Opinion: It’s time to refocus from the Budget to long-term reform

Ryman Healthcare Australia CEO Cameron Holland.

Ahead of this week’s 2023-24 Federal Budget, the Albanese government promised to be ambitious for aged care.

Several measures were announced, with billions of dollars in additional funding flowing into the sector over the next 12 months, alongside recently reported changes to migration settings that will have a major impact on the supply of aged care workers into the future.

But although these measures will go some way to addressing the crisis our sector is experiencing in the short term, it’s not enough to ensure a sustainable future for aged care in Australia. An alternative approach is needed to help fix our broken aged care system, instead of just pouring more taxpayer dollars into a bucket with a hole in the bottom.

The reality is that there is no path out of Australia’s aged care crisis that doesn’t involve some kind of consumer co-contribution model.

I found last week’s news that the government has commissioned policy research on consumer co- contributions to aged care far more encouraging than the announcements made by Treasurer Jim Chalmers in the Budget.

The fact the government is looking at how to address this fundamental problem tells me it’s actually serious about fixing aged care in Australia long term. Real change to the financial model of our sector has the potential to be a sustainable, long-term solution to the broken system we find ourselves in.

Currently, our sector is failing to meet changing customer needs, and two-thirds of operators are running at a loss. A shift towards consumer co-contributions would allow operators to provide the kind of care our elderly deserve.

Aged care has three core components – accommodation, care and daily services. At the heart of the co- contribution model lies the deregulation of accommodation and daily service costs, which are currently funded by the government on top of direct aged care services.

We currently have an absurd situation where consumers want to pay for better accommodation and daily services and aged care operators want to provide them, but they aren’t allowed to. 

While direct aged care services should always be publicly funded, and are a cherished safety net for vulnerable elderly Australians, those with the means should be able to pay for the quality accommodation and daily services they want.

Giving people the choice to pay for the kind of accommodation and services they’ve worked hard for, and have come to expect, would put operators back on a path to profitability and attract the capital investment they need to grow. 

At the same time, it’ll lessen the financial burden on the government and free up funding to meet the care needs of all older Australians.

With the huge spike in demand that is starting to hit aged care, real reform of the sector’s funding model can’t come soon enough.


Please enter your comment!
Please enter your name here