industry & policy
Don’ t bank on deregulation
Lessons for the aged care sector from the Royal Commission into Banking.
By Michael Fine
It might seem far-fetched to think that there could be any connections between caring for an older person and the current Banking Royal Commission in Australia. Banking, after all, is about money and how it’ s managed. It’ s concerned with big financial institutions that everyone knows and thought they trusted. Caring is about people and how they are supported when they need direct personal help. Personal relationships are central. Both fields require competence, trust and a sense of responsibility.
But these two worlds overlap. Perhaps they were never so far apart. But increasingly we need to think of how the two spheres shape and influence each other.
So, as we digest the daily scandals emerging from the current Banking Royal Commission, what have we learned so far?
One very big lesson we’ ve learned is that it’ s not wise to assume that the market and its principles of competition will ensure optimal outcomes for all.
Deregulation of the banking industry was supposed to provide benefits for everyone – but we now learn that for banks, the main point of deregulation was to enable them to increase their size, importance and profits by lending more and more money, even when customers were unable to pay it back. They also expanded by offering more investment services, often disguising what turn out to be the crippling charges involved.
In response to the problems revealed in just the first few weeks of the inquiry, the government is not just talking about the need for more regulation and better oversight, but about significant prison sentences to provide a deterrent to unethical and unlawful actions.
There’ s an immediate parallel in the field of aged care services. As reported in Aged Care Insite, the minister for aged care, Ken
Wyatt, told us in April of plans to introduce a new agency, the Aged Care Quality and Safety Commission, which will replace the three existing lame ducks responsible for monitoring standards in the industry: the Australian Aged Care Quality Agency, the Aged Care Complaints Commissioner and the regulatory arm of the Department of Health.
“ We’ ll also have a serious incident response scheme, which came out of the Australian Law Reform Commission recommendations, so that we protect senior Australians who are vulnerable in facilities,” Wyatt recently told the ABC.
An incident response scheme for ageing! Sounds like a police unit. Where will they be based? Will we see negligent aged care proprietors sentenced to prison? Will there be increased use of surveillance cameras in homes and facilities to monitor what really goes on when questions are being asked?
Another lesson we have learned from the Banking Royal Commission is that there are many bank customers who are unable to assess the various financial choices offered to them by their bank. Choice is not always good – especially when you don’ t understand what you are choosing. Yet we are constantly reminded about the virtues of freedom of choice when it is underpinned by competition.
Could this be a lesson for aged care too? Perhaps consumer choice is only a label, as so many people have chosen CDC packages that they are unable to access in the past year. My hunch is that if choice is not enough in financial questions, it is likely to be even less reliable, to prove even more problematic, in aged care, where most consumers and family members simply don’ t know enough about what might happen to be able to make wise choices.
I could go on looking at the lessons we could learn for aged care. But there is much more water due to flow under the bridge in the coming months. Will our policymakers and service providers in aged care be able to join the dots and apply the lessons from our mistakes with banking?
We need to learn just how much the finance and banking industries mean for the provision of aged care. And we need to do so quickly. Just see how well you can join the dots as the public inquiry continues. ■
Michael Fine is an honorary professor at Macquarie University.
10 agedcareinsite. com. au