With just three weeks until Budget night, hopes of serious aged care reform are in doubt.
Media reports this week suggest that the Government will allocate just $10 billion over four years for aged care in its response to the Royal Commission’s Final Report in the Federal Budget – including funding for more Home Care Packages.
It sounds like a lot of money – and with 100,000 older Australians on the waiting list for home care – it’s very welcome.
But the reality is it will take more cash – and a longer-term plan – to make the Commissioners’ recommendations a reality.
Independent thinktank the Grattan Institute forecast earlier this year that an extra $7 billion a year would be required to meet all of the reforms being proposed.
Now they have released a new report revising this forecast to $10 billion a year.
$1.5 billion to increase aged care workers’ wages by 25%
The Federal Government already spends around $20 billion a year on aged care with another $7 million being chipped in by individuals.
An extra $2.5 billion a year is unlikely to address the underlying issues that impact on the aged care sector.
Take aged care workers’ wages for example – earlier this week, Labor called for the Government to use its response to fix the widespread underemployment and low wages across the sector.
But the Health Services Union (HSU) estimates bringing aged care workers’ pay up to a minimum standard would require a 25% wage increase – a $1.5 billion a year investment.
You can see then how thinly spread $2.5 billion a year would be.
We need to pay more for a high-quality aged care system
What is the solution then?
The Grattan Institute says an extra $10 billion a year could be found – if we are willing to pay for it.
They estimate a Medicare-style 1% levy on taxable income would raise around $8 billion per year and cost the median taxpayer about $610 per year.
Reducing the tax breaks for wealthy older Australians by taxing superannuation earnings in retirement – currently untaxed for people with superannuation balances of less than $1.6 million – at 15% would save another $6 billion and more in coming years, Grattan adds.
Finally, changes to the Pension assets test and the residential aged care means test to include more of the value of the family home would also ensure that those who can afford to pay do so – and those that cannot, receive the support from the Government that they require.
Grattan says this would provide enough money to clear the 100,000-long waiting list for adequate home care; shift the system to higher-level care at home for longer; employ at least 70,000 more aged care workers; and lift the amount of care per person and ensure 24/7 RN coverage in all aged care homes.
Aged care transformation will take more than extra funding
It’s not just about money though.
The system also has to deliver confidence to families that their loved ones will receive the care that they need and deserve – that means better accountability and transparency, improved workforce pay, training and career development and a genuinely rights-based system that provides care to all.
Will the politicians consider all of the above in their Budget response?
