This week the ABC turned the spotlight on a not-for-profit aged care provider that recently made 120 laundry and kitchen staff in New South Wales and Queensland redundant.
Some residents and their families have been angered by the move while the Health Services Union has labelled it a cost-cutting exercise, but for us it underlines the real impact of the Federal Government’s budget cuts to aged care.
Respected aged care accounting firm StewartBrown is reporting 43 per cent of aged care facilities are now making a loss, up from 34 per cent in the previous financial year – that’s over four in ten facilities in the red.
Can you imagine if these were schools or hospitals? The figures would be front-page news.
Aged care sector at serious risk
StewartBrown has put the figures down to this year’s indexation freeze on aged care subsidies, the amendments to the Aged Care Funding Instrument (ACFI) that kicked in last January and the increasing costs of direct care.
They say labour costs have jumped four per cent since June last year, mostly due to increased hours and wage costs. Meanwhile residents are going into care later – the average age to enter residential aged care is now 82 – so these costs are only going to increase.
Minister for Aged Care Ken Wyatt has rejected the idea the system is under-funded, saying Commonwealth spending in the sector has increased by around $1 billion per year since 2013. He’s also said that the new indexation rates released this week should see more funding flow to the sector.
But the new rates are far below what is needed – just 1.4 per cent in the “Activities of Daily Living” and “Behaviour” domains and 0.7 per cent increase in “Complex Health Care”.
The peak aged care bodies have been calling on the Government for an immediate four per cent funding indexation increase or about $470 million in short-term funding while a long-term, sustainable solution is developed.
We need it – otherwise stories about providers outsourcing workers will be the least of our problems.
