Industry groups are disappointed that the 2010-11 federal budget has done nothing to bridge the growing gap between aged care costs and funding.

The government used the budget to announce three new projects valued at $100 million to boost the skills of aged care workers and to support nurse practitioners.

It also implemented a number of measures announced last month as part of the government’s broader health reforms, including a $300 million extension to the Zero Real Interest Loans (ZRIL) program.

But the budget did nothing to address fundamental funding issues such as the inadequate indexation of care subsidies and a limited access to capital, according to Aged and Community Services Australia (ACSA).

“This means that the erosion in hours for a CACP [Community Aged Care Package], which has already dropped form seven to five hours will increase, and that process will start to affect EACH [Extended Aged Care at Home] packages as well,” said the group’s CEO, Greg Mundy.

“In a sense doing nothing does mean that services for those people will go backwards.

“The ZRILs will make a small contribution but no-one says they’re going to solve the capital problem.

“That means the shortfall in the construction of nursing homes is going to continue and there’s already a backlog of some years in states like Tasmania and WA.”

The industry’s lobbying efforts are now firmly fixed on the Productivity Commission’s aged care review, with a preliminary report due in December.

The CEO of Catholic Health Australia (CHA), Martin Laverty said the review was now the “main game in town”.

“CHA are investing all of our energies into the Productivity Commission review to get the outcome of having a thorough blueprint for the future of aged care,” he said

“In the interim there’s a lot of homework to do. We have almost grown used to the fact that the aged care today is provided without adequate money and that is having a detrimental impact on residential aged care.”

However the CEO of Aged Care Association Australia (ACAA), Rod Young, warned that it would take a long time to implement the Productivity Commission’s recommendations.

He said that in the mean time, the aged care sector could struggle to meet the demands of the ageing population.

“When you look at all the data, 2011 is when the demographic change starts to impact on the system,” Mr Young said.

“2011 is seven months away – I just don’t know what the government’s plans are to address that potential shortfall and undersupply situation.”

“If demand were to exceed supply, that would make the industry much more viable but it would not do much for consumer choice.”