Soaring building costs hits WA aged care industry

Aged care providers say nursing home owners cannot afford to take on new clients, because of the rising cost of building accommodation and difficulties in finding staff.

They are also closing existing beds, according to press reports .

The sector has declined to take up 336 licences – more than a third of the 1,000 Federal Government funded bed licences – offered in the 2008 budget.

It is now 2,000 beds short of Government targets.

Anne-Marie Archer from the Aged Care Industry Council says slim profit margins means care providers cannot afford to build new premises to house the extra beds.

She says soaring construction costs have put Western Australia in a worse position than other states.

“The reality is, providers are not moving into a long term sort of viable future and that comes in largely because of the funding regulations etcetera, that will not allow providers to have a viable model,” she said.

Stephen Kobelke from Aged and Community Services WA, said the industry had spurned once lucrative bed licences.

“I was shocked,” Mr Kobelke said. “Normally there would have been competition for those licences, but now the Government can’t give them away.”

He said several not-for-profit aged care facilities had told him they intended to hand back bed licences, because they could not find staff to work in jobs paying less than $40,000 a year.

Construction of new residential care homes had slowed to a trickle, Mr Kobelke said, due to a 9.3% hike in building and operating costs in metropolitan Perth.

“There is no business case to set up a new aged care home, even on a charitable basis,” he said.

Amana Living chief executive, Ray Glickman, whose Anglican Church body operates 15 residential care facilities, said staff were already in acute short supply in Perth.

Mr Glickman said 40% of shifts in some nursing homes were being covered by costly agency staff, and he was struggling to keep doors open in regions where even agencies could not supply any workers.

“Things are too serious now for us to remain silent,” he said.

David Fenwick, who runs the 173 bed Amaroo Village in Gosnells, in Perth’s southwest, said he had closed his waiting list when it reached 153 people.

“The Government has abandoned Australia’s elderly in both pensions and aged care, and we need help to meet the real capital cost in Perth of providing new aged care beds at $220,000 per bed place,” he said.