industry & reform
Changing the model
Aged care providers seek sustainable funding solutions in white paper submission
By Elise Hartevelt
The submission process for the comprehensive white paper is in full swing as Australia seeks to address the financial challenges plaguing its aged-care system .
Over 63 per cent of aged care providers are operating at a loss , highlighting the urgency of finding sustainable funding solutions .
The Aged and Community Care Providers Association ( ACCPA ) recently took the initiative to draft a white paper that will advise the Albanese Government on funding aged care for the next three decades .
The document will incorporate input from sector stakeholders , including older Australians , unions , finance providers , and academics , and is to be submitted within the coming months .
ACCPA chief Tom Symondson said the white paper could be a significant step towards addressing the sector ’ s current financial challenges .
10 agedcareinsite . com . au
“ It ’ s time to have an honest conversation about how Australia bridges the gap between our current system and those of comparable countries ,” Mr Symondson said .
“ The majority of aged-care funding in Australia comes from taxpayers , rather than individuals , placing an increasing burden on the federal government budget .”
Australia ’ s expenditure on aged care stands at 1.2 per cent of GDP , falling below the average of 2.5 per cent of GDP spending by other highincome nations .
The GDP , or Gross Domestic Product , measures the total value of goods and services produced within a nation ’ s borders over a specific period .
Nevertheless , aged care ranks among Australia ’ s top five budget expenditures , alongside the health system , National
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Australia ’ s expenditure on aged care stands at 1.2 per cent of GDP , falling below the average of 2.5 per cent of GDP spending by other high-income nations
Disability Insurance Scheme ( NDIS ), and defence .
During 2021-22 , government spending on aged care services was 27 per cent higher than in 2017-18 – consistent with annual spending growth over the five years .
Despite the government allocating over $ 25.1bn to aged care , there ’ s a growing burden on the federal budget , as most funding comes from taxpayers .
Mr Symondson said that greater co-contributions and taxpayer levies were sustainable funding solutions .
“ We must not lower our expectations and accept that Australia will have an aged-care system with standards well below comparable countries ,” he said .
Sector stakeholders have repeatedly called for greater co-contributions and taxpayer levies , but the government has been reluctant to consider these as viable options .
The Aged Care Financing Authority ( ACFA ) stated in 2020 that a sustainable aged-care system could be achieved by raising co-contributions from older Australians who had the means to do so . “ The Government ’ s response to the Royal Commission ’ s Final Report brought positive reforms for older Australians , including increased funding and improved care ,” the ACFA report read .
“ But these reforms come at a considerable cost .
“ Without reform of consumer funding contributions , the government and therefore future taxpayers will face significant sustainability concerns .”
Aged Care Minister Anika Wells recently announced the department would explore a taxpayer levy to address the ageing population ’ s needs . In line with this , the Health Services Union ( HSU ) told The Australian it would push for a 0.65 per cent aged-care levy at the Australian Labor Party National Conference . HSU chief Gerard
Hayes said implementing the additional levy could generate over $ 20bn for the aged-care sector in four years .
Commissioner Lynelle Briggs also proposed a flat-rate levy at 1 per cent