Bang for your buck: funding aged care ranks 6th in economist survey on boosting economy

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Social housing and permanently boosting the JobSeeker rate have beaten out funding high-quality aged care as the key ways to help the economy get back in the black over the next two years, according to a survey of 49 economists ahead of next Tuesday’s Budget update.

The economists who responded to the Conversation-Economic Society of Australia pre-budget survey were asked to rate 13 options selected by a committee of the central council of the Society in terms of their effectiveness in boosting the economy, and nominate four as the best.

As you can see from the chart above, social housing was the winner, with 55% of respondents supporting the option, saying it would deliver a social benefit of reducing homelessness as well as provide work for the construction industry.

Closely behind on 51% was permanently boosting JobSeeker, currently due to end in December, followed by education and training at 45%.

Aged care came out in sixth position on 31% behind infrastructure projects and wage subsidies, but ahead of boosting childcare subsidies at 29%.

The numbers seem low – but there was agreement among many of the economists that aged care should be targeted as a priority in the wake of COVID.

“Given the source of the crisis, and the need to protect the aged while allowing the rest of the economy to operate more normally, more money to aged care seems desirable,” said Nigel Stapledon from the University of NSW.

However, some of the respondents said the money was needed to crack down on ‘unscrupulous’ operators.

“The budget is an opportunity to right this wrong. Funding of aged care should include greater funding for government regulation and monitoring of aged care to reduce the exploitation and profit-skimming of some private providers,” said Lisa Cameron of Monash University.

Despite this, there is still a strong argument that funding aged care will deliver the economic boost the Government is seeking.

Uncapping aged care beds and home care packages will require an increase in the workforce which will drive employment, while new accommodation models will boost construction.

There are also the social benefits that would come from more spending – including restoring the ‘trust’ of the community in the aged care system.

Will the Treasurer come to the same conclusion in his Budget update?

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