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Australia spending less than international counterparts


Source: Research Paper 2: Review of International Systems for long-term care of older people

Australia’s low level of spending on aged care compared to other nations is “embarrassing” and putting the care of seniors at risk, say aged care peak bodies.

The royal commission released two Flinders University-led research papers on Friday that provide an overview of aged care systems and models in other countries and innovative models of aged care (read our story here).

The report looks at population demographics, use of long-term care, government and user spending and workforce.

In terms of government spending, the researchers found that Denmark and Sweden came out on top with both countries spending more than 4 per cent of Gross Domestic Product on long-term care.

According to the report, Australia’s demographic profile and GDP per capita is roughly similar to Sweden and Denmark but Australia’s estimated expenditure on long-term care is lower at 1.2 per cent of GDP.

Australia also spends a lower proportion of GDP on long-term care than Japan (3.6 per cent) and the Netherlands (3.4 per cent) and slightly less than England (1.5 per cent) and Canada (1.3 per cent).

Patricia Sparrow

Aged and Community Services Australia CEO Patricia Sparrow said the results were a wake up call for Australia.

“Australia is at the bottom of the barrel when it comes to GDP spending on aged care.

“That’s not just embarrassing, it should also be an urgent wake up call for the economy and for people entering retirement who may need aged care within the next 20 years,” Ms Sparrow said.

Australia is falling behind because older Australians are undervalued, she said.

“There is a fundamental mismatch here, that at its core is an undervaluing of the contribution older people deliver for community and the economy.”

“Not only is the aged care sector underfunded compared to other countries, but Australians who make huge sacrifices to care for elderly relatives don’t get the same level of benefits either,” Ms Sparrow said.

Aged care needs funding boost

Leading Age Services Australia CEO Sean Rooney said the report highlighted the chronic underfunding of aged care in Australia.

“With findings that Australia spends around 1.2 per cent of GDP on aged care, well below the OECD [Organisation for Economic Co-operation and Development] average of around 1.5 per cent and much lower than some European countries, it is vital our residential and home care programs receive a long-term funding increase,” Mr Rooney told Australian Ageing Agenda.

Sean Rooney

“The care of senior Australians is at risk, as residential homes suffer extreme financial stress and thousands of people are dying before receiving their approved home care packages.

“Australians want and deserve a world-class aged care system and a critical part of achieving this is world-class funding,” he said.

AAA has sought comment from Minister of Aged Care and Senior Australians Richard Colbeck.

Access Research Paper 2: Review of International Systems for long-term care of older people here and Research Paper 3: Review of Innovative Models of Aged Care here.

Read Community Care Review’s coverage here.

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2 Responses to Australia spending less than international counterparts

  1. Anton Hutchinson January 29, 2020 at 1:57 pm #

    Another report, more facts of the deplorably under spend on residential care. I may have lost count but I think that now makes twenty such damming reports.

    And what are our associations doing? Very bloody little culminating in zero improvement.
    What, are we waiting for an act of benevolence in the May budget… from a government that has deliberately and callously brought about massive financial stress for residential operators? Good one.

    It’s time to put the pressure back on the government, a plan was put forward by the Guild weeks ago… nothing in the way of support for that. And worse than that.. the associations won’t even put a plan to the membership!
    Most of us single and small operators have invested their lives over decades and we are annoyed, wildly frustrated and desperate.

    Get off your knees LASA etc and get serious now!
    Nothing in the May budget!

  2. Pam January 29, 2020 at 4:18 pm #

    I have worked in management in residential aged care for the last 39 years so I have witnessed the development of RAC from basically a boarding house situation with some care for elderly people, to the sub-acute facilities that they are now. Also during that time I have seen many governments come and go, so I have a fairly good idea of who performed well for the elderly of Australia, and who didn’t. How do I rate the current coalition government………..where do I start.
    I will start with the government of Malcolm Turnbull – the Prime Minister who thought so highly of aged care that when he formed his new Cabinet after taking over from Tony Abbott, he forgot to appoint someone to the aged care portfolio. In December 2016 I wrote this to Prime Minister Turnbull on behalf of the Board of our charitable home – “The reason for this letter is to express to your our utter disappointment with decisions taken by the Turnbull Government to reduce funding to the aged care sector at a time when people are coming into our care with levels of acuity never before experienced in our very long history. The cuts we are talking about are as follows – Cuts of $472 million announced in the Mid-Year Economic and Fiscal Outlook last year, and cuts of $1.2 billion announced in the May Federal Budget through proposed changes to the ‘complex health care’ domain of the Aged Care Funding Instrument. Previous cuts to our funding included a freezing of indexation in 2012, and the removal of the payroll tax supplement in the 2014 budget. ……..We have experienced many changes and cuts to our funding over the last 8 years and we have survived, but these cuts are in a totally different category as they really do have the potential to bring this industry to its knees”.
    That letter was four pages long and did it receive an acknowledgement/reply – no it did not.
    My point is that the government had only ever funded us to provide a very basic level of care, and at the very time our incoming residents are entering with high levels of acuity they make the biggest funding cuts in the history of aged care.
    Our facility is in regional Australia and is now making a loss because the funding cuts made three years ago have now fully impacted. The current Prime Minister Scott Morrison was the Treasurer when these cuts were made, and now he chooses to ignore the fact that over 50% of RACFs are making a financial loss because of decisions he made in 2016/17. I don’t know what the plan was put forward by the Guild weeks ago that Anton mentioned above, but I agree that our peaks LASA and ACSA need to do something dramatic that will capture the attention of the media and the Australian public. The PM does seem to have a ‘tin ear’ and only seems to react when public pressure is brought to bear.

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