The Health Services Union is calling for a Medicare-style levy to fund Australia’s aged care system.
However, a former aged care peak body CEO says wealthy aged care users should pay more rather than the taxpayer.
The proposal comes after last week’s hearing of the aged care royal commission briefly discussed non-government funded approaches to aged care including Japan’s social insurance model.
The HSU has announced this week it is preparing a national campaign called Eldercare to address the aged care sector’s “severe, chronic and urgent” funding problem.
It said aged care funding needs to increase by at least $5 billion.
Central to the campaign is a push for a universal, single-payer system for aged care, funded by a Medicare-style levy.
HSU secretary for NSW, ACT and Queensland Gerard Hayes said Australia needed a secure and sustainable funding source for aged care in the decades ahead.
“Providing a dignified level of care to an ageing population is going to cost more money,” Mr Hayes said.
“A universal aged care system, funded by a special levy deserves serious consideration.”
The HSU intends to make this proposal a central feature of the next federal election, he said.
Paul Carberry, who was CEO of aged care peak body Leading Age Services Australia South Australia from 2005 – 2016, agreed the sector was underfunded.
However, he called HSU’s solution misguided.
“If the solution to everything is a new tax, we won’t have an economy left that’s worth taxing.
“In terms of the effect on people’s living standards, levies and taxes disproportionately affect people on low incomes, like HSU members, because most of their money is spent on necessities,” Mr Carberry said.
A big part of the solution has to be requiring aged care clients with substantial property and financial assets to pay more for their care, he said.
“At the moment this doesn’t happen, and taxpayers bear too much of the burden,” Mr Carberry said.
He said aged care funding and regulatory mechanisms also needed to be simplified so more of the available money was spent on care rather than other activities.
Royal commission discusses insurance model
At last week’s royal commission hearing royal commissioner Tony Pagone asked a panel of industry representatives about alternatives to Australia’s model of aged care services largely funded by government.
He asked their view on Japan’s insurance model, which he described as a bucket of money that people are entitled to draw upon, similar to Australia’s superannuation guarantee fund.
COTA Australia chief executive Ian Yates said a discussion about social insurance was important and could happen at both the royal commission and government’s current retirement income review.
It is about how you effectively finance needs in later life, which is what other overall retirement income system is designed to do, he said.
Aged Care Sector Committee Independent Chair David Tune agreed it was to important discuss but said a social insurance system would take time to mature in the same way it took the superannuation guarantee years.
A real issue is whether people are going to accumulate enough over their lifetime to be able to meet their needs, whether they are income, aged care or health needs, Mr Tune said.
“So you are probably talking … something like a 30, 40 year transition to get there.”
Robert Bonner, director of operations and strategy at the Australian Nursing & Midwifery Federation’s South Australian Branch, said the issue was whether it was a social insurance system building a pot of money for the whole community or an individual to access services.
He said the latter was at odds with some of the posited principles such as equity of access, and assessment based on need.
“We would argue that, yes, there is a need to explore some of these options in terms of system funding but not at the individualised level,” Mr Bonner said.
Economist Professor Mike Woods from the Centre of Health Economics at University of Technology Sydney supports having the conversation but said it needed to distinguish between insurance and savings.
“Savings gives you that personal entitlement, which is what the superannuation system is built on, whereas an insurance system is a pooled requirement and then people draw on it as they need, depending on their circumstances.”
He said Japan used a hybrid of these.
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