Social Security (Long-term Residential Care) Amendment Bill — In Committee 
Social Security (Long-term Residential Care) Amendment Bill — In Committee 
[Volume:622;Page:17346] 
Social Security (Long-term Residential Care) Amendment Bill 
In Committee 
Debate resumed from 30 November. 
Part 2 Amendments to principal Act ( 
continued 
)  
SIMON POWER (National—Rangitikei) 
: 
 I find myself taking a keen interest in the bill and an even keener interest in Part 2—which of course is where we are up to at present. I note that Part 4 the three schedules and of course the title clause still have to be debated prior to the conclusion of this matter. Turning specifically to Part 2 it seems that the Social Services Committee spent some time on proposing minor amendments to the principal Act relating to— 
Hon Ruth Dyson 
: Part 3. 
SIMON POWER 
: Yes quite right—but in Part 2 of the bill. Perhaps the Minister in the chair the Hon Ruth Dyson would like to take a call and clarify the issue for me. This part makes minor amendments to the principal Act relating to new Part 4 which is as the Minister rightly points out now in new clause 3A. Specifically and interestingly it repeals paragraph (c) of section 61EA(4) of the Act and substitutes a paragraph that unequivocally states: “is a resident assessed as requiring care (as defined in section 136)” of the principal Act “in respect of whom a funder (as defined in that section)” which is presumably section 136 of the principal Act “is paying some or all of the cost of contracted care services (as defined in that section)”—which is presumably again a reference to section 136—“under section 141 or section 142;”. To the uninitiated in respect of this bill that amendment may at first glance appear confusing. That would be understandable but legislation such as this needs to be if nothing else clear unambiguous and easy to follow. 
I noted last night that when we were debating this bill in Committee the Minister was reluctant to take a call although members of the Opposition who have extensive knowledge of these matters were contributing to the debate on Parts 1 and 2. I do not fit into the category of being a member who has extensive knowledge of these matters so I ask the Minister directly to take a call and explain the impact of the new provisions in Part 2 to the uninitiated—in other words to all the members of the New Zealand public who are not intimately involved in this industry and who at some stage in the future may well need to have matters relating to their long-term residential care clarified as they reach the magic age at which they have predetermined they will seek such care. There will be members of the public who find this legislation very confusing indeed. 
The Minister to be fair is regarded as a fair Minister although she is one who has clearly been beaten down by her Cabinet colleagues on the issue of asset and income testing with regard to this bill. I think that is disappointing and I have said so prior to the Committee stage; in fact I may well have said so during the first or second reading debates on this bill. I get around the sector a bit and I know that the Minister is regarded as if not a bit left wing somebody whose words can be relied on from time to time. And now the Minister finds herself in the situation where that is not actually the case. The Minister has been trampled by her Cabinet colleagues into backing away from a pre-election promise on asset and income testing and a pale imitation of that campaign promise is what the Committee now has before it. 
It would help the Committee if the Minister would rise and do us the courtesy of clarifying for the benefit of those members who are less informed on these matters—such as me—the impact of new clause 3A in a way that leaves those who wish to take up long-term residential care at some stage in the future in no doubt as to their entitlements and their obligations and more important their own responsibilities when moving into such care. 
JUDITH COLLINS (National—Clevedon) 
: 
 I rise on behalf of the National Party in relation to Part 2—which of course is slightly confusing to anyone listening because this part actually inserts a new Part 4 into the principal Act so we have a Part 2 and a Part 4 together. I note that the National Party is supporting the amendments in Part 2 in order to assist where we can in this area—an area of course where we have some extremely vulnerable people. I am sure that all of us here either have had or do have very elderly parents so I think we understand that they are people who need to be looked after—and for some the relationship between parent and child is somewhat reversed in the process. Obviously we are very pleased in many ways to be able to support these particular amendments. 
A few issues have been brought up in relation to the report back to the House. In particular there is an issue about conjugal status. The Social Services Committee made a comment about the wording of section 152 inserted by clause 4 in relation to whether it is actually sufficiently clear. 
 There are also issues in relation to the change in asset value and maximum contribution and in particular to the cap of $636 per week. That sounds like an awful lot of money—and of course it is—but when we look at the cost of looking after someone in what is really a hospital situation we see that it is not that much more. In fact that cost is often cheaper than the cost of a lot of motel rooms over a weekly period. So to have that cap put in legislation like this I think can be very very difficult particularly for the providers. 
I am very concerned that there are people in this industry who have indicated they will exit the industry because they feel that they just cannot make ends meet. One of the problems in the industry is that it has a lot of groups of people operating in it who comprise not-for-profit organisations. Normally we would say that that was a good thing and that they are organisations such as The Salvation Army who are able to provide a good standard of care. But the trouble is that The Salvation Army is now getting out of that provision of care because it cannot make ends meet. 
The irony is that the people who can just survive happen to be the bigger commercial operators because the smaller commercial operators are certainly finding that there really is not enough in the rates that are paid to make it worth their while. Not only are they in the situation of having to provide a good standard of care but they are also in the situation where they care for people who are often in great need and who are now coming into this sort of care much later in life. 
About 20 years ago elderly people would often live in the situation of long-term residential care for maybe 15 or 20 years before they died. So they were going into care in a much better physical mental and emotional state than the state they are often in now. As I recall from the Social Services Committee hearings on this bill people said that the average time the elderly now stay in residential care is I think about 6 months. I am sure the Minister will know that more precisely than I do but it is a much shorter period of time. I ask the Minister whether that is right. 
Hon Ruth Dyson 
: Eighteen months. 
JUDITH COLLINS 
: Eighteen months is it? It is certainly not what it used to be. I am sure that many of the members of the Committee like me were trotted around by their parents to go and visit elderly great-aunts and other relatives who had been living in rest homes for many many years. Certainly that is not a situation we tend to have now because people are more often staying in their own homes. There are caregivers coming into those homes which I think is a very very good thing but we do need to have better services and wages for caregivers. I think we here can all agree that caregivers are people who help our elderly to stay in their own homes. It takes a huge weight off their families to know there is someone going in every day or every second day to make sure that something is happening for them. 
Dr MURIEL NEWMAN (Deputy Leader—ACT) 
: 
 I would like to make some comments on Part 2 of this bill and in particular I want to look at schedule 27 “Means assessment under Part 4” substituted in schedule 1. It takes us through the changes that will be effected until the year 2026 and shows the progressive increases in the threshold. 
But what I really want to talk about is whether this legislation is good legislation. The initial cost of the bill will be about $110 million. I understand that that amount will increase by about $15 million a year as the threshold increases and more people retire. I also understand that in 30 years’ time the cost of this legislation could be as much as $1 billion a year and I ask the Labour Government whether it has the right to put in place such a small bill—which it is; there are only two parts to it—that will cost this country so much when the important point is that the cost burden will fall on families who are struggling to get by. Those families will be forced to pay higher and higher taxes as the years go by and to pay taxes for people who can afford their own care. I think that that is the important point. 
There has been a means-tested regime in place and although not everybody thinks it is fair it has forced New Zealanders to look at the fact that if they can afford to pay for rest home care then they have been asked to do so. This bill changes all that and it will force poor struggling families to pay for people who could well afford to pay for themselves. 
I say that that is poor legislation. It is ill-advised and it is not based on real need but simply on the need to buy votes. That is what this bill is—vote-driven legislation. I say shame on the Labour Government for doing that because of the huge cost burden that it will put on New Zealand. In particular it is what we call inter-generational theft where one generation has to pay for another generation. 
I say that the answer to the problem of elderly care is to make sure that people can save up and have resources in their retirement. Then if they have some unforeseen event they have the financial means to be able to cope with it. 
However the second point about this bill is that most of the submissions made to the Social Services Committee talked about the fact that this was a broken promise of the Labour Party. Labour charged into power in 1999 promising to abolish asset testing and all submitters including many elderly submitters from Grey Power essentially asked: “Why have you broken your pre-election commitment to the elderly? Where have your principles gone Labour Party?”. They went on to say that they believed that this bill was a breach of faith and they strongly opposed the Government’s move to bring this bill into Parliament. They said it was simply not good enough. 
I concur with them that this is a Government that tries to pretend it is doing the right thing but we see with this bill that it is not. It is simply making a sop to that elderly vote. The Government has not abided by its election promises and as a result I think that members are sitting here tonight voting on poor legislation. 
A more worrying part of this bill has already been brought up in this debate. It is the fact that many of the social service providers who have been in this sector are essentially saying that unless the Government does something to assist them to make ends meet they will have to quit the sector. We have already seen that with The Salvation Army and that situation is not good enough. 
PAUL ADAMS (United Future) 
: 
 I rise on behalf of United Future to speak on Part 2 of this bill. As I was beginning to say last time when I ran out of time and the bell rang it is interesting to hear the voting record of all the parties on this particular bill. Even though there have been adverse comments against the bill most parties are supporting it. 
I think that when we are caring for the elderly we need to be well aware of the shortage of staff in rest homes. I also think that in a busy society like we have today we all tend to want things to be done instantly; yet people running rest homes and care centres for the elderly are really being totally frustrated at the present time by the Government’s inability to make a decision on things that are basically essential for those people to be able to continue running their homes. They need to employ staff for a 24-hour facility and with holiday pay amendments and all those things their costs are increasing; yet they are hamstrung by being unable to recoup those costs. 
 In rest homes that cater for the elderly there is obviously a lot of difference between one that has been established for many many years and one that has been built today. With the current costs of building a rest home and putting all the facilities into it it would be nigh impossible to be able to get one under way. That is a shame when we consider the elderly. Many of them would want the more comfortable facilities that are perhaps available today yet because of the delays in addressing the major issues that continually came through in the select committee process people just cannot do it. 
When we see The Salvation Army pull out of providing a service we know that we are dealing with a serious issue because The Salvation Army would be one organisation that would fall over backwards to try to cater for this group of people. Yet sadly we heard just recently that it is no longer able to continue with one of its services and a rest home has had to be closed down. 
The owners of one of the rest homes I visited—and rest homes of course have numerous rooms in them mostly catering for just one person per room—told me that they are now looking very closely at the viability of turning the rest home into student accommodation. That has to be a major concern for us. We have to address the concerns that the submitters have brought to us. I believe—and we have been told—that it is squarely in the Government’s quarter. It is not anything to do with this legislation; it is a Government decision. I again encourage the Government to make these decisions quickly because it is a very very important issue. 
I think that when we come into those twilight years as will happen to us all if people have the ability to pay for a better type of care then they should be free to do that. We have to look seriously at how we are dealing with these people. We have a growing sector of the population coming up here. It is an increasing market and United Future believes it is well time that the Government addressed this issue very speedily. That is all I will say on this particular clause. 
SIMON POWER (Senior Whip—National) 
: 
 I raise a point of order Madam Chairperson. I ask for clarification. When the debate resumed in the Committee stage following the dinner break my recollection is that Mr Paul Adams the member who has just spoken had some time left on a call from when the Committee previously met to discuss this bill. For one reason or another Mr Adams was not available to take up that call at which point I took the call. I just wonder how the apportionment of calls is to operate in an environment where National had two members seeking the call yet the call was handed to United Future in a situation where on only two calls prior to that Mr Adams had the opportunity to complete his call from the last time the Committee met but did not take that opportunity. 
The CHAIRPERSON (Ann Hartley) 
: The member is completely wrong. It is my responsibility to give the call as per the Standing Orders. Mr Adams was quite entitled to the call. 
GEORGINA BEYER (Labour—Wairarapa) 
: 
 I move  
That the question be now put 
. 
KATHERINE RICH (National) 
: 
 As the debate resumes on this very important bill I think it is important to talk about honesty. Members opposite when in Opposition travelled from one end of New Zealand to the other talking about how they would abolish asset testing for the elderly. Helen Clark kissed and hugged a lot of elderly folk all over the country then said that the Labour Party would abolish asset testing—not get rid of it not partially remove it but totally abolish asset testing. How it has changed its tune now it is in Government! 
Today the debate started with Government members talking about honesty. They gave us a series of lectures on honesty. One could say: “If only they would listen to their own advice.” If there is one thing that New Zealanders crave from Governments it is honesty. There has been an honesty deficit from this Government. If Government members were to turn up at any public meeting that was not organised by their own party they would hear from members of the public about honesty. Guess who said: “People want some honesty about asset testing.”? It was Annette King when she was the Opposition spokeswoman on health. Throughout  
Hansard 
 Annette King has made comment after comment not about partially removing asset testing not about kinda sorta nearly or almost getting rid of asset testing but about totally abolishing asset testing. If Labour Party members want to talk about honesty one would think they would do it while they were in Government. But no they have changed their tune since they were in Opposition. 
Judith Collins 
: The “h” word. 
KATHERINE RICH 
: The “h” word as my learned colleague Judith Collins has said They have changed their tune because they know they cannot deliver on that election promise. It is just not possible at this point. 
We are debating a bill that is very complex but in reality I think we will create a few problems out there in the residential-care sector. We have already seen The Salvation Army pull the pin. Members of The Salvation Army came before the Social Services Committee and told us they were having difficulty. They told us that they would have to reconsider their investment in the residential-care market if they were unable to cover the basic costs of looking after the elderly in their care. Some of the select committee members scoffed and said: “This is just posturing designed to convince the Government that they are serious.” Unfortunately some of the Government members did not take The Salvation Army seriously and we read in the paper only yesterday that The Salvation Army is to exit the residential-care market. It is putting 12 of its facilities on the market—one of them Red Roofs happens to be in Dunedin—and will get out of that part of the business altogether. 
One of the things that the Government should be concerned about is what will happen if there is a mass exodus from the residential-care market. Who will provide all those beds? Of course more and more New Zealanders will look to the hospital system to provide that care. If we talk to any carers out in the community—any nurses who are out there working on the ground—they will say that too many people spend too long in their own homes these days. It is almost as if the pendulum has swung too far. That is why some of the residential carers say that when people come into their residential-care facilities they have more extreme conditions than perhaps they did 10 or 20 years ago when people used to drive to the care facility as opposed to being brought in by ambulance. That is why the facilities are seeing people who need longer stays people who have more extreme health conditions and people who require a higher standard of care than perhaps was the case earlier. 
With that higher standard of care comes of course a cost. One of the things that is of great concern in this part of the bill is the fixing of the pricing cap—the $636 cap that people talk about. One of the strange things about this bill is that the Government is saying that it will determine not only what the people who are funded by the public system will pay and be asked to pay but also what the private sector can ask private payers—people who contract and make their own decisions—to pay. That in a sense is price fixing. The Government has not attempted to do it in any other sector but it is doing it in the residential-care market. 
STEVE CHADWICK (Labour—Rotorua) 
: 
 I move  
That the question be now put 
. 
Hon GEORGINA TE HEUHEU (National) 
: 
 We left this debate last night of course but I think it is worth reminding ourselves every time we stand—and my colleague who spoke previously did this—that in 1999 this Government promised to remove asset testing. This bill does not do that. What this bill does is lift the levels at which those requiring long-term care cannot be assessed on but we think it has lifted those levels far too high. Actual care in rest homes is only part of this whole scenario. One would have thought that after 6 years the Government would be a lot more intelligent about the way it reordered this whole area. Of course what we have is providers feeling that they cannot hack it any more. It will be worse even for those who think that they can. 
But there is an issue about the carers as well. As the Government puts more money into this area as provided for in the bill one has to ask about the carers. As we know there is only a certain amount of money to go around in any particular area. This is a Government that has previously said that it stands for carers but there is no increase in funding at all for carers. There is none for those who care for the elderly so that they can stay in their own homes. In 5 years there has been no increase in the earnings of carers. We all know just what a job a task a mission it is for those wonderful people in our communities who care-give to those of our senior citizens who remain at home. They do things like giving them a shower helping them with their dressings or medications and cooking them a meal. Carers do not get funded even for transport. 
A National Government would have increased the amount that people can keep before liabilities kick in. We think that is certainly justifiable but on the other hand this Government has basically chosen to put all its eggs in one basket. The total long-term care scenario has been neglected. This is a Government that has continually said it cares for all sectors of this industry. The Minister in the chair the Hon Ruth Dyson is sitting there with her chest puffed out and no doubt feeling very proud of herself for what has been delivered in the bill but there is a whole side of this issue that is not being taken care of or being addressed. 
Steve Chadwick 
: We’ll get there bit by bit. 
Hon GEORGINA TE HEUHEU 
: That is OK. Getting there bit by bit is one thing but the Government will find that the cost structure that has been built in will be so high plus a number of barriers and hoops are being put in place that increase the bureaucracy. It will be unmanageable. Getting there bit by bit is OK but the Government has to be sure that as it gets there bit by bit it is able to meet the bits by bit. 
How long will the bit be? It has taken 6 years for a Government that promised all sorts of things when it was in Opposition and it certainly is not delivering them in this bill. We will see what the senior citizens think. No doubt they will feel let down again by a Government that made out the previous National Government to be hard and uncaring. It turns out that this Labour Government is much the same in any event even if that were true of the previous Government which of course it was not. We can see that it is justifiable to increase the level of income that a person requiring long-term care can keep before the liabilities kick in. But we think that this legislation has gone too far to the detriment of other parts of the sector. 
The other point I want to address briefly is in Part 1 and Part 2. Clause 3(d) in Part 1 states that one of the purposes of the bill is to clarify the funder’s obligations to pay for contracted care services associated with long-term residential care. New Part 4 “Long-term residential care in hospital or rest home” in clause 4 provides a definition of what contracted care services means. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I raise a point of order Madam Chairperson. I seek a point of clarification. Yesterday the debate on Part 1 was truncated after a fairly short-lived debate. The Chairperson at the time said that on Part 2 which is clearly the larger part of this bill members would be given the opportunity to debate it widely. The Government has already moved one closure motion to try to stop this debate. I ask you because this is such an important bill and this is the main part to ensure that Opposition members are given an opportunity to speak on it. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 The member is wrong in his first premise. He stated that the debate on Part 1 was truncated. Debates are not truncated. Members move a closure motion and it is up to the Chairperson whether that is accepted. The Chairperson last evening decided to accept the closure motion on Part 1 because he had heard the arguments and Part 1 was short. We have had a long debate on Part 2 but the key point is that it is not appropriate for members to raise points of order to give you the value of their opinion on how long they believe the debate should run. You are the sole judge of that Madam Chairperson. If a Government member moves a closure motion only you determine whether that should be taken into account. Although we value Dr Hutchison’s opinions on other matters on procedural ones we do not. 
The CHAIRPERSON (Ann Hartley) 
: There is no debate on the closure. Members should know that by now. 
Dr MURIEL NEWMAN (Deputy Leader—ACT) 
: 
 I raise a point of order Madam Chairperson. With respect to the previous speaker the Chairman did take the unusual call of explaining to the Committee that he had accepted a closure after one closure motion having been moved by the Government because he felt that the Chair would then allow a far wider debate on Part 2. If Mr Hughes is trying to pretend that the Chairman did not give us that assurance then he is misrepresenting what happened last night. 
The CHAIRPERSON (Ann Hartley) 
: It is at the discretion of the Chair whether to accept a closure motion. That is the end of the matter. 
Hon MARK GOSCHE (Labour—Maungakiekie) 
: 
 I move  
That the question be now put 
. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I was interested to hear Darren Hughes say just a short while ago that tonight the Government is delivering. There is no doubt that what it is delivering in this bill is a legacy of broken promises. Part 2 is testimony to that when one goes into its details particularly in new section 153 in clause 4. 
I see the Minister in the chair the Hon Ruth Dyson is smirking. We have repeatedly asked her to take a call to explain to the Committee why she and the Labour Party went around the country for a decade campaigning on abandoning asset and income testing. They modified it towards the end of the decade to abandoning just asset testing. All that this bill does is modify or change the amount that the elderly have to pay. We must again remind the Minister in the chair what the Prime Minister said about asset testing. She said: “We say asset testing older people is wrong. It will go.” 
What do we have in new section 153(1) in clause 4? It states: “The maximum contribution is the amount to be prescribed by an Order in Council made by the Governor-General that is $636 per week adjusted by an amount that reflects the movement in the All Groups …”. The concern about this provision is that it is totally unrealistic. As I pointed out in the debate yesterday it was The Salvation Army spokesperson Major Alistair Herring who said that The Salvation Army believes that this bill should at the very least commence with the adjusted figure of $757.14 which adjusts the rate back to 1994 when Jenny Shipley set the initial figure of $636. The effect of this has been the absolutely unrealistic stance that the Labour Government has taken towards the elderly and elder care in the last 5 to 6 years. 
 I will go back for a moment to a comment on the Ministry of Health’s response to the PricewaterhouseCoopers report which was that since receiving the final report on residential care pricing implementation in June 2000 the ministry has attempted first to change the report’s intended purpose and second to selectively use the findings to suit its own cost parameters. In Port Waikato the electorate I so proudly represent I know that rest homes up and down the electorate are closing because of this Government’s absolutely unrealistic pricing policy. It goes further than that because it extends throughout New Zealand. 
Of course we have heard the news that The Salvation Army is closing its residential units. It is an indictment on the Minister in the chair Ruth Dyson that during her watch The Salvation Army is exiting residential care. It is one of the trusted organisations in New Zealand and an organisation that the elderly do trust. Why is it exiting? It is exiting because of the refusal of this Government to acknowledge just what it costs to run residential care homes. Every time I have spoken in the debate I have asked the Minister to come and tell us why the Government reneged on the promise it campaigned on for 10 years. Is she prepared to front up and explain that to people of New Zealand particularly the elderly? 
There is no doubt that National supports improving asset testing for the elderly but we support it being done in a realistic way. We support this bill but we are deeply concerned about the absolute inconsistency that the Government has displayed in bringing the bill to the House. 
DARREN HUGHES (Junior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 82 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8; Maori Party 1. 
Noes 36 
New Zealand National 27; ACT New Zealand 9. 
Motion agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 281 and Supplementary Order Paper 307 in the name of the Hon Ruth Dyson to Part 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 109 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Maori Party 1. 
Noes 9 
ACT New Zealand 9. 
Amendments agreed to. 
A party vote was called for on the question  
That Part 2 as amended be agreed to. 
Ayes 109 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Maori Party 1. 
Noes 9 
ACT New Zealand 9. 
Part 2 as amended agreed to. 
Schedules 
The question was put that the amendments set out on Supplementary Order Paper 281 in the name of the Hon Ruth Dyson to schedule 1 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 109 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Maori Party 1. 
Noes 9 
ACT New Zealand 9. 
Amendments agreed to. 
A party vote was called for on the question  
That schedule 1 as amended be agreed to. 
Ayes 109 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Maori Party 1. 
Noes 9 
ACT New Zealand 9. 
Schedule 1 as amended agreed to. 
The question was put that the amendments set out on Supplementary Order Paper 307 in the name of the Hon Ruth Dyson to schedule 2 be agreed to. 
A party vote was called for on the question  
That the amendments be agreed to. 
Ayes 109 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Maori Party 1. 
Noes 9 
ACT New Zealand 9. 
Amendments agreed to. 
A party vote  was called for on the question  
That schedule 2 as amended be agreed to. 
Ayes 109 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Maori Party 1. 
Noes 9 
ACT New Zealand 9. 
Schedule 2 as amended agreed to. 
A party vote was called for on the question  
That schedule 3 be agreed to. 
Ayes 109 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8; Maori Party 1. 
Noes 9 
ACT New Zealand 9. 
Schedule 3 agreed to. 
Clause 1 Title 
Hon GEORGINA TE HEUHEU (National) 
: 
 I am very pleased to see Minister Maharey sitting in the Chamber. This bill epitomises to a tee what we in the Opposition like to call the “Maharey principle”—that is and I am taking his own words: “That’s just what you say when you’re in Opposition”. Clearly since the Labour Party has been in Government it tends to do things other than what it said it would do when it was in Opposition. As I said this Social Security (Long-term Residential Care) Amendment Bill epitomises that principle to a tee. The Minister should not take that as praise being heaped on him at all. Obviously it does him no credit that he made that comment. It does him no credit whatsoever. 
What Labour said when it was in Opposition which has already been referred to but which I think deserves being said again is that it would abolish income and asset testing. It was saying that at the beginning of the 1990s and throughout most of the 1990s although by the end of the 1990s that had been watered down to asset testing. This is a Government that says one thing in Opposition and does something else when in Government. Minister Maharey admitted that; he seems to be proud of that. I do not know why he is proud of it because I would not be proud of that myself. [ 
Interruption 
] It would be great for Minister Maharey to take a call because the Minister in the chair the Hon Ruth Dyson has not responded to any of our requests for her to take a call. Maybe Minister Maharey might oblige us and take a call to tell us why he thinks it is OK for this Government to feel very proud of what it is doing. I do not think that Grey Power members out and about in communities around New Zealand are feeling very happy. The Minister should tell us why he thinks it is OK for Labour to say one thing in Opposition and do exactly the opposite when in Government. 
It is not good enough. This Government was elected with a pretty clear mandate in 1999 so one would think that it felt that it had a mandate to keep the promises it made while it was in Opposition. But disappointingly no it did not do it. So here we are in the Chamber tonight debating the Social Security (Long-term Residential Care) Amendment Bill which basically delivers something but falls far short of what this Government said that it would deliver when it was in Opposition. 
In the rest of my time available I want to express my concerns and worries about the definition of “contracted care services”. The select committee made a change. Those services were originally defined as “specified care services”. For some reason the select committee thought that “contracted care services” would make a better description. Last night one of my colleagues Dr Lynda Scott who has huge experience in this area raised the issue of what were the basic services that fall under the definition of “contracted care services”. I want the Minister to tell us what those services are. She should give us and those who are already in long-term care and those who will be going there shortly some peace of mind and reassurance that what would normally be regarded as a fair provision of services will still be available once the legislation comes into force. Probably Steve Chadwick could give us some peace of mind on that situation. 
A couple of senior citizens have dropped me a note to express their worries about what that definition actually entails. The problem is that the funders themselves the district health boards are under huge funding pressures anyway. We all know that. So we will have a situation whereby the services to be delivered which fall under the term “contracted care services” are not defined. 
Dr MURIEL NEWMAN (Deputy Leader—ACT) 
: 
 I rise to give a contribution on the title of this bill. The title that springs to mind is “Another Labour Party Broken Promise Bill”. This bill is a Labour Party broken promise and a half-hearted attempt to try to get it through before the election. However we know that this legislation does not come into force until July and also that the asset testing that will be addressed is simply a minimal part of what Labour promised at the 1999 election. I do think that a more appropriate title for this bill would be the “Crippling of the Aged-Care Sector Bill”. We heard from many submitters that if this bill goes through it will cripple the sector and drive many of the providers out of business and that there is already a crisis in the sector. This is a crisis for those organisations that one could call social providers. They are the churches the charitable groups—I raise a point of order Madam Chairperson. What appears to be rather a robust conversation is going on. 
The CHAIRPERSON (Ann Hartley) 
: When members are speaking from the cross benches it is really difficult for the speaker. 
Dr MURIEL NEWMAN 
: The social providers are being crippled by this Government. The interesting thing is that a healthy society needs a vibrant and flourishing civil society. Social providers like The Salvation Army and Presbyterian Support New Zealand are organisations that are absolutely fundamental to the strength of civil society and the Labour Government wants to close them down. I do not think that anyone would mind if it did it in an open and honest way and just shut them down but Labour does it by stealth. It stabs them in the back and crushes them by stealth. How does it do that? It squeezes them out. 
We heard from organisations that told us about the costs involved such as $36000 for an audit and $100000 for certification. They talked about the increases in accident compensation levies that had been introduced by Labour the requirements of the Occupational Safety and Health Service the costs of the Employment Relations Act the Holidays Act and so on. It became very obvious that the sector which did not have any increases at all at a time when Labour was increasing costs was caught between a rock and a hard place and as we know it had nowhere to go. 
The Labour Government is squeezing those charities and organisations—which have been there for years—out of the sector. It is nationalising aged care in New Zealand by stealth. I believe that the Government should at least be honest. This bill should be called the “Nationalisation of Aged Care in New Zealand Bill”. If it had a title like that then every Kiwi would understand what Labour is trying to do. The fact that the Minister has not taken even one call in this debate during the Committee stage means that we have hit the nail on the head. So the thoughts we have been promoting about how Labour wants to close down those social service providers are correct. Maybe the Minister in the chair will take a call to correct the record. Otherwise what we know is that Labour intends to nationalise aged care in New Zealand and all those other providers will just have to wait. Their time will come and they will be squeezed out as well. 
It is a sad day when members have to take calls in debates like this. This is poor legislation. It is not good law. It will be incredibly costly to taxpayers in New Zealand. Many of them are already struggling. They do not need legislation that is designed to buy votes for Labour at the next election. That is not what the House should be all about. We should be passing good laws that are needed by our community and our society. We should not be passing laws that are simply aimed at trying to give the Labour Party another term in office. This is a sad day for New Zealand. 
KATHERINE RICH (National) 
: 
 I still have some questions for the Minister in the chair the Hon Ruth Dyson and it is very interesting that she has not taken a single call during the Committee stage of this bill. The Opposition has asked a lot of questions about this legislation—and they are not just our questions; they were raised by most of the submitters to the Social Services Committee—for example Age Concern Grey Power Presbyterian Support the Anglican Methodist Family Care Centre and The Salvation Army. Yet not one of those questions has been answered by the Minister. If this is such good law why did almost every aged-care provider tell the select committee that the Government was doing the wrong thing? Why did almost every submitter—groups that are normally very supportive of the Government—tell us that this law was a recipe for disaster because of the continued underfunding of the aged-care sector? Why did submitter after submitter tell us they would be getting out of the provision of aged care if some of their concerns were not addressed? 
We began the Committee stage of the bill yesterday and interestingly one of the major providers of aged care The Salvation Army told the New Zealand public that it was getting out of aged care and is selling 12 facilities. The Salvation Army has been involved in the care of the nation’s elderly for 70 years but now it is getting out washing its hands of it saying that it has had enough cannot cover its costs and is sick of cross-subsiding aged care from other areas of its business. The Salvation Army has said it is getting out of running facilities and will concentrate on caring for people in their homes. The Government still remains silent. It has not explained why that is the case. It has not explained why there has been a broken promise. While in Opposition Helen Clark travelled this country from 1990 onwards telling the New Zealand public that asset testing would be abolished under Labour. Labour spokespersons on health told the then National Government that the New Zealand people wanted some honesty about the health system. 
Annette King said while in Opposition that people wanted some honesty about asset testing and the health system. In the same speech she went on to criticise the Government for sending people to Australia for health care but that is a matter for another debate altogether. 
Has the Labour Government not changed its tune? Now it is not interested in talking about honesty about asset testing any longer. 
Steve Chadwick 
: We inherited big deficits when we came into power. 
KATHERINE RICH 
: It is interesting that new members are piping up but they were not here in Parliament when the promises were made. The Labour Government has given up on talking about its goal of abolishing asset testing and is not talking about broken promises any more. It pretends that this partial removal of asset testing shows it is keeping its promise. But most of the groups that came before the select committee had seen through the Government’s clever talk and realised it was breaking its promise. 
This bill is very complex law. Some submitters said they did not quite understand what the implications would be and who would be covered—what was meant by “eligible person” or “contracted services” and what would be covered. They found the price fixing of their business totally abhorrent. They saw this legislation as just another opportunity for the Government to meddle in their affairs and make it increasingly difficult for them to get on with the work they want to do: looking after the elderly and frail New Zealanders in their care. The Minister will have received many hundreds of letters on this issue—as I have—from a lot of residential care facilities in her own electorate. I have heard from Taieri Court Rest Home and from Redroofs Rest Home—one of those to be closed down as a result of this legislation. People are worried about their jobs and families are worried about the people in their care. People are worried about the continuity and quality of the service yet the Government has not said one word about this bill. Not one Government member has taken a call to defend this bill and to talk about some of its complexities. Is that not interesting? The Minister in the chair has sat there call after call without listening to the concerns reflected by the Opposition—which are the concerns of Age Concern Grey Power and a lot of the other groups that are interested in the care of the elderly. 
PAUL ADAMS (United Future) 
: 
 My main concerns with regard to this legislation are not so much about what it does as what it does not do. As the previous speaker Katherine Rich said the Government has been amazingly quiet during the whole of the debate on this legislation and that is what the submitters told us at the Social Services Committee all the way through. They asked what the Government would do about the serious concerns that we are addressing. I received letter after letter from rest homes and other aged-care facilities and I have also been getting letters from those who look after the disabled. I realised the bill does not cover that sector but the disability sector faces very very similar challenges in the care of disabled people and we should also be very concerned about that. I implore the Government to become involved in the plight of those older people and their families who are dependent on the services of rest homes and private hospitals. As I understand it since 1977 the rest homes have had only a 6 percent increase in the fees they can charge which I believe happened in about June 2003 and the hospitals a mere 0.25 percent increase. 
There have been additional costs coming upon those institutions every day especially when one considers a lot of the compliance costs that have been put upon them which they have had no control over. Many of them have said the cost of doctors’ visits can be $70 to $110 per visit and many of their residents need to have those visits if the facilities are to truly care for residents. They have pharmaceutical costs which have increased with the introduction of the pharmaceutical schedule change as well as with the normal cost increases. Medical supplies and all those things have gone up. Health and disability sector standards compliance costs require significantly more time to be spent on documentation and reporting than has ever been required before. Many aged-care facilities have been telling me that they now have to employ extra staff just to deal with those particular issues not to mention the occupational safety and health compliance costs involving the widespread purchasing of various types of lifting equipment. All those costs have come on and been forced upon rest homes and they have had no choice but to comply with them. 
I urge the Government to address that issue. As we heard time and time again at the select committee as submitters brought up those issues it is a Government policy issue. Well if it is a Government policy issue as it obviously is then I would urge the Government again to pay serious attention to making changes in its policy at the earliest time because there are challenges in the aged-care and disability sectors. I do not think it is acceptable when it is a core business for those people—and yes they do have a genuine heart for those they care for—that they are virtually hamstrung with things they have absolutely no control over whatsoever. The aged-care facilities do not want to close putting the elderly back into unacceptable living conditions. They want to look after them. But it came through clearly at the select committee through all the submissions that the aged-care facilities are not able to do an adequate job. They are unable to do their job effectively and give residents the care and attention that most of them desire to give because of Government policy. United Future would again strongly encourage the Government to deal with the policy issues and put in place a regime that pays reasonably well so that elderly people can be cared for correctly. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Clause 1(1) states ironically: “This Act is the Social Security (Long-term Residential Care) Amendment Act”. The emphasis should certainly not be on “long-term”. I think the title should be changed to the “Social Security (Short-term Residential Care) Amendment Bill” because that is exactly what will happen to the elderly people who at present live in The Salvation Army’s residential care units. I go back to what Major Herring said regarding the fact that the money for that has not been adjusted since 1994. He said back in May of this year that if such an adjustment were not made it was likely not-for-profit providers like The Salvation Army would have difficulty in remaining in the residential care market. Well that prediction has certainly come true and Major Herring gave exactly that warning to the Labour Government which ignored that very very excellent organisation. Instead the affected residents are to be moved into alternative care. 
Major Herring went on to say: “Not-for-profit providers are in the residential care market out of concern for older people and a desire to provide high-quality care.” That is the sort of person whom the Minister in the chair Ruth Dyson—who has stayed silent throughout this debate—has totally ignored. That epitomises the promises that Labour members campaigned on for 10 years while in Opposition during the 1990s but that the Labour Government has since broken. Since the Minister will not take a call maybe the Hon Steve Maharey the master or the archdeacon of the flip-flop—the U-turn—may be prepared to take a call to explain his principles and explain why the Labour Party campaigned for a decade that it would remove asset and income testing and then absolutely changed its mind once it came into Government thereby defrauding many elderly people. 
Perhaps other names for this bill could be the “Labour Government’s Broken Promise to the Elderly Act”—that is one title we have talked about—the “Labour Government (Let’s Help The Salvation Army Exit Elder Care) Bill” or the “Labour Government (Let’s Dupe the Elderly) Bill”. I have seen in Port Waikato up and down the electorate the smaller rest homes predictably just not being able to survive because of the totally unrealistic way that the Labour Government has supported the elderly despite report after report. 
Hon Dr Michael Cullen 
: Spend spend spend. 
Dr PAUL HUTCHISON 
: Minister Cullen says: “Spend spend spend.” He has spent $3 billion more on the health system yet productivity has gone down. There are fewer operations now and he is spending more than previously. He and this Government have presided over the creation of the most complex bureaucracy in health that this country has ever known and clearly productivity has gone down as shown by report after report. Talk about spending! Dr Cullen would be the champion of spending—and spending poorly when it comes the health sector. He cannot for one moment talk about spending effectively when we talk about the health sector or about the very very important area of elderly care. We have had the PricewaterhouseCoopers report which the Government totally ignored. In fact just a little while ago in June 2000 a report stated the Ministry of Health had attempted to change the report’s intended purpose—that relates to the PricewaterhouseCoopers report—and to use the findings selectively to suit its own cost parameters. 
JILL PETTIS (Senior Whip—Labour) 
: 
 I move  
That the question be now put 
. 
A party vote was called for on the question  
That the question be now put. 
Ayes 81 
New Zealand Labour 51; New Zealand First 13; Green Party 9; United Future 8. 
Noes 36 
New Zealand National 27; ACT New Zealand 9. 
Motion agreed to. 
A party vote was called for on the question  
That clause 1 be agreed to. 
Ayes 108 
New Zealand Labour 51; New Zealand National 27; New Zealand First 13; Green Party 9; United Future 8. 
Noes 9 
ACT New Zealand 9. 
Clause 1 agreed to.