5 November 1997
E&OE..........................................................................................................................
MARTIN:
Mr Howard, thank you for your time.
PRIME MINISTER:
Good to be here, Ray.
MARTIN:
Even before the announcement tonight it’s been called a cave-in, is that what it is?
PRIME MINISTER:
No, it’s not. It’s fixing the great fear that elderly people have that the bond system would force them to sell their family home. And I’ve decided to scrap the accommodation bond system altogether for nursing homes and substitute it with an average annual fee of about $4000. And I can categorically say to anybody now who goes into a nursing home and who, because of their means, is assessed as making a contribution to their care, that under no circumstances will you have to sell your family home. And under no circumstances, therefore, would your entitlement on the basis of your existing assets to the pension be in any way effected.
Now, the policy objective is not altered. We will still get millions of dollars extra into the capital needs of nursing homes.
MARTIN:
From the $4000...
PRIME MINISTER:
From the $4000 a year.
MARTIN:
So who pays that? Does everybody pay...
PRIME MINISTER:
No, only people who are caught by a means test. The means test will be exactly the same. And in order to have to pay it you have to assets worth more than $22,500...
MARTIN:
But not including your house.
PRIME MINISTER:
No, no, no, well, your house will be in no way effected.
MARTIN:
So your house isn’t part of your assets under your new scheme?
PRIME MINISTER:
No, the house remains part of the assets but you won’t be forced to sell it because the amount is only $4000 a year. Now, people who don’t have the $4000 a year or who can’t borrow it from their family or who can’t make private arrangements, we are going to make arrangements with financial institutions to lend them that money on the basis that they won’t have to make any repayment of either principle or interest unless for other reasons they decide to sell their home or alternatively in the event of their death that money, like any other debt, would be payable out of the estate.
So the simple message is that under no circumstances will any people who are assessed as having to make a contribution, a capital contribution, to their care in a nursing home be forced to sell their family home.
Now, in a lot of cases in the past, under the accommodation bond system, they weren’t either. But because of the fear campaign I became convinced that there was a lot of unnecessary distress for elderly Australians and I decided to change the system without prejudicing the policy objective and that is to get more money into nursing homes.
MARTIN:
Let me try and make it clear to people watching tonight then. So if I’ve got a family home and I’ve got to pay $4000, if I don’t have the $4000 you’re going to work out a system whereby I can borrow on my home?
PRIME MINISTER:
You can get it from the bank or some other institution. You won’t have to repay any of it while you’re in the nursing home. You won’t have to pay any interest. Now, if you decide for other reasons to sell your home then naturally you repay it then...
MARTIN:
But no more than $4000.
PRIME MINISTER:
Well, average $4000 a year in some parts of Australia which are lower cost it will be a little less than $4000 a year. In some of the higher cost areas it will be somewhat higher.
MARTIN:
When does this start?
PRIME MINISTER:
Well, it’s going to be effective from tonight and when we bring in the new legislation it will operate from tomorrow. And we will encourage providers to operate under the new rules and Warwick Smith will be talking to the nursing home industry and providers to ensure that that is followed.
The good thing about this decision is that it relieves the elderly of the distress they were obviously suffering but we also will get millions of dollars more into nursing homes. Many of them are dilapidated, many of them are in an appalling state...
MARTIN:
That’s obviously accepted but I guess the points that’s been made - there’s a couple of points here - but one has been that we’ve had over a year to sell this, why this about face right now? Would you agree you’ve been inept in selling it up to now?
PRIME MINISTER:
Well, I think we’ve made a mistake with the implementation of this. And governments, Ray, from time to time make mistakes and when they do what they ought to do is recognise it and do something about it.
MARTIN:
But a week ago you said fine-tuning, nothing else is going to change. Tonight you’re making a major change.
PRIME MINISTER:
Well, I’m making a major change that still preserves the policy. We’ll still get the money into the nursing home sector...
MARTIN:
But yesterday there were accommodation bonds, today there aren’t.
PRIME MINISTER:
Well that’s right.
MARTIN:
Well, that’s a major change.
PRIME MINISTER:
Well, look, that’s a major change but it doesn’t alter the fact that the objective of getting more money into dilapidated nursing homes is being achieved. But I’m doing it in a way that doesn’t cause unnecessary distress to elderly people. Now, I don’t mind changing my mind, I don’t mind...
MARTIN:
Is this policy on the run?
PRIME MINISTER:
No, it’s not policy on the run. I think...
MARTIN:
It’s not because the polls are showing that you’re in trouble.
PRIME MINISTER:
Well I didn’t need a poll to tell me that this was not being well received in the Australian community.
MARTIN:
But last week you told us from London that in fact there will be no changes.
PRIME MINISTER:
I said there, I did say that. And Ray, I don't mind acknowledging that we have made a change in this, but what matters, my being able tell both to my biographer that I never changed my mind, I never admitted that I was wrong. Or, is it better that I listen to people, particularly to elderly Australians and I make decisions that are in their best interests.
I would rather be categorised as somebody who is willing to change his mind in the interests of a section of the Australian community than somebody who was so stubborn and pig-headed, that he was never willing to admit that his Government had made a mistake.
MARTIN:
Does this smack of panic PM?
PRIME MINISTER:
No.
MARTIN:
Well hang on. A week ago you were saying that: "the right amount of fine tuning had been done, I wouldn’t see any other changes being necessary". Tonight you’ve made major changes.
PRIME MINISTER:
Well the statement on which that comment was based did indicate that further work was being done in relation to the accommodation bond.
MARTIN:
You would have to agree that this has been a shocker. You have two Ministers trying to sell this and now we have got the Prime Minister selling it.
PRIME MINISTER:
Well Ray, the important thing is that elderly Australians, as from tonight, will know that in the event of anyone of them going into a nursing home, they won’t be forced to sell their family home.
MARTIN:
But they are going to have to work out a deal after Mr Smith works it out with the banks and institutions, whereby they borrow on the home.
PRIME MINISTER:
Well we will assist them. Well, that’s if they don’t have the $4000 a year. Many of them will have that...
MARTIN:
Just quickly, If I pay $2600, which was yesterday’s or today’s system. If I have already payed that do I have to top that off to $4000?
PRIME MINISTER:
No.
MARTIN:
Why not?
PRIME MINISTER:
Well, because you’re under the old system and we will give people an option in the legislation to rearrange their affairs under the new system, not just pay the $2600. Under the old accommodation bonds system you also forewent interest on the money that you have had to arrange to post the bond.
MARTIN:
Can I just ask you, did Cabinet clear this, or is this John Howard’s decision?
PRIME MINISTER:
Well I initiated it and I discussed it with all of my senior colleagues and the majority of them met today and agreed. I have got to tell you that there is overwhelming support, if that’s what you are interested in knowing...
MARTIN:
I’m sure there is, given the polls, I’m sure there is John..
PRIME MINISTER:
...there is overwhelming support for our decision to relieve elderly Australians of concern about their family homes.
MARTIN:
Prime Minister, we must go but I hope in fact, elderly Australians are relieved tonight. Thank you for your time.
[Ends]