A capital failure in aged care

A recent survey showing that around half of the nation’s providers had deferred building works in the past 12 months, has re-sounded the call for government action to address the problem of capital investment for aged care.

The sector has called upon federal election candidates to step up to the mark and demonstrate their commitment to address the very real problem of capital investment in aged care.

The Aged Care Industry Council (ACIC) has recently released the results of an online building survey which found that around half of the nation’s aged care providers had deferred building works in the past 12 months.

The results are being blamed on government indecision surrounding capital financing. Over 40 per cent of the deferred works were new works, while almost 60 per cent were renovations and extensions- half of which were being deferred indefinitely.

CEO of Aged Care Association Australia (ACAA), Rod Young, said that what the sector is asking for is “plain and simple”- government action.

“The survey, which attracted 220 responses, represents 20 per cent of the industry,” Mr Young said.

“It clearly showed that of those who had decided to defer building works, the deferrals amounted to over $1 billion of investment. Extrapolate that to the whole industry and you are looking at five times that amount.

Mr Young said that because of such a slowdown, there “simply won’t be enough places in residential care for older Australians who will be forced to stay longer in hospital or cared for at home by their children”.

”Neither of these alternatives is acceptable if older people are to have appropriate care and support when they need it most.

“…It is unfortunate that at a time when the industry needs investment, the current incentives for the industry- particularly those for nursing homes- are sending all the wrong signals. Providers can’t afford to take the risk.”

Aged and Community Services Australia (ACSA) CEO, Greg Mundy, said that the government can not afford to stand still on aged care.

“The whole process of building, including financing and planning approval, takes time,” Mr Mundy said.

“Continual delays will exacerbate what is already a looming problem in some areas where there are long waiting lists for residential care.

“Governments plan and budget for all other infrastructure needs but they have failed to provide workable capital raising policies in aged care.”

Thirty-one per cent of respondents blamed the inability to service borrowings as a reason for deferring building works and 21.8 per cent cited the cost of finance.

The issue of capital financing was raised at last week’s aged care debate where the Minister for Ageing, Justine Elliot said she stood on the government’s record of reform and reminded the sector of the successful zero interest loans.

Mr Young and Mr Mundy however commented that the loans and one-off grants can only be regarded as a partial solution in what is essentially an under-funded industry.
 

Tags: acaa, acic, acsa, aged, building, captial, care, council, deferrals, industry, investment,

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