Australia’s aged care sector is in crisis – and no one should be surprised.
After years of underbuilding, we’re now paying the price. Our analysis of GEN Aged Care Data shows that between 2020-21 and 2023-24, South Australia added just 253 residential aged care beds. NSW added 700, Victoria 1,372, and WA 1,330. But demand is surging – and the pipeline isn’t keeping pace.
Nowhere is the crunch clearer than in South Australia. Today, 241 older patients are stuck in hospital, waiting for aged care placements. Occupancy in homes is at 98%. The beds just aren’t there.
A big problem – and the wrong fix
The South Australian Government has responded with a 10-point plan to “unblock” the system – a plan that peak body Ageing Australia says is “unworkable.”
Top of the list: asking the Commonwealth to fund 120% of the hospital cost for every aged care-eligible patient still in a hospital bed. That’s over $2,000 per person per day – or around $578,000 per day for SA alone.
Also proposed: penalising providers who refuse hospital discharges by cutting their AN-ACC funding – despite those same providers lacking the space, staff, or resources to safely accept high-needs residents.
This is not just SA’s problem
The aged care bed shortage is national. COVID-era capital freezes, ongoing financial instability, and weak investment have all left the sector unable to scale with the ageing population.
The answer, according to Ageing Australia? A coordinated national strategy – with Federal and State Governments working together on structural reform.
Signs of hope in Canberra
Encouragingly, the Federal Government appears to be paying attention. Speaking on ABC Radio Adelaide last week, Health and Aged Care Minister Mark Butler acknowledged the “bed block” crisis and the need to improve the sector’s “investability.”
“We need new nursing homes built,” he said. “They haven’t been getting built because they weren’t delivering a return. That’s changing.”
He pointed to the looming Baby Boomer demand: “The oldest Boomers will hit the aged care system in big numbers in about two or three years.”
His message to providers? “Get out there and build.”
Time for Plan T
But calls to “build” won’t be enough without action. The sector needs funding reform, capital incentives, and regulatory certainty to scale up.
That’s why we’re proposing Plan T – a transformation strategy led by providers to address the core issues:
- Fix financial viability
- Expand workforce capacity
- Unlock capital investment in new beds
- Develop care models for high-acuity needs
South Australia has sounded the alarm. But the solution must come from a national effort.
The Federal Government is signalling a willingness to act. Ageing Australia is ready to lead. The question now is: will the sector get on board?
