The Transfer of Intergenerational Wealth

"Families need to be aware that what we are talking about here is the transfer of intergenerational wealth, not to families, but into the pockets of large multi-nationals.

Shame about elderly people not having enough money for aged care."

Tom Gait, Retirement Village Residents Association.

Thursday, 26 July 2018

Retirement Industry Code Of Conduct Criticised

In a letter to the Property Council a retirement village resident of 11 years has criticized the proposal of the retirement living industry to establish an industry Code of Conduct.

The code is voluntary and the only punishment for not upholding the standards espoused in the code is, after repeated breaches, to have the name of the organisation removed from the code.

The letter -

"Thank you for the opportunity to make comment re a 'Retirement Living Industry Code of Conduct'.

Although admirable to some within the retirement living industry, an aspirational code of conduct is no substitute for consumer protections under law. If there is to be a code it should only be a short, sharp commitment to operate lawfully, morally and ethically. Only legislation and then regulators ready to enforce that law can truly protect retirees. An industry ombudsman is of the greatest need with fast, affordable, decisive enforcement of that law. Not even a not-for-profit operator has been a guarantee of ethical or lawful behaviour within the retirement living industry.

History has recorded self regulation as a fail and although we may self regulate with the best of intentions, the dark motivation to step over the line of morality and legality comes from a basic human weakness. A weakness to firstly protect or advantage oneself at the cost of another, and secondly in many cases a weakness to protect or advantage the organisation one serves at the cost of many. The aspiration to a retirement living code will last as long as the desire to advantage the resident is in the best interest of an individual operator, when the opposite is true the code will often most assuredly fail. Only the strength of the written law together with a ready and simple path to justice, such as an industry Ombudsman, will see the rights of residents truly protected and where necessary redressed. Anything else is in my personal view simply a mechanism to divert the eyes of the legislator away from the need to legislate.

If the objective of the code is to help elevate the currently held poor community view of the industry, then the industry must join with residents and their representative bodies and drive legislative reforms that truly protect retirees. It is what is actually happening to village residents that is driving down the reputation of the industry. The community not just residents are shocked at the lack of legality and morality in the operations of some, will the code truly drive improved legality and morality amongst operators. Improved legislative protections for residents however will generate greater confidence in the industry, confidence in both those coming baby boomers thinking of moving toward this sector and of course just as importantly their family members. A new found confidence that could propel the Australian industry closer to the penetration levels seen overseas.

Good operators are seeing the retirement living industry trashed by bad operators, of all the times operators and retirees should share a singular desire of a better industry it should be at this point in time. A Retirement Living Industry Code of Conduct may give some industry players a warm and fuzzy feeling, but it makes zero, zero contribution to tangible protections for retirees. The industry, not just residents, should be campaigning for an Ombudsman in every state.

No modern responsible industry should be afraid of the law nor be ready to hide behind any weaknesses in it. If an industry has to write down to remind itself to operate lawfully, morally and ethically then that industry has already failed both their customers and the community generally. To be a respected industry you don't aspire to ideals, you live them.

Thank you,"

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Function of Government

The role of government is to create an environment for commerce to function whilst at the same time protecting retirees and particularly vulnerable retirees from both financial and emotional harm emanating from that function.

The Victorian Retirement Villages Act 1986 provides the environment for commerce to function but fails to fully protect retirees from financial and emotional harm as a result of it.

The Victorian legislative definition of a retirement village in demanding the payment of an 'in-going' amount without the transfer of property ownership is a major contributor to that financial and emotional harm suffered by retirees.


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