Budget fails on industry sustainability

The budget hasn’t improved the aged care sector’s financial sustainability but hopefully a new taskforce will, says Grant Cordery.

While the budget has improved aged care funding from a wages and inflationary view, it hasn’t boosted the sector’s financial sustainability, StewartBrown’s Grant Corderoy tells Australian Ageing Agenda.

But he’s hopeful the new taskforce announced in the budget will. Details on alternative future funding options could come as soon as December, Minister for Aged Care Anika Wells told a post-budget webinar briefing on Wednesday.

Like others in the sector, Mr Corderoy – senior partner at aged care accountancy and benchmarking firm StewartBrown – said he was happy funding announced in the budget would cover the 15 per cent pay rise for aged care workers.

“That’s good. It’s a positive move all round. I believe that it covers the costs – that it’s fully covered. So, I’m happy from that extent,” Mr Corderoy told AAA.

Similarly for the increase in care subsidy – the Australian National Aged Care Classification. From 1 July the starting price for AN-ACC will increase from $216.80 to $243.10 to cover both the 15 per cent pay rise and indexation. It reportedly puts the annual indexation above 5 per cent compared to the 1.5 per cent a year of recent years.

“It is what’s needed,” said Mr Corderoy. “But I was pleasantly surprised at the new rates of starting pricing for AN-ACC. They’ve covered a shortfall in the current AN-ACC. And I think there is enough set aside for CPI [inflation].”

That’s the positive news. What the budget didn’t do is improve the sector’s financial sustainability, he pointed out.

“In other words, the additional funds … will be washed through,” he added. “The government’s made sure that you’re getting additional funding, and you’ve got to pass it on quite rightly to your workers. So the budget didn’t include any measures that are going to improve financial sustainability.”

He hopes this has been deferred for only a little bit to the new taskforce.

As reported, Tuesday’s federal budget includes $700,000 in 2023-24 for the Aged Care Taskforce. In addition to informing the design of the Support at Home program, the taskforce will review funding arrangements for aged care, and develop options for a system that is “fair and equitable” for all Australians. It has been well received by stakeholders including the provider peak and Mr Corderoy.

“The taskforce is a very good idea as it will allow the design of funding reforms such as changes to consumer contributions to aged care and support at home,” Mr Corderoy told AAA. “As long as it has a clear charter and clear delivery time,” he added.

At Wednesday’s briefing hosted by the Department of Health and Aged Care, Ms Wells gave the impression it would.

The taskforce “is designed to stand up quickly and deliver outcomes, we hope, for MYEFO,” she told viewers – referring to the Mid-Year Economic and Fiscal Outlook, which is usually delivered in December. “We’re going to look at how do we get more funding into a sector that needs more funding.”

Anika Wells addressing stakeholders in a post-budget briefing

It comes, said Ms Wells, in response to “the big unanswered question of the royal commission” of how to fund aged care sustainably while lifting the standard – unanswered because the commissioners had differing views and recommendations.

The taskforce will, according to the Department of Health and Aged Care’s website, build on the royal commission’s recommendations and review funding arrangements for aged care with a focus on:

  • contributions arrangements that will support a sustainable system
  • equity for older people needing aged care now and into the future, and for all Australians contributing to aged care funding through their taxes
  • making innovation the sector default
  • enhancing the elements of the system that Australians value, including putting people using aged care at the centre of the funding arrangements.

Ms Wells said she wanted to address the funding dilemma through a national conversation involving all stakeholders.

“I’ve already had people express interest in being on the taskforce since it was announced last night,” she said. “..We will do more work on this in the weeks to come. There will be terms of reference. There will be time limits to it. I sincerely invite you if you have thoughts about how we should sustainably fund aged care, now is the time to come forward with your ideas.”

Mr Corderoy is keen to be involved. “I will be available for the taskforce if invited,” he told AAA. He’s hoping it will have a strong remit. “And they’ve hinted this in the first point of the taskforce; they’re talking about consumer contributions beside equity. I think that’s code for: we need to look at how we increase the consumer contributions,” he said.

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Tags: aged care taskforce, anika wells, featured, stewartbrown, sustainability,

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