KPMG’s latest deep dive into the aged care sector is released today and it confirms what many of us already know.

Demand is rising. So is the money. But the sector? It’s still shrinking.

Take home care. Government funding soared 29.2% to $8.8 billion in FY24. But the number of people receiving a Home Care Package only grew by 6.6%. The waitlist keeps ballooning.

Just five new home care providers entered the market – mostly NDIS players expanding into aged care. And their share of Government funding? Barely a ripple – see below.

KPMG warns that the looming Support at Home rollout – now delayed to 1 November – will spark a wave of market exits and consolidations. That’s already happening: two more Canberra providers have just pulled the pin.

Residential aged care isn’t faring much better

The number of residents rose 3.2% over the year, but the number of places increased by just 1%. New providers are only opening one home at a time – again see below – nowhere near what’s needed to meet demand.

We’re not moving the needle. And yet, the opportunity is right there.

Since mid-2023, the home care waitlist has exploded by 125%. Fewer older Australians are entering residential care – down from 6.5% to 4.2% of the 65-plus population – but the supply of beds has barely budged, growing just 1% a year since FY18.

There’s no shortage of customers – just a shortage of places which the Government is under increasing pressure to solve.

And still, the sector has more cash than ever. Funding for the top 25 home care providers jumped 49.5%. The rest of the market saw an 18.3% lift.

New capital is also circling with investors watching.

Minister Butler has warned: demand is about to take off. The question is, who’s going to meet it?

Will existing operators step up – or will they hold back and let newcomers take the prize?

We’ll have more on the challenges – and opportunities – facing home care in the next issue of SATURDAY.