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Funding high-quality aged care services 1.28 MB

Australians have been rightly shocked by repeated exposés of widespread mistreatment, neglect and even abuse of elders in our aged care system. Longstanding problems in the system became even more acute during the COVID-19 pandemic, which posed such a danger to older Australians (especially those in residential care facilities): three-quarters of all deaths due to COVID-19 in Australia occurred in aged care facilities. In response to these concerns, the government appointed the Royal Commission into Aged Care Quality and Safety. The Commission compiled exhaustive evidence of systematic failures in the aged care system, identifying in particular the roles of inadequate government funding, undervalued and precarious employment arrangements, and the conflicted incentives of private for-profit providers in causing this crisis in care. The Commission’s final report, issued in March 2021, contained 148 recommendations to urgently repair the system and provide better care to our seniors. Of particular note are several recommendations relating to employment practices in aged care: including the need for permanent employment (not casual, agency, or gig jobs), the need for binding minimum staffing ratios and time allotments, the need for registration and regulation of support workers, and the need for much better training opportunities and clearer career paths.

The comprehensive and ambitious scope of these recommendations gives rise to a common question: How will we pay for all that? This funding issue must be placed in an appropriate context. First, aged care services is not just a budgetary ‘cost’ for government. This report documents that aged care is also a vital, valuable industry in its own right: employing 400,000 Australians, generating some $25 billion in annual GDP, and lifting national incomes, employment, and tax revenues at a time when Australia needs all of those. Expanding the quantity and quality of aged care services should be seen as an economic opportunity, not just a fiscal expense. Second, strengthening the generational ‘pact’ which underlies aged care – with each successive generation of elders cared for by those who come after them – has valuable and efficiency-enhancing economic effects. It allows Australians to make important decisions through their lives (about education, careers, home ownership, investments, and more), safe in the knowledge that they will be adequately cared for in their old age. Finally, large government deficits are both inevitable and desirable as the economy recovers from the COVID-19 pandemic. The economy will need more government spending, funded through deficits, for years to come, and in this context it is not appropriate to worry about ‘funding’ every dollar of incremental expense on aged care (or any other social priority, for that matter).

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