Above: Minister for Mental Health and Ageing, Mark Butler
By Keryn Curtis
The Interim Operating Framework for the newly formed Aged Care Financing Authority (ACFA) was released on Monday evening by Minister for Mental Health and Ageing, Mark Butler.
The Aged Care Financing Authority is a key plank of the Government’s $3.7 billion Living Longer Living Better aged care reform package announced by the Prime Minister and Mr Butler on 20 April.
Minister Butler said in a statement that the interim framework, developed in consultation with the aged care sector, will provide some much needed certainty for aged care providers and financiers and would “allow the new Financing Authority to hit the ground running.”
“One of the very clear messages from aged care providers and financiers has been the need for certainty. They need to know that their investment decisions rest on solid foundations to ensure we get the investment we need in residential aged care into the future.”
“The Aged Care Financing Authority will provide independent advice to the government on pricing and financing issues, informed by consultation with consumers, and the aged care and finance sectors,” he said.
However, aged care providers and some members of the finance sector are viewing the interim framework with more caution
National head of aged care services for the business consultancy, Grant Thornton, Cam Ansell said that the ACFA has potential for positive change if the real agenda is to transition to a more viable and sustainable industry.
However he said the risk was that it could increase the regulatory burden on the sector.
“I accept that there is a need for transitionary arrangements in an imbalanced market to protect the disadvantaged, but this needs to be a short term pathway towards less regulation through the Financing Authority, not more,” he said.
Mr Ansell said greater price regulation and the continued inhibition of free market forces, would limit choice for consumers, investment from providers, and affordability for the Australian taxpayer, working against many of the stated objectives of the Authority.
“A heavy hand on accommodation and service pricing would prolong the capital strike and limit access to services for the aged,” he said.
CEO of Aged and Community Services Australia, Adjunct Professor John Kelly, said there remained concerns that price regulation by ACFA for accommodation payments for all aged care residents has the potential to discourage future investment in aged care homes.
“Some aged care providers have already put new developments on hold given the uncertainty this raises,” he said.
Professor Kelly said it was also essential that the operations and recommendations of ACFA are genuinely independent and transparent if decision-making is to be informed by credible analysis of aged care service costs.
The Aged Care Financing Authority comprises and independent chair, Lynda O’Grady, and deputy chair, Graeme Hugo, and representatives from consumer, union, provider and investment groups. AAA reported on the membership make-up of ACFA last week, with the news story, Two steps forward in aged care reform. AAA has previously reported on the consultation process for the draft interim operating framework, with the 1 June story entitled, In good faith.