Hal Kendig
Professor Hal Kendig


While the Living Longer Living Better (LLLB) reforms steer aged care policy in the right direction, and begin to address the sustainability of aged services, several “big issues” remain to be confronted and will require fortitude and political will.

In a fresh stocktake of the reform process, Professor Hal Kendig has said that stakeholders must stay the course as resistance to some changes would be inevitable.

Professor Kendig, from the Centre for Research on Ageing, Health & Wellbeing at ANU, spoke on the progress made and challenges ahead at the Committee for Economic Development (CEDA) earlier this week, and is preparing a discussion paper on the issues.

As Australian Ageing Agenda has reported, the CEDA conference heard from Assistant Minister for Social Services Mitch Fifield, who signalled the need for further reform of the aged care sector but said any major changes would be put on hold until the LLLB reforms were bedded down.

Professor Kendig said the blueprint for reform developed by the National Aged Care Alliance (NACA) and the “analytical framework” from the Productivity Commission’s 2011 inquiry into aged care provided the necessary directions for future policy.

Furthermore, the new institutional structures being established, such as the Aged Care Financing Authority and the Aged Care Quality Agency, meant the sector was “positioned to act”.

Given the current budget sustainability issue facing Australia, there was a growing acceptance of the need for individuals with means to contribute more to the cost of their care and get more choice, and for those who could not to have adequate government support, he said.

“But we’re going to encounter political difficulty; there will be ongoing resistance from a range of areas, and stakeholders must continually deal with these issues along the way, because there are understandably some very strong entrenched interests,” Professor Kendig told AAA.

The right direction

Professor Kendig presented a summary of the history leading up to the current reforms, which highlighted the significant nature of the changes underway. He described the reforms as a “historic change” from a provider and funder focus to a consumer and carer focus.

“We’re at a critical point of enabling this to happen,” he said. “The evidence and the research tell us this is what older people and carers want. And when we talk about sustainability issues, it’s not just the bottom line that’s important; it’s meeting the needs of older people in an equitable and sustainable way.”

He said consumer directed care (CDC) was the most constructive approach available to drive this shift. While it was undoubtedly positive and enabled greater flexibility and independence, it also had limitations which had to be recognised.

While the provision of funding to the consumer would instil greater transparency in the system, the current ability of providers to “case mix” and cross subsidise clients who needed more than their package permitted would be lost in the CDC model.

“For some people who don’t need as much, in terms of care, they will have some surplus to buy more of what they want, which is great. The issue will be for those who need more than their allocated amount permits. This will be challenging for providers who are very dedicated to their clients, and will see some of them either having inadequate care or going into residential care.”

These issues would be evaluated and monitored as the CDC model was rolled out, he added.


On the broader challenge of funding aged services, Professor Kendig said the issue of sustainability was paramount. “The budget deficit is real. We are not going to be able to expect great increases from the public sector for aged care – although we should fight like crazy for it.

“We have to recognise that there is a huge potential for older people themselves to pay more towards their own cost, as long as it is done fairly, sensitively, and flexibly.”

The PC’s report outlined this very well, he said, but the former government decided against including the home as an asset.

While historically this reform had been “a step too far” for governments, it was inevitable that people be enabled to draw on the wealth in their home. “Families generally recognise that the care of their older family members is the priority. If that reform is done sensibly, and these are new rules for the way it works, that would offer a way forward.”

Professor Kendig said this change would not happen overnight: “Rather it’s about saying this is coming down the road, and as part of the implementation of aged care reform over the next decade we have to enable people to have that choice to use their own resources.”

This reform would also ensure that the “very scare public money we have can disproportionately go towards those who don’t have any private resources,” he added.

Stakeholder discussion

Professor Kendig said he aimed to contribute to the reform agenda by highlighting the issues and encouraging stakeholder reflection. To that end, he was preparing a discussion paper which the ANU Centre for Research on Ageing, Health & Wellbeing would publish in coming weeks.

Similarly, the ARC Centre of Excellence in Population Ageing Research was preparing a series of aged care reform briefing papers.

Australian Ageing Agenda will carry further coverage of these papers when they are published in coming weeks. 

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