Aged care financial and tax practices under inquiry

The inquiry, which is scheduled to report in August, aims to examine a number of tax and financial areas of providers, including:

• The use of any tax avoidance or aggressive tax minimisation strategies
• The associated impacts on the quality of service delivery, the sustainability of the sector, or value for money for government
• The adequacy of accountability and probity mechanisms for the expenditure of tax payer money
• Whether current practices meet public expectations

The Australian Nursing and Midwifery Federation (ANMF), who have been vocal about their concerns of tax avoidance by for-profit aged care providers, has commended the Senate Economics Reference Committee and welcomed the inquiry on behalf of its members working in the sector and the elderly nursing home residents they care for.

ANMF Federal Secretary Annie Butler highlighted that the inquiry announcement comes just one week after the release of an ANMF report – Tax avoidance by for-profit aged care companies: profit shifting on public funds, which she says shows that the top six for-profit providers received $2.17 billion in Government subsidies but “paid little tax”.

“Our new report, conducted by the Tax Justice Network, leaves no doubt that many of these for-profit providers, some with foreign ownership, continue to use a variety of corporate loopholes in order to pay little or no tax,” Ms Butler explains.

“There are currently no rules to ensure that the $2.17 billion in Government subsidies given to for-profit providers is spent directly on care for their residents.

“As a result, care is being missed. There’s simply not enough staff to feed, wash, toilet, change or give them medication.

“Aged care residents receive one and a half hours less care than they should, every day.

“The bottom-line is that big for-profit providers and their shareholders continue to generate massive profits at the expense of the taxpayer funding which should be going directly toward the care of elderly Australians. They’re putting their profits before their responsibility to provide care. And that has to change.”

Ms Butler says the ANMF look forward to this inquiry publically examining “these providers’ financial and tax practices” and thanks the Senators for “listening to the concerns raised in the Report, which revealed these providers have the financial capacity to employ more nurses and carers but are placing their profits and shareholders before safe care for their residents by using available loopholes to avoid paying their fair share of tax”.

“Companies that receive millions of dollars via Australian Government subsidies should be required by law to meet higher standards of transparency in financial reporting,” she says.

“Proof of Government funding being directly spent on the care of elderly residents needs to be mandated as a prerequisite to receiving a subsidy.”

Submissions to the inquiry are currently open until 8 June 2018, with full inquiry and report due by 14 August 2018.