Reform must be driven by an independent review

As readers of Inside Ageing might be aware, in the last year the Coalition Government has taken a lot of money out of the aged care sector, cutting $1.6 billion in funding from the Aged Care Funding Instrument.

The Government has taken this approach because they believe there is over-use of complex health care by aged care providers to increase payments.

Senator Rachel Siewert
Senator Rachel Siewert

However, many providers and aged care residents across the country have raised concerns about the impacts that cuts to the Aged Care Funding Instrument will have.


Changes to the complex health care domain were set to impact people suffering from chronic pain, degenerative diseases, severe arthritis and complex wounds.

Paul Sadler from Aged and Community Services Australia (ACSA) flagged some major concerns, saying:

“Our modelling suggests that the full implementation of the proposed changes to ACFI would decrease annual funding per resident by an average of $6,655. A decrease in funding may also affect other areas, such as investment in workforce development, which may in turn, impact on the quality of services provided. We have been calling for some time for a comprehensive review of aged care funding and we have welcomed the Government being willing to commence the discussions on the funding tool and a re-examination of alternatives. These discussions are ongoing,” Mr Sadler said.

This comes at a time when those entering residential aged care are going in later with far more complex health care needs.

This week, the Government announced they would wind back on cuts to chronic pain and physiotherapy, which is a step in the right direction. The Government also agreed to increase the supplement to support remote and rural aged care services. This is a positive thing but I note that huge cuts to the sector still remain.

The sector has also raised concerns about the lack of consultation and transparency in the cuts. These concerns highlight the need for a full cost of care study by Government, so that we can develop an accurate picture of what the true cost is.

We also need full and independent review of the funding instrument. Genuine reform of the instrument should be driven by an independent review, not by government making ad hoc cuts.

I agree that those found to be abusing the tool need to be held accountable, but we do not need to take a swing at the funding instrument as a whole before a full review is undertaken.

An ad hoc tightening of the ACFI is about Government saving money, not genuine reform.  The Government’s budget cuts are going to hit the sector hard and further add to uncertainty in the sector.

As part of the Senate inquiry into the aged care workforce we are already receiving evidence of the impacts of the first round of cuts on care and workforce.

Unfortunately, my two attempts to refer this issue to a Senate inquiry into the issue has not been supported by either the Government or Opposition, despite the members of the Labor party expressing concern about aged care funding and introducing a private members bill for an aged care funding review.

A senate inquiry would occur in a reasonable time frame, whereas the bill will sit in the chamber, and will not get government support in the Lower House even if it does get debated and supported in the Senate. This seems to be more about looking like something is being done. Now the Government has announced more changes to the cuts, it is more important than ever that we have a senate inquiry to the cuts. The bottom-line is: they are complicated and need investigating. I hope both the old parties acknowledge that these changes need further scrutiny, particularly because there is still $1.6 billion in cuts to the aged care sector on the table. This is not loose change.

Australia’s population is ageing and we need to continue to provide quality care for older Australians irrespective of the challenges the aged care sector faces. Behind these cuts are older Australians who deserve quality care, they should not be at the brunt of budget ad hoc savings measure by the Coalition Government.

We need to develop innovative and creative solutions to the challenges, but ensure we have proper funding to meet the needs of older Australians into the future.

We also need to more broadly look at how we support older Australians into the future, that includes making sure we work hard to retain and encourage workers in the aged care sector workforce, addressing aged discrimination in the workplace, and ensuring the sector is ready for an increased ageing population and beyond.

Senator Rachel Siewert is the Australian Greens whip and has led the push for a senate inquiry into aged care funding. 

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