Bed shortages from coast to coast
Not-for-profit aged care groups say bed shortages are “inevitable”, following another disappointing budget.
Poor capital funding mechanisms in aged care will lead to bed shortages throughout Australia, not-for-profit providers warn.
This week’s budget failed to deliver for aged care and the possible benefits from the Productivity Commission’s review of the sector will not be experienced for years, according to the Bethanie Group in Western Australia and Anglicare Sydney.
The CEO of Bethanie, Wayne Belcher says the situation is particularly disturbing in WA where there have been ongoing under-subscriptions of residential care places.
“It’s interesting that as part of the COAG [Council of Australian Governments] arrangement, there were 2,500 new places announced for aged care,” he said.
“There are actually about 2,500 places in WA which are unallocated from the past six years so, in theory, they could all be picked up in WA alone.
“But the reason no-one is picking them up is that the funding is not commensurate with the cost of building.”
Mr Belcher estimates that it costs between $180,000 and $200,000 per place to build a new aged care facility.
“If you took out a $200,000 principal on a loan with five per cent interest over ten years, that would add up to about $82 a day,” he said.
“Yet the accommodation charge at the moment is set at $26.88 each day.
“If that was raised to even $65 a day, I think most providers would be delighted and they would be racing each other to build new facilities.”
Anglicare Sydney believes the cost of building new facilities is actually $42 per resident per day but the group’s CEO, Peter Kell, agrees that bed shortages are “inevitable”.
He is concerned that older people in poorer areas could be hit hardest by the lack of supply.
“It’s not coincidental that in Sydney, there is an oversupply in the areas where you can get extra service bonds because of the financial demographic, while in those places where people can’t afford to contribute as much, there is an undersupply,” he said.
According to Mr Kell, one such area is the southwest corridor of Sydney where the state government is releasing land for an extra 300,000 to 400,000 in coming decades.
“That’s a city the size of Canberra in the area near Camden and there is already a shortage of accommodation for older people in that area,” he said.
Although Anglicare Sydney is planning to build two new facilities in the city’s southwest through its Chesalon Living division, Mr Kell said it is putting pressure on the organisation.
“Being the kind of organisation that we are, our philosophy is to provide good Christian care for people in need,” he said.
“We try to do that at our own cost if we can…but the current situation does make it harder.”
Cartoon courtesy of Bethanie Ray.