Aged care funding a ticking time bomb

Aged care industry leaders have called on the Federal Government to address the urgent issues threatening the viability of Australia’s $7 billion aged care industry.

They warn that if action is not taken in this year’s budget aged care homes may start to close. At an absolute minimum, existing top-up indexation measures, which are about to lapse, must be continued.

Aged Care Industry Council (ACIC) spokesperson Greg Mundy said: “The previous Government commissioned a $7 million plus review of residential aged care pricing from eminent economist Professor Warren Hogan, and then ignored his longer term recommendations.

“Temporary measures put in place in the 2004 Budget provided an additional 1.75% indexation per year on top of the approximately 2% which would otherwise be paid. This provision is about to expire and there has been no action on the longer term solutions Professor Hogan recommended or any alternative lasting solutions.”

ACIC’s Rod Young added: “The Government’s own data shows that 40% of residential aged care providers are operating in the red and all sectors of the industry are trending steeply downwards.

“If the temporary top up of an additional $1.75% indexation per annum provided in 2004 is allowed to lapse, the nursing home sector in particular will go into meltdown,” Mr Young said.

“Already it’s impossible for us to pay nurses and other care staff comparable wages to the public hospital sector.”

Greg Mundy commented: “Aged care has limped along on a series of short term expedient patch-up solutions for most of the past decade. Now is the time to put in place lasting solutions that allow the industry to properly plan for our ageing population.

“We need an index that accurately tracks the real costs of providing quality care and we need to be able to raise the capital to build the aged care homes of the future. Neither of these things are in place at present and the continuity of care for the frailest people in our community is being placed at risk.

“A serious investment in more care for people living at home is also needed.”

The Aged Care Industry Council is an umbrella body covering over 95% of Australia’s aged care providers in the church and charitable and privately owned and operated sectors.