To ensure that providers are not worse off than at present where the rest home contract price is below $636 per week the maximum will remain at that level. A minor amendment is proposed to the gifting provisions. At present a person applying for the residential care subsidy can gift up to $5000 per year for up to 5 years prior to entering care. That time period and amount are currently set out in the bill but are able to be amended by regulation. For greater flexibility the Government proposes to remove that period and amount from the bill so that they can now be prescribed by regulation. As I have stated the first $780 of income from assets is to be exempt. The Government proposes to adjust this amount annually to reflect changes in the consumer price index so that the amount does not lose relative value over time. 
In concluding I sincerely thank the Social Services Committee for its consideration and amendments. I also thank the officials for their considerable work on this legislation. I commend its progress to the House. 
Dr LYNDA SCOTT (National—Kaikoura) 
: 
 This is a prime example of the “Maharey principle”. This Government is doing in Government what in Opposition it said it would not do and Steve Maharey said: “That’s just what you say when you’re in Opposition.” We heard this Government say at every Grey Power meeting from one end of the country to another that it would abolish income and asset testing. That is what it said time and time again. Then that promise was watered down to “the Government would remove asset testing”. I think that was on the pledge card. 
Darren Hughes 
: No it wasn’t. 
Dr LYNDA SCOTT 
: Well the Government said that at every Grey Power meeting. I was at many of them and that was said from one end of the country to the other. The problem was that when Labour got into Government it found out that the cost would be phenomenally high and it backed down on that promise. The Government has spent 5 years getting to this point with continual promises. Now it has added a gradual phased process and Grey Power is not happy because the Government has broken its promises. 
Ruth Dyson said that the Government wanted to contribute in a fair way to older people and to other social spending. The amount people can keep in assets has been increased to $150000 which means that the cost to the Government will be $110 million in the 2005-06 year. But this Government along with not keeping its promise on asset-testing removal has not invested in other aged-care services. 
Grey Power said that today it has joined the growing campaign seeking urgent funding support from district health boards for elder-care facilities. District health boards now look after aged-care funding and they have offered a 1 percent increase in fees nationwide. This Government has kept money that should be going into all sorts of aged-care services simply and utterly for that promise—one it is not even fully delivering on. 
Since 2001 rest homes have been faced with an increase of 1.83 cents per unit in the cost of electricity. Rest homes now have to provide transport and a support person to accompany any resident who goes to a specialist medical appointment and that cost includes the time of that person away from the hospital and the need for replacement. Often the cost can be up to $100 per trip. The cost of cleaning and other products used has gone up approximately 15 percent. The cost of medical supplies incontinence products and doctors’ visits have all increased markedly. While rest homes are funded for $12 per visit visits now actually cost between $20 and $30 depending on the time of day. Then there is staffing. The Government has not been able to increase the level of funding for staffing. 
So this Government has not been investing in the care of older people when those people go into rest homes. It is all very well to say that older people can keep more of their assets but those rest homes have been run down considerably under this Government. It does not care about older New Zealanders. Grey Power national president Graham Stairmand said the 1 percent offer was not fair or equitable and demonstrated that the Government did not value elderly people. The head of Grey Power said about this Government that it should stop being complacent. 
Inflation as we know is running at around 3 percent. An offer of 1 percent will lead to the closure of homes—indeed we already know that the Mary Potter Hospital in Christchurch is going to close. That hospital has been there for 90 years. Since 1913 it has been run by a Catholic order of nuns. Now 68 frail elderly people are going to be kicked out because the order cannot manage to keep the hospital going. It cannot be said that the hospital is making a profit because it is not. We have also seen that Presbyterian Support has sold its facilities in Nelson-Marlborough Canterbury Hamilton Tauranga Thames Whakatane Kerikeri and Auckland. Why? It is because this Government does not care about the elderly. It is all very well keeping this political promise in a half-hearted sort of way but when people actually get into elder-care homes they cannot get decent care because the homes are not being funded. 
This Labour Government had better just shake itself up because Grey Power now thinks the Government does not care about the elderly and that is true. The managers of those homes know they cannot deliver quality care with the level of funding they get and we all know that district health boards are in deficit are cash-strapped and cannot offer any more. We needed this Government to give more funding to aged care but it has kept the money to deliver on an income and asset-testing promise. 
The Government said originally it was going to fund $200 million. We hear tonight from Ruth Dyson that it is $100 million. What happened to the other $100 million? It was not spent on dementia units where our frailest elderly are kept. It was not spent on our home carers. 
What about the carers? This Government has previously said it stood up for carers but what happens now? There is no increase in funding for our carers—not those who care for the elderly so they can stay in their own homes. In 5 years there has been no increase in the earnings of carers. I point out that carers in rural areas travel a long way to give somebody a shower help with a dressing or with medications or cook a meal. They do not get funded for their transport. They earn $10 an hour and out of that they have to pay for their transport. 
Rural Women New Zealand is saying that that situation cannot continue. Grey Power is saying that the situation cannot continue. This Government has not been funding elderly people’s care. The Government has been keeping that money to pay for this promise but it is a broken promise and only half-heartedly delivered. 
I want to say what a National Government would have done. Indeed when we were in Government we increased the income and asset-testing level—the amount that people can keep. That is quite justifiable which is why we have been supporting an increase in the asset-testing level. But getting the balance right between the other areas of aged care—equipment management home support carers carer support dementia care hospital care and rest-home care—is where the extra money needs to be. So we would not have raised the level as high as this but we would have made sure that extra money went into aged-care services. 
If someone is looking after a husband or wife who happens to have dementia then the carer needs support. Elder-abuse services have not had that support. The National Government set up 20 elder-abuse services in this country. They have not had any increased funding or any expansion. We all know that elder abuse is increasing especially financial abuse but we have not seen any increase of funding in that area. 
What have we seen from this Government in relation to aged-care services? There has been nothing—no increases in any other form or shape—and we have Grey Power saying that this Government does not value the elderly. Grey Power wishes to see an increase in that area and it says there are 800 aged-care providers in this country and they have 25000 staff. Public hospitals used to provide the level of care for our very frail elderly people then those people were moved into residential facilities in the community nearer to their families. I thought it was a very good idea when I was working as a geriatrician and fully supported it. But these nursing hospitals have nurses in them. Such hospitals have to have registered nurses but they cost money and these hospitals can no longer afford to pay for staff members at a level sufficient to recruit staff. 
The issues of recruitment and retention of carers and nurses in our aged-care sector are at crisis point. I have here an article in my local paper: “Aged-care operators may quit”. This appeared just 2 days ago. Throughout the country every MP will have people knocking on their doors. Every MP will have people calling in to say that their aged-care sector is under immense pressure and this Government is doing absolutely nothing about it. The wage that staff in rest-home care get paid per day is $78. That is low. It has been held at that level for the whole time this Government has been in office. 
We know we have an ageing population and that that puts increased pressures on the sector. We must make allowances for that but we must care for our frailest elderly in this country and help people to stay in their homes. This bill is just a broken promise by this Government. 
DARREN HUGHES (Labour—Otaki) 
: 
 Of all the issues for the National Party to attack a Labour-led Government on those concerning older people would have to be the last that that party would have the gall to raise on the floor of Parliament. That is the party that promised in 1990—“no ifs no buts no maybes”—that the surcharge would go. That was the party that in coalition with New Zealand First in 1996 promised that party it would abolish asset testing and income testing not just in the public sector but also in the private sector. That is the party that now in Opposition will not even tell older New Zealanders what its policy will be on superannuation. That is the party that when Mrs Shipley was its leader cut superannuation for older people. So as we approach the second reading of the Social Security (Long-term Residential Care) Amendment Bill I am sure the House will forgive me if I am a little bit cynical that National Party speakers have the cheek to get up and criticise the performance of the Labour-Progressive Government. 
This bill improves the situation for older people. Every time we deal with matters affecting older people we make things better for them. We might not deliver nirvana we might not make absolutely everything perfect but we improve their situation. We leave them better off as a result of our policies not worse off. The National Party’s record every single time it has tried to do something for older people is that it has made them worse off. It is no surprise to me that the National Party could find only one of its retiring members of Parliament to stand up tonight and attack this legislation because in my electorate of Otaki which has the highest number of people over the age of 65 I know that this bill will make a difference. I know that this Labour-Progressive Government is introducing legislation that will improve life for older people just like we improved it when we increased superannuation in 2000. 
This Government helps older people. We are on their side and National Party members should plead guilty to their years of neglect decline and absolute betrayal of older New Zealanders. 
BILL GUDGEON (NZ First) 
: 
 Dotted throughout the country are people who have gone without—especially people living in rural areas. A lot of them still carry water from the creek to wash their clothes and live in housing that is not up to standard. Many of them take risks with their health in not visiting their doctor about problems with their eyes or other matters and also in attending to their household shopping. Many because of the state of their health are unable to read their prescriptions properly or to take the advice of their doctor and carry out the instructions. I would say that most of the elderly in this country have done their share. They have worked very hard and they have played their part in the economy. Many have received a good education but because of their financial situation they have had to rely on other sources and means to survive. 
As I listen to the comments being made by members from the Government and the Opposition I realise that it is all about throwing stones at each other. Why are we not taking care of the elderly? I know and understand that Grey Power people are not happy with the decisions that have been made because to them a promise is a promise. At the last election a promise was made and not carried out. So why are the people who are in this category and at this stage of life dismayed at the decisions being made by the people in power? Most of them are honest law-abiding citizens. They need help and that is what we are here for. 
I refer to the purpose of the bill. The aim of the bill as introduced is to amend the Social Security Act in relation to the income and asset testing of older people who have been assessed as requiring long-term residential care indefinitely. In particular its aim is progressively to increase the assets people may retain before being required to use them to pay for care. Another purpose is to remove asset testing for people aged 50 to 64 who at present are required to use their assets to pay for their care. The other purpose is to exclude from the income test the earnings of the spouse of a person in care and the first $780 per person per year of income from assets. 
What are the main changes in the bill? Listed are changes that affect the accommodation supplement the disabilities allowance and beneficiaries in hospital. If these people are to survive comfortably until the end of their days on this earth they should be taken care of. They have contributed to the tax take of this country and to its exports and imports. They have paid taxes all their lives and they need to be taken care of. Although New Zealand First has disagreed with the promises the Government made and is disappointed in them we support this bill because of the steps being taken to look after our elderly. They are steps in the right direction. But let me say this to the Government: they need to improve greatly. 
I am not here to throw stones at the Government. My responsibility as an Opposition member in the New Zealand First Party is to remind the Government of its responsibilities in its administration and care of our people. This goes right across the board. Some of the people we see when we travel to rural areas are still living in the 1930s and the 1950s—and we say we are taking care of them! Do we take care of them only to get the vote and after that wash our hands of them? We have to face the issues of where we will take care of our people. If the responsibilities are ours then we should carry them out to the best of our ability and with honesty and integrity. 
Grey Power people have not been happy. We see this when we visit the different electorates. They ask: “What are you going to do New Zealand First?”. We will challenge the Government on the issues just as we have in the past. The Government needs to be reminded that if it is going to make promises then it has to keep them. If the Government makes promises before the election those promises need to be followed up. [ 
Interruption 
] Yes we will carry them out. 
Why do beneficiaries who are in hospital have to struggle to be taken care of? I remember a lady who was not allowed to drive because of her eyesight. Her nearest shop was about 45 to 50 kilometres from where she lived. She went to the hospital on the East Coast but it could not do anything for her. She then went to the hospital in Gisborne and it could not do anything for her until her doctor asked: “Why is it that these operations are costing less overseas than the operations our people are paying for here?”. When that was revealed her operation was taken care of. It did not cost what initially it would have cost had she had been by herself. 
That is just one of many many examples of the issues our elderly folk have to put up with because of decisions made not only by this Government but by the previous National Government. We have supported decisions that have been good for the public and I say to my fellow colleague on the Government benches that we will continue to do that. It is not like the docking of tails. Why? We have been doing that all our lives on the farms. [ 
Interruption 
] Is the member going to say that to the farmers? 
Dianne Yates 
: Farmers don’t do it. 
BILL GUDGEON 
: The tails still get docked. New Zealand First will support this bill with the recommendation that the Government will improve on the decisions it has made. That was our decision in the Social Services Committee and we will continue to follow up on the issues. Hopefully elderly members in our community will be in a better situation than they are at the moment. We hope they will flourish and continue to flourish and that their health problems and whatever else they need to be taken care of will be taken care of. 
SUE BRADFORD (Green) 
: 
 As I pointed out when this bill to amend the asset-testing regime for older people was first introduced to Parliament 9 months ago the Green Party cannot help but give qualified support to this legislation given that it is our policy to abolish asset testing for residential care for the elderly. Like many submitters to the Social Services Committee we see the current asset-testing regime as iniquitous discriminating as it does against one part of the population—the elderly. In 1999 the Labour Party promised to remove asset testing. At that time Labour seemed to appreciate like the Greens that older people have already spent a lifetime paying taxes which they presume will assist with their care and support in later life when they need help the most. Through the asset-testing system they become now the only category of citizens who have to pay twice for long-term residential health-care—once out of their taxes and then all over again if they have sufficient income and assets basically to be taxed twice. 
Like many submitters the Green Party recognises however that while this bill is far from satisfactory in that it does not remove asset testing altogether or solve the other very real problem of adequate funding for residential care all round it does take significant steps in the right direction. These include progressively raising the value of assets that people can keep before they have to use them to help pay residential care costs removing asset testing for people aged 50 to 64 who currently have to use what they have to pay for care by excluding the spouse of a person in care from the income test by making $636 a week the maximum contribution payable and by a number of other measures intended to make the system somewhat clearer and simpler to administer. 
The Government has made it clear that the reason it cannot go further or even all the way towards redeeming its own election promise to end the asset-testing regime lies purely in the cost. The Green Party recognises that while we can and should continue to press Labour to go further in this direction we have to be realistic too and to some extent at least accept the fiscal constraints under which the Government is operating. The fact that the Government cannot or will not go as far as we would like does not mean that we should not support this bill. After all many many of our older citizens and their spouses will breathe a huge sigh of relief once this bill becomes law and I do not believe there is any virtue in standing in the way of that positive outcome. 
We have also taken on board the submissions and other representations from the many rest home proprietors who express anxiety about the future of long-term residential care in this country because of inadequate funding and other matters. In particular we note all the submissions that stated that the $636 a week cap is unrealistic in that if inflation had applied over the last 10 years the rate would now be over $750 a week. 
 However the Green Party recognises the positive commitment by the Government as outlined in the commentary on the bill in which the select committee was informed that Cabinet is considering this issue further. What is more I also note our recommendation to alter the bill’s commencement date to 1 July next year which will mean that the bill comes into effect on the date that the maximum contribution rate will have had its first consumer price index adjustment upwards. 
There is no getting away from the fact the bill does not even attempt to resolve the difficult issues underlying and surrounding it. Discrimination against the elderly should be carefully and deliberately phased out over time. Above all we should look seriously at what alternatives there might be to the current rest home funding model. Why are property value gains excluded from the equation when taking into account rest home profit and loss? Do we ever stop to consider that the quality and cost of residential care might improve along with staff wages and conditions if perhaps the Crown provided land and buildings for rest homes in the future just as it does with State housing hospitals and schools? We need to find a more equitable long-term solution to the current inequities and difficulties in this sector but it is not the elderly themselves who should continue to bear the brutal costs of a discriminatory regime. This bill does make progress but from whatever perspective one likes to take it we still have a long way to go. 
Dr MURIEL NEWMAN (Deputy Leader—ACT) 
: 
 I stand on behalf of the ACT party to vote and speak on this Social Security (Long-term Residential Care) Amendment Bill. The ACT party will not be supporting the bill. However it is important to remind listeners and the Government that when a political party campaigns on a promise such as removing income and asset testing which the Labour Party campaigned on in the lead-up to the 1999 election then the public of New Zealand should be able to expect that promise to eventuate. We have to look back and ask whether Labour did anything by the last election. The answer is no—absolutely no. Here we are almost upon the next election and it has introduced this bill on long-term care but does the bill remove income testing? No. Does it remove asset testing? No. Is it good legislation? No. Should it be supported? No. What will the bill do for New Zealand? It will put an enormous cost burden on younger New Zealanders forever because once Parliament brings in these types of laws it is very very difficult for future Governments to repeal them. 
This bill is a cold clinical political move by the Labour Government to buy the retired voters of New Zealand. It is the most clinical legislation that has yet come through this House. It is not driven by any passionate desire of Labour to bring in laws to sort out a problem based on need. No the legislation is being brought in to sort out a problem based on voter support at the next election. 
This essentially means that this Labour Government will take money off families who are struggling to pay for the residential care of people who in many many cases could well pay for it themselves. One has to ask oneself whether that is fair. Should laws be fair? Yes they should. Is this a good fair law? The answer is no. 
If one thinks of those New Zealanders who at the moment are having a bit of a tough time—I tend to think of those who are coming out of universities polytechs and training programmes with big student loans; they cannot even afford to have children or buy a house—it is those people who Labour wants to pay more and more tax to fund New Zealanders who could care for themselves. It is not based on need. That is the problem. If laws are based on need then I think most parties believe it is fair to support them. This one is not based on need. 
If we look at the numbers we see that the costs will be $110 million in the first year and $126 million in the second year. It has been estimated that 15 years on this law change will cost $350 million. The number of New Zealanders who are retiring every year is about 15000. In 30 years’ time that number will almost quadruple. It will be almost 60000 a year. One would have to say then that the cost of this policy will be more than $1 billion a year. Can the country afford it when we have an ageing population and our birth rate is not even keeping up with the number of people who are moving out of the workforce? The answer is no. This is a policy that will help bankrupt this country in times when we do not have an economy as buoyant as today. 
This bill makes a huge rod for the back of taxpayers. In question time in Parliament today we heard that the average household in New Zealand today pays 46 percent of its income in tax. Forty-six percent of everything the average family in New Zealand earns today is paid out in tax and that is without this bill in place. When the impact of this legislation bites hard we will find families paying well over half their income in tax to the Government and that will not even include all the other charges that families have to pay such as rates petrol tax and all the other levies and hidden stealth taxes that Governments like the Labour Government introduce. 
When will the burden stop? When can working families think to themselves: “Thank goodness we haven’t got a greedy Government that will try to take more and more of what they earn.”? The only time that will stop is when we have a change in Government. So for people out there right now who feel they are struggling who feel they are working harder and going nowhere the only answer is a change in Government. 
Already we have 62000 New Zealanders on waiting lists waiting for operations. Why does the money that this Government is putting into ill-advised legislation not go into helping those people on hospital waiting lists get fixed or into getting the health care they need? But no the Government is happy to see them in pain and suffering because it wants to buy the elderly vote. 
Ordinary people around New Zealand are fearful. They are afraid at night and go around their houses checking that all their windows and doors are locked. The reason is that New Zealand is one of the most under-policed nations in the Western World. We would need another 2500 police to match the policing levels in Australia. Why does the Government not put some of the money that is going into bad legislation into funding the police properly so that New Zealanders can feel safe in their streets? 
If Government members sneer at that then I want them to know that in Whangarei where I live this year alone we have had 14 armed robberies and that is in a town that has had only one armed robbery over the last number of years that anyone can remember. Since February there have been 14 armed robberies in that town alone and that is during a time when the Government has chosen to take three police officers off the beat reducing the number to one and when it is disestablishing the drug squads. We know that the problem is the methamphetamine epidemic that is taking over New Zealand. This Government should be putting money into initiatives to keep New Zealanders safe instead of putting it into legislation that will bankrupt our country in the future and that has no sound principle except a huge huge election bribe driving it. 
This is intergenerational theft of the worst order. This Government is making working New Zealanders who are struggling to raise families and to pay mortgages student loan debts and all the other bills they have pay for people who are at the other end of their life. Elderly people may have $150000 sitting in their bank and we are not asking them to contribute to their own care. I think the Government should stop and think about what it is doing. The Committee of the whole House is ahead. It could still pull this bill realising that it is not fair to burden New Zealand with the cost of this legislation. 
I finish by asking whether we can trust this Government. I want it to tell us what has happened to the $7 billion surplus from the last Budget. Where has the $7 billion gone? I think it has squandered it away. I think that that money has vanished with nothing to show for it. This is a Government that one cannot trust. It is putting through legislation that will be too expensive for a small country like New Zealand to cope with especially when we have an ageing population and a shrinking workforce. If this Government cared about those elderly New Zealanders it would cut taxes and allow people to plan for their own retirement so that when people did retire they would be wealthy and well able to cope with what lay ahead. 
PAUL ADAMS (United Future) 
: 
 Poor Judith Collins! She has been so patiently trying to get a call. 
Lianne Dalziel 
: I would rather listen to you dear. 
PAUL ADAMS 
: I thank the member. This bill is interesting. I found it a very interesting bill to deal with at the Social Services Committee. I heard young Darren Hughes the only passionate member of the Labour Party speak on this bill. He probably looks at me and thinks that I am elderly also. I say to him that one thing about becoming old—as long as one does not die in a crash or something else—is that it happens to us all. 
It is interesting to think of the people this bill will affect. They are people who have lived through a period of time that has probably seen more changes than any other generation. I think of my children’s great-grandmother. She recently passed away at 98 years of age. She saw many changes in her generation yet she still had certain principles in her life. Even in her latter days when she was living by herself in her own home on her little pension she was still able to pay out cash from the savings that she had prudently put away to her many children grandchildren and great-grandchildren. 
This legislation deals with those elderly people. If we are honest we would say that there are two areas of society that we really need to take care of: children and the elderly. In many ways there are similarities between the two groups. Little children do not understand every issue of life and they can often be confused and fearful if they are not understood. Likewise as we age similar concerns can come back to us. In other words we can tend to become like little children in our old age. Therefore I think that if we are to be a responsible Parliament passing legislation that affects the elderly we must be concerned with all generations yet too often we look at things and ask what they will cost us now. Sometimes things do need to cost us now. 
As has been said by previous speakers many of the elderly have worked very hard. Many of them have contributed greatly to our country. Many of them have raised their children well and many paid a tremendous price as they lived through the Depression and wars. Yet I have noticed as the bill was going through the select committee that while United Future is supporting this bill—because we absolutely support the removal of asset testing on our elderly—the Labour members of the House have been very quiet with regard to broken promises. I do not think it is acceptable for Labour members to say: “Well we didn’t say exactly that.” I say to Darren Hughes that in the simplicity of campaigning people understand what we are saying. They understand a broken promise. 
I think the Labour Government needs to look at what has happened in the elections in the United States and Australia. People have been getting tired of all the testing with regard to families and society in general and they are swinging back in a huge way to a more conservative view on life. Some parties in this House are taking no notice of that. I want to address the press tonight and say that they are taking no notice of it. I point out to them that they have missed it in every election in the United States and Australia of late. They need to wake up and understand that there is a swing in this nation that will gain momentum. It will not slow down. People are becoming concerned about their families. 
What frustrated me during the select committee process was that we would continually hear something brought forward—for example the issue of rest homes and their daily rate of pay—and were told that that was nothing to do with this legislation; that it was Government policy and that we could not address it. If as we now understand those major issues facing the care of our elderly in this nation are Government policy then I encourage the Government to address them. Rest homes are businesses. There is nothing wrong with making a profit in business but those rest homes are competing for staff such as nurses and others who are needed to care for the elderly. The staff are unable to get an increased income until the Government decides to change the policy. It needs to be done this side of Christmas but I suspect after reading these Supplementary Order Papers that it has already been pushed way out into the new year. I say to the Government that that is totally unacceptable. The elderly in this country deserve to be cared for correctly and properly. They need to know especially if they are prepared to contribute to their own costs that they can have the type and standard of life in their latter days that they desire. I think that to treat them like a political football is absolutely disgusting. 
This bill was not contentious at the select committee. I notice that the only minority view is from the ACT party which opposes the bill because of the asset-testing scenario. I think that in general all members on the select committee were frustrated that most of the submitters’ concerns on the issue of caring for the elderly in this country were thrown straight back at them with the explanation: “That is Government policy”. If this Government is interested in Grey Power members and in the elderly in this country then all members in this House need to put pressure on Cabinet to address those issues because they certainly need to be addressed. 
We have an ageing population. Surely the Government wants to make sure that long-term residential care systems are in place and that care of the elderly becomes a growth industry. There will be more elderly people in the future yet I have heard as I have visited rest home after rest home that many are having to close their doors. At two or three rest homes I have been to people have said that it would be best to stop caring for the elderly and put the rooms out as student accommodation instead. In Auckland for example where there is Massey University and Auckland University the owners of many of the facilities that currently care for the elderly could make far more money by turning their properties into accommodation for students. 
One thing that did impress me about the owners of all those homes is that they would do that as an absolute last resort. Those people are not in that business because they want to make money. The people who work and labour in those homes have a personal relationship with their customers. They know them by name they know their various needs and they know their various medical requirements. They really do love those people and those people love them. The rest home is a place where they can gather and have social contact. They can have games together and go on visits together. 
I believe that the Government which is failing to address the urgent issues that are currently before it needs to hang its head in shame. The select committee could not address those issues much as we wanted to. The select committee—and I believe this was the case across all the parties—could hear the heartfelt cry from those people. We could see the need. As I listen to the Government members tonight it absolutely amazes me that this disgusting state of affairs is taking so long to be addressed. The Government needs to address it and needs to do so tonight. 
United Future is supporting the bill because at least the bill is going in the right direction with regard to the removal of asset testing. But that is not the major problem that is currently facing the many elderly people and the many rest homes in this country. I challenge the Government tonight. We will support this legislation but when will the Government address the parts of its policy that only the Government can address? Will the Government do so this side of Christmas? Will it bring some relief for the elderly? 
NANAIA MAHUTA (Labour—Tainui) 
: 
 This bill signals yet another election commitment by this Government that has been kept. Can we fix it? Yes we can. Will it matter? Yes it does. Is this a Government that cares? Yes it is. Around 31000 older people will benefit from this bill. That amounts to about 7 percent of our population. In 1999 the Government promised to introduce legislation to remove asset testing from all forms of long-term care for older people. This bill is a step in the right direction. Asset testing is unfair. If only Maori lived to be 65 and older they would get the benefit of this legislation. If only Maori had assets valued at above about $200000— 
Lianne Dalziel 
: Who put asset testing in? 
NANAIA MAHUTA 
: The previous National Government did. When that Government introduced asset testing in no way at all did that benefit Maori. I hope that in the years to come we will have a lot more Maori living beyond 65 and realising the benefits of this legislation. Having said that it is a step in the right direction. It is a step that clearly signals that we are moving towards a fairer system. Although the policy contained in the bill will not be retrospective—it will be implemented on 1 July 2005—it is a good bill and a step in the right direction. It will help many older people and it will make a difference to many people. 
Pita Paraone 
: What about Maori? 
NANAIA MAHUTA 
: As soon as Maori get out and walk the pavements and live to a ripe old age they will certainly reap the benefits of this legislation. 
JUDITH COLLINS (National—Clevedon) 
: 
 The debate tonight has been very interesting. I particularly enjoyed the contributions of Paul Adams from United Future and of Dr Lynda Scott who speaks from the experience of being a geriatrician and a member of the Social Services Committee which dealt with the bill. I was on the select committee for the submission part of the process along with Paul Adams. The bill is a disappointment in many ways. I think we should acknowledge that there are some good moves in it but it is a tragedy that people are now being told that they will be able to retain some more of their assets when they go into a rest home when all around the country rest homes are in absolutely dire straits and are looking to close. The submissions to the select committee on the bill were an absolute eye-opener to me. Like many people in this House I had parents who were elderly before they passed on but I was certainly not aware of the dire straits in which many rest home owners and the people who work or live in them find themselves. That is because my mother always used to say to me when I was a little girl growing up that I should never put her in a rest home—and of course I never did; none of my family would ever have done that. 
One of the best things about the asset-testing regime is that it actually acknowledges that most people wish to age in their own homes with their own families. One of the really good things about the programme that National brought in in the 1990s is the ability for caregivers to come into the home so that people can age with dignity in their own homes. But there comes a time—and I certainly heard this from the submitters—when many people who are near to the end of their life simply cannot manage in their own homes and need to go into much more intensive care than they would have needed on average some 20 years ago when people often stayed in rest homes for 10 to 15 years before they passed on. We now find that people are often much sicker much older and much nearer to the end of their life before they enter a rest home. I understand—and I am sure Dr Scott can correct me if I am wrong—that the average time for a resident to be in a rest home is about 3 to 6 months. 
Dr Lynda Scott 
: In geriatric hospitals. 
JUDITH COLLINS 
: That is on the geriatric side. Consequently the costs involved for rest home owners have grown significantly. We have all been inundated by letters from rest home owners and from residents themselves about the dire straits that the owners are in. 
I was shocked that The Salvation Army came along to the select committee and said that it was thinking of closing its homes because it could not afford to keep them open. It is an appalling situation that such not-for-profit organisations are the very ones that are finding it harder and harder to keep their premises open and continue their operations. The Government has set in law a figure of $636 per week for the care of the elderly. That is the same as it has been for the last 10 years Mr Assistant Speaker. You may well raise your eyebrows at that and so may we all raise ours. The fee has been the same for 10 years. As Dr Scott quite rightly pointed out it is $78 a day. That is less than the cost of a motel that provides no care whatsoever. It is totally unfair to expect rest home owners who have to have qualified staff including registered nurses on at nights and other times—qualified enrolled nurses and caregivers who are now going through a qualifications process which is as it should be—to operate on that basis. Because the Government is so mean about giving people a fair go when it comes to paying for the costs of care rest homes are being run down and driven to the wall while all the time the Government consistently increases the costs for those small businesses—and it certainly has done that. 
I have had information given to me by a rest home which states that there was in fact a review by PricewaterhouseCoopers over 3 years ago and it showed that a 20 percent increase in funding was required then. Since then rest homes have not had anything. They have now been offered a 1 percent rise to pay for the additional costs and that is a total and an absolute insult. We have had the caregivers from those places coming along to the Health Committee and saying to us that they need to be given decent wages—and they do. Some caregivers who work in rural communities and who work outside the residences—the people who have to travel in their cars and get themselves to one home after another—are not getting any more after they pay their petrol money than about $4 or $5 an hour before tax. That is an absolute disgrace. This Government has sat there for 5 years and mouthed on about what it will do for the elderly yet it has allowed that situation to continue. Government members talk and talk about giving caregivers qualifications and about doing all sorts of lovely things like that but that does not pay the bills. Those people get $5 an hour for the hard job of looking after elderly people and making sure that their health is not worse today than it was yesterday. They often have to do all sorts of housework for them and to lift them in and out of the bath. 
Caregivers are being abused by the Labour Government which refuses to treat them with decency and honesty. If it does not have the money to increase the payment for care it should tell them so. But we know that the Government does have the money for that. The Government has more and more money for all sorts of little schemes that may win it a few votes yet it continues to treat caregivers like dirt. It does so mainly because the unions have sucked in those poor workers who think that the unions are on their side. If the unions were on the caregivers’ side they would be taking some action against this Government. They would be marching in the streets and I would be there with them. Those people are being abused and used practically as slave labour by the Labour Government which will not do a thing to help them because all that it is concerned about is sucking up to its mates. The Government thinks it can take those poor people for granted. The unions sell caregivers a T-shirt with a union logo on it and those poor people are supposed to think that the unions are on their side when they are not. The Labour Government has the power to do something about the situation—and it does have the money for that because it has so much in the way of taxpayers’ money—but it will not do anything for those workers. It is just not fair that caregivers are being treated like that day in and day out. 
Then we get this paltry pathetic excuse for a bill and we are all supposed to become excited about it. The only thing that I get excited about is the way that caregivers are being treated. 
Lianne Dalziel 
: Who brought in asset testing? 
JUDITH COLLINS 
: That member Lianne Dalziel turned up with a petition at the select committee. She has told us time and time again that she supports caregivers. I ask her who brought in the $4-an-hour pay rate for them. That member has been in power for 5 long years and she sits in the select committee and bleats on that she is there for the poor caregivers. Lianne Dalziel has been in Government for 5 long years and the Government has not given one thing to caregivers. Labour takes caregivers for granted and does not care one scrap for them because they are nice honest decent people who care about the people they are looking after. 
This bill is an absolute travesty. It does not go nearly far enough for the working people whom it should be for. It is all about giving them a little bit and making them think that that is OK. It is not OK—it is definitely not. 
SIMON POWER (National—Rangitikei) 
: 
 I am delighted to take a call on the Social Security (Long-term Residential Care) Amendment Bill. I find myself taking a very keen interest in this bill at short notice. The thing that I am most looking forward to about this bill is not the discussion or the debate that we have in this House but more particularly the debates and discussions that will occur on the platform during the election campaign next year when we are able to have a discussion with the public on the issues around the Government’s original promises to remove income and asset testing. I am very much looking forward to asking the Labour candidate in my electorate exactly how that candidate along with previous candidates and MPs who are currently in the House has got around the issue of having stood on a platform of removing income and asset testing when that has not occurred. 
But the Labour Party did not just quickly scuttle to the current position that we see before us in this bill. We have seen a series of scuttles occur since 1999. Initially the promise was held out to the elderly of New Zealand that income and asset testing would be removed. Then the Government softened that position considerably and said it would simply remove asset testing. Then it changed its position again by saying that it would keep the regime for asset testing in place and raise the level of assets that an elderly person can keep to the $150000 mark with $10000 a year added to that. But that is not what Labour MPs sitting in this House promised the elderly of New Zealand prior to the 1999 election. 
I tell members opposite that they and the candidates they choose in electorates around New Zealand during the general election next year will have to face down the question as to how they campaigned in 1999 to remove asset and income testing which they did not do. Those candidates and sitting MPs will have to face down the question as to why asset testing was not removed. Then those candidates and sitting MPs will have to face down the question as to why that regime has remained in place. 
National will not sit silently at those meetings and let those candidates get away with convincing the elderly of New Zealand that they have their best interests at heart. We have seen here a direct and unequivocal broken promise from Ruth Dyson. To be honest I would have expected more from Ruth Dyson. Members can say what they like about her but I would say that she is a bit of a straight shooter. I am pretty disappointed that we now find ourselves in this situation. I do not believe for one moment that Ruth Dyson is happy with this. Minister Dyson should not grin across the House. I would think that she feels completely bought off and cheapened by the little scuttle-bug deal that has been done to pull up short on promises to the elderly people of New Zealand. Although I do not agree with a lot of Ruth Dyson’s politics I know that she will not be happy with this because she has a reputation as being a bit of a straight shooter and this legislation sells her considerably short. I think that is a shame because Minister Dyson had the opportunity to fulfil the election promise of 1999 to the elderly people of New Zealand and she has been pushed out by the rest of the Labour Cabinet to take the fall with the senior citizens around this country. 
Ruth Dyson is the person who will have to front up during the election campaign and give the answers to questions that she wanted to answer completely differently had she not been the fall person for this miserable Labour Government. On one hand it takes $7 billion worth of surpluses from the hard-working taxpayers of New Zealand and on the other hand instead of redistributing that money in a way that many of the Labour members would feel proud of and which is in keeping with the great Labour mantra of redistribution it does nothing—despite having run two election campaigns with promises of scrapping asset and income testing. 
That will be this Government’s legacy. If it was able to stand on a platform and say that it is genuinely a party that believes in the redistribution of wealth and with one hand it will take $7 billion of taxpayers’ money but with the other hand it will farm it out to the elderly of New Zealand then whether or not people agreed with it that is a genuine political philosophy that other political parties in this House—not National—may hold to. But it cannot even do that with honour. It takes with one hand and it holds on with the other hand. Ruth Dyson is the fall guy for this legislation which can be summed up in a series of very simple words: broken election promises. 
A party vote was called for on the question that the Social Security (Long-term Residential Care) Amendment Bill be now read a second time. 
JEANETTE FITZSIMONS (Co-Leader—Green) 
: 
 I raise a point of order Mr Speaker. Please could I register a vote? I did not hear the call to vote because I was speaking to the Minister about the bill. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: Yes. Please exercise your vote. 
A party vote was called for on the question  
That the Social Security (Long-term Residential Care) Amendment Bill be now read a second time. 
Ayes 111 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Progressive 2; Maori Party 1. 
Noes 9 
ACT New Zealand 8; Independent: Awatere Huata. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I raise a point of order Mr Speaker. I would appreciate your guidance on the issue that has just arisen. I accept that it is now past so I am looking to the future. As I recollect the situation and I have been in the House it seemed to me that a party was not present in the House while a vote was taken. A member of that party then came into the House and sought to lodge a vote. That would seem to me to be inconsistent with the Standing Orders and I would appreciate your guidance on the matter. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: The member was present in the House before the vote was concluded and accordingly I allowed her vote. 
Jeanette Fitzsimons 
: I raise a point of order Mr Speaker. Could I please just clarify that I was present in the House and have been since 5 minutes past 9 not just before the vote was concluded. I was speaking with the Minister about the bill itself. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: I accept that. I said that the member was present in the House at the required time. 
Dr the Hon LOCKWOOD SMITH (National—Rodney) 
: 
 I raise a point of order Mr Speaker. I am just seeking your guidance so that we understand how the Standing Orders are applied. If you have called a vote and a party is not present in the House when you call that party and if a member of that party subsequently comes into the House is it in order then for that party to seek to be able to lodge a vote? What is the ruling in respect of that? Obviously while it is not particularly important on this vote one can imagine a situation where it would be important and I wonder at what point is the cut-off for a party to come into the House to vote. 
The ASSISTANT SPEAKER (Hon Clem Simich) 
: This does not concern Jeannette Fitzsimons of course but it is as long as the member who wishes to vote is in the House before the vote is concluded. That would be my interpretation of it. We could look at it further but that would be my interpretation. As long as a member is in the House before the vote is concluded. So we have proceeded correctly.