In the 850-word piece – titled ‘Let’s do better for our elders’ – Pat Garcia, who took on his role since October last year, argues that while there is some room for debate at the edges, no one can dispute the fact that a significant amount of funding is required to fix the system.
However, Australia has avoided the debate on how the cash can be raised.
“Despite what modern monetary theorists may tell us, there’s no pain-free way to find funding. Any method will raise a squeal from someone. And for the past 20 years every squeal has been met with a hasty retreat,” he writes.
However, he says opponents need to come up with a viable alternative.
Mr Garcia points to the Royal Commission’s recent consultation paper on funding and financing which estimates income taxes will need to rise by 2% to foot the bill – around $1,700 a year for the average income earner – through a Medicare-style levy.
The CEO says that while this makes sense, he claims fairer means testing – and higher user contributions – are still key.
“We quarantine a potential source of billions in funding: housing wealth. It’s only the first $171,000 of the value of a home that is means tested for personal and nursing care. It’s a profligacy we can no longer afford.”
He adds that the Pension Loans Scheme (PLS) could be a viable option for people to draw down against the value of their homes, with those who don’t have any significant wealth to remain supported.