Budget: Stakeholders react

Australian Ageing Agenda’s round-up of reaction to the Federal Budget 2014-15 from aged care providers, consumer groups, policy experts and other aged care stakeholders.


Australian Ageing Agenda’s round-up of reaction to the Federal Budget 2014-15 from aged care providers, consumer groups, policy experts and other aged care stakeholders.


Patrick Reid, CEO, Leading Age Services Australia: “LASA welcomes the announcement of the redirection of the $1.5 Billion Workforce Supplement. The Supplement will now be allocated back into care via residential, homecare and relevant community programs.”

“However, another measure announced tonight will see many aged care providers bearing a disproportionate burden of ‘fixing the budget’, via the removal of the aged care payroll tax supplement. This $653 million cut (over four years) will directly erode capacity for providers to deliver frontline care services to older Australians.

“LASA welcome the announcement of the Young Carer Bursary Program. It is important that there is as much flexibility as possible for young carers to continue study while providing care without the added burden of fulfilling work commitments.”

John Kelly

Adjunct Professor John Kelly, CEO, Aged & Community Services Australia: “Retaining the $1 billion Workforce Supplement in aged care is welcomed and will ensure the funding is fairly distributed rather than available only to those providers who had measures in place to access it under previous legislation. Redirecting the funding to a 2.4 per cent ongoing increase in aged care subsidies is welcome news in a Budget that has generally quarantined aged care from funding cuts and will help provide stability for the sector.

“An ongoing 20 per cent increase in the Viability Supplement will mean services will continue to be provided on the ground in many smaller communities… Bringing forward Home Care Packages is also welcome.

“A disappointment was the cessation of the Housing Help for Seniors Programme removing $173 million over five years… Of real concern, however, is the reduction in real annual growth in the Home Support Programme to 3.5 per cent from a level of 6 per cent from 1 July 2018 and we will be taking this up with the government.”

Ian Yates Speaker webIan Yates, chief executive, Council on the Ageing: “The biggest concern is the projected cut to the rate of real growth in the Commonwealth Home Support Program, from 6 per cent a year to 3.5 per cent after 1 July 2018. The government is wrong to link this to the growth in the 65 plus population as most users of community aged care are in their mid-70s or over, whose numbers are increasing at a faster rate. This is the front line of aged care and it makes no sense to cut it.

“In addition, the axing of the Aged Care Payroll Tax Supplement will see aged care providers pass on more than $650 million to consumers over the next four years in higher accommodation charges.

“Giving aged care providers back the $1.5billion Aged Care Workforce Supplement over five years will do nothing for development of the aged care workforce however we welcome its redirection to community aged care providers and residential care, and we welcome the 20 per cent increase in the viability supplement for rural and remote providers.”

Emily Millane

Emily Millane, research fellow, Per Capita: “The Budget set out a few discrete measures which attack the most needy in our society while failing to address the budgetary pressures presented by longevity. What it needed was a comprehensive plan based on fairness and sustainability.

“An increase to pension eligibility age is only useful where it is part of a package of measures to keep people in work. The $10,000 payment to employers does not deal with systemic issues like age-based discrimination or workplaces which are not flexible and adaptive to the needs of older workers.

“Attaching pension payments to the CPI is a crude measure to decrease pension payments without coming out and saying that this is being done. Abolishing the seniors supplement will directly affect these most vulnerable groups, forcing them into debt or an even lower standard of living.

“There was nothing at all on superannuation taxation. This was an obvious place to start to deal with budget sustainability and fairness of our retirement income system… Nothing at all on eligibility for the pension when it could be better targeted.”

Derek McMillanDerek McMillan, CEO, Australian Unity Retirement Living: “We need to assess this budget against the three pillars of access, consumer control and sustainability. On these measures we can only give the government a pass mark at best. Bringing forward places from outer years is a welcome move as there is a desperate shortage today of home care services for older people and an inadequate pipeline of new residential beds. On the other hand, whilst the budget supports consumer directed care it is silent on increased consumer control of care options, which is a great disappointment. And scrapping the imperfect but worthy Housing Help for Seniors trial actually reduces pensioners options and self-determination so we have taken a step backwards on the necessary journey towards true consumer control.

“Finally, the swings-and-roundabouts with the aged care funding changes will be welcome for particular segments of the industry but once again ignores the true sustainability question. Rather than further extending the operation of obsolete residential care facilities, what funding models are necessary to support the construction of new residential facilities?”

Mike Rungie NEWMike Rungie, CEO, ACH Group: “In many ways the long-term move in the Budget to expect people to work until they are 70 is a part of a much needed shift to positive expectations by society for continued engagement of older people. Already up to a third of people in their 60s will see it this way as they were hoping to work through to at least 70 in any case.

“It’s good to see the budget starting to introduce incentives to employers to employ people in their 50s and 60s. But working until you are 70 is a major attitudinal and skills shift that will need much more support than what’s contained in the budget. The Budget starts the debate. Future budgets must fund a variety of quite new strategies that make it possible to work until at least 70, not punish people if they can’t find a job that doesn’t exist.”

Robyn_BattenRobyn Batten, executive director, Blue Care: “It is pleasing to hear the $1 billion, previously allocated to the Workforce Supplement, will be retained in aged care and distributed across all providers, not only those with particular industrial instruments. I also welcome the 20 per cent increase in the Viability Supplement.  The small providers, particularly in rural and remote areas play a crucial role in many communities and are the only option for older people to remain in their community. The increase in the viability supplement will assist these providers… Bringing forward the timing of the increase in community care packages will enable more people to remain in their own home for longer, which is most people’s preference.

“On the down side, the introduction of Medicare payments will have a disproportional impact on older people, who often require more frequent visits to GPs than young people.  We know some aged pensioners currently struggle to pay for needed medical care and medicines and this co-payment and the reduction in the rate of increase of their pensions will exacerbate this problem for them.

“The Home Support Program has been growing by 6 per cent, due to demand for these services, reducing the growth of the HSP to 3.5 per cent will mean increased rationing of these services which support older people to remain independent.”

Martin Laverty

Martin Laverty, CEO, Catholic Health Australia: “CHA is welcoming the reallocation of more than $1 billion originally earmarked for the flawed Aged Care Workforce Compact back into the general fund for aged care delivery, which will mean all aged care providers can benefit from the funding boost and deliver better care for older Australians… CHA had always argued that the funding for the Workforce Compact should be spread evenly across the aged care sector so that all providers, regardless of their size or the nature of the employment contracts they had with their staff, could use the money to improve care outcomes for older people. CHA had also argued that governments should have no role in setting wages for workers.”

Dr Yvonne LuxfordDr Yvonne Luxford, CEO, Palliative Care Australia: “We welcome the commitment to fund all initiatives under the National Palliative Care Program for a further six months, but are concerned that the future of these important quality improvement and educational programs remains uncertain under the Federal Budget… I also have concerns that the use of Activity Based Funding as a method to fund health services delivered in hospitals remains uncertain after 2016. Palliative care and other subacute services are currently engaging in a huge amount of work to adopt an ABF model. Will this be wasted effort?

“PCA has long advocated for advance care plans to be included in the Personally Controlled Electronic Health Record (PCEHR) and the continued support for the PCEHR in this Budget will make this a reality… Additionally, we hope the huge increase in dementia research funding goes some way to improve end of life care for people with dementia and their carers, and that the nursing and allied health scholarships help improve palliative care in rural and remote areas.”

Hal KendigProfessor Hal Kendig, Centre for Research on Ageing, Health & Wellbeing, ANU: “Budgets are important for signalling new policy direction – which is especially important with a new government – as well as resourcing support and services. It is telling that the Department of Human Services did not mention aged care in its media releases though the budget outcomes statement did include residential and community care.

“In last year’s budget, just after the bipartisan passage of Living Longer, Living Better legislation, there were modest but short term allocations for re-structured aged care programs, in line with the important Caring for Older People report of influential Productivity Commission. There were a few wins in this year’s Budget– notably the Workforce Supplement funding has been welcomed by the aged care industry and Home Care Packages were brought forward– and aged care has largely been spared from the major cuts elsewhere in the budget.

“Major funding developments are largely left ‘between the lines’ for the future. Overall cuts in health funding, and severe restraint on state governments, have set the grounds for ongoing contention. There is the clear need for substantial resource increases to ensure adequacy of care especially for people who do not have the means to contribute more of their own resources.  The increase of accommodation charges is at the forefront of what can be expected to be more user funding in new means testing arrangements.

“Aged care will surely emerge more prominently in the lead-up to the next election. This year’s modest allocations need to be appreciated in the context of the governments’ overall deficit reduction strategy.”

MaryWoodwebMary Wood, executive director, Retirement Living Council: “The decision to abolish a pilot program that removes penalties on age pensioners who wish to downsize is a disappointing and retrograde step. Dumping the Housing Help for Seniors program, just before it was due to begin, will have adverse effects for senior Australians who want to move to a smaller house. The Productivity Commission has recommended in two recent reports that the Australian Government should support innovative schemes that allow wealth in family homes to be unlocked, and enable seniors to downsize without being financially penalised. Senior Australians should be allowed to choose homes that allow them to age in place, but the scrapping of Housing Help for Seniors creates less housing choice and puts more pressure on residential aged care and the taxpayer… Enabling senior Australians to choose homes containing grab rails and other mobility-enabling features, free of any trip hazards, such as homes in retirement villages, has many social and economic benefits, which will be harder to attain for many Australians due to this decision.”

??????????Louis Dudley, managing director, Bupa Care Services: “The redirection of the $1.5 billion Workforce Supplement back into the general funding pool was a good thing to do and I commend the government for that. It’s a much more equitable way across the industry to deliver that money to the hands of the people who deliver the care. We have already given most of that pay increase regardless of not getting the supplement money initially, so we are pleased to see that go back into the general pool of funding.

“The payroll tax supplement is something we’re still coming to terms with. I understand why the Commission of Audit proposed it; the idea that the Commonwealth would not pay back state taxes. However, this needed much more discussion and consideration before it was just removed. Effectively we now have to go back to the state governments and negotiate with each one – that’s increasing red tape for me.”

Tags: ach-group, acsa, blue-care, cota, emily millane, federal-budget, ian-yates, john-kelly, lasa, mike-rungie, patrick-reid, pca, per capita, robyn-batten, yvonne-luxford,

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