The industry has expressed disappointment at the Rudd Government’s failure to embrace fundamental aged care reform in the 2009 federal budget.

Just weeks after the Senate’s Finance and Public Administration Committee called for radical changes to the sector, the government has shied away from implementing major policy upgrades.

The biggest news for providers out of Wayne Swan’s second budget is that aged care facilities will benefit from the highly publicised pension upgrade.

From 20 September single pensioners will receive a $32.49 weekly increase in their payments and the basic daily fee will be adjusted to 84 per cent of this new figure.

Pensioners living in aged care will keep $10.09 of the increase, leaving providers with an extra $22.40 each week.

But while the government is passing on the pension increase to providers it will not increase the conditional adjustment payment (CAP) by a further 1.75 per cent in the coming year.

The CEO of Aged Care Association Australia (ACAA), Rod Young said this could leave the industry in a precarious position at the next budget.

“The question now is: what happens to the industry’s aged care index from July 1 2010?” he said.

“Will we be left trying to survive just on COPO? If that’s the case we will have gone back to where we were a decade ago.

“It seems clear that we are going to have to reach an agreement with government about aged care indexation before next year’s budget.”

The Acting CEO of COTA Over 50s Ian Yates agreed, saying urgent action was needed in the coming months.

“The budget has not dealt with reform on aged care in line with growing recommendations from Government’s own advisers including the Productivity Commission and the Health and Hospitals Reform Commission,” he said.

The Minister for Ageing, Justine Elliot said the budget announcements would take federal funding for aged care to $7.1 billion in 2009-10.

“This funding to aged and community care will mean that investment will continue to
occur so the sector can build on the more than 175,000 nursing home beds in Australia,” she said.

Mrs Elliot added that the government will consider the long-term needs of aged care providers further when the full report of the National Health and Hospitals Reform Commission is released.

Adding to industry concerns is the government’s refusal to allow consumers to contribute more to the capital costs of aged care.

“The whole of the industry and every report from the last decade has indicated that the current capital raising system is not sustainable,” said Mr Young.

The government has also ignored calls from the industry to set up a new indexation system for community care.

But industry groups have welcomed the government’s decision to boost the viability supplement for rural and remote aged care services by $14.8 million.

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