Anecdotal evidence from the current financial year indicates that the industry’s dire financial position has worsened and “many providers are considering walking away” from aged care.
The Government’s external analysis of the industry for last financial year revealed 40 per cent of operators were running at a loss but the Aged Care Industry Council (ACIC) says the situation has deteriorated.
The council warned that unless the Commonwealth Government guarantees the continuation of the Conditional Adjustment Payment (CAP), the industry would reach crisis point.
It said that the loss of the CAP amounted to a $210 million budget cut for aged care.
“Unless the Government listens to the industry and accepts serious structural reform is essential, it is likely that as many as 10 per cent of providers will be forced out during the next financial year,” said ACIC representative Greg Mundy.
“On top of that, at least 4000 staff will be trimmed from staffing levels already cut to the quick due to funding inadequacy, aged care pay rates will move into disparity with the acute hospital sector above 15 per cent on average and aged care providers will simply stop building and/or replacing existing infrastructure as the current system is not sustainable.”
The industry is already feeling pressure following the removal of subsidies for capital works when the previous government’s Securing the Future of Aged Care package was introduced on 20 March.
“This is a system in crisis and Government must recognise this,” said ACIC representative, Rod Young.