Aged care spending will jump from 0.8 to 1.8 per cent of GDP 2050, according to the third Intergenerational Report.

The report said residential care would be the main contributor to the growth in aged care spending, although spending on community care is also set to rise.

The rising cost is linked to population ageing, with the number of people aged 85 and over expected to increase more than fourfold to 1.8 million by mid-century.

“Faced with these pressures, we need to ensure our budget is sustainable, or the quality of government services and public infrastructure will suffer,” said federal treasurer, Wayne Swan.

But aged care groups have warned the Rudd Government that it needs to invest in aged care services now if it wants to prepare for the future.

The CEO of Aged and Community Services Australia (ACSA), Greg Mundy said the report validates the association’s calls for reform.

“Catering for the accommodation and care needs of older Australians must be a major feature of the government’s broad agenda to manage the future of our country,” he said.

“This must be seen as a positive challenge to provide more flexible and integrated services to meet these needs and not as an onerous task.”

He said many of the industry’s concerns about funding and overregulation would be addressed if the National Health and Hospitals Reform Commission’s recommendations were adopted.

The Australian Nursing Federation (ANF) also weighed into the debate, calling on the government to increase the number of nurses working in aged care.

“Without appropriate healthcare professionals in nursing homes, high-need residents will flood hospital emergency departments and more and more elderly Australians will languish in acute hospital beds for conditions that could have been managed more efficiently in their residence and with much less emotional trauma,” said federal secretary Ged Kearney.

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