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Deep clean
“ The aged care
system is a stain on Australians ’ conscience .
Aged care system needs $ 10 billion a year : Grattan .
The cleaning bill needed to remove the aged care “ stain on Australians ’ conscience ” should total $ 10 billion a year , a leading think tank says .
The Grattan Institute said the extra spending could be funded by some mix of a new Medicare-style levy on taxable income , changes to the pension assets test and / or the residential aged care means test , and reductions in tax breaks on superannuation .
“ The aged care system is a stain on Australians ’ conscience ,” Grattan ’ s Stephen Duckett , Anika Stobart and Hal Swerissen said . “ Fixing aged care is more than a political problem , it is a moral imperative .”
The royal commission identified a $ 9.8 billion annual funding shortfall in aged care .
The Sun-Herald reported that the government will promise at least
$ 10 billion over four years for aged care in May ’ s federal budget .
Quoting an unidentified source , the publication said while the exact figure isn ’ t yet finalised it would exceed $ 10 billion .
But writing for The Conversation , Duckett said this amount is “ below what experts identify as necessary to fix the problems revealed by the royal commission ”.
To come up with the $ 10 billion per year for aged care , Grattan said the government could consider a 1 per cent aged care levy on taxable income , as set out in the final royal commission report , which would raise about $ 8 billion per year and cost the median taxpayer about $ 610 per year .
The group added government should find more money for the sector by cutting “ excessively generous ” tax breaks for wealthy older Australians .
“ More of the value of the family home should be included in the Age Pension assets test . And superannuation earnings in retirement – currently untaxed for people with superannuation balances of less than $ 1.6 million – should be taxed at 15 per cent , the same as superannuation earnings before retirement .”
Duckett added that should additional funding not be accompanied by system reform , “ then an opportunity will have been wasted , and the spending will be wasted on system inefficiencies and excess management fees rather than on improved services for consumers ”.
The Grattan report detailed a path forward for aged care based on the royal commission ’ s recommendations .
Its authors said their report seeks to provide a clearer roadmap to a better aged care system after the final report was “ littered with disagreements between the two commissioners ”.
“ It navigates through the differing views of the Commissioners to show how Australia can achieve a rights-based system that provides adequate care and support for all who need it .” ■
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