The level of aged care in this country could be raised by a 1% increase to income tax or the Medicare levy – but are Australians ready to pay?

The Royal Commission into Aged Care Quality and Safety might not have been in session this week, but it stayed in the headlines with the release of its 11th research paper from economic advisory firm Deloitte Access Economics.

There was plenty to take away from the 45-page report, but Deloitte’s key conclusion was that Australia’s aged care system would be able to achieve a higher-quality ‘four-star’ rating through improvements funded by a 1.01% income tax increase, or 0.89% hike in the Medicare levy.

Under this model, the Commonwealth’s aged care spend would rise from $20 billion this year to $45 billion in 2030 and $151 billion in 2050.

So, where would this money go?

Deloitte points to the need for systemic improvements like increasing staffing levels and training, uncapping the number of Home Care Packages and improving access to medical professionals.

And the firm notes there will be a workforce demand that comes with this – the equivalent of 30,000 new full-time jobs, plus another 50,000 part-time workers just to meet the needs of the growing older population.

Interestingly, Deloitte says a 1.48% increase to income tax or a 1.31% increase in the Medicare levy would be enough to bring Australia’s aged care system to a ‘five-star’ rating, which would see aged care expenditure climb to $50 billion in 2030 and $171 billion by 2050.

But are Australians ready and willing to pay?

It’s tricky to say, but it’s worth casting your mind back to one of the Commission’s earlier research papers.

Its sixth report focused on a survey of 10,000 Australians by Flinders University who said they would be willing to pay 3.1% more income tax if it meant they’d have access to a better-quality aged care system.

This is well below the figures suggested by Deloitte.

But, before you get too excited, it is important to remember these are just figures. Filling out a survey online is one thing – opening your wallet is another entirely.

Prime Minister Scott Morrison thought as much, putting the kibosh on the suggestion of higher taxes to fund aged care in a press conference this week.

“I will await their [the Royal Commission’s]recommendations but the Australian government, particularly in the middle of a pandemic, particularly when we are seeking to rebuild our economy, whether it is in what is the quite-ravaged area of Victoria at the moment or in other parts of the country which have been able to remain largely COVID free, the one way you build your economy back is you don’t hit it with higher taxes,” he said.

“That is not our plan, it has never been our plan. Our plan to grow our economy has always been about getting people’s backs, not getting on them.”

If the Royal Commission has revealed anything, it’s that there will be elements of Australia’s aged care sector that have to change – and doing so won’t be cheap.

Making these potentially unpopular decisions will take strong leadership.