Ageing Australia calls for decisive investment ahead of federal budget

Ageing Australia has released a comprehensive set of recommendations ahead of the upcoming federal budget, urging the Australian Government to commit to long-term, sustainable investment in aged care.

The peak body says urgent action is needed to ensure the sector can meet the needs of a rapidly ageing population, supported by a workforce and funding model that are fit for purpose.

Ageing Australia CEO Tom Symondson said demographic pressures were accelerating and the system was not keeping pace.

“Action is needed now, with the number of Australians aged over 70 set to reach 2.3 million by 2044,” Mr Symondson said.

“We should be building 10,000 beds a year over the next decade just to meet demand, but right now we are only delivering a fraction of what is required.”

He said targeted investment in aged care infrastructure would not only improve access to services but also reduce strain on the broader health system.

“Investment now will safeguard older Australians, strengthen quality care and reduce pressure on hospitals,” he said.

Mr Symondson emphasised that meeting future demand was not just about residential care capacity.

“It’s not just about beds. Most older people want to remain in their homes and communities for as long as possible. To support this, providers need appropriate resourcing to coordinate and deliver care in the community.”

Workforce shortages also remain a critical risk for the sector. Ageing Australia estimates that by 2050 the aged care system will face a shortfall of around 400,000 workers unless urgent action is taken.

“Without immediate and sustained investment, Australia will simply not have the workforce needed to support its ageing population,” Mr Symondson said.

“These measures, if adopted, will give Australians confidence that quality care will be available as they age, when and where they need it.”

Key recommendations

Funding

Ageing Australia is calling for a range of funding reforms to stabilise providers and support future growth, including:

• Increasing the Accommodation Supplement so residential aged care providers can remain viable and invest in safe, modern homes

• Setting a price floor for the Maximum Permissible Interest Rate (MPIR) at eight per cent to encourage investment in new builds and upgrades

• Reviewing the Australian National Aged Care Classification (AN-ACC) funding model to better align care funding with real provider costs

• Introducing a low-interest loan scheme to support the development and renewal of residential aged care homes

• Expanding the Aged Care Capital Assistance Program (ACCAP) to prioritise capital development in areas of greatest need

• Implementing price caps for Support at Home services no earlier than 1 January 2027, using actual activity data to ensure prices reflect delivery costs

• Increasing the care management cap for Support at Home to ensure older people receive adequate coordination and support

• Increasing funding for Commonwealth Home Support Programme (CHSP) services to maintain continuity of care ahead of the transition to Support at Home

Workforce

To address growing workforce shortages, Ageing Australia recommends:

• Allocating $150 million to expand ACCAP, including a dedicated aged care worker accommodation stream to help attract and house staff, particularly in non-metropolitan and First Nations communities

• Establishing a national Essential Skills Visa to streamline migration pathways for overseas aged care and community care workers

• Removing Labour Market Testing for critical aged and community care roles to enable faster recruitment of international workers

Ageing Australia says the upcoming federal budget represents a critical opportunity to put the aged care system on a sustainable footing and ensure older Australians can access high-quality care well into the future.