ACAA chief welcomes government ‘commitment’

Above: Aged Care Association CEO, Rod Young.

By Stephen Easton

The CEO of Aged Care Association Australia (ACAA), Rod Young, has “warmly welcomed” a government forecast of increased aged care subsidies through the Aged Care Funding Instrument (ACFI) on behalf of the industry.

In a statement released today, Mr Young said the industry was “delighted” by a statement found in the Treasury’s Mid-Year Economic and Fiscal Outlook (MYEFO) that notes aged care subsidies are projected to increase by $444 million over the current financial year and $1.9 billion over four years.

“However,” he said, “this situation reinforces the need for the Government to respond to the recommendations of the recently released Productivity Commission report for substantial long term reform of the sector. Unless Government responds in the 2012-2013 budget, the demands on the public purse will continue to expand rapidly over coming years as the Australian over sixty five population almost doubles between now and 2040.”

According to the MYEFO document (see ‘Parameter and other variations’ under ‘Payment estimates’), the predicted growth in aged care subsidies was due to “an increase in the estimated average subsidy for aged care residents as a result of older Australians entering residential aged care facilities with greater care needs than previously anticipated”.

“The industry is … delighted that in these very difficult financial times, the Government has been able to support the industry by finding additional funds that will enable care providers to continue to deliver quality services,” Mr Young said.

The ACAA chief said it was essential that the ACFI, introduced in 2008 to replace the Resident Classification Scale, continued “its move towards better matching the funding to care needs, which is in the interest of each and every person in our care”.

But Graeme Croft, CEO of Innovative Care, which owns 11 aged care facilities in Victoria, Queensland and New South Wales, is not as delighted at the increase.

“It’s all to do with increased acuity,” Mr Croft said. “I don’t think there’s anything to be delighted about with the government only giving about a 1.8 per cent [average] funding increase in the past two years.

“I don’t think there’s any joy in those numbers. What it simply means is an increased level of acuity and that’s matched off by higher staffing costs, so if you’ve got greater care needs, you’ve got greater staffing costs, in terms of numbers.”

Mr Croft said there was no doubt the ACFI had delivered a greater level of funding since its introduction, but that this was to be expected because, as noted in the Treasury outlook, people were living at home longer and entering residential care with higher care needs. This, he said, was illustrated by large numbers of low care beds being occupied by people with high care needs.

Similar comments were made by ACAA’s federal president, Brian Dorman, at the organisation’s National Congress earlier this month, after the Minister for Mental Health and Ageing, Mark Butler, said there had been a 4.2 per cent increase in subsidies through the ACFI.

The Innovative Care chief executive said the government needed to increase yearly funding in line with the real cost increases experienced by aged care providers, including wage increases and general increases in the cost of living experienced by all Australians, such as electricity prices.

All aged care providers were “in the race to recruit good quality nursing staff”, he said, and more funding was “absolutely” needed to attract them.

Mr Young and the Aged and Community Services Australia (ACSA) chief executive, Patrick McClure, both strongly criticised the 1.9 per cent indexation applied to the subsidies this year. Both organisations also criticised last year’s indexation of 1.7 per cent.