Grattan Institute calls for $10 billion a year to fund Royal Commission recommendations

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The independent thinktank has revised its expectations of what it will cost to deliver a high-quality aged care system for older Australians – and the numbers are big.

The Institute’s Stephen Duckett, Anika Stobart and Hal Swerissen (pictured above) have penned a 27-page report – titled ‘The next steps for aged care: Forging a clear path after the Royal Commission’ – arguing that the Federal Government should boost aged care funding by about $10 billion a year.

The report identifies four key factors for transformational change:

  • A new Aged Care Act that enshrines the rights of older Australians and includes a universal entitlement to needs-based care;
  • New independent governance arrangements, including independent pricing, independent quality standards, independent oversight, and regional governance structures;
  • Major reforms to the aged care workforce, including minimum care hours per resident in residential aged care, a national registration scheme for all personal care workers, and mandated Certificate III training at a minimum.
  • A massive boost in aged care funding – and a plan for how the Government will finance it.

This extra funding could be found by a combination of:

  • a new Medicare-style 1% levy on taxable income – Grattan says this would raise around $8 billion per year and cost the median taxpayer about $610 per year;
  • changes to the Pension assets test and/or the residential aged care means test to include more of the value of the family home; plus
  • reductions in excessively generous tax breaks on superannuation for wealthy older Australians with superannuation earnings in retirement – currently untaxed for people with superannuation balances of less than $1.6 million – taxed at 15%, saving around $6 billion a year today and more in the future.

The authors conclude this would provide enough cash to clear the 100,000-long waiting list for adequate home care; shift the system to higher-level care at home for longer; employ at least 70,000 more aged care workers; and lift the amount of care per person and ensure 24/7 RN coverage in all aged care homes.

Critically, Grattan says that any additional funding has to come with system reform – otherwise it will be a wasted exercise.

“The Government’s response to the Royal Commission report has not been promising so far,” they state.

“The Government must lift its ambition, and seize this opportunity to introduce landmark social policy reform fit to stand next to Medicare and the National Disability Insurance Scheme. Aged care reform is more than a political challenge, it’s a moral imperative.”


About Author

Lauren is the Editor at DCM Group and has guided its range of media including The Weekly SOURCE, The Daily RESOURCE and The Donaldson Sisters since 2016. With 13 years’ experience as a journalist, editor and commentator, Lauren is the only journalist to have attended every session of the Royal Commission into Aged Care Quality and Safety, producing 300 issues of the subscriber-only The Daily COMMISSION which offers exclusive insights and analysis of the issues surrounding the Royal Commission and the aged care sector.