Peak body the Retirement Living Council (RLC) has welcomed the decision of the Aged Care Quality and Safety Commission to scale back its proposed minimum liquidity requirement for aged care operators with retirement village operations – from 10% to 2%.
The backdown, announced Thursday (3 July), follows intense lobbying by the RLC and accounting firm StewartBrown, exclusively revealed by The Weekly SOURCE in May. Ageing Australia also called for independent living unit (ILU) liabilities to be excluded in its submission.
RLC Executive Director Daniel Gannon said the original proposal would have forced operators to hold onto hundreds of millions of dollars to meet the requirement, halting much-needed investment in new villages at a time when demand already exceeds supply.
He added that dozens of Not For Profit operators across Australia were considering cancelling new developments and some banks were reassessing whether they would proceed with lending for certain developments.
While welcoming the decision, Daniel didn’t hold back in his criticism of the regulator.
“This is a welcome outcome for industry, but the fact these standards reach through to retirement villages in the first place shows the Commission doesn’t understand retirement living,” he said.
“While two per cent is better than 10 per cent, it’s still not zero per cent. Many operators will be relieved at where the ratio has landed, but public policy-making didn't need to detour into this space – especially given the risk it placed on future investment and supply.
“The sloppy process has impacted confidence. If these standards weren’t watered down, it would have locked up capital for operators trying to inject new age-friendly housing supply into a housing and care market under stress.”
